Exhibit 10.33
EXECUTION VERSION
SECOND AMENDMENT, dated as of January 27,
2004 (this "AMENDMENT"), to the $192,500,000 AMENDED
AND RESTATED FIVE-YEAR REVOLVING CREDIT AND
COMPETITIVE ADVANCE FACILITY AGREEMENT, dated as of
May 20, 2002 (as amended, the "CREDIT AGREEMENT"),
among THE READER'S DIGEST ASSOCIATION, INC., a
Delaware corporation (the "COMPANY"), the BORROWING
SUBSIDIARIES party thereto (the "BORROWING
SUBSIDIARIES"), the LENDERS party thereto (the
"LENDERS") and JPMORGAN CHASE BANK, as administrative
agent (in such capacity, the "ADMINISTRATIVE AGENT")
and collateral agent (in such capacity, the
"COLLATERAL AGENT").
WITNESSETH:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
agreed to extend credit to the Borrowers on the terms and subject to the
conditions set forth therein.
WHEREAS, the Company has informed the Administrative Agent
that it intends to enter into a sale and partial leaseback transaction of its
Westchester County, New York headquarters and has requested that the Required
Lenders amend certain provisions of the Credit Agreement in connection with such
sale and leaseback transaction as set forth in this Amendment, and the Lenders
whose signatures appear below, constituting at least the Required Lenders, are
willing to amend the Credit Agreement on the terms and subject to the conditions
set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements
herein contained and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1. DEFINED TERMS. Capitalized terms used but not otherwise
defined herein have the meanings assigned to them in the Credit Agreement.
SECTION 2. AMENDMENTS TO SECTION 1.01. Section 1.01 of the Credit
Agreement is hereby amended by adding in its proper alphabetical order the
following definition:
"HEADQUARTERS SALE AND LEASEBACK" means a sale and leaseback
transaction consisting of the sale of the Company's headquarters
located in the town of New Castle and having a mailing address at
Reader's Xxxxxx Xxxx, Xxxxxxxxxxxxx, XX 00000, for Net Proceeds of not
less than $35,000,000, which Net Proceeds shall be used to repay
amounts outstanding under the Term Loan Agreement as required pursuant
to Section 2.12(b) thereof, and the partial leaseback of such
headquarters by the Company.
SECTION 3. AMENDMENT TO SECTION 6.01(a)(ix). Section 6.01(a)(ix) of the
Credit Agreement is hereby amended in its entirety to read as follows:
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"(a)(ix) other Debt that, when aggregated with the aggregate
outstanding Debt of the Company secured by Liens permitted pursuant to
Section 6.02(o) and the aggregate sale price of the assets sold in sale
and leaseback transactions permitted pursuant to Section 6.03(b), shall
at no time exceed 5.0% of Consolidated Assets."
SECTION 4. AMENDMENTS TO SECTION 6.02(o). Section 6.02(o) of the Credit
Agreement is hereby amended in its entirety to read as follows:
"(o) other Liens securing Debt that, when aggregated with the
Debt of Subsidiaries permitted under Section 6.01(a)(ix) and the
aggregate sale price of the assets sold in sale and leaseback
transactions permitted under Section 6.03(b), does not exceed 5.0% of
Consolidated Assets at any time."
SECTION 5. AMENDMENT TO SECTION 6.03. Section 6.03 of the Credit
Agreement is hereby amended in its entirety to read as follows:
"SALE AND LEASEBACK TRANSACTIONS. The Company will not, and
will not permit any Subsidiary to, enter into any arrangement, directly
or indirectly, with any Person whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now
owned or hereafter acquired, and thereafter rent or lease property
which it intends to use for substantially the same purpose or purposes
as the property being sold or transferred; PROVIDED, HOWEVER, that,
notwithstanding the above, (a) the Company may consummate the
Headquarters Sale and Leaseback and (b) the Company or any Subsidiary
may engage in any other sale and leaseback transactions if the
aggregate sale price of the assets sold in such other transactions,
when aggregated with the Debt of Subsidiaries permitted under Section
6.01(a)(ix) and the Debt secured by Liens permitted pursuant to Section
6.02(o), does not exceed 5.0% of Consolidated Assets at any time."
