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EXHIBIT 4.1
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FOURTH AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June
5, 1998, among AMERICAN MEDIA OPERATIONS, INC. (formerly known as Enquirer/Star,
Inc.), a Delaware corporation (the "COMPANY"), the Subsidiaries signatories
hereto, the banks and other financial institutions from time to time parties to
this Agreement (collectively, the "BANKS"; individually, a "BANK"), and THE
CHASE MANHATTAN BANK ("CHASE"), as agent for the Banks hereunder (in such
capacity, the "AGENT").
W I T N E S S E T H :
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WHEREAS, the Company, certain banks and Chemical Bank (as
predecessor to Chase, "CHEMICAL"), as agent for such banks, are parties to the
Third Amended and Restated Credit Agreement, dated as of November 10, 1994,
among the Company, certain banks and other financial institutions (the "EXISTING
BANKS"), and Chemical as agent for the Existing Banks, and as further amended
(the "EXISTING CREDIT AGREEMENT"), pursuant to which the Existing Banks have
made term loans to the Company which are outstanding on the date hereof in the
aggregate principal amount of $261,401,306 (the "EXISTING TERM LOANS") and have
agreed to make revolving credit loans to the Company from time to time in an
aggregate principal amount not to exceed $75,000,000 at any one time outstanding
(the "EXISTING REVOLVING CREDIT LOANS");
WHEREAS, the Company has requested that the Existing Credit
Agreement be amended and restated to, among other things, (a) extend the final
maturity and restructure the amortization schedule of the Existing Term Loans,
(b) extend the availability of the revolving credit facility provided for
thereunder, (c) expand the permitted uses of the proceeds of such loans, and (d)
provide for certain other amendments as set forth herein; and
WHEREAS, certain of the Existing Banks (the "CONTINUING
BANKS") and the Agent have so agreed to amend and restate the Existing Credit
Agreement, and certain other banks (the "NEW BANKS") have agreed to become
parties hereto;
NOW, THEREFORE, the parties hereto agree that, effective on
the Closing Date (as hereinafter defined), the Existing Credit Agreement shall
be amended and restated to read in its entirety as follows:
SECTION 1 DEFINITIONS.
1.1 DEFINED TERMS. As used in this Agreement, terms defined in
the caption and recitals hereto shall be used as so defined, and the following
terms have the following meanings (such definitions, and the definitions of all
other terms defined herein, to be equally applicable to both the singular and
the plural forms of the terms defined):
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"ABR LENDING OFFICE": initially, the office of each Bank
designated as such in Schedule I; thereafter, such other office of such
Bank, if any, located within the United States which shall be making or
maintaining ABR Loans.
"ABR LOAN": a Loan that bears interest at a rate based upon
the Alternate Base Rate.
"ADDITIONAL AMOUNT": as defined in subsection 2.16(b).
"AFFILIATE": as applied to any Person, a spouse or immediate
relative of such Person, any member, director, officer or partner of
such Person, any corporation, association, firm or other entity of
which such Person is a member, director, officer or partner, and any
other Person (other than a Subsidiary) directly or indirectly
controlling, controlled by or under direct or indirect common control
with such Person. For purposes hereof, the "immediate relative" of any
Person shall mean the parents, grandparents, children, grandchildren,
siblings, aunts, uncles, nieces and nephews of such Person and any
spouse of any of the foregoing, and a Person shall be deemed to be
"controlled by" another Person if the latter Person possesses, directly
or indirectly, power either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors of the
former Person or (b) direct or cause the direction of the management
and policies of the former Person whether by contract or otherwise.
"AFTER TAX OPERATING CASH FLOW": for any period, Operating
Cash Flow for such period after deducting therefrom the amount of taxes
actually paid in cash during such period by the Company and its
Restricted Subsidiaries.
"AGENT": as defined in the Preamble hereto.
"AGREEMENT": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"ALTERNATE BASE RATE": at a particular date, the higher of (a)
the rate of interest publicly announced by Chase in New York City from
time to time as its reference rate and (b) 1/2 of 1% above the rate set
forth for such date opposite the caption "Federal Funds (Effective)" in
the weekly statistical release designated as "H.15 (519)", or any
successor publication, published by the Board of Governors of the
Federal Reserve System. The reference rate is not intended to be the
lowest rate of interest charged by Chase in connection with extensions
of credit to debtors.
"APPLICABLE COMMITMENT FEE RATE": with respect to any payment
of commitment fees pursuant to subsection 2.8(a) or (b), the rate per
annum set forth below opposite the Leverage Ratio of the Company in
respect of the Margin Period in which is included the date of such
payment:
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Leverage Ratio Commitment Fee
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Greater than .500%
or equal to
5.0 to 1.0
Greater than .375%
or equal to
4.00 to 1.0 but
less than 5.0 to 1.0
Less than .250%;
4.0 to 1.0
PROVIDED, HOWEVER, that until the Margin Period relating to the fiscal
quarter ending June 29, 1998, the Applicable Commitment Fee Rate shall
be .375%.
"APPLICABLE MARGIN": for each Margin Period, the rate per
annum for the relevant type of Loan set forth below opposite the
Leverage Ratio of the Company for such Margin Period in accordance with
the provisions of subsection 2.19(a):
Leverage Ratio ABR Loans Eurodollar Loans
Greater than
or equal to .75% 1.75%
5.0 to 1.0
Greater than or equal to .50% 1.50%
4.50 to 1.0 but less than
5.0 to 1.0
Greater than or equal to .25% 1.25%
4.0 to 1.0 but less than 4.5 to
1.0
Greater than or equal to 0% 1.00%
3.5 to 1.0 but less than
4.0 to 1.0
Greater than or equal to 0% .875%
3.0 to 1.0 but less than
3.5 to 1.0
Less than 3.0 to 1.0 0% .750%
PROVIDED, HOWEVER, that until the Margin Period relating to the fiscal
quarter ending June 29, 1998, the Applicable Margin shall be .50% for
ABR Loans and 1.50% for Eurodollar Loans, and PROVIDED, FURTHER, that
if at any time the Company shall fail to deliver the financial
statements required by subsection 5.1(b) for any fiscal quarter or the
related Applicable Margin Certificate required by subsection 5.1(i) on
or before the date such statements and Certificate are required to be
delivered pursuant to such subsections, the Leverage Ratio shall be
deemed for purposes of this definition to be greater than 5.0 to
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1.0 for the period which commences five Business Days after such
required date of delivery and ends on the date which is five Business
Days after such financial statements and Certificate are actually
delivered (a "LATE DELIVERY PERIOD"), after which the Applicable Margin
for the remainder of such Margin Period shall be determined in
accordance with the preceding schedule (subject, nevertheless, to the
overriding provisions of this proviso insofar as this proviso may apply
to any other then delinquent financial statements and/or Applicable
Margin Certificate) and PROVIDED, FURTHER, that if, when delivered,
such statements and Certificate shall support a determination of an
Applicable Margin for such Late Delivery Period which is less than that
determined therefor in accordance with the foregoing proviso, the
Applicable Margin for such period shall be retroactively reduced to
such lesser amount.
"APPLICABLE MARGIN CERTIFICATE": as defined in subsection
5.1(i).
"ASSET SALE" any sale, assignment, sale and leaseback,
conveyance, transfer or other disposition (a "DISPOSITION") of property
or assets or series of related Dispositions of property or assets
(excluding any such Disposition permitted by clause (a), (b) or (c) of
subsection 6.8).
"ASSIGNMENT AND ACCEPTANCE": an assignment and acceptance to
be entered into by a Bank and an assignee, substantially in the form of
Exhibit F.
"AVAILABLE REVOLVING CREDIT COMMITMENT": as to any Bank, an
amount equal to the excess, if any, of (a) the amount of such Bank's
Revolving Credit Commitment at such time over (b) the aggregate unpaid
principal amount at such time of all Revolving Credit Loans made by
such Bank.
"BANK": as defined in the Preamble hereto.
"BORROWING DATE": any Business Day, as the case may be,
specified in a notice pursuant to subsection 2.7 as a date on which the
Company requests (or is deemed to have requested) the Banks to make
Term Loans or Revolving Credit Loans.
"BUDGET": for a fiscal year, the budget of the Company for
such fiscal year prepared in accordance with subsection 5.1(e).
"BUSINESS DAY": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or
required by law to close.
"BV": BVIII and BVIIIA, collectively.
"BVIII": Boston Ventures Limited Partnership III, a
Massachusetts limited partnership.
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"BVIIIA": Boston Ventures Limited Partnership IIIA, a
Massachusetts limited partnership.
"CAPITAL EXPENDITURE": the amount of any expenditure made or
obligation incurred, directly or indirectly, in connection with the
acquisition or construction of fixed assets, real property or equipment
to the extent such amount is required in accordance with GAAP to be
added as a debit to the fixed asset account of the Person making such
expenditure or incurring such obligation.
"CAPITAL LEASE": any lease of property (real, personal or
mixed) which in accordance with GAAP should be capitalized on the
lessee's balance sheet.
"CAPITAL STOCK": any and all shares, participations or other
equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.
"CASH EQUIVALENTS": investments of the types permitted under
subsection 6.3(c).
"CHANGE OF CONTROL": any of the following events:
(1) BVIII, BVIIIA and Xxxxxxxxx, collectively, shall
cease to own, directly or indirectly, free and clear
of Liens other than Media Permitted Liens on a fully
diluted basis, shares of Capital Stock of Media
having an aggregate economic interest on liquidation
of at least 15%, PROVIDED that, for purposes of this
clause (1), BVIII and BVIIIA shall be deemed to own
shares of Capital Stock of Media transferred to their
limited partners so long as BVIII or BVIIIA retains
the exclusive power to vote, or to direct the voting
of, such Capital Stock of Media;
(2) any Person or any group of Persons acting together
(other than BVIII, BVIIIA or Xxxxxxxxx) owns,
directly or indirectly, stock representing the same
percentage or a greater percentage of any stock
having voting power with respect to Media as is owned
by BVIII, BVIIIA and Xxxxxxxxx, collectively;
(3) during any period of twelve consecutive months,
individuals who at the beginning of such period
constituted Media's Board of Directors (together with
any new or replacement directors whose election by
Media's Board of Directors, or whose nomination for
election by Media's stockholders, was approved by a
vote of at least a majority of the directors then
still in office who were either directors at the
beginning of such period or whose election or
nomination for election was previously so approved)
cease for any reason to constitute a majority of the
directors then in office;
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(4) Media shall cease to own, on a fully diluted basis,
in the aggregate all the outstanding shares of each
class of Capital Stock of the Company free and clear
of Liens (except Liens created by the Media Pledge
Agreement); or
(5) any holder of Subordinated Debt shall elect to have
any such Subordinated Debt repurchased following any
Change of Control Triggering Event (as defined in the
Senior Subordinated Indebtedness 1992 Indenture) or
any Change of Control (as defined in the Senior
Subordinated Indebtedness 1994 Indenture), PROVIDED
that a Change of Control under this clause (5) shall
not be deemed to occur until the date that is five
Business Days prior to the Purchase Date (as defined
in the Senior Subordinated Indebtedness 1992
Indenture and the Senior Subordinated Indebtedness
1994 Indenture, as applicable).
"CHASE": as defined in the Preamble hereto.
"CHEMICAL": as defined in the Recitals hereto.
"CLOSING DATE": the first day (provided that such day shall
occur no later than June 30, 1998) on which (a) the Agent shall have
determined that the conditions precedent set forth in Section 4 have
been satisfied and (b) this Agreement shall have been executed by the
parties hereto.
"CODE": the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL": as defined in the Security Agreement.
"COMMITMENT LETTER DATE": May 4, 1998.
"COMMITMENTS": the collective reference to the Term Loan
Commitments and the Revolving Credit Commitments; individually as to
any Bank, its "COMMITMENT".
"COMMONLY CONTROLLED ENTITY": an entity, whether or not
incorporated, which is under common control with the Company within the
meaning of Section 4001 of ERISA or is part of a group which includes
the Company and which is treated as a single employer under Section 414
of the Code.
"COMPANY": as defined in the Recitals hereto.
"COMPANY PLEDGE AGREEMENT": the Amended and Restated Pledge
Agreement to be executed and delivered by the Company in favor of the
Agent substantially in the form of Exhibit H-1, as the same may be
amended, supplemented or otherwise modified from time to time
(including, without limitation, pursuant to subsection 9.12).
"CONTINUING BANKS": as defined in the Recitals hereto.
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"CONTRACTUAL OBLIGATION": as to any Person, any provision of
any security issued by such Person or of any agreement, contract,
instrument or undertaking to which such Person is a party or by which
it or any of its property is bound.
"CREDIT DOCUMENTS": collectively, this Agreement, the Notes
and the Security Documents.
"CREDIT PARTY": any party to any of the Credit Documents other
than the Banks and the Agent.
"DEFAULT": any of the events specified in Section 7, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"DOLLARS" and "$": dollars in lawful currency of the United
States of America.
"ENVIRONMENTAL LAWS": any and all Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees or requirements of any Governmental Authority
regulating, relating to or imposing liability standards of conduct
concerning any Hazardous Materials or environmental protections, as now
or may at any time hereafter be in effect, including, without
limitation, the Clean Water Act, also known as the Federal Water
Pollution Control Act, the Comprehensive Environmental Response,
Compensation and Liability Act, the Superfund Amendment and
Reauthorization Act of 1986, the Emergency Planning and Community Right
to Know Act, the Resource Conservation and Recovery Act, the Safe
Drinking Water Act, the Toxic Substances Control Act, together, in each
case, with each amendment thereto, and the regulations adopted and
publications promulgated thereunder and all substitutions therefor.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"EURODOLLAR LENDING OFFICE": initially, the office at each
Bank designated as such in Schedule I; thereafter, such other office of
such Bank, if any, which shall be making or maintaining Eurodollar
Loans as designated as such from time to time in a notice from such
Bank to the Agent.
"EURODOLLAR LOAN": a Loan that bears interest at a rate based
upon the LIBO Rate.
"EVENT OF DEFAULT": any of the events specified in Section 7,
provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"EXISTING BANKS": as defined in the Recitals hereto.
"EXISTING CREDIT AGREEMENT": as defined in the Recitals
hereto.
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"EXISTING REVOLVING CREDIT LOANS": as defined in the Recitals
hereto.
"EXISTING TERM LOANS": as defined in the Recitals hereto.
"FISCAL YEAR": when used with respect to any year, the fiscal
year of the Company ending on the last Monday in March of such year or
such other fiscal year of the Company permitted pursuant to subsection
6.12.
"GAAP": generally accepted accounting principles as defined by
the Financial Accounting Standards Board as from time to time in
effect; PROVIDED, HOWEVER, that for purposes of computing the
Applicable Margin and compliance with the covenants contained in
Section 6 and the related definitions, "GAAP" shall mean said
principles as in effect on December 31, 1997 and as applied by the
Company in the preparation of its financial statements for the fiscal
period ended December 31, 1997 referred to in subsection 3.1 and
consistently followed.
"GOVERNMENTAL AUTHORITY": any nation or government, any state
or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any corporation or other
entity owned or controlled (through stock or capital ownership or
otherwise) by any of the foregoing.
"GUARANTEE": as to any Person, any obligation of such Person
guaranteeing or in effect guaranteeing any Indebtedness, leases,
dividends or other obligations ("PRIMARY OBLIGATIONS") of any other
Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such
Person, whether or not contingent, (a) to purchase any such primary
obligation or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or
payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (d)
otherwise to assure or hold harmless the owner of such primary
obligation against loss in respect thereof; PROVIDED, HOWEVER, that the
term Guarantee shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of
any Guarantee shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee is made (or, if such Guarantee is limited by its terms to a
lesser amount, such lesser amount) or, if not stated or determinable,
the maximum reasonably anticipated liability in respect thereof as
determined by the guarantor in good faith.
"HAZARDOUS MATERIALS": any hazardous materials, hazardous
wastes, hazardous or toxic substances, defined or regulated as such in
or under any Environmental Law,
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including, without limitation, asbestos, gasoline and any other
petroleum products, including crude oil or any fraction thereof, and
materials exhibiting the characteristics of ignitability, corrosivity,
reactivity or extraction procedure toxicity, as such terms are defined
in connection with hazardous materials or hazardous wastes or hazardous
or toxic substances in any Environmental Law.
"INDEBTEDNESS": as applied to any Person, (i) all items
(except items of capital stock or capital or paid-in surplus or of
retained earnings or the equivalent thereto in the case of a
corporation) which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of the
balance sheet of such Person as of the date of which Indebtedness is to
be determined, including, without limitation, any Capital Lease
(provided that in no event shall deferred subscription income be
treated as Indebtedness for purposes of this definition), (ii) all
indebtedness secured by any Lien to which any property or asset owned
or held by such Person is subject, whether or not the indebtedness
secured thereby shall have been assumed by such Person, and (iii) all
indebtedness of others with respect to which such Person has provided a
Guarantee or otherwise has agreed to become directly or indirectly
liable.
"INDEBTEDNESS FOR BORROWED MONEY": as applied to any Person,
all Indebtedness of such Person evidenced by any note, bond, debenture
or other instrument or in respect of borrowed money, any Capital Lease
or any portion of the purchase price of property or services that is
deferred for a period of one year or more from the date of purchase.
"INSOLVENCY": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term
as used in Section 4245 of ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INTEREST EXPENSE": for any period, the aggregate amount
(determined in accordance with GAAP on a consolidated basis) of
interest excluding amortization of deferred debt costs (or, in the case
of Capital Leases, the interest component of lease payments) deducted
in determining Net Income for such period, including, without
limitation, to the extent required in accordance with GAAP to be
included in the computation of interest for such period, amounts
payable or receivable under interest rate hedge agreements.
"INTEREST PAYMENT DATE": (a) as to any ABR Loan, the last day
of each March, June, September and December, (b) as to any Eurodollar
Loan in respect of which the Company has selected an Interest Period of
one, two or three months, the last day of such Interest Period, and (c)
as to any Eurodollar Loan in respect of which the Company has selected
an Interest Period in excess of three months, the last day of each
March, June, September and December during such Interest Period and the
last day of such Interest Period.
"INTEREST PERIOD": with respect to any Eurodollar Loan:
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(a) the period commencing on the Borrowing
Date or conversion date, as the case may be, with respect to
such Eurodollar Loan and ending one, two, three, six or
(subject to the availability of eurodollar funds for such
period as determined by the Required Banks in their sole
discretion) nine or twelve months thereafter, as selected by
the Company in its notice of borrowing as provided in
subsection 2.7 or its notice of conversion as provided in
subsection 2.14, as the case may be; and
(b) thereafter, each period commencing on
the last day of the next preceding Interest Period applicable
to such Eurodollar Loan and ending one, two, three, six or
(subject to the availability of eurodollar funds for such
period as determined by each of the Required Banks in their
sole discretion) nine or twelve months thereafter, as selected
by the Company by irrevocable notice to the Agent not less
than three Business Days prior to the last day of the then
current Interest Period with respect to such Eurodollar Loan;
PROVIDED that the foregoing provisions relating to Interest Periods are
subject to the following:
(A) if any Interest Period would otherwise
end on a day which is not a Business Day, that Interest Period
shall be extended to the next succeeding Business Day unless
the result of such extension would be to carry such Interest
Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding
Business Day;
(B) any Interest Period that begins on the
last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the
last Business Day of a calendar month;
(C) if any Interest Period for a Term Loan
would otherwise extend beyond a Term Loan Installment Payment
Date, then (x) the Interest Period for the principal amount
(if any) of the Term Loans required to be repaid on such date
shall end on such date and (y) the remainder (if any) of each
such Loan shall have an Interest Period determined in
accordance with the other provisions of this definition; and
(D) any Interest Period with respect to the
Term Loans or the Revolving Credit Loans that would otherwise
extend beyond the final Term Loan Installment Payment Date or
the Revolving Credit Commitment Termination Date, as the case
may be, shall end on such Term Loan Installment Payment Date
or Revolving Credit Commitment Termination Date, as
applicable.
"INTEREST RATE HEDGE ARRANGEMENT": any interest rate swap
agreement, interest rate cap agreement, interest rate future, interest
rate option or other interest rate hedge arrangement to or under which
the Company is a party or a beneficiary.
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"LEASE": any lease or other periodic payment arrangement with
respect to the use of tangible property (real, personal or mixed).
"LEVERAGE RATIO": in respect of any Margin Period, the ratio
of (a) the aggregate principal amount or accreted value, as the case
may be, of Total Debt outstanding on the last day of the fiscal quarter
to which such Margin Period relates to (b) two times the Operating Cash
Flow for the two consecutive fiscal quarters ending on the last day of
the fiscal quarter to which such Margin Period relates.
"LEVERAGE TEST": at any time, the ratio of (a) the aggregate
principal amount or accreted value, as the case may be, of Total Debt
then outstanding to (b) Operating Cash Flow for the then most recently
ended period of four consecutive fiscal quarters for which financial
statements shall have been delivered to the Banks pursuant to
subsection 5.1.
"LIBO RATE": with respect to each Interest Period pertaining
to the Eurodollar Loans, the rate per annum equal to the average
(rounded upwards to the nearest whole multiple of 1/100 of one percent)
of the respective rates notified to the Agent by the Reference Banks as
the rate at which each of their Eurodollar Lending Offices is offered
Dollar deposits two Business Days prior to the beginning of such
Interest Period in the interbank eurodollar market where the foreign
currency and exchange operations of such Eurodollar Lending Office are
customarily conducted at or about 10:00 A.M., New York City time, for
delivery on the first day of such Interest Period for the number of
days comprised therein and in an amount equal to the amount of the
Eurodollar Loans of such Reference Bank to be outstanding during such
Interest Period.
"LIEN": any mortgage, pledge, hypothecation, security
assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention
agreement and any Capital Lease having substantially the same economic
effect as any of the foregoing).
"LOANS": the collective reference to the Term Loans and the
Revolving Credit Loans.
"XXXXXXXXX": Xxxxx X. Xxxxxxxx, Xxxxxxx Xxxxxxxxxx and Xxxxxxx
X. Xxxxxx, collectively.
"MARGIN PERIOD": in relation to any fiscal quarter, (1) with
respect to ABR Loans, the period which (i) commences five Business Days
after the date of delivery to the Agent of the financial statements
required by subsection 5.1(b) for such quarter and the related
Applicable Margin Certificate required by subsection 5.1(i), and (ii)
ends four Business Days after the date of delivery to the Agent of such
financial statements and related Applicable Margin Certificate for the
next succeeding fiscal quarter and (2) with respect to Eurodollar
Loans, each Interest Period which commences during the period described
in
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clause (1) of this definition, PROVIDED that, for each Type of Loan,
the first such Margin Period shall commence on the Closing Date and
shall end on the first date upon which a Margin Period for such Type of
Loans shall commence in accordance with the foregoing provisions of
this definition.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a)
the business, operations, property, condition (financial or otherwise)
or prospects of the Company and its Restricted Subsidiaries taken as a
whole, (b) the ability of the Company or any other Credit Party to
perform its obligations under this Agreement, the Notes or the other
Credit Documents or (c) the validity or enforceability of this
Agreement, any of the Notes or the other Credit Documents or the rights
or remedies of the Agent or the Banks hereunder or thereunder.
"MEDIA": American Media, Inc. (formerly known as Enquirer/Star
Group, Inc.), a Delaware corporation.
"MEDIA PERMITTED LIENS": Liens on no more than 2,175,000
shares of Class A and/or Class C stock of Media pledged by GP Group
Acquisition Limited Partnership, and its successors in interest from
time to time, to secure its Guarantee of the obligations of Xxxxxxxxx
Publishing, Inc. to Fleet Bank in an aggregate amount of no more than
$9,600,000 or Liens in favor of BVIII, BVIIIA or Xxxxxxxxx.
"MEDIA PLEDGE AGREEMENT": the Third Amended and Restated
Pledge Agreement, substantially in the form of Exhibit H-2, to be
executed and delivered by Media in favor of the Agent, as the same may
be amended, supplemented or otherwise modified from time to time.
"MORTGAGE": the Mortgage, dated October 4, 1989, executed and
delivered by SOM Publishing, Inc. pursuant to the Original Credit
Agreement, as the same has been and hereafter may be amended,
supplemented or otherwise modified from time to time (including,
without limitation, pursuant to the Mortgage Supplement).
"MORTGAGE SUPPLEMENT": the Mortgage Supplement, substantially
in the form of Exhibit G, to be executed and delivered by SOM
Publishing, Inc..
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NATIONAL ENQUIRER": National Enquirer, Inc., a Florida
corporation and a wholly owned Subsidiary of the Company.
"NET CASH PROCEEDS": (a) in connection with any Asset Sale or
any Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as
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and when received) of such Asset Sale or Recovery Event, net of
attorneys' fees, accountants' fees, investment banking fees, amounts
required to be applied to the repayment of Indebtedness secured by a
Lien expressly permitted hereunder on any asset that is the subject of
such Asset Sale or Recovery Event (other than any Lien pursuant to a
Security Document) and other customary fees and expenses actually
incurred in connection therewith and net of taxes paid or reasonably
estimated to be payable as a result thereof (after taking into account
any available tax credits or deductions and any tax sharing
arrangements) and (b) in connection with any issuance or sale of equity
securities or debt securities or instruments or the incurrence of
loans, the cash proceeds received from such issuance or incurrence, net
of attorneys' fees, investment banking fees, accountants' fees,
underwriting discounts and commissions and other customary fees and
expenses actually incurred in connection therewith.
"NET INCOME": for any period, the consolidated net income (or
loss), excluding extraordinary, non-recurring and other similar unusual
items, of the Company and its Restricted Subsidiaries for such period,
determined in accordance with GAAP.
"NEW BANKS": as defined in the Recitals hereto.
"NON-EXCLUDED TAXES": as defined in subsection 2.20.
"NOTES": the collective reference to the Term Loan Notes and
the Revolving Credit Notes.
"OBLIGATIONS": (a) all indebtedness, obligations and
liabilities of the Company and the other Credit Parties to the Banks
and the Agent incurred under or arising out of or in connection with
this Agreement, the Notes and the other Credit Documents, whether for
principal, interest (including, without limitation, interest accruing
after the commencement of any bankruptcy, reorganization, insolvency or
other similar proceeding with respect to the Company, whether or not
such interest constitutes an allowed claim in such proceeding), fees,
expenses or otherwise and (b) all obligations and liabilities of the
Company to any Bank under or in connection with any Interest Rate Hedge
Agreement.
"OPERATING CASH FLOW": for any fiscal period, the sum of Net
Income for such fiscal period, PLUS the sum of (i) Interest Expense,
(ii) writeoffs of assets, (iii) depreciation and amortization of
intangibles, (iv) taxes, (v) all other non-cash charges, (vi)
management fees permitted to be paid as set forth in subsection 6.9 and
(vii) expenses incurred pursuant to the Company's profit sharing plan,
in each case, to the extent deducted in determining such Net Income,
MINUS net non-operating income (net of non-operating expense),
including interest income.
"OPERATING LEASE": any Lease other than a Capital Lease.
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"ORIGINAL CREDIT AGREEMENT": the Credit Agreement, dated as of
June 7, 1989, among the Company, Chemical and certain banks, as the
same has been amended, amended and restated, supplemented or otherwise
modified from time to time.
"PARTICIPANTS": as defined in subsection 9.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"PERSON": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"PLAN": at any particular time, any employee benefit plan
which is covered by ERISA and in respect of which the Company or a
Commonly Controlled Entity is (or, if such plan were terminated at such
time, would under Section 4069 of ERISA be deemed to be) an "employer"
as defined in Section 3(5) of ERISA.
"PLEDGE AGREEMENTS": the Media Pledge Agreement, the Company
Pledge Agreement and the Retail Marketing Pledge Agreement.
"PROPERTIES": as defined in subsection 3.26.
"PURCHASING BANKS": as defined in subsection 9.6(c).
"RECOVERY EVENT": any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation proceeding
relating to any asset of the Company or any of its Restricted
Subsidiaries.
"REFERENCE BANKS": Chase, Bank Boston, N.A., and The Bank of
New York.
"REGISTER": as defined in subsection 9.6(d).
"REINVESTMENT DEFERRED AMOUNT": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by the
Company or any of its Restricted Subsidiaries in connection therewith
that are not applied to prepay the Term Loans or reduce the Revolving
Commitments pursuant to subsection 2.10(b) as a result of the delivery
of a Reinvestment Notice.
"REINVESTMENT EVENT": any Asset Sale or Recovery Event in
respect of which the Borrower has delivered a Reinvestment Notice.
"REINVESTMENT NOTICE": a written notice executed by a
Responsible Officer of the Company stating that no Event of Default has
occurred and is continuing and that the Company (directly or indirectly
through a Restricted Subsidiary) intends and expects to
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use all or a specified portion of the Net Cash Proceeds of an Asset
Sale or Recovery Event to acquire assets useful in its business.
"REINVESTMENT PREPAYMENT AMOUNT": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto
less any amount expended prior to the relevant Reinvestment Prepayment
Date to acquire assets useful in the Company's business.
"REINVESTMENT PREPAYMENT DATE": with respect to any
Reinvestment Event, the date occurring twelve months after such
Reinvestment Event.
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
such term as used in Section 4241 of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty-day
notice period is waived under subsections .13, .14, .16, .18, .19 or
.20 of PBGC Reg. 2615.
"REQUIRED BANKS": at any particular time, Banks the aggregate
of
(a) the Term Loan Commitments of which (or, at
any time after the Term Loan Commitments
shall have expired, terminated or been fully
utilized, the Term Loans of which), and
(b) the Revolving Credit Commitments of which
(or, at any time after the Revolving Credit
Commitments shall have expired or
terminated, the Revolving Credit Loans of
which), constitute at least 51% of the sum
of
(x) the Term Loan Commitments (or, at any time
after the Term Loan Commitments shall have
expired, terminated or been fully utilized,
the Term Loans), and
(y) the Revolving Credit Commitments (or, at any
time after the Revolving Credit Commitments
shall have expired or terminated, the
Revolving Credit Loans),
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws, corporation agreement or other
organizational or governing documents of such Person, and any law,
treaty, rule or regulation, or determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or
binding upon such Person or any of its properties or to which such
Person or any of its property is subject.
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"RESPONSIBLE OFFICER": as to any Person, the chief executive
officer, the president, the chief financial officer or any vice
president of such Person.
"RESTRICTED PAYMENT": (a) any payment by the Company of a
dividend on, or any payment by the Company or any Subsidiary on account
of the purchase, redemption or retirement of, or any other distribution
on, any share of any class of the Capital Stock of the Company
(including any such payment or distribution in cash or in property or
obligations of the Company or any Subsidiary) and (b) any payment,
prepayment or recoupment on or in respect of Subordinated Debt
(including, without limitation, by application of any right of set
off), or any purchase, redemption, retirement, defeasance or other
acquisition of Subordinated Debt, direct or indirect, by deposit of
monies or otherwise.
"RESTRICTED SUBSIDIARY": any Subsidiary of the Company that is
not an Unrestricted Subsidiary, including, without limitation, each
Subsidiary of the Company that is listed as a Restricted Subsidiary on
Schedule II.
"RETAIL MARKETING": Retail Marketing Network, Inc.
"RETAIL MARKETING PLEDGE AGREEMENT": the Pledge Agreement to
be executed and delivered by Distribution Services, Inc. in favor of
the Agent substantially in the form of Exhibit H-3, as the same may be
amended, supplemented or otherwise modified from time to time.
"REVOLVING CREDIT COMMITMENT": as defined in subsection
2.4(a).
"REVOLVING CREDIT COMMITMENT PERCENTAGE": as to any Bank at
any time, the percentage of the aggregate Revolving Credit Commitments
then represented by such Bank's Revolving Credit Commitment (or, at any
time after the Revolving Credit Commitments shall have expired or
terminated, the percentage of the aggregate Revolving Credit Loans then
represented by such Bank's Revolving Credit Loans).
"REVOLVING CREDIT COMMITMENT PERIOD": the period from and
including the Closing Date to but excluding the Revolving Credit
Commitment Termination Date.
"REVOLVING CREDIT COMMITMENT TERMINATION DATE": March 31,
2004.
"REVOLVING CREDIT LOANS": as defined in subsection 2.4.
"REVOLVING CREDIT NOTE": as defined in subsection 2.5.
"REVOLVING CREDIT REQUIRED BANKS": at a particular time, Banks
the Revolving Credit Commitment Percentages of which aggregate at least
51%.
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"SECURITY AGREEMENT": the Security Agreement, dated as of June
7, 1989, executed and delivered by the Company and each of its
Subsidiaries in favor of the Agent substantially in the form of Exhibit
C to the Original Credit Agreement, as the same has been and hereafter
may be amended, supplemented or otherwise modified from time to time
(including, without limitation, pursuant to subsection 9.12).
"SECURITY DOCUMENTS": collectively, the Security Agreement,
the Mortgage, the Pledge Agreements and the Subsidiary Guarantee.
"SENIOR SUBORDINATED 1992 INDEBTEDNESS": Indebtedness for
Borrowed Money of the Company in the aggregate initial principal amount
of $100,000,000 evidenced by the Senior Subordinated Notes Due 2002
issued pursuant to the Senior Subordinated Indebtedness 1992 Indenture.
"SENIOR SUBORDINATED 1994 INDEBTEDNESS": Indebtedness for
Borrowed Money of the Company in the aggregate initial principal amount
of $200,000,000 evidenced by the Senior Subordinated Notes Due 2004 of
the Company issued pursuant to the Senior Subordinated Indebtedness
1994 Indenture.
"SENIOR SUBORDINATED INDEBTEDNESS 1992 INDENTURE": the
Indenture dated as of May 1, 1992 between the Company and the United
States Trust Company of New York, as trustee, with respect to the
Senior Subordinated Notes Due 2002 of the Company.
"SENIOR SUBORDINATED INDEBTEDNESS 1994 INDENTURE": the
Indenture dated as of November 1, 1994 between the Company and the
United States Trust Company of New York, as trustee, with respect to
the Senior Subordinated Notes Due 2004 of the Company.
"SENIOR SUBORDINATED NOTES DUE 2002": the 10 3/8% Senior
Subordinated Notes Due 2002 of the Company.
"SENIOR SUBORDINATED NOTES DUE 2004": the 11.63% Senior
Subordinated Notes Due 2004 of the Company.
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"SOAP OPERA NEWS": the Soap Opera News division of SOM
Publishing, Inc.
"SOLVENT": when used with respect to any Person, means that,
as of any date of determination, (a) the amount of the "present fair
saleable value" of the assets of such Person will, as of such date,
exceed the amount that will be required to pay all "liabilities of such
Person, contingent or otherwise", as of such date (as such quoted terms
are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors) as such
liabilities become absolute and matured, (b) such
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Person will not have, as of such date, an unreasonably small amount of
capital with which to conduct its business and (c) such Person will be
able to pay its debts as they mature, taking into account the timing of
and amounts of cash to be received by such Person and the timing of and
amounts of cash to be payable on or in respect of indebtedness of such
Person; in each case after giving effect to (A) as of the Closing Date,
the making of the Loans to be made on the Closing Date and to the
application of the proceeds of such Loans and (B) on any date after the
Closing Date, the making of any Loan to be made on such date, and to
the application of the proceeds of such Loan. For purposes of this
definition, (i) "debt" means liability on a "claim", and (ii) "claim"
means any (x) right to payment, whether or not such a right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured
or (y) 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
or unmatured, disputed, undisputed, secured or unsecured.
"SUBORDINATED DEBT": the Senior Subordinated 1992 Indebtedness
and the Senior Subordinated 1994 Indebtedness or any other unsecured
and unguaranteed Indebtedness of the Company all the net proceeds of
which are used to repay all or a portion of the Senior Subordinated
1992 Indebtedness and/or the Senior Subordinated 1994 Indebtedness and
related premiums, fees and expenses and which (1) matures in accordance
with a schedule no more advanced than that provided for in the Senior
Subordinated Indebtedness 1994 Indenture, (2) contains covenants and
other provisions no more restrictive on the Company than those
contained in the Senior Subordinated Indebtedness 1994 Indenture, as
determined by the Required Banks in their reasonable judgment (and
acknowledged by them in writing in advance of any such repayment) and
(3) contains provisions for the subordination of the principal of and
interest on (and any other obligations of the Company in respect of)
such Indebtedness to the prior payment in full of the principal of and
interest (including all post-petition interest, whether or not such
interest constitutes an allowed claim in any bankruptcy or
reorganization proceeding) on the Loans and penalties, fees,
indemnifications, reimbursements, damages and other obligations and
liabilities payable under this Agreement and the collateral documents
delivered pursuant thereto on terms and conditions no less favorable to
the Banks, as determined by the Required Banks in their reasonable
judgment (and acknowledged by them in writing in advance of any
repayment), than those contained in the Senior Subordinated
Indebtedness 1994 Indenture; PROVIDED that the Agent and each Bank
shall have received (a) copies of all draft documentation in respect of
such Indebtedness, promptly upon the distribution thereof and (b) final
form copies of such documentation prior to the execution thereof.
"SUBSIDIARY": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the
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management of which is otherwise controlled, directly or indirectly
through one or more intermediaries, or both, by such Person. Unless
otherwise specified herein, each reference to the term Subsidiary shall
be to a Subsidiary of the Company.
"SUBSIDIARY GUARANTEE": the joint and several Guarantee, dated
as of June 7, 1989, executed and delivered by each Restricted
Subsidiary of the Company in favor of the Agent substantially in the
form of Exhibit I of the Original Agreement as the same has been or
hereafter may be amended, supplemented or otherwise modified from time
to time (including, without limitation, pursuant to subsection 9.12).
"SUPER-MAJORITY BANKS": Banks the aggregate then outstanding
principal amount of the Term Loans of which and the aggregate Revolving
Credit Commitments (or, at any time after the Revolving Credit
Commitments shall have expired or terminated, the Revolving Credit
Loans) of which constitute at least 85% of the sum of the aggregate
unpaid principal amount of the Term Loans and the aggregate amount of
the Revolving Credit Commitments (or, at any time after the Revolving
Credit Commitments shall have expired or terminated, the Revolving
Credit Loans).
"TERM LOAN": as defined in Section 2.1(a).
"TERM LOAN COMMITMENTS": as to any Bank, its obligation to
make and/or continue Term Loans to the Company pursuant to subsection
2.1(a) in the aggregate amount referred to therein.
"TERM LOAN INSTALLMENT PAYMENT DATE": as defined in subsection
2.3.
"TERM LOAN NOTES": as defined in subsection 2.2.
"TERM LOAN PERCENTAGE": as to any Bank at any time, the
percentage of the aggregate Term Loan Commitments then represented by
such Bank's Term Loan Commitment (or, at any time after the Term Loan
Commitments shall have expired, terminated or been fully utilized, the
percentage of the aggregate Term Loans then represented by such Bank's
Term Loans).
"TERM LOAN REQUIRED BANKS": at any time, Banks the Term Loan
Percentages of which aggregate at least 51%.
"TERM NOTE": as defined in subsection 2.2.
"TOTAL DEBT": all Indebtedness for Borrowed Money of the
Company and its Restricted Subsidiaries.
"TOTAL DEBT SERVICE": for any period, all scheduled payments
of principal (including any such scheduled payment of the Term Loans
optionally prepaid pursuant to subsection 2.3(b) prior to the scheduled
due date thereof), Interest Expense and commitment fees, in each case
with respect to Total Debt during such period.
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"TRANCHE": each set of Eurodollar Loans having the same
Interest Period.
"TRANSFEREE": as defined in subsection 9.6(f).
"TYPE": as to any Loan, its nature as an ABR Loan or a
Eurodollar Loan.
"UNRESTRICTED SUBSIDIARY": any Subsidiary of the Company that
is listed as an Unrestricted Subsidiary on Schedule II and each other
Subsidiary that the Company designates as an Unrestricted Subsidiary in
accordance with subsection 6.3(f), PROVIDED, HOWEVER, that the Company
may, so long as no Default or Event of Default would result therefrom,
cause any Unrestricted Subsidiary to become a Restricted Subsidiary by
so notifying the Agent in a written instrument executed by a
Responsible Officer.
"WEEKLY WORLD NEWS": Weekly World News, Inc., a Florida
corporation and a wholly owned Subsidiary of the Company.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) All terms defined in
this Agreement shall have the defined meanings when used in the Notes and the
Security Documents or any certificate or other document made or delivered
pursuant hereto or thereto, unless otherwise defined therein.
(b) As used herein and in the Notes, and in any certificate or
other document made or delivered pursuant hereto, accounting terms relating to
the Company not defined in subsection 1.1, and accounting terms partly defined
in subsection 1.1 (to the extent not defined), shall have the respective
meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
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SECTION 2 AMOUNT AND TERMS OF LOANS.
2.1 TERM LOANS. Subject to the terms and conditions hereof,
each Bank having a Term Loan Commitment severally agrees that on the Closing
Date it will, (i) in the case of each Continuing Bank, continue as a Term Loan
all or a portion of its Existing Term Loan and/or make a new Term Loan or, (ii)
in the case of each New Bank, make a new Term Loan to the Company (a "TERM
LOAN"; collectively, the "TERM LOANS") in an amount or amounts, as the case may
be, such that, after giving effect thereto, the Term Loan of such Bank
outstanding on the Closing Date will equal the amount set forth opposite such
Bank's name in Schedule I under the heading "Term Loan Commitment". The Term
Loans continued or made on the Closing Date shall be in an aggregate amount
equal to $250,000,000. The Term Loans may from time to time be (i) Eurodollar
Loans, (ii) ABR Loans or (iii) a combination thereof, as determined by the
Company and notified to the Agent in accordance with subsection 2.7(a), (b) or
(c) or 2.14, as the case may be.
2.2 TERM LOAN NOTES. The Term Loans continued and/or made by
each Bank to the Company shall be evidenced by a promissory note a "TERM LOAN
NOTE" of the Company, substantially in the form of Exhibit A hereto, with
appropriate insertions as to date, payee and principal amount, payable to the
order of such Bank and representing the obligation of the Company to pay the
unpaid principal amount of the Term Loans continued and/or made by such Bank,
with interest thereon as prescribed in subsection 2.11. Each Term Loan Note
shall (i) be dated the Closing Date, and (ii) bear interest on the unpaid
principal amount thereof from time to time outstanding from the date thereof
until paid in full at the applicable interest rate per annum determined as
provided in, and payable as specified in, subsection 2.11. Each Bank is
authorized to endorse the date, Type and amount of its Term Loans, the date and
amount of each payment or prepayment of principal thereof, the date and amount
of each conversion to a different Type pursuant to subsection 2.14, and the
Interest Period and the interest rate with respect thereto, on the schedule
annexed to and forming a part of its Term Loan Note, which endorsements shall
constitute PRIMA FACIE evidence of the accuracy of the information so recorded,
PROVIDED that failure by any Bank to make any such recordation on its Term Loan
Note shall not affect any of the obligations of the Company under such Term Loan
Note or this Agreement. Each Continuing Bank shall on or as soon as practicable
after the Closing Date deliver to the Agent its Term Loan Note issued pursuant
to the Existing Credit Agreement, marked "superseded", and will accept, in
substitution for and replacement of (but not in satisfaction of) such existing
Term Loan Note (to the extent of the Term Loan evidenced thereby), a Term Loan
Note meeting the requirements of this subsection; the Agent will on the Closing
Date deliver to the Company all such existing Term Loan Notes received by the
Agent on or before such Date.
2.3 REPAYMENT OF TERM LOANS; OPTIONAL PREPAYMENTS. (a) The
Company shall repay the Term Loans, in installments on the dates and in the
amounts set forth below:
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DATE AMOUNT
June 30, 1999 $6,250,000
September 30, 1999 $6,250,000
December 31, 1999 $6,250,000
March 31, 2000 $6,250,000
June 30, 2000 $9,375,000
September 30, 2000 $9,375,000
December 31, 2000 $9,375,000
March 31, 2001 $9,375,000
June 30, 2001 $12,500,000
September 30, 2001 $12,500,000
December 31, 2001 $12,500,000
March 31, 2002 $12,500,000
June 30, 2002 $15,625,000
September 30, 2002 $15,625,000
December 31, 2002 $15,625,000
March 31, 2003 $15,625,000
June 30, 2003 $18,750,000
September 30, 2003 $18,750,000
December 31, 2003 $18,750,000
March 31, 2004 $18,750,000
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(b) The Company shall have the right, at any time and from
time to time, to prepay the Term Loans, in whole or in part, without premium or
penalty, upon receipt by the Agent of notice thereof prior to 10:00 A.M., New
York City time, on the date which is one Business Day prior to the date thereof,
specifying the date and amount of prepayment, PROVIDED that Eurodollar Loans may
not be optionally prepaid on other than the last day of any Interest Period with
respect thereto. Upon receipt of such notice the Agent shall promptly notify
each Bank thereof. If such notice is given, the Company shall make such
prepayment, and the payment amount specified in such notice shall be due and
payable, on the date specified therein. Optional partial prepayments on the Term
Loans shall be in an aggregate principal amount equal to the lesser of (i)
$5,000,000 or a whole multiple of $1,000,000 in excess thereof and (ii) the then
unpaid principal amount of the Term Loans.
(c) Any prepayment of the Term Loan Notes pursuant to
paragraph (b) of this subsection shall be applied in chronological order against
the installments of the Term Loan Notes. Amounts prepaid on account of the Term
Loan Notes may not be reborrowed. Accrued interest on the amount of any such
prepayment and any unpaid commitment fee payable pursuant to subsection 2.8(b)
and any amounts payable pursuant to subsection 2.17 in connection therewith
shall be paid on the date of such prepayment.
2.4 REVOLVING CREDIT LOANS. (a) Subject to the terms and
conditions hereof, each Bank severally agrees to make revolving credit loans
(the "REVOLVING CREDIT LOANS") to the Company from time to time during the
Revolving Credit Commitment Period in an aggregate principal amount at any one
time outstanding not to exceed the amount set forth opposite such Bank's name in
Schedule I under the heading "Revolving Credit Commitment", as such amount is
subject to reduction as provided herein (such amount, as the same may be so
reduced, the "REVOLVING CREDIT COMMITMENT"). The Revolving Credit Commitments
initially shall be in the aggregate amount of $120,000,000.
(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) ABR Loans or (iii) a combination thereof as determined by
the Company and notified to the Agent in accordance with subsection 2.7 or 2.14,
as the case may be, PROVIDED that no Revolving Credit Loan shall mature after
the Revolving Credit Commitment Termination Date and no Revolving Credit Loan
that is a Eurodollar Loan shall be made after the day that is one month prior to
the Revolving Credit Commitment Termination Date.
2.5 REVOLVING CREDIT NOTES. The Revolving Credit Loans made by
each Bank to the Company shall be evidenced by a promissory note of the Company,
substantially in the form of Exhibit B hereto, with appropriate insertions as to
date, payee and principal amount (a "REVOLVING CREDIT NOTE"), payable to the
order of such Bank and representing the obligation of the Company to pay a
principal amount equal to the lesser of (a) the original amount of the Revolving
Credit Commitment of such Bank and (b) the aggregate unpaid principal amount of
all Revolving Credit Loans made by such Bank to the Company pursuant to
subsection 2.4(a). Each Revolving Credit Note shall (i) be dated the Closing
Date, (ii) be stated to mature on the
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Revolving Credit Commitment Termination Date, and (iii) bear interest on the
unpaid principal amount thereof from time to time outstanding from the date
thereof until paid in full at the applicable interest rate per annum determined
as provided in, and payable as specified in, subsection 2.11. Each Bank is
authorized to endorse the date, Type and amount of each Revolving Credit Loan to
the Company made or converted by such Bank, and the date and amount of each
payment or prepayment of principal thereof, and, in the case of Eurodollar
Loans, the Interest Period and the interest rate with respect thereto, on the
schedule annexed to and forming a part of its Revolving Credit Note, which
endorsements shall constitute PRIMA FACIE evidence of the accuracy of the
information so recorded, PROVIDED that failure by any Bank to make any such
recordation on its Revolving Credit Note shall not affect any of the obligations
of the Company under such Revolving Credit Note or this Agreement. Each
Continuing Bank shall on or as soon as practicable after the Closing Date
deliver to the Agent its Revolving Credit Note issued pursuant to the Existing
Credit Agreement, marked "superseded", and will accept, in substitution for and
replacement of (but not in satisfaction of) such existing Revolving Credit Note
(to the extent of the Revolving Credit Loans evidenced thereby), a Revolving
Credit Note meeting the requirements of this subsection; the Agent will on the
Closing Date deliver to the Company all such existing Revolving Credit Notes
received by the Agent on or before such Date.
2.6 OPTIONAL REDUCTION OR TERMINATION OF REVOLVING CREDIT
COMMITMENTS. (a) The Company shall have the right, upon receipt by the Agent of
notice thereof prior to 11:00 A.M., New York City time, on the date which is one
Business Day prior to the date thereof, to terminate the Revolving Credit
Commitments or, from time to time, to reduce the amount of the Revolving Credit
Commitments to an amount not less than the aggregate principal amount of the
Revolving Credit Loans outstanding after giving effect to any contemporaneous
prepayment thereof. Any termination of the Revolving Credit Commitments shall be
accompanied by the payment of any unpaid commitment fee payable pursuant to
subsection 2.8(a) and any amounts due pursuant to the provisions of subsection
2.17. Any such reduction of the Revolving Credit Commitments shall be in an
amount equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof
and shall reduce permanently the amount of the Revolving Credit Commitments then
in effect.
(b) Once reduced or terminated, the Revolving Credit
Commitments may not be reinstated.
2.7 PROCEDURES FOR BORROWING. (a) The Company may borrow and
continue Term Loans on the Closing Date, PROVIDED that the Company shall give
the Agent irrevocable notice of the proposed Closing Date (which notice must be
received by the Agent prior to 11:00 A.M., New York City time, at least three
Business Days prior to the proposed Closing Date in the case the Term Loans
requested to be made on such Date include Eurodollar Loans, and at least one
Business Day prior to the requested Closing Date otherwise), requesting that the
Banks make and/or continue Term Loans on the Closing Date and specifying whether
such Loans are to be Eurodollar Loans, ABR Loans or a combination thereof. Upon
receipt of such notice the Agent shall promptly notify each Bank thereof. Each
New Bank and each Continuing Bank which is increasing its Term Loans on the
Closing Date shall on the Closing Date make available to the Agent for the
account of the Company at the office of the Agent set forth in subsection 9.2
prior
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to 11:00 A.M. on the Closing Date, in funds immediately available to the Agent,
an amount equal to its Term Loan Commitment (in the case of each New Bank) or
the amount, if any, of the increase in its Term Loans (in the case of each
Continuing Bank) over its Existing Term Loans. All such amounts so made
available to the Agent will be (i) applied by the Agent to the payment to each
Existing Bank of the excess of the principal amount of its Existing Term Loan
outstanding under the Existing Credit Agreement as at the opening of business on
the Closing Date over the principal of its Term Loan to be outstanding on the
Closing Date pursuant to this Agreement and (ii) to the extent of any remaining
such amounts, made available to the Company for the purposes specified in
subsection 2.13(a).
(b) The Company may borrow under the Revolving Credit
Commitments during the Revolving Credit Commitment Period on any Business Day,
PROVIDED that the Company shall have given the Agent irrevocable notice (which
notice must be received by the Agent prior to 11:00 A.M., New York City time, at
least three Business Days prior to the requested Borrowing Date, in the case of
Eurodollar Loans, and at least one Business Day prior to the requested Borrowing
Date, in the case of ABR Loans), specifying (i) the amount to be borrowed, (ii)
the requested Borrowing Date, (iii) whether the borrowing is to be of Eurodollar
Loans, ABR Loans, or a combination thereof, and (iv) if the Loan is to be
entirely or partly a Eurodollar Loan, the length of the initial Interest Period
for such Loan and PROVIDED, FURTHER, that certain special procedures specified
in subsection 2.7(c) (which, to the extent inconsistent with the provisions of
this paragraph, shall override such provisions) shall be applicable to the
Revolving Credit Loans to be made on the Closing Date. Each borrowing pursuant
to the Revolving Credit Commitments shall be in a principal amount equal to (x)
in the case of ABR Loans, at least the lesser of (1) $500,000 or a whole
multiple of $100,000 in excess thereof and (2) the aggregate amount of the
Available Revolving Credit Commitments, and (y) in the case of Eurodollar Loans,
at least $10,000,000 or a whole multiple of $1,000,000 in excess thereof. Upon
receipt of such notice from the Company, the Agent shall promptly notify each
Bank thereof. Each Bank will make the amount of its PRO RATA share of each
borrowing available to the Agent for the account of the Company at the office of
the Agent set forth in subsection 9.2 prior to 11:00 A.M. on the Borrowing Date
requested by the Company in funds immediately available to the Agent. The
proceeds of all such Loans will then be made available to the Company by the
Agent at such office of the Agent by crediting the account of the Company on the
books of such office with the aggregate of the amounts made available to the
Agent by the Banks and in like funds as received by the Agent.
(c) The Company shall give a notice pursuant to subsection
2.7(b) in respect of the Revolving Credit Loans to be made on the Closing Date,
which notice shall specify the aggregate amount thereof which the Company wishes
to have outstanding on such Date, and each New Bank shall on the Closing Date
make available, in immediately available funds, to the Agent, as a Revolving
Credit Loan, an amount equal to its Revolving Credit Commitment Percentage of
the aggregate principal amount so specified by the Company, and each Continuing
Bank affected by the provisions of this sentence shall on the Closing Date make
available, in immediately available funds, to the Agent, as a Revolving Credit
Loan, an amount equal to the excess, if any, of (i) its Revolving Credit
Commitment Percentage of the aggregate principal amount so specified by the
Company over (ii) the aggregate principal amount of its Revolving Credit Loans
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outstanding immediately prior to the Closing Date. The proceeds of all such
amounts so made available to the Agent will be applied by the Agent to the
payment to each Existing Bank affected by the provisions of this sentence of (A)
the excess, if any, of the aggregate principal amount of its Existing Revolving
Credit Loans outstanding under the Existing Credit Agreement as at the opening
of business on the Closing Date over its Revolving Credit Commitment Percentage
of the Revolving Credit Loans requested by the Company to be outstanding on the
Closing Date [and (B) the excess, if any, of the principal amount of its
Existing Term Loan outstanding under the Existing Credit Agreement as at the
opening of business on the Closing Date over the principal of its Term Loan to
be outstanding on the Closing Date pursuant to this Agreement; such application
shall be made first to Existing Banks that are not Continuing Banks and then to
Continuing Banks].
2.8 FEES. (a) The Company agrees to pay to the Agent for the
account of each Bank a commitment fee for the period from and including the
Closing Date to but not including the Revolving Credit Commitment Termination
Date equal to the Applicable Commitment Fee Rate in effect on the date upon
which payment is to be made on such Bank's average daily Available Revolving
Credit Commitment during such period. Such commitment fee shall be payable
quarterly in arrears on the last day of each March, June, September and
December, commencing on June 30, 1998, and on the Revolving Credit Commitment
Termination Date.
(b) The Company agrees to pay to the Agent for the account of
each Bank on the Closing Date an upfront fee separately agreed between the
Agent, the Company and the Banks.
(c) The Company agrees to pay to the Agent for the Agent's
account the fees separately agreed between the Agent and the Company on the
dates so separately agreed.
(d) The Company agrees to pay to each Bank that is required to
maintain reserves in respect of "Eurocurrency liabilities" in accordance with
Regulation D of the Board of Governors of the Federal Reserve System a fee,
payable on each date upon which interest shall be payable on Eurodollar Loans
hereunder, calculated by multiplying (i) the principal amount of such Bank's
Loans outstanding from time to time by (ii) a fraction, the numerator of which
shall be 1.00 and the denominator of which shall be a number equal to 1.00 minus
the aggregate of the rates (expressed as a decimal fraction) of reserve
requirements current on the date two Business Days prior to the beginning of
such Interest Period (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), as now and from time to time hereafter in
effect, 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 such System (such fee to be adjusted to
the nearest 1/100 of one percent, if such nearest percentage exists, or if not,
to the next higher 1/100 of one percent).
2.9 PREPAYMENTS OF REVOLVING CREDIT LOANS. (a) The Company may
on the last day of the relevant Interest Period if the Revolving Credit Loans to
be prepaid are in whole or in part Eurodollar Loans, or at any time and from
time to time if the Revolving Credit Loans to be
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prepaid are ABR Loans, prepay the Revolving Credit Loans hereunder, in whole or
in part, upon receipt by the Agent of notice thereof prior to 10:00 A.M., New
York City time, on the date which is one Business Day prior to the date thereof,
specifying the date and amount of prepayment and whether the prepayment is of
Eurodollar or ABR Loans or a combination thereof and, if a combination thereof,
the amount of prepayment allocable to each. If the Agent receives any such
notice, it shall promptly notify the Banks thereof. If such notice is given, the
Company shall make such prepayment, and the payment amount specified in such
notice shall be due and payable on the date specified therein, together with
accrued interest to such date on the amount prepaid and any amounts payable
pursuant to subsection 2.17 in connection therewith. Partial prepayments of
Revolving Credit Loans shall be in an amount equal to $500,000 or a whole
multiple of $100,000 in excess thereof.
(b) If after giving effect to any termination or reduction of
the Revolving Credit Commitments pursuant to subsection 2.6 or 2.10, the
outstanding aggregate principal amount of the Revolving Credit Loans exceeds the
amount of the Revolving Credit Commitments, the Company shall prepay such
Revolving Credit Loans on the date of such termination or reduction in a
principal amount equal to such excess, together with interest thereon accrued to
the date of such prepayment and any amounts payable pursuant to subsection 2.17
in connection therewith.
2.10 MANDATORY PREPAYMENTS AND COMMITMENT REDUCTIONS. (a) If
any Indebtedness for Borrowed Money shall be issued or incurred by the Company
or any of its Restricted Subsidiaries (excluding any Indebtedness incurred in
accordance with subsection 6.1(a) through (d) as in effect on the date of this
Agreement), an amount equal to 100% of the Net Cash Proceeds thereof shall be
applied on the date of such issuance or incurrence toward the prepayment of the
Term Loans and the reduction of the Revolving Commitments as set forth in
subsection 2.10(c), PROVIDED that the provisions of this subsection shall be
inapplicable to Indebtedness for Borrowed Money issued or incurred subsequent to
the Closing Date in an aggregate principal amount not in excess of $100,000,000
so long as, after giving effect to the issuance or incurrence thereof, the ratio
of Total Debt then outstanding to Operating Cash Flow for the then most recently
ended period of four consecutive fiscal quarters for which financial statements
shall have been delivered to the Banks pursuant to subsection 5.1 is less than
4.5 to 1.0.
(b) If on any date the Company or any of its Restricted
Subsidiaries shall receive Net Cash Proceeds from any Asset Sale or Recovery
Event then, unless a Reinvestment Notice shall be delivered in respect thereof
within 30 days after such Asset Sale or Recovery Event, such Net Cash Proceeds
shall be applied on the 30th day after such Asset Sale or Recovery Event toward
the prepayment of the Term Loans and the reduction of the Revolving Commitments
as set forth in subsection 2.10(c); PROVIDED, that, notwithstanding the
foregoing, (i) the aggregate Net Cash Proceeds of Asset Sales that may be
excluded from the foregoing requirement pursuant to a Reinvestment Notice shall
not exceed $25,000,000 and (ii) on each Reinvestment Prepayment Date, an amount
equal to the Reinvestment Prepayment Amount with respect to the relevant
Reinvestment Event shall be applied toward the prepayment of the Term Loans and
the reduction of the Revolving Commitments as set forth in subsection 2.10(c).
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(c) Any payments of the Loans made pursuant to this subsection
shall be applied FIRST to the prepayment of the Term Loans, with such prepayment
being applied to the installments of principal thereof ratably according to the
then remaining amounts thereof, and SECOND to the permanent reduction of the
Revolving Credit Commitment (and to the prepayment of the Revolving Credit Loans
to the extent that the then aggregate outstanding principal amount thereof
exceeds the Revolving Credit Commitment as so reduced). Amounts prepaid on
account of the Term Loan Notes may not be reborrowed.
2.11 INTEREST RATE AND PAYMENT DATES. (a) Each Eurodollar Loan
shall bear interest for each Interest Period applicable thereto on the unpaid
principal amount thereof at a rate per annum equal to the LIBO Rate determined
for such Interest Period plus the Applicable Margin.
(b) Each ABR Loan shall bear interest on the unpaid principal
amount thereof at a rate per annum equal to the Alternate Base Rate plus the
Applicable Margin.
(c) If all or a portion of the principal amount of any of the
Loans or any interest payable thereon or any other amount payable hereunder
shall not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum which is
(x) in the case of overdue principal, 2% above the rate which would otherwise be
applicable pursuant to this subsection or (y) in the case of overdue interest,
2% above the rate described in paragraph (b) of this subsection, in each case
from the date of such non-payment until such amount is paid in full (as well
after as before judgment).
(d) Interest payable hereunder and under the Notes shall in no
event be payable at a rate per annum in excess of the maximum rate permitted by
applicable law; PROVIDED, that the portion of interest not payable on an
Interest Payment Date pursuant to this sentence shall be payable on subsequent
Interest Payment Dates to the extent that such subsequent payment does not
result in the violation of applicable law on such subsequent Interest Payment
Dates. Interest on each Loan shall be payable in arrears on each Interest
Payment Date and upon payment (including prepayment) in full thereof and, in the
case of Revolving Credit Loans, on the Revolving Credit Commitment Termination
Date, PROVIDED that interest accruing pursuant to paragraph (c) of this
subsection shall be payable on demand.
2.12 INABILITY TO DETERMINE INTEREST RATE. In the event that
the Agent shall have determined (which determination shall be conclusive absent
manifest error) that by reason of circumstances affecting the interbank
eurodollar market, adequate and reasonable means do not exist for ascertaining
the LIBO Rate applicable pursuant to subsection 2.11 for any Interest Period
with respect to (a) proposed Loans that the Company has requested be made as
Eurodollar Loans, (b) Eurodollar Loans that will result from the requested
conversion of Loans that are ABR Loans into Eurodollar Loans or (c) the
continuation of Eurodollar Loans beyond the expiration of the then current
Interest Period with respect thereto, the Agent shall forthwith give telecopy
notice of such determination, confirmed in writing, to the Company and the Banks
at least two Business Days prior to, as the case may be, the requested Borrowing
Date for such Eurodollar Loans, the conversion date of such ABR Loans or the
last day of such Interest Period. If such
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notice is given (x) unless the Company requests immediately upon receipt of such
notice that such Eurodollar Loans not be made as ABR Loans, any requested
Eurodollar Loans shall be made as ABR Loans, (y) any ABR Loans that were to have
been converted to Eurodollar Loans shall be continued as ABR Loans and (z) any
outstanding Eurodollar Loans shall be converted, on the last day of the then
current Interest Period with respect thereto, to ABR Loans. Until such notice
has been withdrawn by the Agent, no further Eurodollar Loans shall be made or
continued as such, nor shall the Company have the right to convert Loans that
are ABR Loans to Eurodollar Loans.
2.13 USE OF PROCEEDS. (a) The Company agrees to use the
proceeds of the Term Loans made on the Closing Date to refinance Indebtedness
outstanding under the Existing Credit Agreement.
(b) The Company agrees to use the proceeds of the Revolving
Credit Loans for general corporate purposes.
2.14 CONVERSION AND CONTINUATION OPTIONS; MINIMUM AMOUNT OF
LOANS. (a) The Company may elect from time to time to convert its Eurodollar
Loans to ABR Loans by giving the Agent (which shall promptly notify the Banks)
at least two Business Days' prior irrevocable notice of such election, PROVIDED
that any such conversion of Eurodollar Loans shall only be made on the last day
of an Interest Period with respect thereto. The Company may elect from time to
time to convert ABR Loans to Eurodollar Loans by giving the Agent (which shall
promptly notify the Banks) at least three Business Days' prior irrevocable
notice of such election. All or any part of outstanding Eurodollar Loans and ABR
Loans may be converted as provided herein, PROVIDED that (i) no Loan may be
converted into a Eurodollar Loan when any Default or Event of Default has
occurred and is continuing and the Agent or the Required Banks have determined
that such a conversion is not appropriate or after the day which is one month
prior to the final Term Loan Installment Payment Date or the Revolving Credit
Commitment Termination Date, as the case may be, (ii) partial conversions shall
be in an aggregate principal amount of (A) in the case of any conversion of
Loans to Eurodollar Loans, $5,000,000 or a multiple of $1,000,000 in excess
thereof and (B) in the case of any conversion of Loans to ABR Loans, at least
$500,000 or a multiple of $100,000 in excess thereof and (iii) any such
conversion may be made only if, after giving effect thereto, subsection 2.14(c)
shall not have been contravened.
(b) Any Eurodollar Loan may be continued as such upon the
expiration of an Interest Period with respect thereto by compliance by the
Company with the notice provisions contained in subsection 2.7; provided that
(i) no Eurodollar Loan may be continued as such when any Default or Event of
Default has occurred and is continuing and the Agent or the Required Banks have
determined that such a continuation is not appropriate, (ii) if the Company
shall not have complied with such notice provisions, the Company shall be deemed
irrevocably to have requested that such Eurodollar Loan be converted to an ABR
Loan on the last day of such Interest Period (reduced to the extent necessary to
reflect any reductions of the Commitments on or prior to the conversion date)
and (iii) any such continuation may be made only if, after giving effect
thereto, subsection 2.14(c) shall not have been contravened.
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(c) All borrowings, conversions, continuations and selections
of Interest Periods hereunder shall be in such amounts and be made pursuant to
such elections so that, after giving effect thereto, the unpaid principal amount
of any Tranche shall not be less than $10,000,000, and there shall be no more
than 6 Tranches outstanding at any time.
(d) Eurodollar Loans shall be made and maintained by each Bank
at its Eurodollar Lending Office, and ABR Loans shall be made and maintained by
each Bank at its ABR Lending Office.
2.15 ILLEGALITY. Notwithstanding any other provisions herein,
if any change in any Requirement of Law, or in the interpretation or application
thereof, shall make it unlawful for any Bank to make or maintain Eurodollar
Loans or convert ABR Loans to Eurodollar Loans, (a) the agreement of such Bank
hereunder to make Eurodollar Loans, continue Eurodollar Loans as such or convert
ABR Loans to Eurodollar Loans shall forthwith be cancelled and (b) the Loans of
such Bank then outstanding as Eurodollar Loans, if any, shall be converted
automatically to ABR Loans on the respective next succeeding Interest Payment
Date(s) for such Loans or within such earlier period as required by law. The
Company hereby agrees promptly to pay any Bank, upon its demand, any additional
amounts necessary to compensate such Bank for actual and direct costs reasonably
incurred by such Bank in making any repayment in accordance with this
subsection, including, but not limited to, any interest or fees payable by such
Bank to lenders of funds obtained by it in order to make or maintain its
Eurodollar Loans hereunder. A certificate as to any additional amounts payable
pursuant to this subsection submitted by such Bank to the Company shall be
conclusive in the absence of manifest error. The agreement in this subsection
shall survive the termination of this Agreement and payment of the Notes and all
other amounts payable hereunder. Each Bank agrees to use reasonable efforts
(including reasonable efforts to change its Eurodollar Lending Office) to avoid
or to minimize any amounts which may otherwise be payable pursuant to this
subsection; PROVIDED, HOWEVER, that such efforts shall not cause the imposition
on such Bank of any additional costs or legal or regulatory burdens deemed by
such Bank to be material.
2.16 REQUIREMENTS OF LAW. (a) In the event that any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by any Bank with any request or directive (whether or not having the
force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) does or shall subject any Bank to any tax of any
kind whatsoever with respect to this Agreement, the Notes or any
Eurodollar Loans made hereunder or change the basis of taxation of
payments to such Bank of principal, interest or any other amount
payable hereunder in respect of Eurodollar Loans (except for taxes
covered by subsection 2.20, changes in the rate of tax imposed on the
overall net income of such Bank by the United States, any state or
subdivision thereof or any other country where the Eurodollar Lending
Office is situated);
(ii) does or shall impose, modify or hold applicable
any reserve, special deposit, compulsory loan or similar requirement
against assets held by, or deposits or
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other liabilities in or for the account of, advances or loans by, or
other credit extended by, or any other acquisition of funds by, any
office of such Bank which is not otherwise included in the
determination of the LIBO Rate hereunder; or
(iii) does or shall, after the date hereof, impose on such
Bank any other condition;
and the result of any of the foregoing is to increase the cost to such Bank of
making, converting to, continuing or maintaining Eurodollar Loans or to reduce
any amount receivable hereunder in respect of Eurodollar Loans, then, in any
such case, the Company shall promptly pay to such Bank, upon its demand, all
additional amounts necessary to compensate such Bank for such increased cost or
reduced amount receivable which such Bank deems to be material as determined by
such Bank with respect to the Eurodollar Loans made to the Company hereunder,
PROVIDED that the Company shall not be obligated to pay any such compensation in
respect of increased costs or reduced amounts receivable resulting from an event
described in clause (iii) above for any period prior to the date upon which the
Agent or any Bank shall notify the Company of such event.
(b) In the event that any Bank shall have determined that any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by any Bank or any
corporation controlling such Bank with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof, including, without limitation, the
issuance of any final rule, regulation or guideline, does or shall have the
effect of reducing the rate of return on such Bank's or such corporation's
capital as a consequence of its obligations hereunder to a level below that
which such Bank or such corporation could have achieved but for such change or
compliance (taking into account such Bank's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Bank to be material,
then from time to time after submission by such Bank to the Company (with a copy
to the Agent) of a written request therefore, the Company shall pay to such Bank
such additional amount or amounts (the "ADDITIONAL AMOUNT") as will compensate
such Bank for such reduction; PROVIDED, HOWEVER, that (i) such Bank shall apply
its then standard method of calculating any such Additional Amount, (ii) such
Bank shall represent that such Additional Amount is or will be calculated in a
similar way for other borrowers of such Bank in similar circumstances, (iii)
such Bank shall represent that such requests from such Bank for Additional
Amounts are not inconsistent with such Bank's treatment of other borrowers which
are subject to similar provisions and (iv) if the Company becomes obligated to
pay any Bank any Additional Amount pursuant to this subsection, the Company
shall have the right, so long as no Event of Default has occurred and is then
continuing, upon giving not less than three Business Days' notice to the Agent
and such Bank, to require such Bank to transfer its Commitment to a Purchasing
Bank selected by the Company pursuant to an Assignment and Acceptance, PROVIDED,
FURTHER, that the Company shall pay accrued interest on the Loans of such
transferor Bank, any amounts payable to such Bank pursuant to subsections 2.16,
2.17 and 2.20 and any accrued and unpaid commitment fee or other amounts payable
to it hereunder on the date of such transfer.
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(c) A certificate as to any Additional Amounts payable
pursuant to the provisions of this subsection submitted by such Bank to the
Company shall be conclusive in the absence of manifest error. The agreements in
this subsection shall survive the termination of this Agreement and payment of
the Notes and all other amounts payable hereunder. Upon payment in full of the
Notes and all other amounts payable hereunder, and upon receipt by the Agent
(which shall promptly notify the Banks) of a written request therefor from the
Company, the Agent will notify the Company of any Additional Amounts then due
under this subsection and, upon receipt of payment of such amounts, will deliver
to the Company an instrument releasing the Company from any further liability
under this subsection.
2.17 INDEMNITY. The Company agrees to indemnify each Bank and
to hold each Bank harmless from any loss or expense which such Bank may sustain
or incur as a consequence of (a) default by the Company in payment of the
principal amount of or interest on any Eurodollar Loan of such Bank, (b) default
by the Company in making a borrowing of, conversion into or continuation of
Eurodollar Loans after the Company has given a notice pursuant to subsection 2.7
or 2.14, (c) default by the Company in making any prepayment after the Company
has given a notice pursuant to subsection 2.3 or 2.9 or (d) a prepayment of a
Eurodollar Loan on a day which is not the last day of an Interest Period with
respect thereto, including, but not limited to, any such loss or expense
incurred by such Bank in liquidating or re-employing deposits and any such loss
or expense arising from interest or fees payable by such Bank to lenders of
funds obtained by it. A certificate as to any additional amounts payable
pursuant to this subsection submitted by such Bank to the Company shall be
conclusive absent manifest error. This covenant shall survive termination of
this Agreement and payment of the Notes and any other amounts owing in respect
of this Agreement. Upon payment in full of the Notes and all other amounts
payable hereunder, and upon receipt by the Agent (which shall promptly notify
the Banks) of a written request therefor from the Company, the Agent will notify
the Company of any amounts then due under this subsection and, upon receipt of
payment of such amounts, will deliver to the Company an instrument releasing the
Company from any further liability under this subsection.
2.18 PRO RATA TREATMENT AND PAYMENTS. (a) Except in the case
of borrowings on the Closing Date (which shall be made in accordance with the
procedures specified in subsections 2.7(a) and (c)), each borrowing of Revolving
Credit Loans by the Company from the Banks, each payment by the Company on
account of any fee (other than the fees described in subsections 2.8(b) and (c))
and any reduction of the Revolving Credit Commitments of the Banks shall be made
PRO RATA according to their respective Revolving Credit Commitment Percentages.
Each payment (including each prepayment) by the Company on account of principal
of and interest on the Term Loans or Revolving Credit Loans (other than as set
forth in subsections 2.10(c), 2.15, 2.16, 2.17 and 2.20) shall be made PRO RATA
according to the respective outstanding principal amounts of such Loans held by
each Bank, except that after all of the Loans shall have become due and payable
(whether at the stated maturity, by acceleration or otherwise) each payment
shall be made PRO RATA according to the respective outstanding principal amounts
of the Loans held by each Bank. All payments (including prepayments) by the
Company on account of principal, interest and fees shall be made without set-off
or counterclaim and shall be made prior to 12:00 Noon, New York City time, on
the due date thereof to the Agent, for the account of the Banks, or the Agent,
as the case may be, at the Agent's office located at 000 Xxxx Xxxxxx, Xxx Xxxx,
00
00
Xxx Xxxx 00000 in Dollars and in immediately available funds. The Agent shall
promptly distribute such payments for the account of the Banks to the Banks upon
receipt in like funds as received. If any payment hereunder (other than payments
on the Eurodollar Loans) becomes due and payable on a day other than a Business
Day, the due date thereof shall be extended to the next succeeding Business Day,
and, with respect to payments of principal, interest thereon shall be payable at
the then applicable rate during such extension. If any payment on a Eurodollar
Loan becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day unless the result
of such extension would be to extend such payment into another calendar month,
in which event such payment shall be made on the immediately preceding Business
Day.
(b) Unless the Agent shall have been notified in writing by
any Bank prior to any Borrowing Date that such Bank will not make the amount
which would constitute its Term Loan Percentage or Revolving Credit Commitment
Percentage, as the case may be, of the borrowing on such date available to the
Agent (other than amounts which the Continuing Banks shall on the Closing Date
continue to hold outstanding in accordance with the procedures specified in
subsections 2.7(a) and (c)), the Agent may assume that such Bank has made such
amount available to the Agent on such Date, and the Agent may, in reliance upon
such assumption, make available for the benefit of the Company a corresponding
amount. If such amount is made available to the Agent by such Bank on a date
after the Closing Date or such Borrowing Date, such Bank shall pay to the Agent
on demand an amount equal to the product of (i) the daily average Federal funds
rate during such period as quoted by the Agent, times (ii) the amount of such
Bank's Term Loan Percentage or Revolving Credit Commitment Percentage, as the
case may be, of such borrowing, times (iii) a fraction the numerator of which is
the number of days that elapse from and including the Closing Date or such
Borrowing Date to the date on which such Bank's Term Loan Percentage or
Revolving Credit Commitment Percentage, as the case may be, of such borrowing
shall have become immediately available to the Agent and the denominator of
which is 360. A certificate of the Agent submitted to any Bank with respect to
any amounts owing under this subsection shall be conclusive, absent manifest
error. If such Bank's Term Loan Percentage or Revolving Credit Commitment
Percentage, as the case may be, of such borrowing is not in fact made available
to the Agent by such Bank within three Business Days of the Closing Date or such
Borrowing Date, the Agent shall be entitled to recover such amount with interest
thereon at the rate per annum applicable to ABR Loans hereunder, on demand, from
the Company, without prejudice to any rights which the Company or the Agent may
have against such Bank hereunder.
(c) The failure of any Bank to make the Loans to be made by it
on the Closing Date or any Borrowing Date shall not relieve any other Bank of
its obligation, if any, hereunder to make its Loans on the Closing Date or such
Borrowing Date, but no Bank shall be responsible for the failure of any other
Bank to make the Loans to be made by such other Bank on the Closing Date or such
Borrowing Date.
2.19 COMPUTATION OF INTEREST AND FEES. (a) Interest in respect
of ABR Loans the interest rate applicable to which is based upon Chase's
reference rate and all fees shall be calculated on the basis of a 365 or 366-day
year, as the case may be, for the actual days elapsed.
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Interest in respect of Eurodollar Loans shall be calculated on the basis of a
360-day year for the actual days elapsed. The Agent shall as soon as practicable
notify the Company of each determination of a LIBO Rate. Any change in the
interest rate on the Notes resulting from a change in the Alternate Base Rate or
the Applicable Margin with respect to ABR Loans shall become effective as of the
opening of business on the day on which such change in the Alternate Base Rate
shall become effective or such Applicable Margin changes as provided herein. The
Applicable Margin with respect to Eurodollar Loans that is in effect on the
first day of any Interest Period shall remain in effect throughout such Interest
Period. The Agent shall as soon as practicable notify the Company of the
effective date and the amount of each such change.
(b) Each determination of an interest rate by the Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Company and the Banks absent manifest error.
2.20 TAXES. (a) All payments made by the Company under this
Agreement and any Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Agent or any Bank as a result of a
present or former connection between the Agent or such Bank and the jurisdiction
of the Governmental Authority imposing such tax or any political subdivision or
taxing authority thereof or therein (other than any such connection arising
solely from the Agent or such Bank having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement or any
Note). If any such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions or withholdings ("NON-EXCLUDED TAXES") are required to be withheld
from any amounts payable to the Agent or any Bank hereunder or under any Note,
the amounts so payable to the Agent or such Bank shall be increased to the
extent necessary to yield to the Agent or such Bank (after payment of all
Non-Excluded Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement; PROVIDED, HOWEVER, that the
Company shall not be required to increase any such amounts payable to any Bank
that is not organized under the laws of the United States of America or a state
thereof if such Bank fails to comply with the requirements of paragraph (b) of
this subsection. Whenever any Non-Excluded Taxes are payable by the Company, as
promptly as possible thereafter the Company shall send to the Agent for its own
account or for the account of such Bank, as the case may be, a certified copy of
an original official receipt received by the Company showing payment thereof. If
the Company fails to pay any Non-Excluded Taxes when due to the appropriate
taxing authority or fails to remit to the Agent the required receipts or other
required documentary evidence, the Company shall indemnify the Agent and the
Banks for any incremental taxes, interest or penalties that may become payable
by the Agent or any Bank as a result of any such failure. The agreements in this
subsection shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
(b) Each Bank that is not incorporated under the laws of the
United States of America or a state thereof shall:
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(i) in the case of a Bank that is a "bank" under Section
881(c)(3)(A) of the Code:
(A) deliver to the Company and the Agent (x) two duly
completed copies of United States Internal Revenue Service
Form 1001 or 4224, or successor applicable form, as the case
may be, and (y) an Internal Revenue Service Form W-8 or W-9,
or successor applicable form, as the case may be;
(B) deliver to the Company and the Agent two further copies of
any such form or certification on or before the date that any
such form or certification expires or becomes obsolete and
after the occurrence of any event requiring a change in the
most recent form previously delivered by it to the Company;
and
(C) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by
the Company or the Agent; or
(ii) in the case of a Bank that is not a "bank" under Section
881(c)(3)(A) of the Code:
(A) deliver to the Company and the Agent (x) a statement under
penalties of perjury that such Lender (I) is not a "bank"
under Section 881(c)(3)(A) of the Code, is not subject to
regulatory or other legal requirements as a bank in any
jurisdiction, and has not been treated as a bank for purposes
of any tax, securities law or other filing or submission made
to any Governmental Authority, any application made to a
rating agency or qualification for any exemption from tax,
securities law or other legal requirements (II) is not a
10-percent shareholder within the meaning of Section
881(c)(3)(B) of the Code and (III) is not a controlled foreign
corporation receiving interest from a related person within
the meaning of Section 881(c)(3)(C) of the Code and (y) an
Internal Revenue Service Form W-8;
(B) deliver to the Company and the Agent a further copy of
said Form W-8, or any successor applicable form or other
manner of certification on or before the date that any such
Form W-8 expires or becomes obsolete or after the occurrence
of any event requiring a change in the most recent form
previously delivered by such Bank; and
(C) obtain such extensions of time for filing and complete
such forms or certifications as may be reasonably requested by
the Company or the Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Bank from duly
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completing and delivering any such form with respect to it and such Bank so
advises the Company and the Agent. Such Bank shall certify (i) in the case of a
Form 1001 or 4224, that it is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes and
(ii) in the case of a Form W-8 or W-9 delivered pursuant to subsection
2.20(b)(i), that it is entitled to an exemption from United States backup
withholding tax. Each Person that shall become a Bank or a Participant pursuant
to subsection 9.6 shall, upon the effectiveness of the related transfer, be
required to provide all of the forms and statements required pursuant to this
subsection; PROVIDED that in the case of a Participant such Participant shall
furnish all such required forms and statements to the Bank from which the
related participation shall have been purchased.
SECTION 3 REPRESENTATIONS AND WARRANTIES.
-------------------------------
To induce the Banks to enter into this Agreement and to make
the Loans, the Company hereby represents and warrants to each Bank and the Agent
that:
3.1 FINANCIAL CONDITION. (a) The audited consolidated balance
sheet of the Company and its consolidated Subsidiaries at March 31, 1997 and the
related audited consolidated statement of net earnings and changes in financial
position for the period ended on such date, reported on by Xxxxxx Xxxxxxxx LLP,
copies of which have heretofore been furnished to each Bank, are complete and
correct in all material respects and present fairly the consolidated financial
condition of the Company and its consolidated Subsidiaries as at such date, and
the consolidated results of their operations and changes in financial position
for the fiscal year then ended. All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP.
As of the date of such financial statements, neither the Company nor any of its
Subsidiaries had any material obligation, contingent or otherwise, which was not
reflected in the foregoing statements or in the notes thereto and which could
have a material adverse effect on the business operations, property or financial
or other condition of the Company and its Subsidiaries taken as a whole except
as disclosed in this Agreement.
(b) The unaudited consolidated balance sheet and statement of
net earnings of the Company and its consolidated Subsidiaries for the nine-month
period ended on December 31, 1997, copies of which have heretofore been
furnished to each Bank, are complete and correct in all material respects and
present fairly the consolidated financial condition of the Company and its
consolidated Subsidiaries as at such date, and the consolidated results of its
operations for the nine-month period then ended, subject to normal year-end
audit adjustments. All such financial statements, including the related
schedules and notes thereto, have been prepared in accordance with GAAP.
(c) Since December 31, 1997 there has been no change and no
development or event involving a prospective change which has had or could
reasonably be expected to have a Material Adverse Effect, and neither the
Company nor any of its Subsidiaries has, since December 31, 1997, incurred any
material obligation, contingent or otherwise, which has had or could reasonably
be expected to have a Material Adverse Effect.
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(d) Except as permitted pursuant to subsection 6.5 of this
Agreement or subsection 6.5 of the Existing Credit Agreement, since December 31,
1997 no dividends or other distributions have been declared, paid or made upon
any of the Capital Stock of the Company nor has any of the Capital Stock of the
Company been redeemed, retired, purchased or otherwise acquired by the Company.
3.2 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each Credit
Party (a) is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, (b) has the corporate or
partnership power and authority and the legal right to own and operate its
property, to lease the property it operates and to conduct the business in which
it is currently engaged, (c) is duly qualified as a foreign corporation or
foreign partnership and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct of its
business requires such qualification except where the failure to be so qualified
would not have a Material Adverse Effect, and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith
would not, in the aggregate, have a Material Adverse Effect.
3.3 CORPORATE POWER; AUTHORIZATION. Each Credit Party has the
corporate power and authority and the legal right to make, deliver and perform
the Credit Documents to which it is a party, and the Company has the corporate
power and authority and legal right to borrow hereunder. Each Credit Party has
taken all necessary corporate action to authorize the execution, delivery and
performance of the Credit Documents to which it is a party, and the Company has
taken all necessary corporate action to authorize the borrowings hereunder.
3.4 ENFORCEABLE OBLIGATIONS. This Agreement and the Company
Pledge Agreement have been duly executed and delivered by the Company and each
other Credit Document has been duly executed and delivered by each Credit Party
party thereto. This Agreement and each Credit Document constitutes a legal,
valid and binding obligation of each Credit Party which is a party thereto, and
this Agreement and each Credit Document is enforceable against such Credit Party
in accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
3.5 NO LEGAL BAR. The execution, delivery and performance of
the Credit Documents, the borrowings hereunder and the use of the proceeds
thereof will not violate any Requirement of Law or any Contractual Obligation of
the Company or any of its Restricted Subsidiaries, except for violations which
would not, in the aggregate, have a Material Adverse Effect, and will not result
in the creation or imposition of any Lien (other than pursuant to the Security
Documents) on any of its or their respective properties or assets pursuant to
any Requirement of Law applicable to it or them, as the case may be, or any of
its or their Contractual Obligations.
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3.6 DELIVERY OF CERTIFICATES OF INCORPORATION AND BY-LAWS. The
Company has delivered to the Agent, for itself and for each Bank, a complete
copy of the certificate of incorporation and by-laws of Media, the Company and
each Restricted Subsidiary.
3.7 DISCLOSURE. No representation or warranty made by the
Company in any Credit Document or in any document delivered in connection
therewith, and not corrected by a subsequent written disclosure delivered to the
Agent and the Banks prior to the date hereof, contains any untrue statement of a
material fact or omits to state any material fact necessary to make the
statements herein or therein not misleading. Except as disclosed elsewhere in
this Agreement, or in any Schedule or Exhibit specifically referred to herein,
there is no fact known to the Company (other than general economic conditions,
which conditions are commonly known and affect businesses generally) which
materially adversely affects, or which would in the future, in the reasonable
judgment of the Company, materially adversely affect, the business, assets,
properties or financial condition of the Company and its Restricted Subsidiaries
taken as a whole.
3.8 INVESTMENT COMPANY ACT. No Credit Party is an "investment
company" or a company "controlled" by an "investment company" (as each of the
quoted terms is defined or used in the Investment Company Act of 1940, as
amended).
3.9 FEDERAL REGULATION. No part of the proceeds of any of the
Loans will be used for any purpose which violates, or which would be
inconsistent with, the provisions of Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
3.10 NO DEFAULT. Neither the Company nor any of its Restricted
Subsidiaries is in default under or with respect to any Contractual Obligation,
which default could have a Material Adverse Effect. Neither the Company nor any
of its Restricted Subsidiaries is in default in any respect which could have a
Material Adverse Effect under any order, award or decree of any Governmental
Authority or arbitrator binding upon or affecting it or them or by which any of
its or their properties or assets may be bound or affected. No Default or Event
of Default has occurred and is continuing.
3.11 NO BURDENSOME RESTRICTIONS. Neither the Company nor any
of its Restricted Subsidiaries is a party to or is bound by any Contractual
Obligation or subject to any Requirement of Law or other corporate restriction
having, or reasonably likely to have, a Material Adverse Effect, except as
disclosed in this Agreement.
3.12 TAXES. Each of the Company and its Restricted
Subsidiaries has filed or caused to be filed all Federal, state, local and
foreign tax returns which, to the knowledge of the Company, are required to be
filed, except where the failure to file would not have a Material Adverse
Effect, and has paid or caused to be paid all taxes shown as due on such returns
or on any assessment received by it or any real or personal property taxes,
other than (a) any taxes or assessments, the validity of which the Company or
the relevant Restricted Subsidiary is contesting in good faith by appropriate
proceedings and with respect to which the Company or such Restricted Subsidiary
shall, to the extent required by GAAP, have set aside on its books adequate
reserves and (b) taxes, assessments and returns relating thereto which,
individually or in the
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aggregate, are not material to the Company and its Restricted Subsidiaries taken
as a whole. The Company has delivered a complete and correct copy of the Tax
Allocation Agreement dated as of September 1, 1994 between the Company and Media
including all amendments thereto.
3.13 SUBSIDIARIES. The Subsidiaries of the Company listed on
Schedule II will constitute all of the Restricted Subsidiaries and Unrestricted
Subsidiaries, respectively, of the Company as of the Closing Date.
3.14 LABOR MATTERS. There are no strikes or other labor
disputes against the Company or any of its Restricted Subsidiaries pending or,
to the knowledge of the Company, threatened that (individually or in the
aggregate) could reasonably be expected to have a Material Adverse Effect. Hours
worked by and payment made to employees of the Company and its Restricted
Subsidiaries have not been in violation of the Fair Labor Standards Act or any
other applicable Requirement of Law dealing with such matters that (individually
or in the aggregate) could reasonably be expected to have a Material Adverse
Effect. All payments due from the Company or any of its Restricted Subsidiaries
on account of employee health and welfare insurance that (individually or in the
aggregate) could reasonably be expected to have a Material Adverse Effect if not
paid have been paid or accrued as a liability on the books of the Company or the
relevant Restricted Subsidiary.
3.15 ERISA. No Reportable Event has occurred since June 1,
1983 with respect to any Plan, and each Plan has complied and has been
administered in all material respects with applicable provisions of ERISA and
the Code. The present value of all benefits under each Single Employer Plan
maintained by the Company or any Commonly Controlled Entity (based on those
assumptions used to fund such Plan) did not, as of the last annual valuation
date prior to the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such benefits. Neither
the Company nor any Commonly Controlled Entity (a) has during the preceding
six-year period had a complete or partial withdrawal from any Multiemployer Plan
or (b) maintains any Multiemployer Plan. The present value (determined using
actuarial and other assumptions which are reasonable in respect of the benefits
provided and the employers participating) of the liability of the Company and
each Commonly Controlled Entity for post retirement benefits to be provided to
their current and former employees under Plans which are welfare benefit plans
(as defined in Section 3(1) of ERISA) does not in the aggregate, exceed the
assets under all such Plans allocable to such benefits.
3.16 NO LITIGATION. Except as listed on Schedule III, no
litigation, investigation or proceedings of or before any Governmental Authority
is pending or, to the best of the Company's knowledge, threatened against any
Credit Party or any of its Subsidiaries (a) with respect to any Credit Document,
the Loans or the use of proceeds thereof and the other transactions contemplated
hereby or (b) which has any reasonable likelihood of having a Material Adverse
Effect.
3.17 OWNERSHIP OF PROPERTY, LIENS. Each of the Company and its
Restricted Subsidiaries has good and marketable title to, or valid and
subsisting leasehold interests in, all its respective real property, and good
title to, or valid and subsisting leasehold interests in, all its
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respective other property, and none of such property is subject to any Lien,
except as permitted hereunder or as described in Schedule VI.
3.18 SECURITY DOCUMENTS. (a) The provisions of the Pledge
Agreements are effective to create in favor of the Agent, for the ratable
benefit of the Banks, a legal, valid and enforceable security interest in the
pledged securities described therein and proceeds thereof and, assuming the
Agent has maintained continuous possession of the pledged securities, each of
the Pledge Agreements constitutes a perfected first lien on, and security
interest in, all right, title and interest of the pledgor party therein in the
pledged securities described therein.
(b) The provisions of the Mortgage are effective to grant to
the Agent, for the ratable benefit of the Banks, a legal, valid and enforceable
mortgage lien on all of the right, title and interest of SOM Publishing, Inc. in
the mortgaged property described therein. Such Mortgage constitutes a perfected
first lien on, and security interest in, such mortgaged property, subject to the
encumbrances and exceptions to title set forth therein and except as noted in
the title policy delivered to the Agent in connection with the delivery of the
Mortgage to the Agent and stated to be acceptable to it.
(c) The provisions of the Security Agreement are effective to
create in favor of the Agent a legal, valid and enforceable security interest in
all right, title and interest of the Company and each of its Restricted
Subsidiaries in the Collateral described therein, and the financing statements
referred to in Schedule IV having been filed and recorded in the offices in the
jurisdictions listed in Schedule IV under the names set forth in Schedule IV,
and the Security Agreement having been filed and recorded in the United States
Patent and Trademark Office, the Agent, for the ratable benefit of the Banks,
has a fully perfected security interest in all right, title and interest of the
Company and each of its Restricted Subsidiaries in such Collateral superior in
right to any Liens which the Company, any of its Subsidiaries or any third
Person may have against such Collateral or interests therein, except existing
Liens described in Schedule VI, Liens of the type described in subsection 6.2(c)
and given priority by operation of law pursuant to Section 9-310 of the Uniform
Commercial Code, rights of buyers in the ordinary course of business which take
free from the Lien of the Security Agreement pursuant to Section 9-307 of the
Uniform Commercial Code, Liens of the type described in subsection 6.2(d),
Liens, on property other than real property, which can be perfected in any
manner other than solely through (i) the filing of a financing statement under
the Uniform Commercial Code, (ii) the taking of possession of such property or
(iii) a filing in the United States Patent and Trademark Office, and Liens on
any tangible personal property which may constitute Collateral or proceeds
thereof which is located in any jurisdiction other than those listed on Schedule
IV.
3.19 COPYRIGHTS, PERMITS, TRADEMARKS, LICENSES AND LEASES. The
Company and each of its Restricted Subsidiaries (a) owns, or is licensed or
otherwise has the right to use, all of the trademarks, trade names, copyrights,
licenses, rights and subscription lists reasonably necessary for the conduct of
its business, including, without limitation, publishing its publications, which
ownership, license or right of the Company or such Restricted Subsidiary is free
and clear of Liens (except Liens in favor of the Agent for the ratable benefit
of the Banks pursuant to the Security Documents), (b) has obtained assignments
of all leases and other rights of whatever
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nature necessary for the present and, as of the Closing Date, planned future
conduct of such business, without any conflict with the rights of others, and
(c) has received all assignments, bills of sales and other documents, and duly
effected all filings, recordings and other action, necessary to establish,
protect and perfect the Company's or such Restricted Subsidiary's right, title
and interest in and to all of the property referred to in clauses (a) and (b)
immediately preceding, except to the extent that the failure to do so could not
be reasonably expected to have a Material Adverse Effect or as may be described
on Schedule VII.
3.20 GOVERNMENTAL AND OTHER CONSENTS. No Credit Party is
required to obtain any order, consent, approval or authorization of, or required
to make any declaration or filing with, any Governmental Authority or any other
Person in connection with the execution and delivery of this Agreement and the
issuance and delivery of the Notes pursuant hereto, or in connection with the
execution and delivery of the Credit Documents or the granting of the Liens
pursuant to the Security Documents, except (a) in order to perfect the Banks'
security interests in the Collateral, the filings in the offices listed on
Schedule IV and in the United States Patent and Trademark Office, (b) in order
to perfect the Banks' Lien created by the Mortgage, the recording of the
Mortgage in the appropriate recording office and (c) the consents,
authorizations and filings required by state anti-takeover statutes, except
where the failure to obtain the same would not have a Material Adverse Effect.
3.21 HOLDING COMPANY ACT. The Company is not a "Holding
Company" or a "Subsidiary Company" of a "Holding Company", or an "Affiliate" of
a "Holding Company", as such terms are defined in the Public Utility Holding
Company Act of 1935.
3.22 SECURITIES ACT, ETC. Neither the registration of any
security under the Securities Act of 1933 or the securities laws of any state,
nor the qualification of an indenture in respect thereof under the Trust
Indenture Act of 1939, is required in connection with any Loan hereunder or the
issuance of the Notes pursuant hereto.
3.23 ACCURACY OF INFORMATION. To the best of the Company's
knowledge, all written information, reports and other papers and data with
respect to the Company (other than projections and estimates) furnished to the
Banks by or on behalf of the Company were, at the time the same were so
furnished, correct in all material respects, or have been subsequently
supplemented by other information, reports or other papers or data, to the
extent necessary to make them correct in all material respects. All projections
and estimates with respect to the Company so furnished by or on behalf of the
Company, as supplemented, were prepared and presented in good faith by the
Company, it being recognized by the Banks that such projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered by any such projections may differ from the projected
results. No fact is known to the Company which materially and adversely affects
or in the future may (so far as the Company can reasonably foresee) materially
and adversely affect the business, assets or liabilities, financial condition,
results of operations or business prospects of the Company which is not publicly
available or which has not been set forth in the financial statements referred
to in subsection 3.1 or in such information, reports, papers and data or
otherwise disclosed in writing to the Banks prior to the date hereof. No
document furnished or statement made in writing to the Banks by or on
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behalf of the Company in connection with the negotiation, preparation or
execution of this Agreement contains any untrue statement of a material fact, or
omits to state any such material fact necessary in order to make the statements
contained therein not misleading, in any case which has not been corrected,
supplemented or remedied by subsequent documents furnished or statements made in
writing to the Banks.
3.24 INSURANCE. Schedule V lists all insurance maintained by
the Company and its Restricted Subsidiaries as of the date hereof.
3.25 STOCK OWNERSHIP. All the issued and outstanding capital
stock of the Company is owned of record and beneficially by Media, free and
clear of Liens, other than those created or permitted by the Media Pledge
Agreement. As of the date hereof, BV, Xxxxxxxxx Publishing, Inc. and Xxxxxxxxx
collectively own, directly or indirectly, free and clear of Liens (other than
Media Permitted Liens) on a fully diluted basis, shares of Capital Stock of
Media having at least 75% of the aggregate voting power of the shares of Capital
Stock of Media.
3.26 ENVIRONMENTAL MATTERS. Each of the representations and
warranties set forth in subsection 3.26(a) through (e) is true and correct with
respect to each parcel of real property owned or operated by the Company or any
of its Restricted Subsidiaries (the "PROPERTIES"), except to the extent that the
facts and circumstances giving rise to any such failure to be so true and
correct would not have any reasonable likelihood of having a Material Adverse
Effect:
(a) The Properties do not contain, and have not previously
contained, any Hazardous Materials in concentrations which violate Environmental
Laws.
(b) The Properties are in compliance with all Environmental
Laws, including, without limitation, all applicable Federal, state and local
standards and requirements regarding the generation, treatment, storage,
handling, use or disposal of Hazardous Materials at such properties and there is
no Hazardous Materials contamination which could materially interfere with the
continued operation of such Properties or materially impair the fair saleable
value thereof.
(c) Neither the Company nor any of its Restricted Subsidiaries
has received any notice of violation or advisory action by any Governmental
Authority regarding environmental control matters or permit compliance with
regard to the Properties nor is the Company aware that any Governmental
Authority is contemplating delivering to the Company or any of its Restricted
Subsidiaries any such notice.
(d) Hazardous Materials have not been transferred from the
Properties to any other location.
(e) There are no governmental administrative actions or
judicial proceedings pending or contemplated under any Environmental Laws to
which the Company or any of its Restricted Subsidiaries is or will be named as a
party with respect to the Properties.
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3.27 YEAR 2000. Any reprogramming required to permit the
proper functioning (but only to the extent that such proper functioning would
otherwise be impaired by the occurrence of the year 2000), in and following the
year 2000, of the Company's and its Restricted Subsidiaries' computer systems
and the testing of all such systems as so programmed, will be completed by July
1, 1999 except to the extent that failure to do so would not have any reasonable
likelihood of having a Material Adverse Effect. The cost to the Borrower and its
Restricted Subsidiaries of such reprogramming and testing and of the reasonably
foreseeable consequences of year 2000 to the Borrower and its Restricted
Subsidiaries (including, without limitation, reprogramming errors and the
failure of others' systems or equipment) will not result in a Material Adverse
Effect.
3.28 SOLVENCY. On the Closing Date and on each date on which a
Loan will be made hereunder (after giving effect to the transactions being
consummated on such day) the Company will be Solvent.
SECTION 4 CONDITIONS.
4.1 CONDITIONS TO EFFECTIVENESS. The effectiveness of this
Agreement is subject to the satisfaction of the following conditions precedent,
and, upon such satisfaction, the Agent is authorized to confirm such
effectiveness to the Company:
(a) EXECUTION OF AGREEMENT. The Agent shall have received for
each party hereto a counterpart of this Agreement, executed and
delivered by a duly authorized officer of each party hereto.
(b) INTEREST ON EXISTING LOANS. The Agent shall have received,
for the account of each Existing Bank, immediately available funds in
an amount sufficient to pay in full all interest on the Loans (as
defined in the Existing Credit Agreement) and commitment fees payable
under the Existing Credit Agreement, in each case as accrued through
the Closing Date.
(c) NOTES. The Agent shall have received, for the account of
each Bank which is entitled thereto, a Term Loan Note and a Revolving
Credit Note, conforming to the requirements hereof and duly executed by
the Company.
(d) LEGAL OPINION OF COUNSEL TO THE COMPANY. The Agent shall
have received, with a counterpart for each Bank, (i) an opinion of
Xxxxxxx Xxxx & Xxxxxxxxx, counsel to the Company, dated the Closing
Date and addressed to the Banks, substantially in the form attached as
Exhibit C-1 and (ii) an opinion of Xxxxxxx Xxxxxxxxxx, counsel to the
Company, dated the Closing Date and addressed to the Banks,
substantially in the form attached as Exhibit C-2.
(e) LEGAL OPINION OF FLORIDA COUNSEL TO THE COMPANY. The Agent
shall have received, with a counterpart for each Bank, an opinion of
Steel Xxxxxx & Xxxxx, Florida
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counsel to the Company, dated the Closing Date and addressed to the
Company, the Agent and the Banks, substantially in the form attached as
Exhibit D.
(f) AUTHORIZING ACTIONS. All corporate and other proceedings
of the Company and the other Credit Parties in connection with the
transactions contemplated by this Agreement, the Notes and the other
Credit Documents, and all documents and instruments incident thereto,
shall be satisfactory in form and substance to the Agent and its
counsel; and the Agent and its counsel shall have received, with a copy
for each Bank, such counterpart originals or certified or other copies
of all such documents and instruments and of all records of corporate
and partnership proceedings in connection with such transactions as the
Agent or its counsel may reasonably request.
(g) INCUMBENCY CERTIFICATES. The Agent shall have received,
with a counterpart for each Bank, certificates of an appropriate
representative of the Company and each of the other Credit Parties,
dated the Closing Date, as to the incumbency and signatures of the
officers of the Company and the Credit Parties executing on their
respective behalf this Agreement, the Notes and the Credit Documents to
which each is a party and any certificate or other document to be
delivered pursuant hereto or thereto, together with evidence of the
incumbency and signature of such appropriate representative.
(h) FILINGS, REGISTRATIONS AND RECORDINGS. Upon filing of (i)
financing statements on form UCC-1 in the jurisdictions listed on
Schedule IV, and (ii) the documents required to be filed, if any, in
the United States Patent and Trademark Office, all filings of any
documents (including, without limitation, any Uniform Commercial Code
financing statements) required to be filed, registered or recorded in
order to create, in favor of the Agent, for the ratable benefit of the
Banks, a perfected first Lien on the collateral described in the
Security Documents shall have been properly filed, registered or
recorded in each office in each jurisdiction in which such filings,
registrations and recordations are required, and any other action
necessary to perfect such a Lien shall have been taken; and the Agent
shall have received, with a counterpart for each Bank, evidence
satisfactory to it that such filings, registrations and recordings have
been made, that all such other actions shall have been completed and
that all necessary filing, subscription and inscription fees and all
recording and other similar fees, and all taxes and other expenses
related to such filings, registrations and recordings have been paid in
full.
(i) LIEN SEARCHES. The Agent shall have received, with a copy
for each Bank, the results of a recent search, by a Person satisfactory
to the Agent, of the Uniform Commercial Code filings and tax and
judgment liens which may have been filed in such jurisdictions as the
Agent may request with respect to personal property of the Company and
certain of its Subsidiaries.
(j) PLEDGE AGREEMENTS. The Agent shall have received, with a
counterpart for each Bank, the (i) Media Pledge Agreement, executed and
delivered by a duly authorized officer of Media, and an Acknowledgment
and Consent executed and delivered by a duly authorized officer of the
issuer of the Pledged Stock (as defined in the Media Pledge
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Agreement) covered by the Media Pledge Agreement, (ii) the Company
Pledge Agreement, executed and delivered by a duly authorized officer
of the Company, and an Acknowledgment and Consent executed and
delivered by a duly authorized officer of each issuer of the Pledge
Stock (as defined in the Company Pledge Agreement) covered by the
Company Pledge Agreement and (iii) the Retail Marketing Pledge
Agreement, executed and delivered by a duly authorized officer of
Distribution Services, Inc., and an Acknowledgment and Consent executed
and delivered by a duly authorized officer of the issuer of the Pledge
Stock (as defined in the Retail Marketing Pledge Agreement) covered by
the Retail Marketing Pledge Agreement.
(k) MORTGAGE SUPPLEMENT AND TITLE ENDORSEMENT. The Agent shall
have received, (i) with a counterpart for each Bank, the Mortgage
Supplement, executed and delivered by a duly authorized officer of SOM
Publishing, Inc.; (ii) an endorsement to the existing title insurance
policies updating the effective date and amending the description of
the insured Mortgage to include the Mortgage Supplement; and (iii) a
no-lien affidavit executed by the president of SOM Publishing, Inc. in
form satisfactory to the title company.
(l) The Company shall have complied with subsection 6.3(d)(ii)
of the Existing Credit Agreement with respect to FrontLine Marketing,
Inc., and American Media Marketing, Inc.
(m) CLOSING CERTIFICATES. The Agent shall have received, with
a counterpart for each Bank, a Closing Certificate of Media, the
Company and each other Credit Party, dated the Closing Date,
substantially in the form of Exhibit E-1, E-2 or E-3, as the case may
be, with appropriate insertions, executed by the President, any Vice
President or any Vice Chairman, the Secretary or any Assistant
Secretary or the Treasurer of the Company, Media or such other Credit
Party and the statements set forth therein shall be true and correct.
(n) FEES. The Agent shall have received the fees payable on
the Closing Date in accordance with subsection 2.8.
(o) NO VIOLATION. The consummation of the transactions
contemplated hereby shall not involve any Bank in a violation of any
Requirement of Law.
(p) CONSENTS, LICENSES, APPROVALS, ETC. The Agent shall have
received, with copies for each Bank, copies of all consents, licenses
and approvals, if any, required in connection with the execution,
delivery and performance by each Credit Party and the validity and
enforceability against each Credit Party of the Credit Documents to
which it is a party, and such consents, licenses and approvals shall be
in full force and effect, except as are disclosed to the Agent in
writing on or prior to the Closing Date and are acceptable to the
Required Banks.
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(q) INSURANCE. The Agent shall have received, with a copy for
each Bank, evidence, in form and substance satisfactory to the Agent,
that the Company has obtained all the insurance policies required
pursuant to subsection 5.3.
(r) ADDITIONAL MATTERS. All corporate and other proceedings
and all other documents and legal matters and tax matters in connection
with the transactions contemplated by this Agreement, the Notes and the
other Credit Documents shall be reasonably satisfactory in form and
substance to the Banks.
4.2 CONDITIONS TO ALL LOANS. The obligation of any Bank to
make its Term Loan or any Revolving Credit Loan (including its initial Revolving
Credit Loan) to be made by it hereunder is subject to the satisfaction of the
following conditions precedent:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties made by each Credit Party in each Credit
Document to which it is a party shall be correct in all material
respects on and as of the Borrowing Date for such Loan as if made on
and as of such date and after giving effect to such Loan (unless stated
to relate to a specific earlier date (including by reference to "the
date hereof"), in which case, such representations and warranties shall
be true and correct in all material respects as of such earlier date).
(b) NO EXISTING DEFAULT. No Default or Event of Default shall
have occurred and be continuing hereunder on the Borrowing Date with
respect to such Loan or after giving effect to the Loan to be made on
such Borrowing Date.
Each borrowing by the Company hereunder shall constitute a
representation and warranty by the Company hereunder as of the date of each such
borrowing that the conditions in clauses (a) and (b) of this subsection have
been satisfied.
SECTION 5 AFFIRMATIVE COVENANTS.
The Company hereby agrees that, so long as any of the
Commitments remains in effect, any Note remains outstanding and unpaid, or any
other amount is owing to any Bank or the Agent hereunder:
5.1 FINANCIAL STATEMENTS, ETC. The Company shall furnish or
cause to be furnished to each Bank:
(a) As soon as reasonably possible, and in any event within 90
days after the end of each fiscal year of the Company, (i) the
consolidated balance sheet of the Company and its Restricted
Subsidiaries as at the end of such year, (ii) the related consolidated
statements of income and retained earnings of the Company and its
Restricted Subsidiaries for such year and (iii) the consolidated
statement of cash flows of the Company and its Restricted Subsidiaries
for such year, setting forth in each case in comparative form with
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respect to such financial statements figures for the prior fiscal year,
all in reasonable detail and certified by Xxxxxx Xxxxxxxx LLP or other
independent public accountants selected by the Company and reasonably
satisfactory to the Agent, which opinion shall be in a form generally
recognized as unqualified and shall state that such financial
statements have been prepared in accordance with GAAP and that the
audit by such accountants in connection with such financial statements
has been made in accordance with GAAP; PROVIDED, HOWEVER, that delivery
of copies of the Annual Report on Form 10-K of the Company for such
fiscal year filed with the Securities and Exchange Commission shall be
deemed to satisfy the requirements of this clause (a);
(b) As soon as reasonably possible, and in any event within 60
days after the end of each fiscal quarter in each fiscal year of the
Company, (i) the unaudited consolidated balance sheet of the Company
and its Restricted Subsidiaries as at the end of such fiscal quarter,
(ii) the unaudited consolidated statements of income and retained
earnings of (A) the Company and its Restricted Subsidiaries, (B)
National Enquirer, Inc., (C) Weekly World News, Inc., (D) the weekly
magazine known as STAR, (E) SOM Publishing, Inc. (showing separately
the financial statements for weekly magazines known as Soap Opera News
and Soap Opera Magazine), (F) Country Weekly, Inc. and (G)] each
Subsidiary formed pursuant to the provisions of subsection 6.3(d) or
(e) for such fiscal quarter and for the period from the beginning of
the then current fiscal year to the end of such fiscal quarter and
(iii) the consolidated statement of cash flows of the Company and its
Restricted Subsidiaries for such fiscal quarter and for the period from
the beginning of the then current fiscal year to the end of such fiscal
quarter, setting forth, in each case, figures from the Budget for the
then current fiscal year and figures (in comparative form) for the
corresponding fiscal periods of the prior fiscal year, all in
reasonable detail and signed by the Chief Financial Officer of the
Company;
(c) Together with the financial statements delivered pursuant
to subparagraph (a) above, a statement signed by the accountants who
have reported on the same to the effect that in connection with their
examination of such financial statements they have reviewed the
provisions of this Agreement and have no knowledge of any event or
condition which constitutes a Default or Event of Default or, if they
have such knowledge, specifying the nature and period of existence
thereof; PROVIDED, HOWEVER, that in issuing such statement, such
independent accountants shall not be required to go beyond normal
auditing procedures conducted in connection with their opinion referred
to in subparagraph (a) above;
(d) Together with the financial statements delivered pursuant
to subparagraphs (a) and (b) above, a statement signed by the Chief
Financial Officer of the Company to the effect that he has reviewed the
terms of this Agreement and has no knowledge of any event or condition
which constitutes a Default or Event of Default or, if he has such
knowledge, specifying the nature and period of existence thereof and
setting forth details showing compliance with the requirements
contained in subsections 6.1, 6.3, 6.4, 6.5, 6.6, 6.8, 6.9, 6.13, 6.14
and 6.15 and in Section 7 (including, without limitation, a
reconciliation between GAAP utilized in preparing said financial
statements and GAAP
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used (in accordance with the proviso to the definition of the term
"GAAP" in subsection 1.1) in calculating such compliance);
(e) Promptly upon its becoming available and in any event not
later than the commencement of each fiscal year, the Budget for the
Company for such fiscal year, setting forth projections of the
consolidated balance sheet and consolidated statements of income and
cash flows of the Company as at the end of and for each month during
such fiscal year, all in reasonable detail, and, promptly upon
preparation thereof, any other budgets that the Company may prepare and
any revisions of the Budget;
(f) Promptly upon their becoming available, copies of any and
all periodic or special reports filed by the Company with any
Governmental Authority, if such reports indicate any material change in
the business, operations, affairs or conditions of the Company or if
copies thereof are requested by the Agent or any Bank, and copies of
any and all material notices and other material communications from any
Governmental Authority which relate to the Company;
(g) Promptly upon receipt thereof, copies of all audit reports
submitted to the Company by independent public accountants in
connection with each interim or special audit of the books of the
Company made by such accountants;
(h) Forthwith upon a Responsible Officer of the Company
obtaining knowledge of any condition or event which constitutes a
Default or an Event of Default, and in any event within 4 days of such
Responsible Officer's obtaining such knowledge, a certificate signed by
such Officer specifying in reasonable detail the nature and period of
existence thereof and what action has been taken or is proposed to be
taken with respect thereto;
(i) Concurrently with the delivery of the financial statements
referred to in paragraph (b) of this subsection 5.1, a certificate of
an appropriate representative of the Company showing in detail the
computations necessary to calculate the Applicable Margin (the
"APPLICABLE MARGIN CERTIFICATE") (including, without limitation, a
reconciliation between GAAP utilized in preparing said financial
statements and GAAP used (in accordance with the proviso to the
definition of the term "GAAP" in subsection 1.1) in calculating such
Applicable Margin); and
(j) Promptly upon receipt thereof, and in any event on or
prior to delivery of the financial statements required by subsection
5.1(b) with respect to the fiscal quarter in which the Company makes
any loan or advance to, investment in or acquisition of, any Person
permitted by the provisions of subsection 6.3(d), (i) an unaudited
balance sheet of such Person as at the end of its most recent fiscal
quarter, (ii) the unaudited statements of income and retained earnings
of such Person for such fiscal quarter and for the period from the
beginning of the then current fiscal year to the end of such fiscal
quarter and (iii) the unaudited statement of cash flows of such Person
for such fiscal quarter and for the period from the beginning of the
then current fiscal year to the end of such fiscal quarter.
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The Company will also furnish or cause to be furnished to each
Bank such other information regarding the business, affairs and condition of the
Company and its Restricted Subsidiaries as such Bank may from time to time
reasonably request.
5.2 LEGAL EXISTENCE; COMPLIANCE WITH LAWS, ETC. The Company
shall, and shall cause each of its Restricted Subsidiaries to: maintain its
corporate existence (except as a consequence of mergers permitted by subsection
6.7); maintain all properties which are reasonably necessary for the conduct of
its business, including properties now or hereafter owned, in good repair,
working order and condition (ordinary wear and tear excepted); take all actions
necessary to maintain and keep in full force and effect those rights that the
Company determines in good faith are material and that are in the best interests
of the Company and its Restricted Subsidiaries to maintain; and, except as
otherwise provided herein, comply in all material respects with all applicable
statutes, rules, regulations and orders of, and all applicable restrictions
imposed by, all Governmental Authorities in respect of the conduct of its
business and the ownership of its properties (including, without limitation,
applicable statutes, rules, regulations, orders and restrictions relating to
environmental, safety and other similar standards or controls) and the material
terms of all material leases, contracts, agreements and licenses; PROVIDED,
HOWEVER, that neither the Company nor any Restricted Subsidiary will be required
by reason of this subsection to comply therewith at any time while the Company
or such Restricted Subsidiary, as the case may be, shall be contesting its
obligation to do so in good faith by appropriate proceedings promptly initiated
and diligently conducted, and if (a) it shall have set aside on its books such
reserves, if any, with respect thereto as are required by GAAP and deemed
adequate by the Company and its independent public accountants, and (b) such
failure to comply shall not be materially adverse to the interests of the Banks.
The Company and its Restricted Subsidiaries shall continue to engage primarily
in the business in which it is engaged on the Commitment Letter Date.
5.3 INSURANCE. The Company shall, and shall cause each of its
Restricted Subsidiaries to: (i) maintain or cause to be maintained on all
insurable properties now or hereafter owned or leased by it insurance against
loss or damage by fire or other casualty to the extent customary with respect to
like properties of companies conducting similar businesses and in any event not
materially less than the insurance listed on Schedule V, (ii) shall maintain or
cause to be maintained public liability and workers' compensation insurance
insuring the Company to the extent customary with respect to companies
conducting similar businesses, (iii) maintain or cause to be maintained
insurance against libel actions in an amount satisfactory to the Agent and the
Required Banks and (iv) upon request, furnish to any Bank satisfactory evidence
of such insurance. The Company shall cause all such insurance policies (except
for workers' compensation insurance policies and any insurance maintained
against libel actions and public liability) to (i) name the Agent as an
additional insured, (ii) provide, in the case of property and casualty policies,
that the Agent shall be named as loss payee or additional insured, as the case
may be, and that any loss shall be payable notwithstanding any act of negligence
of, or any breach of warranty by, the Company, or by any change in the title,
ownership or possession of the insured property, or by the use of the property
for purposes more hazardous than is permitted in the policy, (iii) contain a
waiver of all rights of set off, counterclaim, deduction or subrogation against
the Company and (iv) provide that no cancellation, material reduction in amount
or material change in coverage thereof shall be effective until at least 30 days
after receipt by the
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Agent of written notice thereof. Any payments received by the Agent from any
insurer under any property and casualty insurance policy with respect to loss or
damage to property owned by the Company or any Restricted Subsidiary shall be
held by the Agent and (i) unless an Event of Default shall have occurred and be
continuing, shall be paid over to the Company or (ii) if an Event of Default
shall have occurred and be continuing, shall be applied as a mandatory
prepayment of the Term Loans in accordance with the procedures set forth in
subsection 2.10(b) or, if the Term Loans have been paid in full, a reduction of
the Revolving Credit Commitment (and to the prepayment of the Revolving Credit
Loans to the extent that the then aggregate outstanding principal amount thereof
exceeds the Revolving Credit Commitment as so reduced.)
5.4 PAYMENT OF TAXES. The Company shall, and shall cause each
of its Restricted Subsidiaries to: pay and discharge promptly as they become due
and payable all taxes, assessments and other governmental charges or levies
imposed upon it or its income or upon any of its property or assets, or upon any
part thereof, as well as all lawful claims of any kind (including claims for
labor, materials and supplies) which, if unpaid, might by law become a Lien upon
its property; PROVIDED that the Company and its Restricted Subsidiaries will not
be required to pay any such tax, assessment, charge, levy or claim (a) if the
failure to comply would not have any reasonable likelihood of having a Material
Adverse Effect or (b) if the amount, applicability or validity thereof shall
currently be contested in good faith by appropriate proceedings or other
appropriate actions promptly initiated and diligently conducted and if the
Company or the relevant Restricted Subsidiary shall have set aside on its books
such reserves, if any, with respect thereto as are required by GAAP and deemed
appropriate by the Company and its independent public accountants.
5.5 PAYMENTS OF OTHER INDEBTEDNESS, ETC. The Company shall,
and shall cause each of its Restricted Subsidiaries to: except as to matters
being contested by appropriate proceedings or other appropriate actions in good
faith, and subject to the provisions of the Subordinated Debt, pay promptly when
due, or in conformance with customary trade terms, all material Indebtedness
(other than Indebtedness for Borrowed Money, to the extent that the failure to
pay such Indebtedness does not constitute a Default or Event of Default under
Section 7(f)) and all material obligations incident to the conduct of its
business.
5.6 FURTHER ASSURANCES. The Company shall, and shall cause
each of its Restricted Subsidiaries which is a Credit Party to: from time to
time hereafter, execute and deliver, or cause to be executed and delivered, such
additional instruments, certificates or documents, and will take all such
actions, as the Agent may reasonably request, for the purposes of implementing
or effectuating the provisions of this Agreement and the other Credit Documents,
or of more fully perfecting or renewing the Agent's rights with respect to the
collateral described in any of the Security Documents (or with respect to any
additions thereto or replacements or proceeds thereof or with respect to any
other property or assets hereafter acquired by the Company or of its Restricted
Subsidiaries which may be deemed to be part of such collateral) pursuant hereto
or thereto. Upon the exercise by the Agent of any power, right, privilege or
remedy pursuant to this Agreement, the Notes or the other Credit Documents which
requires any consent, approval, recording, qualification or authorization of any
Governmental Authority, the Company will execute and deliver, or will cause the
execution and delivery of, all applications, certifications,
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instruments and other documents and papers that the Agent may be required to
obtain from the Company or any of its Subsidiaries for such governmental
consent, approval, recording, qualification or authorization.
5.7 NOTICES. The Company shall promptly give notice to the
Agent and each Bank of:
(a) the occurrence of any Default or Event of Default, which
notice shall contain the information required by the provisions of
subsection 5.1(h);
(b) any (i) default or event of default under any Contractual
Obligation of the Company or any of its Restricted Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time
between the Company or any of its Restricted Subsidiaries and any
Governmental Authority if such default, event of default, litigation,
investigation or proceeding, as the case may be, has any reasonable
likelihood of having a Material Adverse Effect;
(c) any litigation or proceeding (i) affecting the Company or
any Restricted Subsidiary in which the amount involved is $10,000,000
or more or (ii) in which injunctive or similar relief is sought and
with respect to which there exists a reasonable likelihood that such
litigation will have a Material Adverse Effect;
(d) a material adverse change in the business, operations,
property or financial or other condition of the Company and its
Restricted Subsidiaries taken as a whole;
(e) (i) the occurrence or expected occurrence of any
Reportable Event with respect to any Plan or any withdrawal from, or
the termination, Reorganization or Insolvency of, any Multiemployer
Plan or (ii) the institution of proceedings or the taking of any other
action by the PBGC, the Company or any Commonly Controlled Entity, or
any Multiemployer Plan with respect to the withdrawal from, or the
terminating, Reorganization or Insolvency of, any Plan;
(f) a copy of each notice delivered to it by a holder of
Subordinated Debt or the trustee under any of the Senior Subordinated
Indebtedness 1992 Indenture or the Senior Subordinated Indebtedness
1994 Indenture or by it to a holder of Subordinated Debt or such
trustee in accordance with the Senior Subordinated Indebtedness 1992
Indenture or the Senior Subordinated Indebtedness 1994 Indenture;
(g) any offering by BV, Xxxxxxxxx Publishing, Inc. or
Xxxxxxxxx of any Capital Stock of Media for proceeds in an amount in
excess of $5,000,000;
(h) investments in and acquisitions of other Persons for an
aggregate amount in excess of $10,000,000; and
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(i) write-offs of aggregate amounts in excess of $10,000,000
appearing as assets on a consolidated balance sheet of the Company and
its Subsidiaries prepared in accordance with GAAP.
Each notice pursuant to this subsection shall be accompanied by a statement of
an appropriate representative of the Company setting forth details of the
occurrence referred to therein and stating what action the Company or any
Commonly Controlled Entity proposes to take with respect thereto.
5.8 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
The Company shall, and shall cause its Restricted Subsidiaries to: keep proper
books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of the Agent to visit and inspect any of its or its
Subsidiaries' books and records at any reasonable time during normal business
hours and as often as may reasonably be desired, and to discuss the business,
operations, properties and financial and other condition of the Company and its
Subsidiaries with representatives and employees of the Company and its
Subsidiaries and with the Company's independent certified public accountants.
5.9 ENVIRONMENTAL LAWS. (a) The Company shall, and shall cause
its Restricted Subsidiaries to: comply with, and insure compliance by all
tenants and subtenants, if any, with, all Environmental Laws and obtain and
comply in all material respects with and maintain, and insure that all tenants
and subtenants obtain and comply with and maintain, any and all licenses,
approvals, registrations or permits required by Environmental Laws, except to
the extent that failure to do so would not have any reasonable likelihood of
having a Material Adverse Effect; and
(b) The Company shall, and shall cause its Restricted
Subsidiaries to: conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities respecting Environmental
Laws, except to the extent that the same are being contested in good faith by
appropriate proceedings and the pendency of such proceedings would not have any
reasonable likelihood of having a Material Adverse Effect.
5.10 INTEREST RATE HEDGE ARRANGEMENTS. The Company shall
acquire within 90 days of the Closing Date and thereafter maintain for a period
of at least eighteen months following the Closing Date, Interest Rate Hedge
Arrangements which, together with fixed rate Indebtedness for Borrowed Money,
assure that the net interest cost to the Company on at least 50% of the sum of
(i) the Term Loans, (ii) the Revolving Credit Commitments and (iii) the
Subordinated Debt does not exceed a fixed rate per annum of 10.5%.
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SECTION 6 NEGATIVE COVENANTS.
The Company hereby agrees that it shall not, and shall not
permit any of its Restricted Subsidiaries to, directly or indirectly, so long as
any of the Commitments remains in effect, any Note remains outstanding and
unpaid or any other amount is owing to any Bank or the Agent hereunder:
6.1 INDEBTEDNESS FOR BORROWED MONEY. Create, incur, assume or
become or remain liable in respect of any Indebtedness for Borrowed Money,
except:
(a) Indebtedness to the Banks hereunder;
(b) Subordinated Debt;
(c) Indebtedness for Borrowed Money (other than Indebtedness
referred to in (a) and (b) of this subsection) incurred to purchase, or
to finance the purchase of, fixed assets, PROVIDED that the aggregate
principal amount of all such Indebtedness at any one time outstanding
shall not exceed $10,000,000;
(d) existing Indebtedness for Borrowed Money, if any, of the
Company referred to in Schedule VI, in not more than the respective
unpaid principal amounts thereof specified in Schedule VI and any
renewal or extension thereof in an amount not exceeding the amount
thereof remaining unpaid immediately prior to such renewal or
extension; and
(e) other Indebtedness for Borrowed Money not in excess of
$100,000,000 in the aggregate outstanding at any time so long as the
Net Cash Proceeds thereof are, to the extent required by subsection
2.10(a), applied as a mandatory prepayment of the Term Loans and/or
reduction of the Revolving Credit Commitments.
6.2 MORTGAGES, LIENS, ETC. Create, incur, assume or permit to
continue in existence, any Lien with respect to any property or asset now owned
or leased or hereafter acquired or leased, except:
(a) Liens created pursuant to the Security Documents;
(b) the existing Liens referred to in Schedule VI attached
hereto, or any renewal, extension or refunding of any such Lien in an
amount not exceeding the amount thereof remaining unpaid immediately
prior to such renewal, extension or refunding;
(c) Liens for taxes, assessments or other governmental charges
not yet delinquent or being contested in good faith as provided in
subsection 5.4; Liens in connection with workers' compensation,
unemployment insurance or other social security obligations; Liens
securing the performance of bids, tenders, contracts, surety and appeal
bonds; Liens to secure progress or partial payments and other Liens of
like nature arising in the ordinary course of business; mechanics',
workmen's, materialmen's or other like Liens
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arising in the ordinary course of business in respect of obligations
which are not yet due or which are being contested in good faith; and
other Liens arising in the ordinary course of business and incidental
to the conduct of the business of the Company and its Restricted
Subsidiaries or to the ownership of its or their properties or assets,
which were not incurred in connection with the borrowing of money or
the obtaining of credit and which do not materially detract from the
value of the properties or assets of the Company and its Restricted
Subsidiaries taken as a whole or materially affect the use thereof in
the operation of its or their business;
(d) Liens securing Indebtedness for Borrowed Money permitted
by subsection 6.1(c) incurred to purchase or to finance the purchase of
fixed assets, PROVIDED that (i) such Liens shall be created
substantially simultaneously with the purchase of such fixed assets and
(ii) such Liens do not at any time encumber any property other than the
fixed assets financed by such Indebtedness; and
(e) Liens in respect of judgments and awards to the extent
that such judgments or awards are being contested in good faith and
appropriate reserves are maintained with respect thereto on the books
of the Company and its Restricted Subsidiaries to the extent required
by GAAP and so long as execution is not levied thereunder.
6.3 LOANS, GUARANTEES AND INVESTMENTS. Make or permit to
remain outstanding any loan or advance to, or provide any Guarantee in favor of,
or make or own any investment in, or acquire any of the properties or assets
constituting a business unit of, or stock or other evidences of beneficial
ownership of, any other Person, or form any new Subsidiary, except:
(a) extensions of trade credit by the Company and its
Restricted Subsidiaries in the ordinary course of business in
accordance with customary trade practices;
(b) the presently outstanding investments, loans and advances,
if any, and the presently existing Guarantees, if any, referred to in
Schedule VI;
(c) investments in the aggregate for the Company and its
Subsidiaries at any time not to exceed $30,000,000 in (i) marketable
direct obligations of the United States of America maturing not more
than 180 days from the date of issuance thereof, (ii) certificates of
deposit, repurchase agreements or other similar types of investments
maturing not more than 180 days from the date of issuance thereof and
evidencing direct obligations of any bank within the United States of
America having capital surplus and undivided profits in excess of
$500,000,000; and (iii) commercial paper issued by the holding company
of any of the Banks or by an issuer rated at least A-2 by Standard &
Poor's Corporation or P-2 by Xxxxx'x Commercial Paper Division or other
nationally recognized similar service maturing not more than 180 days
from the date of issuance thereof;
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(d) loans and advances to, investments in and acquisitions of
other Persons made by the Company in addition to those permitted by the
other provisions of this subsection, PROVIDED, HOWEVER, that:
(i) the principal business of any such
Person so acquired or in which an investment shall be so made
shall be a business in which Media and its subsidiaries are
engaged on the Commitment Letter Date;
(ii) if such investment or acquisition would
result in the formation of a new Subsidiary, such new
Subsidiary shall be a Restricted Subsidiary and such
investment or acquisition may only be made if, immediately
after the completion thereof, the Company shall (w) cause all
the shares of such Subsidiary that are owned by the Company to
be pledged to the Agent, for the ratable benefit of the Banks,
pursuant to a supplement to the Company Pledge Agreement
executed and delivered by the Company in accordance with the
terms thereof, (x) cause such Subsidiary to become a party to
the Subsidiary Guarantee by executing a supplement thereto in
accordance with the terms thereof, (y) cause such Subsidiary
to become a party to the Security Agreement by executing a
supplement thereto in accordance with the terms thereof and
(z) deliver or cause to be delivered, to the Agent and the
Banks such opinions of counsel with respect to, and copies of
Boards of Directors resolutions authorizing, the execution,
delivery and performance of the agreements described in
clauses (w), (x) and (y) immediately preceding as the Agent
may reasonably request;
(iii) the Company shall have provided to
each Bank the financial statements required pursuant to the
provisions of subsection 5.1(j);
(iv) if at the time of the making of any
such loan, advance, investment or acquisition the Leverage
Test exceeds 3.5 to 1.0, (A) such loan, advance, investment or
acquisition, when added to the aggregate amount thereof made
pursuant to this subsection 6.3(d) subsequent to the Closing
Date, shall not exceed $50,000,000 and (B) when added to (x)
the aggregate amount paid subsequent to the Closing Date to
redeem or purchase Subordinated Debt pursuant to subsection
6.5(b) and (y) the aggregate amount of dividends paid
subsequent to the Closing Date pursuant to subsection 6.5(c),
shall not exceed $100,000,000; and
(v) no Default or Event of Default shall
have occurred or be continuing or would result therefrom;
(e) the acquisition by the Company of the assets of any of its
wholly-owned Restricted Subsidiaries; and
(f) Investments in, and loans and advances to, Unrestricted
Subsidiaries and acquisitions of Persons, that, at the time of the
acquisition thereof, shall be designated by
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the Company as Unrestricted Subsidiaries, PROVIDED that, after giving
effect thereto, the sum of (i) the aggregate amount expended in
connection with all such investments and acquisitions and (ii) the
aggregate then outstanding principal amount of all such loans and
advances shall not exceed $50,000,000.
6.4 LEASES. Permit the aggregate amount of lease expense
(determined in accordance with GAAP) for any fiscal year of the Company to
exceed $6,000,000.
6.5 RESTRICTED PAYMENTS. Declare, order, pay or make any
Restricted Payment or set aside any sum or property therefor, except:
(a) the Company may (i) make regularly scheduled required
payments of principal of and interest on Subordinated Debt to the
extent permitted by the subordination provisions thereof and (ii)
purchase or redeem any portion of the Subordinated Debt prior to the
final maturity date thereof, PROVIDED that the purchase or redemption
price is paid out of the proceeds of other Subordinated Debt or equity
contributions received by the Borrower;
(b) the Company may purchase or redeem any portion of the
Subordinated Debt prior to the final maturity date thereof, PROVIDED
that (i) no Default or Event of Default shall have occurred and be
continuing, or would result therefrom, and (ii) if at the time of such
purchase or redemption the Leverage Test exceeds 3.50 to 1.0, the
purchase price or redemption price of such Subordinated Debt, including
any consent fee and other amounts, if any, payable in connection
therewith, when added to (A) the aggregate purchase price or redemption
price of Subordinated Debt (including any consent fee and other
amounts, if any, payable in connection therewith) paid subsequent to
the Closing Date in accordance with this subsection 6.5(b), shall not
exceed $50,000,000 and (B) the sum of (x) the amount determined in
accordance with the foregoing subclause (A) of this clause (b), (y) the
aggregate amount expended in connection with all loans, advances,
investments and acquisitions made subsequent to the Closing Date
pursuant to subsection 6.3(d) and (z) the aggregate amount of dividends
paid subsequent to the Closing Date pursuant to subsection 6.5(c),
shall not exceed $100,000,000;
(c) so long as no Default or Event of Default shall have
occurred and be continuing, or would result therefrom, the Company may
make payments of cash dividends to Media to enable Media to pay
dividends on or to purchase shares of its Capital Stock, PROVIDED that,
if at the time of such payment of dividends the Leverage Test exceeds
3.5 to 1.0, (A) the amount of such payment, when added to the aggregate
amount of cash dividends paid subsequent to the Closing Date, shall not
exceed $50,000,000 and (B) the sum of (x) the amount determined in
accordance with the foregoing clause (A) of this clause (c), (y) the
aggregate amount expended in connection with all the loans, advances,
investments and acquisitions made subsequent to the Closing Date
pursuant to subsection 6.3(d) and (z) the aggregate amount paid to
redeem or purchase Subordinated Debt subsequent to the Closing Date
pursuant to subsection 6.5(b), shall not exceed $100,000,000;
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(d) the Company may make payments pursuant to the Tax
Allocation Agreement, dated as of September 1, 1994, between the
Company and Media, as such Agreement is in effect on the date hereof
without giving effect to any amendments, or other modifications
thereto; and
(e) the Company may make payments to Media to the extent
necessary to pay Media's reasonable expenses in the ordinary course of
business in connection with preparing and distributing financial
reports required by law, state corporate franchise taxes, directors'
fees and meeting expenses, directors' and officers' insurance premiums,
transfer agent fees and expenses and stock exchange listing fees, and
the Company may make to Media payments of up to $500,000 annually to
pay other reasonable administrative expenses in the ordinary course of
business.
6.6 CAPITAL EXPENDITURES. Make any Capital Expenditures except
(a) Capital Expenditures made with Indebtedness for Borrowed Money permitted by
the provisions of subsection 6.1(c) and (b) additional Capital Expenditures in
an amount not to exceed, during any period set forth below, the amount set forth
opposite such period below:
Period Amount
------ ------
Closing Date - March 31, 1999 $16,000,000
April 1, 1999 - March 31, 2000 $16,000,000
April 1, 2000 - March 31, 2001 $17,000,000
April 1, 2001 - March 31, 2002 $17,000,000
April 1, 2002 - March 31, 2003 $18,000,000
April 1, 2003 - March 31, 2004 $18,000,000
6.7 LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation or amalgamation, change its form of organization or its business,
or liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), convey, sell, lease, transfer or otherwise dispose of, in one
transaction or a series of transactions, all or a substantial part of its
business or assets, except that:
(a) any Restricted Subsidiary of the Company may be merged or
consolidated with or into the Company (PROVIDED that the Company shall
be the continuing or surviving corporation) or with any one or more
wholly owned Restricted Subsidiaries of the Company (PROVIDED that such
wholly owned Restricted Subsidiary shall be the continuing or surviving
corporation); and
(b) any Restricted Subsidiary may sell, lease, transfer or
otherwise dispose of any or all of its business or assets in one
transaction or a series of transactions (upon voluntary
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liquidation or otherwise) to the Company or another Restricted
Subsidiary of the Company that is wholly owned by the Company.
6.8 SALE OF ASSETS. Sell, lease or otherwise dispose of any of
its properties or assets except for: (a) sales of inventory in the ordinary
course of business;
(b) sales or other dispositions of obsolete or worn-out
equipment or equipment which is no longer useful or necessary in the
conduct of its business;
(c) sales permitted pursuant to subsection 6.7; and
(d) sales or other dispositions of properties or assets the
aggregate Net Cash Proceeds of which do not exceed $25,000,000.
6.9 TRANSACTIONS WITH AFFILIATES. (a) Enter into any lease,
conduct any business or enter into any other transaction or series of
transactions with any Affiliate, unless the Board of Directors of the Company or
such Restricted Subsidiary shall have determined that the terms of such lease,
business, transaction or series of transactions are as favorable to the Company
or such Restricted Subsidiary as those which might be obtained at the time from
third Persons in an arm's-length transaction or (b) pay any fees or expenses to,
or reimburse or assume any obligation for the reimbursement of any expenses
incurred by, any Affiliate, PROVIDED, HOWEVER, that the Company and its
Restricted Subsidiaries may, so long as no Default or Event of Default shall
have occurred and be continuing or would result therefrom, (i) pay management
fees to its Affiliates in an aggregate amount during any period of 12
consecutive months (the "FEE PERIOD") not to exceed the sum of (A) $1,200,000
and (B) 4% of the amount by which (x) Operating Cash Flow for the period of 12
consecutive months immediately preceding the Fee Period, as adjusted by
subtracting (1) any expenses incurred pursuant to the Company's profit sharing
plan during such period and (2) an amount equal to that portion of Operating
Cash Flow resulting directly from any acquisitions permitted pursuant to
subsection 6.3(d) and by adding the net operating losses resulting from an
investment made subsequent to the Closing Date in a Person permitted by
subsection 6.3(d) for the period of 12 consecutive months immediately following
such initial investment (or, if shorter than 12 months, the period from the date
of such investment to the date of computation), such amount to be determined by
a certificate setting forth in detail the calculations used in determining such
amount, to be delivered to the Agent and subject to its reasonable approval,
exceeds (y) $100,000,000, and (ii) make Restricted Payments permitted by
subsection 6.5.
6.10 CERTAIN TRANSACTIONS AND AGREEMENTS; LIMITATION ON
AMENDMENTS. Amend, modify or change, or consent or agree to any amendment,
modification or change to any of the terms of the Senior Subordinated
Indebtedness 1992 Indenture, the Subordinated Indebtedness 1994 Indenture or the
Subordinated Debt including, without limitation, the subordination provisions
thereof, except pursuant to any such amendment, modification or change that
would extend the date or reduce the amount of any amount payable thereunder or
relax any covenant, agreement or other obligation of the Company thereunder.
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6.11 LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES. Create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Restricted
Subsidiary of the Company to (a) pay dividends or make any other distributions
on its capital stock or any other interest or participation in, or measured by,
its profits, owned by the Company or any of its Restricted Subsidiaries, or pay
any Indebtedness owed to, the Company or any of its Restricted Subsidiaries, (b)
make loans or advances to the Company or any of its Restricted Subsidiaries or
(c) transfer any of its properties or assets to the Company, except for such
encumbrances or restrictions existing under or by reasons of (i) applicable law
or (ii) customary provisions restricting subletting or assignment of any lease
governing a leasehold interest of the Company or any of its Restricted
Subsidiaries.
6.12 FISCAL YEAR OF THE COMPANY. Fail to maintain at all times
a fiscal year ending on the last Monday in March of each year; PROVIDED,
HOWEVER, that if the Company gives the Agent and the Banks notice that it
desires to change the fiscal year of the Company and its Subsidiaries, the
parties shall negotiate in good faith to amend the Loan Documents to accommodate
such request but such change shall not become effective until the Loan Documents
have been so amended.
6.13 TOTAL DEBT TO OPERATING CASH FLOW. Permit the ratio of
(a) Total Debt as at the end of any fiscal quarter described below to (b)
Operating Cash Flow for the period of four consecutive fiscal quarters ending on
the last day of such fiscal quarter to exceed the ratio set forth opposite such
fiscal quarter below:
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Fiscal Quarter Ending In Ratio
------------------------ -----
Closing Date through
December 31, 1998 5.50 to 1.00
January 1, 1999 through
June, 30, 1999 5.35 to 1.00
July 1, 1999 through
March 31, 2000 5.00 to 1.00
April 1, 2000 through
March 31, 2001 4.50 to 1.00
April 1, 2001 through
March 31, 2002 4.00 to 1.00
April 1, 2002 through
March 31, 2003 3.50 to 1.00
April 1, 2003 and
thereafter 3.00 to 1.00;
PROVIDED that for any period of four consecutive fiscal quarters ending on or
before March 31, 1999 start up losses related to Soap Opera News of up to
$10,000,000 shall be excluded in computing Operating Cash Flow for such period.
6.14 OPERATING CASH FLOW TO INTEREST EXPENSE RATIO. Permit the
ratio of (a) Operating Cash Flow for any period of four consecutive fiscal
quarters ending during any period set forth below (a "TEST Period") to (b)
Interest Expense for such four fiscal quarter period to be less than the ratio
set forth opposite such Test Period below:
Test Period Ratio
----------- -----
Closing Date through
December 31, 1998 1.85 to 1.00
January 1, 1999 through
March 31, 2000 2.00 to 1.00
April 1, 2000 through
March 31, 2001 2.25 to 1.00
April 1, 2001 through
March 31, 2002 2.50 to 1.00
April 1, 2002 through
March 31, 2003 2.75 to 1.00
April 1, 2003 and
thereafter 3.00 to 1.00;
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PROVIDED that for any period of four consecutive fiscal quarters ending on or
before March 31, 1999 start up losses related to Soap Opera News of up to
$10,000,000 shall be excluded in computing Operating Cash Flow for such period.
6.15 TOTAL DEBT SERVICE COVERAGE RATIO. Permit the ratio of
(a) After Tax Operating Cash Flow for any period of four consecutive fiscal
quarters to (b) Total Debt Service for such period to be less than 1.10 to 1.00;
PROVIDED that for any period of four consecutive fiscal quarters ending on or
before March 31, 1999 start up losses related to Soap Opera News of up to
$10,000,000 shall be excluded in computing After Tax Operating Cash Flow for
such period.
SECTION 7 EVENTS OF DEFAULT.
Upon the occurrence and during the continuance of any of the
following events:
(a) The Company shall fail to pay any principal of its Notes
when due or to make any mandatory prepayment of its Notes when due in
accordance with the provisions of subsection 2.3, 2.9(b) or 2.10; or
the Company shall fail to pay any interest, commitment or other fee or
any other amount payable hereunder within five days after the date when
due in accordance with the terms hereof; or
(b) Any representation or warranty made by the Company herein
or by the Company or any other Credit Party in any other Credit
Document, or which is contained in any certificate, document or
financial or other statement furnished at any time under or in
connection with this Agreement, shall prove to have been incorrect in
any material respect on or as of the date made; or
(c) The Company or any other Credit Party which is a party
thereto shall default in the observance or performance of any agreement
contained in subsection 5.7(a) or Section 6 of this Agreement or in
clause (g) of paragraph 5 of the Security Agreement or clause (b) of
paragraph 5 of the Company Pledge Agreement; or
(d) The Company or any other Credit Party which is a party
thereto shall default in the observance or performance of any other
agreement contained in this Agreement or any other Credit Document, and
such default shall continue unremedied for a period of 30 days
following notice given by any Bank; or
(e) Any Credit Document shall cease, for any reason, to be in
full force and effect or the Company or any Credit Party which is a
party thereto shall so assert in writing; or
(f) The Company or any of its Restricted Subsidiaries or Media
shall (I) default in any payment of principal of or interest on any
Indebtedness for Borrowed Money (other than Indebtedness hereunder and
Indebtedness for Borrowed Money less than $5,000,000 in aggregate
principal amount) or in the payment under any Guarantee (other than a
Guarantee of less than $5,000,000), beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness
for Borrowed Money or Guarantee was created; or (II) default in the
observance or performance of any other
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agreement or condition relating to any such Indebtedness for Borrowed
Money or Guarantee or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall
occur, the effect of which default or other event is to cause, or to
permit the holder or holders of such Indebtedness for Borrowed Money or
Guarantee (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness for Borrowed Money to become due prior to
its stated maturity or the Indebtedness covered by such to become
payable; or
(g) (I) The Company or any of its Restricted Subsidiaries or
Media at any time shall commence any case, proceeding or other action
(A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief
of debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it as bankrupt or as insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian or
other similar official for it or for all or any substantial part of its
assets, or the Company or any of its Restricted Subsidiaries or Media
shall make a general assignment for the benefit of its creditors; or
(II) there shall be commenced against the Company or any of its
Restricted Subsidiaries or Media at any time, any case, proceeding or
other action of a nature referred to in clause (I) above which (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a
period of 60 days; or (III) there shall be commenced against the
Company or any of its Restricted Subsidiaries or Media at any time, any
case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets, which results in the entry of an order
for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof;
or (IV) the Company or any of its Restricted Subsidiaries or Media at
any time, shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth
in clause (I), (II) or (III) above; or (V) the Company or Media at any
time, shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
(h) A final judgment which, together with other outstanding
final judgments against the Company and its Restricted Subsidiaries, to
the extent not fully covered by valid, collectible insurance provided
by solvent, unaffiliated insurers, exceeds an aggregate of $5,000,000
shall be rendered against the Company or any of its Restricted
Subsidiaries and if, within 60 days after entry thereof, such judgment
shall not have been discharged or execution thereof stayed pending
appeal, or if, within 60 days after the expiration of any such stay,
such judgment shall not have been discharged; or
(i) The security interests created by any of the Security
Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby; or
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(j) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed,
or a trustee shall be appointed, to administer or to terminate, any
Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion
of the Required Banks, likely to result in the termination of such Plan
for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Company or any
Commonly Controlled Entity shall, or is, in the reasonable opinion of
the Required Banks, likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other such
events or conditions, if any, could subject the Company or any of its
Restricted Subsidiaries to any tax, penalty or other liabilities which
in the aggregate are material in relation to the business, operations,
property or financial or other condition of the Company and its
Restricted Subsidiaries taken as a whole; or
(k) There shall occur a Change of Control;
then, and in any such event, (a) if such event is an Event of Default specified
in clause (I) or (II) of paragraph (g) above, automatically the Commitments
shall immediately terminate and the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement, the Notes and the
Security Documents (including, without limitation, all Loans and all accrued
interest thereon) shall immediately become due and payable, and (b) if such
event is any other Event of Default, either or both of the following actions may
be taken: (i) with the consent of the Required Banks, the Agent may, or upon the
request of the Required Banks, the Agent shall, by notice to the Company,
declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (ii) with the consent of the Required Banks,
the Agent may, or upon the request of the Required Banks, the Agent shall, by
notice of default to the Company, declare the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement, the Notes
and the Security Documents, to be due and payable forthwith, whereupon the same
shall immediately become due and payable. Except as expressly provided above in
this Section 7, presentment, demand, protest and all other notices of any kind
are hereby expressly waived to the extent permitted by applicable law.
SECTION 8 THE AGENT.
8.1 APPOINTMENT. Each Bank hereby irrevocably designates and
appoints The Chase Manhattan Bank as the Agent of such Bank under this
Agreement, the Notes and the other Credit Documents, and each such Bank
irrevocably authorizes The Chase Manhattan Bank, as the Agent for such Bank, to
take such action on its behalf under the provisions of this Agreement, the Notes
and the other Credit Documents and to exercise such powers and perform such
duties as
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are expressly delegated to the Agent by the terms of this Agreement, the Notes
and other Credit Documents, including the right to protect, conserve or
otherwise to manage and dispose of the rights of the Banks with respect to the
Security Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Notes or any of the other Credit Documents the Agent shall not
have any duties or responsibilities, except those expressly set forth herein and
therein, or any fiduciary relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement, the Notes or any of the other Credit Documents or otherwise
exist against the Agent.
8.2 DELEGATION OF DUTIES. The Agent may execute any of its
duties under this Agreement, the Notes and the other Credit Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
8.3 EXCULPATORY PROVISIONS. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement, the Notes or the other Credit
Documents (except for its or such Person's own gross negligence or willful
misconduct), or (ii) responsible in any manner to any of the Banks for any
recitals, statements, representations or warranties made by the Company or any
representative thereof contained in this Agreement, the Notes or the other
Credit Documents or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agent under or in connection
with, this Agreement, the Notes or the other Credit Documents or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement, the Notes or the other Credit Documents or for any failure of the
Company to perform its obligations hereunder or thereunder. The Agent shall not
be under any obligation to any Bank to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement, or to inspect the properties, books or records of the
Company.
8.4 RELIANCE BY AGENT. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any Note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Company), independent accountants
and other experts selected by the Agent. The Agent may deem and treat the payee
of any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement, the Notes and the Security Documents unless it
shall first receive such advice or concurrence of the Required Banks as it deems
appropriate or it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement
and the Notes in accordance with a request of the Required Banks, and such
request and any
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action taken or failure to act pursuant thereto shall be binding upon all the
Banks and all future holders of the Notes.
8.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Bank or the Company
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default." In the event that the Agent
receives such a notice, the Agent shall give notice thereof to the Banks. The
Agent shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Banks; PROVIDED that unless and
until the Agent shall have received such directions, the Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Banks.
8.6 NON-RELIANCE ON AGENT AND OTHER BANKS. Each Bank expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys- in-fact or Affiliates has made any representations
or warranties to it and that no act by the Agent hereinafter taken, including
any review of the affairs of the Company, shall be deemed to constitute any
representation or warranty by the Agent to any Bank. Each Bank represents to the
Agent that it has, independently and without reliance upon the Agent or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and credit worthiness of the
Company and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Bank also represents that it will, independently and
without reliance upon the Agent or any other Bank, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement, the Notes and the other Credit Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and credit worthiness of the
Company. Except for notices, reports and other documents expressly required to
be furnished to the Banks by the Agent hereunder or by the Notes or the other
Credit Documents, the Agent shall not have any duty or responsibility to provide
any Bank with any credit or other information concerning the business,
operations, property, financial and other condition or credit worthiness of the
Company which may come into the possession of the Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
8.7 INDEMNIFICATION. The Banks agree to indemnify the Agent in
its capacity as such (to the extent not reimbursed by the Company and without
limiting the obligation of the Company to do so), ratably according to their
respective amounts specified in clauses (a) through (c) of the definition of
Required Banks, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including without limitation at
any time following the payment of the Notes) be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of this
Agreement, the Notes, the other Credit Documents, or any documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
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thereby or any action taken or omitted by the Agent under or in connection with
any of the foregoing; PROVIDED that no Bank shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting primarily
from the Agent's gross negligence or willful misconduct. The agreements in this
subsection shall survive the payment of the Notes and all other amounts payable
hereunder.
8.8 AGENT IN ITS INDIVIDUAL CAPACITY. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Company as though the Agent were not the Agent
hereunder. With respect to its Loans made or renewed by it and any Note issued
to it, the Agent shall have the same rights and powers under this Agreement, the
Notes and the Security Documents as any Bank and may exercise the same as though
it were not the Agent, and the terms "Bank" and "Banks" shall include the Agent
in its individual capacity.
8.9 SUCCESSOR AGENT. The Agent may resign as Agent upon 10
days' notice to the Banks. If the Agent shall resign as Agent under this
Agreement, then the Required Banks shall appoint from among the Banks a
successor agent for the Banks, which successor agent, unless a Default or Event
of Default has occurred and is continuing, shall be subject to approval by the
Company, whereupon such successor agent shall succeed to the rights, powers and
duties of the Agent, and the term "Agent" shall mean such successor agent
effective upon its appointment, and the former Agent's rights, powers and duties
as Agent shall be terminated, without any other or further act or deed on the
part of such former Agent or any of the parties to this Agreement or any holders
of the Notes. After any retiring Agent's resignation hereunder as Agent, the
provisions of this subsection shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.
Resignation shall not become effective until appointment of a successor.
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SECTION 9 MISCELLANEOUS.
9.1 AMENDMENTS AND WAIVERS. Neither this Agreement, any Note
or the other Credit Documents, nor any terms hereof or thereof may be amended,
waived, supplemented or modified except in accordance with the provisions of
this subsection. With the written consent of the Required Banks and the Company,
the Agent (on behalf of the Banks) and the Company shall, from time to time,
enter into written amendments, supplements or modifications hereto for the
purpose of adding any provisions to this Agreement, the Notes, or the other
Credit Documents or changing in any manner the rights of the Banks or of the
Company hereunder or thereunder or waiving, on such terms and conditions as may
be specified in such instrument, any of the requirements of this Agreement, the
Notes or the other Credit Documents or any Default or Event of Default and its
consequences; PROVIDED, HOWEVER, that no such waiver and no such amendment,
supplement or modification shall (a) reduce the amount or extend the final
maturity of any Note, or reduce the rate or extend the time of payment of
interest thereon, or reduce any fee payable to any Bank hereunder or extend the
time of payment thereof, or change the amount of any Bank's Commitment, in each
case without the consent of the Bank affected thereby, (b) reduce the amount or
extend the scheduled payment date of any installment of principal of any Note
without the consent of the Banks affected thereby, (c) amend, modify or waive
any provision of this subsection or Section 7(f), 7(g), 7(i) or subsection
9.6(a) or reduce the percentage specified in the definition of Required Banks or
Super-majority Banks or amend, modify or waive the definition of Required Banks
or Super-majority Banks or consent to the assignment or transfer by any Credit
Party of any of its rights and obligations under any Credit Document, or
expressly release the stock pledged pursuant to the Media Pledge Agreement or
all or substantially all of the other Collateral on which a Lien is purported to
be created pursuant to any of the Security Documents, in each case without the
written consent of all the Banks, (d) amend, modify or waive any provision of
Section 8 or reduce any fee payable to the Agent hereunder without the written
consent of the then Agent, (e) amend, modify or waive any provision of
subsection 2.4, 2.5, 2.6, 2.7(b) and (c), 2.8(a), 2.9, 2.10 or 4.2 without the
written consent of the Revolving Credit Required Banks, (f) amend or modify the
definition of Revolving Credit Required Banks without the written consent of the
Revolving Credit Required Banks, (g) amend or modify the definition of Term Loan
Required Banks without the written consent of the Term Loan Required Banks, (h)
amend, modify or waive any provision of subsection 2.1, 2.2, 2.3, 2.7(a), 2.8(d)
or 2.10 without the written consent of the Term Loan Required Banks, (i)
expressly release the stock (at any time prior to the transfer of all of its
assets to the Company) or assets of National Enquirer or the assets primarily
used in connection with the publication of the weekly magazine known as STAR
pledged pursuant to the Company Pledge Agreement or the Security Agreement, as
the case may be, or release National Enquirer from
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its obligations pursuant to the Subsidiary Guarantee (at any time prior to the
transfer of all of its assets to the Company), in any case described in this
clause (i) without the written consent of the Super-majority Banks. Any such
waiver and any such amendment, supplement or modification shall apply equally to
each of the Banks and shall be binding upon the Company, the Banks, the Agent
and all future holders of the Notes. In the case of any waiver, the Company, the
Banks and the Agent shall be restored to their former position and rights
hereunder and under the outstanding Notes and any other Credit Documents, and
any Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
9.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing or sent by
telecopy and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or five days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
sent, addressed as follows in the case of the Company and the Agent, and as set
forth in Schedule I in the case of the other parties hereto, or to such address
or other addresses as may be hereafter notified by the respective parties hereto
and any future holders of the Notes:
The Company: American Media Operations, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx and Xxxxx X. Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with a copy to: Boston Ventures Management, Inc.
Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxx X. Xxxxxxxx, III
Xxxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Agent: The Chase Manhattan Bank
Xxx Xxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
PROVIDED that any notice, request or demand to or upon the Agent or the Banks
pursuant to subsections 2.3, 2.6, 2.7, 2.9 and 2.14 shall not be effective until
received by the Agent.
9.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and
no delay in exercising, on the part of the Agent or any Bank, any right, remedy,
power or privilege hereunder
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or under any other Credit Document, shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, remedy, power or privilege
hereunder or thereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein or therein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.
9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder and under the other Credit
Documents and in any document, certificate or statement delivered pursuant
hereto or thereto or in connection herewith or therewith shall survive the
execution and delivery of this Agreement, the Notes and the other Credit
Documents.
9.5 PAYMENT OF EXPENSES AND TAXES. The Company agrees (a) to
pay or reimburse the Agent for all its reasonable out-of-pocket costs and
expenses incurred in connection with the preparation and execution of, and the
preparation and execution of any amendment, supplement or modification to, this
Agreement, the Notes, each other Credit Document and any other documents
prepared in connection herewith, and the consummation of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
disbursements and fees of counsel to the Agent, (b) to pay or reimburse the
Agent for all its out-of-pocket costs and expenses incurred in connection with
the enforcement or preservation of any rights under this Agreement, the Notes,
each Credit Document and any other documents prepared in connection herewith or
therewith, including, without limitation, the disbursements and fees of counsel
to the Agent, (c) to pay, indemnify, and to hold each Bank and the Agent
harmless from and against, any and all recording and filing fees and any and all
other liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, which may be payable or determined to be payable
in connection with the execution and delivery of, or consummation of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the Notes, the
Credit Documents and any such other documents, and (d) to pay, indemnify, and to
hold the Agent and each Bank harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs (including, without limitation, the allocated costs of in-house counsel
relating to this clause (d)), expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement and performance
of this Agreement, the Notes and any of
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the Credit Documents (all the foregoing, collectively, the "INDEMNIFIED
LIABILITIES"); PROVIDED, that the Company shall have no obligation hereunder
with respect to indemnified liabilities arising from (i) the gross negligence or
willful misconduct of the Agent or such Bank, (ii) legal proceedings commenced
against the Agent or such Bank by any security holder or creditor thereof
arising out of and based upon rights afforded any such security holder or
creditor solely in its capacity as such or (iii) legal proceedings commenced
against the Agent or such Bank by any other Bank or by any Transferee (as
defined in subsection 9.6). The agreements in this subsection shall survive
repayment of the Notes and all other amounts payable hereunder.
9.6 SUCCESSORS AND ASSIGNS. (a) This Agreement, the Notes and
the other Credit Documents shall be binding upon and inure to the benefit of the
Company, the Banks, the Agent and all future holders of the Notes and their
respective successors and assigns, except that the Company may not assign or
transfer any of its rights under this Agreement, the Notes and the other Credit
Documents to which it is a party without the prior written consent of each Bank.
(b) Any Bank may, in the ordinary course of its banking
business and 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 Bank, any Note held by such Bank, any Commitment of such Bank or
any other interest of such Bank hereunder and under the other Credit Documents.
In the event of any such sale by a Bank of participating interests to a
Participant, such Bank's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Bank shall remain solely
responsible for the performance thereof, such Bank shall remain the holder of
any such Note for all purposes under this Agreement and the other Credit
Documents, and the Company and the Agent shall continue to deal solely with and
directly with such Bank in connection with such Bank's rights and obligations
under this Agreement and the other Credit Documents. Any participation agreement
entered into between a Bank and a Participant shall provide that such Bank shall
retain the exclusive right to vote on proposed amendments, supplements,
modifications, changes and waivers pursuant to subsection 9.1 except for any of
the foregoing with respect to (i) the extension of any date (as specified herein
or in any Note) of any payment of principal or interest in respect of any Loan,
(ii) the reduction of the amount of any such payment of principal, (iii) the
reduction of the rate of interest on any Loan (as specified herein or in any
Note) or (iv) the release of all or substantially all of the Collateral provided
for in any of the Security Documents. The Company agrees that if amounts
outstanding under this Agreement and the Notes are due and unpaid, or shall have
been declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall be deemed to have the right of set-off
in respect of its participating interest in amounts owing under this Agreement
and any Note to the same extent as if the amount of its participating interest
were owing directly to it as a Bank under this Agreement or any Note; PROVIDED,
that such Participant shall only be entitled to such right of set-off if it
shall have agreed in the agreement pursuant to which it shall have acquired its
participating interest to share with the Banks the proceeds thereof as provided
in subsection 9.7. The Company also agrees that each Participant shall be
entitled to the benefits of subsections 2.16, 2.17 and 2.20 and 9.5(c) and (d)
with respect to its participation in the Commitments and the Loans outstanding
from time to time; PROVIDED, that no participant shall be entitled to receive
any greater amount pursuant to such subsections than the transferor Bank would
have been entitled to receive in respect of the amount
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of the participation transferred by such transferor Bank to such Participant had
no such transfer occurred.
(c) Any Bank may, in the ordinary course of its banking
business and in accordance with applicable law, at any time assign to:
(i) any Bank or any affiliate thereof all or any part of its rights and
obligations under this Agreement and the Notes,
(ii) with the consent of the Company and the Agent (which consent of
the Agent shall not be unreasonably withheld), one or more additional
banks or other financial institutions (together with the Banks and
affiliates thereof described in clause (i) of this paragraph (c), the
"ASSIGNEES"), any part of its rights and obligations under this
Agreement and the Notes, PROVIDED that the consent of the Company may
not be unreasonably withheld in connection with any such sale if, after
giving effect to such sale, (x) the aggregate of the Term Loans and
Revolving Credit Commitments so sold shall not exceed $10,000,000 or
(y) such transferor Bank shall have aggregate Term Loans and Revolving
Credit Commitments of not less than $5,000,000 of the aggregate Term
Loans and Revolving Credit Commitments, and
(iii) with the consent of the Company (other than in connection with a
transfer required by the Company to be made pursuant to subsection
2.16(b)) and the Agent (which consent of the Agent shall not be
unreasonably withheld), one or more Assignees all of its rights and
obligations under this Agreement and the Notes,
in each case pursuant to an Assignment and Acceptance, executed by such
Assignee, such transferor Bank and, in the case of an Assignee that is not then
a Bank or an affiliate thereof, by the Company and the Agent and delivered to
the Agent for its acceptance and recording in the Register, PROVIDED that, with
respect to clauses (ii) and (iii) of this Section 9.6(c), (i) after giving
effect to any such sale of part of any Bank's rights and obligations under this
Agreement and the Notes, such Assignees shall have Term Loans and a Revolving
Credit Commitment aggregating not less than $5,000,000 and (ii) any consent of
the Company otherwise required shall not be required if an Event of Default
under clause (g) of Section 7 has occurred and is continuing. Upon such
execution, delivery, acceptance and recording, from and after the Transfer
Effective Date determined pursuant to such Assignment and Acceptance, (x) the
Assignee thereunder shall be a party hereto and, to the extent set forth in the
Assignment and Acceptance, have the rights and obligations of a Bank hereunder
with Term Loans and a Revolving Credit Commitment as set forth therein, and (y)
the transferor Bank thereunder shall, to the extent provided in such Assignment
and Acceptance, be released from its obligations under this Agreement (and in
the case of an Assignment and Acceptance covering all of the remaining portion
of a transferor Bank's rights and obligations under this Agreement, such
transferor Bank shall cease to be a party hereto). Such Assignment and
Acceptance shall be deemed to amend this Agreement to the extent, and only to
the extent, necessary to reflect the addition of such Assignee and the resulting
adjustment of Term Loan Percentages and/or Revolving Credit Percentages arising
from the purchase by such Assignee of all or a portion of the rights and
obligations of such transferor Bank
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under this Agreement and the Notes. On or prior to the Transfer Effective Date
determined pursuant to such Assignment and Acceptance, the Company at the
expense of the transferor Bank shall execute and deliver to the Agent in
exchange for the surrendered Notes, new Notes to the order of such Assignee in
an aggregate amount equal to the Term Loans and Revolving Credit Commitment
assumed by it pursuant to such Assignment and Acceptance and, if the transferor
Bank has retained a portion of its Term Loans and Revolving Credit Commitment
hereunder, new Notes to the order of the transferor Bank in an amount equal to
the Term Loans and Revolving Credit Commitment retained by it hereunder. Such
new Notes shall be dated the date of the initial Term Loans evidenced thereby
and shall otherwise be in the form of the Notes replaced thereby. The Notes
surrendered by the transferor Bank shall be returned by the Agent to the Company
marked "cancelled."
(d) The Agent shall maintain at its address referred to in
subsection 9.2 a copy of each Assignment and Acceptance delivered to it and a
register (the "REGISTER") for the recordation of the names and addresses of the
Banks and the Revolving Credit Commitment of, and principal amount of the Loans
owing to, each Bank from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Company, the Agent and the
Banks shall treat each Person whose name is recorded therein as the owner of the
Loans recorded therein for all purposes of this Agreement. Any assignment of any
Loan or other obligation 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 Company or any Bank at any reasonable time and
from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by a transferor Bank and an Assignee (and, in the case of an Assignee that is
not then a Bank or an affiliate thereof, by the Company and the Agent) together
with payment to the Agent of a registration and processing fee of $1,000, in the
case of an Assignee that is then a Bank, or $4,000, in the case of a an Assignee
that is not then a Bank, the Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) on the Transfer Effective Date determined pursuant thereto
record the information contained therein in the Register and give notice of such
acceptance and recordation to the Banks and the Company.
(f) The Company authorizes each Bank to disclose to any
Assignee or Participant (each, a "TRANSFEREE") and any prospective Transferee
any and all financial information in such Bank's possession concerning the
Company and its affiliates which has been delivered to such Bank by or on behalf
of the Company pursuant to this Agreement or which has been delivered to such
Bank by or on behalf of the Company in connection with such Bank's credit
evaluation of the Company and its affiliates prior to becoming a party to this
Agreement. All non-public information provided to any Transferee or prospective
Transferee pursuant to this paragraph (f) shall be delivered to such Person
subject to the requirement that such Person maintain the confidentiality of such
information.
(g) If, pursuant to this subsection, any interest in this
Agreement or any Note is transferred to any Transferee which is not incorporated
or organized under the laws of the United States or a state thereof, the
transferor Bank shall cause such Transferee (1) to represent to the
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transferor Bank (for the benefit of the transferor Bank, the Agent and the
Company) that under applicable law and treaties no taxes will be required to be
withheld by the Agent, the Company or the transferor Bank with respect to any
payments to be made to such Transferee in respect of its participation in the
Loans and (2) to agree (for the benefit of the transferor Bank, the Agent and
the Company) that it will deliver the tax forms and other documents required to
be delivered pursuant to paragraph 2.20(b) and comply with all applicable U.S.
laws and regulations with respect to withholding tax exemptions.
(h) Nothing herein shall prohibit any Bank from pledging any
Note in accordance with applicable law.
9.7 ADJUSTMENTS; SET-OFF. (a) If any Bank (a "benefitted
Bank") shall at any time prior to the date upon which all the Loans shall become
due and payable (whether at the stated maturity, by acceleration or otherwise)
receive any payment of all or part of its Term Loans or Revolving Credit Loans,
or interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off or otherwise) in a greater proportion
than any such payment to and collateral received by any other Bank, if any, in
respect of such other Bank's Term Loans or Revolving Credit Loans, as the case
may be, or interest thereon, such benefitted Bank shall purchase for cash from
the other Banks such portion of each such other Bank's Term Loans or Revolving
Credit Loan, or shall provide such other Banks with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
benefitted Bank to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Banks having Term Loans or Revolving Credit
Loans, as the case may be. If any benefitted Bank shall at any time on or after
the date upon which all the Loans shall become due and payable (whether at the
stated maturity, by acceleration or otherwise) receive any payment of all or
part of its Loans, or interest thereon, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off or otherwise) in a
greater proportion than any such payment to and collateral received by any other
Bank, if any, in respect of such other Bank's Loans, or interest thereon, such
benefitted Bank shall purchase for cash from the other Banks such portion of
each such other Bank's Loans, or shall provide such other Banks with the
benefits of any such collateral, or the proceeds thereof, as shall be necessary
to cause such benefitted Bank to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Banks. If all or any portion of
such excess payment or benefits is thereafter recovered from such benefitted
Bank, such purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest. The Company
agrees that each Bank so purchasing a portion of another Bank's Term Loan or
Revolving Credit Loan may exercise all rights of payment (including, without
limitation, right of set-off) with respect to such portion as fully as if such
Bank were the direct holder of such portion.
(b) In addition to any rights and remedies of the Banks
provided by law, each Bank shall have the right, without prior notice to the
Company, any such notice being expressly waived by the Company to the extent
permitted by applicable law, upon all the Obligations payable to such Bank
becoming due and payable (whether at the stated maturity thereof, by
acceleration or otherwise), to set-off and apply against the Obligations of the
Company to such Bank, any amount owing from such Bank to the Company. Each Bank
agrees promptly to notify
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the Company and the Agent after any such set-off and application made by such
Bank, PROVIDED that the failure to give such notice shall not affect the
validity of such set-off and application.
9.8 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.9 COUNTERPARTS. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument.
9.10 INTEGRATION; GOVERNING LAW. This Agreement represents the
agreement of each of the parties hereto with respect to the subject matter
hereof and there are no promises or representations by the Agent or any Bank
relative to the subject matter hereof not stated or referred to herein. THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK FOR CONTRACTS TO BE PERFORMED IN THE
STATE OF NEW YORK.
9.11 SUBMISSION TO JURISDICTION. The Company hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement, the Notes and any other Credit
Document to which it is a party, or for recognition and enforcement of
any judgement in respect of any thereof, to the non-exclusive general
jurisdiction of the courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and
appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts, and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form and mail), postage
prepaid, to the Company at its address set forth in subsection 9.2 or
at such other address of which the Agent shall have been notified
pursuant thereto; and
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to xxx in any other jurisdiction.
9.12 AMENDMENTS TO SECURITY DOCUMENTS. Each of the parties
hereto and, by their signatures hereto, each of the Credit Parties (other than
the Company) hereby agrees that (a)
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each of the Security Documents shall be deemed amended to change each reference
to a Section or subsection of the Existing Credit Agreement that is contained
therein to a reference to the corresponding Section or subsection, as the case
may be, of this Agreement and (b) the Subsidiary Guaranty and the Security
Agreement are each hereby amended by changing the term "Obligations" contained
therein to read as set forth in the definition of "Obligations" contained in
subsection 1.1.
9.13 WAIVER OF JURY TRIAL. THE COMPANY AND THE BANKS HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, THE NOTES OR ANY OTHER CREDIT DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.
9.14 RESTATEMENT. By their execution hereof, each of the
parties hereto agrees that all indebtedness of the Company under the Existing
Credit Agreement shall be continued hereunder, that the Existing Credit
Agreement shall be amended and restated to reflect such continuation and to
preserve the perfection and priority of all security interests securing such
indebtedness under the Existing Credit Agreement and that all indebtedness and
obligations of the Company hereunder shall be secured by the Security Documents.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered in New York, New York, as of the
date first above written.
AMERICAN MEDIA OPERATIONS, INC.
By: Xxxxxxx X. Xxxxxxx
------------------
Title: Senior Vice President - Chief
Financial Officer
NATIONAL ENQUIRER, INC.
WEEKLY WORLD NEWS, INC.
DISTRIBUTION SERVICES, INC.
NDSI, INC.
FAIRVIEW PRINTING, INC.
STAR EDITORIAL, INC.
SOM PUBLISHING, INC.
COUNTRY WEEKLY, INC.
FRONTLINE MARKETING, INC.
RETAIL MARKETING NETWORK, INC.
By: Xxxxxx Xxxxxxxxxxx
------------------
Title: Assistant Secretary
AMERICAN MEDIA MARKETING, INC.
By: Xxxxxx Xxxxxxxxxxx
------------------
Title: Assistant Secretary
THE CHASE MANHATTAN BANK, as
Administrative Agent and as a Bank
By: Xxxxx Xxxxxx
------------
Title: Vice President
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THE BANK OF NEW YORK, as Documentation
Agent and as a Bank
By: Xxxxxxx X. Xxxxxx
-----------------
Title: Assistant Vice President
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
By: Xxxx X. Xxxxx
-------------
Title: Vice President
BANKBOSTON, N.A.
By: Xxxxxxxx X. Xxxxx
-----------------
Title: Director
CANADIAN IMPERIAL BANK OF COMMERCE
By: Xxxxxxx XxXxxxxx
----------------
Title: Executive Director
CREDIT LYONNAIS ATLANTA AGENCY
By: Xxxxx X. Xxxxxx
---------------
Title: First Vice President and Manager
FLEET NATIONAL BANK
By: Xxxx X. Xxxxx
-------------
Title: Vice President
DRESDNER BANK A.G., NEW YORK AND GRAND CAYMAN BRANCHES
By: Xxxx X. Xxxxxxx
---------------
Title: First Vice President
By: Xxxxxxx X. Xxxxxxx
------------------
Title: Assistant Vice President
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PNC BANK, NATIONAL ASSOCIATION
By: Xxxx X. Xxxxxx
--------------
Title: Vice President
BANK OF NOVA SCOTIA
By: Xxxxx Xxxxxxx
-------------
Title: Vice President
FIRST HAWAIIAN BANK
By: Xxxxxx X. Xxxxx
---------------
Title: Vice President
THE SUMITOMO TRUST & BANKING CO., LTD., NEW YORK BRANCH
By: Xxxxx X. Xxxxxx
---------------
Title: Senior VP & Department Manager
XXX XXXXXX AMERICAN CAPITAL PRIME RATE INCOME TRUST
By: Xxxxxxx X. Xxxxxxx
------------------
Title: Senior Vice President and Director
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KZH HOLDING CORPORATION III
By: Xxxxxxxx Xxxxxx
---------------
Title: Authorized Agent