SECTION 6. AMENDMENT TO SECTION 6.05(d). Section 6.05(d) of the Credit
Agreement is hereby amended in its entirety to read as follows:
"(d) (i) the sale of the Company's headquarters in connection
with the Headquarters Sale and Leaseback and (ii) sales, transfers and
dispositions of other assets for consideration not greater than
$5,000,000 for any such transaction or series of related transactions;"
SECTION 7. CONSENT TO HEADQUARTERS SALE AND LEASEBACK TRANSACTION;
AUTHORIZATION TO RELEASE MORTGAGE. Each of the Lenders hereby consents to the
Headquarters Sale and Leaseback and hereby authorizes the Collateral Agent,
pursuant to Section 3.04 of the Mortgage encumbering the Company's headquarters,
to execute and deliver any documents and take all actions reasonably requested
by the Company to release such Mortgage.
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SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The Company, as
to itself and each of its Subsidiaries, hereby represents and warrants to and
agrees with each Lender and the Administrative Agent that:
(a) The representations and warranties set forth in Article IV of the
Credit Agreement, as amended hereby, are true and correct in all material
respects on and as of the Amendment Effective Date (as defined below), and after
giving effect to this Amendment, with the same effect as if made on and as of
such date, except to the extent such representations and warranties expressly
relate to an earlier date; and
(b) This Amendment has been duly authorized, executed and delivered by
the Company. Each of this Amendment and the Credit Agreement as amended hereby
constitutes a legal, valid and binding obligation of the Company and each
Borrowing Subsidiary, enforceable against the Company and each Borrowing
Subsidiary in accordance with its terms, except as enforceability may be limited
by (i) any applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and (ii)
general principles of equity.
(c) As of the Amendment Effective Date (as defined below), after giving
effect to this Amendment, no Default has occurred and is continuing.
SECTION 9. CONDITIONS TO EFFECTIVENESS. This Amendment shall become
effective as of the date first above written (the "AMENDMENT EFFECTIVE DATE")
upon satisfaction of the following conditions:
(a) The Administrative Agent shall have received duly executed counterparts
hereof which, when taken together, bear the authorized signatures of
the Company, the Borrowing Subsidiaries and the Required Lenders; and
(b) To the extent invoiced, the Administrative Agent shall have been
reimbursed for all its reasonable out of pocket expenses, including the
reasonable fees, charges and disbursements of its counsel, related to
this Amendment or the Credit Agreement.
SECTION 10. CREDIT AGREEMENT. Except as specifically stated herein, the
Credit Agreement shall continue in full force and effect in accordance with the
provisions thereof. As used therein, the terms "Agreement", "herein",
"hereunder", "hereto", "hereof" and words of similar import shall, unless the
context otherwise requires, refer to the Credit Agreement as modified hereby.
SECTION 11. APPLICABLE LAW. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 12. COUNTERPARTS. This Amendment may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original but all of which, when taken together, shall constitute a
single
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instrument. Delivery of an executed counterpart of a signature page of
this Amendment by telecopy shall be effective as delivery of a manually executed
counterpart hereof.
SECTION 13. EXPENSES. The Company agrees to (a) pay all fees separately
agreed to between the Company and the Administrative Agent relating to this
Amendment and (b) reimburse the Administrative Agent for its reasonable
out-of-pocket expenses in connection with this Amendment, including the
reasonable fees, charges and disbursements of Cravath, Swaine & Xxxxx LLP,
counsel for the Administrative Agent.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their respective authorized officers as of the
date first above written.
THE READER'S DIGEST ASSOCIATION, INC.,
by:
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Name:
Title:
BOOKS ARE FUN, LTD.,
by:
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Name:
Title:
QSP, INC.,
by:
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Name:
Title:
XXXXXX MEDIA GROUP, INC.,
by:
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Name:
Title:
JPMORGAN CHASE BANK, individually and as
Administrative Agent and Collateral Agent,
by:
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Name:
Title:
To approve the Second Amendment to the Credit
Agreement:
Name of Institution:
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by:
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Name:
Title:
