Exhibit 4
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$100,000,000
TERM LOAN AGREEMENT
among
MEREDITH CORPORATION,
as Borrower
THE NORTHERN TRUST COMPANY,
as Agent
and the Banks named herein
December 19, 1994
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Page 1 of 40
TABLE OF CONTENTS
Page
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INTRODUCTION .................................................... 3
SECTION 1. DEFINITIONS AND ACCOUNTING. ........................ 3
SECTION 2. THE TERM LOAN. ..................................... 10
SECTION 3. FEES. .............................................. 12
SECTION 4. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC. ... 13
SECTION 5. YIELD, CAPITAL MAINTENANCE AND TAXES PROVISIONS. ... 16
SECTION 6. CONDITIONS PRECEDENT. .............................. 21
SECTION 7. REPRESENTATIONS AND WARRANTIES. .................... 22
SECTION 8. COVENANTS. ......................................... 26
SECTION 9. EVENTS OF DEFAULT. ................................. 31
SECTION 10. THE AGENT. ......................................... 33
SECTION 11. MISCELLANEOUS. ..................................... 36
Schedule 1 - Commitments and Information Concerning Banks
Schedule 2 - Existing Credit Agreements
Schedule 3 - Subsidiaries and Investments
Exhibit A - Form of Note
Exhibit B - Form of Opinion of Counsel to the Company
Page 2 of 40
TERM LOAN AGREEMENT
-------------------
AGREEMENT dated as of December 19, 1994 among MEREDITH CORPORATION, an
Iowa corporation (the "Company"), each of the banks that is a signatory hereto
(individually, a "Bank" and, collectively, the "Banks"), and THE NORTHERN TRUST
COMPANY, as agent for the Banks (in such capacity, together with its successors
in such capacity, the "Agent").
WHEREAS, the Company has requested that the Banks make a term loan to it
in an aggregate amount not exceeding $100,000,000, and the Banks are willing to
make such loan upon the terms hereof.
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. DEFINITIONS AND ACCOUNTING.
1.1. Defined Terms. As used herein, the following terms shall have the
following meanings (terms defined in this Section 1.1 or in other provisions of
this Agreement in the singular to have correlative meanings when used in the
plural and vice versa):
"Applicable Lending Office" shall mean, for each Bank and for each type of
Loan, the lending office of such Bank designated for such type of Loan on
Schedule 1 hereto or such other office of such Bank as such Bank may from time
to time specify to the Agent and the Company as the office by which its Loans
of such type are to be made and maintained.
"Business Day" shall mean any day on which commercial banks are not
authorized or required by law to close in Chicago, Illinois, and, if such day
relates to a Conversion, notice, payment or other transaction in respect of a
Eurodollar Loan, a day which is also a day on which dealings in Dollar deposits
are carried out in the London interbank market.
"Capital Lease Obligations" shall mean, as to any Person, the obligations
of such Person which are required to be accounted for as capital leases on a
balance sheet of such Person under GAAP and, for purposes of this Agreement,
the amount of such obligations shall be the capitalized amount thereof,
determined in accordance with GAAP.
"Cash Flow" shall mean, for any period, the sum, for the Company and its
Consolidated Subsidiaries, of (a) net operating income (calculated before
taxes, extraordinary and non-recurring items and income or loss attributable to
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equity in affiliates) for such period plus (b) depreciation and amortization
(to the extent deducted in determining net operating income), Interest Expense,
lease expense, film rental contract expenses and amortization of film rights
for such period minus (c) Capital Expenditures paid during such period.
"Capital Expenditures" shall mean, for any period, expenditures (including
the aggregate amount of Capital Lease Obligations incurred during such period)
paid by the Company or any of its Consolidated Subsidiaries to acquire or
construct fixed assets, plant and equipment (including renewals, improvements
and replacements, but excluding repairs) during such period computed in
accordance with GAAP; provided, that expenditures in an aggregate amount not in
excess of $32,000,000 incurred in connection with (i) the construction of a new
campus for the Company in Des Moines, Iowa and/or (ii) leasehold improvements
to the premises of the Company in New York, New York shall not be treated as
Capital Expenditures.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Commitment" shall mean, as to each Bank, the obligation of such Bank to
participate in the making of the Term Loan in the amount specified for such
Bank in Schedule 1 under the caption "Commitment".
"Consolidated Subsidiary" shall mean each Subsidiary (whether now existing
or hereafter created or acquired) the financial statements of which are
required to be consolidated with the financial statements of the Company in
accordance with GAAP; provided, that Meredith Cable, Inc. shall not be treated
as a Consolidated Subsidiary for purposes of this Agreement.
"Continue", "Continuation" and "Continued" shall refer to the continuation
pursuant to Section 2.4 hereof of a Eurodollar Loan as a Eurodollar Loan from
one Interest Period to the next Interest Period.
"Convert", "Conversion" and "Converted" shall refer to a conversion
pursuant to Section 2.4 hereof of Prime Rate Loans into Eurodollar Loans, or of
Eurodollar Loans into Prime Rate Loans.
"Debt Service" shall mean, for any period, the sum (determined on a
consolidated basis in accordance with GAAP and without duplication) of the
following: (a) all payments of principal of Indebtedness of the Company and
its Consolidated Subsidiaries scheduled to be made during such period plus
(b) all Interest Expense for such period.
"Default" shall mean an Event of Default or an event which with notice or
lapse of time or both would become an Event of Default.
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"Dollars" and "$" shall mean lawful money of the United States of America.
"Environmental Laws" shall mean all federal, state and local laws,
including statutes, regulations, ordinances, codes, rules and other
governmental restrictions and requirements, relating to the discharge of air
pollutants, water pollutants or process waste water or otherwise relating to
the environment or hazardous substances or the treatment, processing, storage,
disposal, release, transport or other handling thereof, including, but not
limited to, the federal Solid Waste Disposal Act, the federal Clean Air Act,
the federal Clean Water Act, the federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the federal Toxic Substances Control
Act, regulations of the Nuclear Regulatory Agency, and regulations of any state
department of natural resources or state environmental protection agency, in
each case as now or at any time hereafter in effect.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or business which is
a member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Company or is under common control (within
the meaning of Section 414(c) of the Code) with the Company.
"Eurodollar Loans" shall mean Loans the interest rates on which are deter-
mined on the basis of rates referred to in the definition of "LIBOR Rate".
"Event of Default" shall have the meaning attributed thereto in Section 9
hereof.
"Fixed Charges Ratio" shall mean, as at any date of determination thereof,
the ratio of (a) Cash Flow for the period of four consecutive fiscal quarters
ending on or most recently ended prior to such date of determination to (b) the
sum of Debt Service, lease expense and film rental contracts expense for such
period.
"GAAP" shall mean generally accepted accounting principles as in effect
from time to time.
"Guarantee" shall mean (a) a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance of, or
otherwise to be or become contingently liable under or with respect to, the
Indebtedness, other obligations, net worth, working capital or earnings of any
Person, (b) a guarantee of the payment of dividends or other distributions upon
the stock or other equity interests of any Person, or (c) an agreement to
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purchase, sell or lease (as lessee or lessor) property or services primarily
for the purpose of enabling a debtor to make payment of such debtor's
obligations or an agreement to assure a creditor against loss, including
causing a bank or other financial institution to issue a letter of credit or
other similar instrument for the benefit of another Person, but excluding
endorsements for collection or deposit in the ordinary course of business. The
terms "Guarantee" and "Guaranteed" shall have correlative meanings.
"Indebtedness" shall mean, as to any Person: (a) obligations created,
issued or incurred by such Person for borrowed money (whether by loan, by the
issuance and sale of debt securities or the sale of property to another Person
subject to an understanding, contingent or otherwise, to repurchase such
property from such Person); (b) obligations of such Person to pay the deferred
purchase or acquisition price of property or services, other than trade
accounts payable (other than for borrowed money) arising and accrued expenses
incurred in the ordinary course of business (for purposes of this Agreement,
accrued expenses in an aggregate amount not in excess of $32,000,000 incurred
in connection with (i) the construction of a new campus for the Company in Des
Moines, Iowa and (ii) leasehold improvements to the premises of the Company in
New York, New York shall be deemed to be incurred in the ordinary course of
business) so long as such trade accounts payable are payable within 60 days of
the date the respective goods are delivered or the respective services are
performed; (c) indebtedness of others secured by a Lien on the property of such
Person, whether or not the respective indebtedness so secured has been assumed
by such Person; (d) obligations of such Person in respect of letters of credit
or similar instruments issued or accepted by banks and other financial
institutions for the account of such Person; (e) Capital Lease Obligations of
such Person; and (f) Indebtedness of others Guaranteed by such Person.
"Interest Expense" shall mean, for any period, all interest in respect of
Indebtedness accrued or capitalized during such period (whether or not actually
paid during such period).
"Interest Period" shall mean, with respect to any Eurodollar Loan, each
period commencing on the date such Eurodollar Loan is made or Converted from a
Prime Rate Loan or the last day of the next preceding Interest Period for such
Loan and ending on the numerically corresponding day in the first, second,
third, sixth or twelfth calendar month thereafter, as the Company may select,
except that each Interest Period which commences on the last Business Day of a
calendar month (or on any day for which there is no numerically corresponding
day in the appropriate subsequent calendar month) shall end on the last
Business Day of the appropriate subsequent calendar month; provided, that (i)
the Company shall select Interest Periods so that on any Principal Payment Date
the aggregate principal amount of Loans not subject to Interest Periods
extending beyond such Principal Payment Date shall equal or exceed the
Page 6 of 40
scheduled payment of principal of the Term Loan due on such Principal Payment
Date, and (ii) each Interest Period which would otherwise end on a day which is
not a Business Day shall end on the next succeeding Business Day or, if such
next succeeding Business Day falls in the next succeeding calendar month, on
the next preceding Business Day.
"Investment" in any Person shall mean: (a) the acquisition of capital
stock, bonds, notes, debentures, partnership or other ownership interests or
other securities of such Person; (b) any deposit with, or loan or other
extension of credit to, such Person; (c) any Guarantee of Indebtedness or other
liabilities of such Person; and (d) any amount committed to be lent to such
Person.
"LIBOR Rate" shall mean, with respect to any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/16 of 1%) which is the British Bankers Association interest
settlement rate published on the Dow Jones Telerate Screen at approximately
11:00 a.m. London time on the date two Business Days prior to the first day of
such Interest Period as the rate in the London interbank market for Dollar
deposits having a term comparable to such Interest Period and in an amount
comparable to the principal amount of the Eurodollar Loans to be outstanding
for such Interest Period.
"Lien" shall mean, with respect to any property of any Person, any
mortgage, lien, pledge, charge, security interest or encumbrance of any kind in
respect thereof, including the interest of a vendor or lessor under any
conditional sale, capital lease or other title retention agreement with respect
to any property purchased, leased or otherwise held by such Person.
"Loans" shall have the meaning attributed thereto in Section 2.1.
"Majority Banks" shall mean Banks holding at least 66-2/3% of the unpaid
principal amount of the Term Loan; provided, that if the Term Loan has not been
made, "Majority Banks" shall mean Banks having at least 66-2/3% of the
aggregate amount of the Commitments.
"Margin Stock" shall mean margin stock within the meaning of Regulations U
and X.
"Multiemployer Plan" shall mean a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by the Company or
any ERISA Affiliate and which is covered by Title IV of ERISA.
"Notes" shall mean the promissory notes provided for by Section 2.8
hereof.
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"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Investments" of any Person shall mean: (a) direct obligations
of the United States of America, or of any agency thereof, or obligations
guaranteed as to principal and interest by the United States of America, or of
any agency thereof, in either case maturing not more than 180 days from the
date of acquisition thereof by such Person; (b) certificates of deposit issued
by any bank or trust company organized under, or having a branch licensed
under, the laws of the United States of America or any state thereof whose
long-term debt securities are rated A or higher by Standard & Poor's
Corporation or Moody's Investor Services, Inc., which certificates of deposit
mature not more than 180 days from the date of acquisition thereof by such
Person; and (c) commercial paper rated A-1 or higher or P-1 by Standard &
Poor's Corporation or Moody's Investors Services, Inc., respectively, maturing
not more than 180 days from the date of acquisition thereof by such Person.
"Person" shall mean any individual, corporation, company, limited
liability company, voluntary association, partnership, trust, estate,
unincorporated organization or government (or any agency, instrumentality or
political subdivision thereof).
"Plan" shall mean an "employee pension benefit plan" within the meaning of
Section 3(2) of ERISA, other than a Multiemployer Plan.
"Post-Default Rate" shall mean a rate per annum equal to 2% above the
Prime Rate as in effect from time to time.
"Prime Rate" shall mean on any day the prime rate established by The
Northern Trust Company and in effect on such day. Each change in the Prime
Rate shall be effective from the date of the announcement by The Northern Trust
Company of a change in its prime rate. Neither the Prime Rate nor the prime
rate of The Northern Trust Company is intended to constitute the lowest rate of
interest charged by The Northern Trust Company or any Bank.
"Prime Rate Loans" shall mean Loans the interest rates on which are
determined on the basis of the Prime Rate.
"Principal Payment Date" shall mean each date specified as such in Section
2.3.
"Quarterly Dates" shall mean the last Business Day of each March, June,
September and December, commencing in March, 1995.
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"Regulations D, U and X" shall mean, respectively, Regulations D, U and X
of the Board of Governors of the Federal Reserve System (or any successor), as
the same may be amended or supplemented from time to time.
"Regulatory Change" shall mean any change after the date of this Agreement
in federal, state or foreign law or regulations (including, without limitation,
Regulation D) or the adoption or making after such date of any interpretation,
directive or request applying to a Bank (whether or not having the force of
law) by any court or governmental or monetary authority.
"SOP 93-7 Charge" shall mean any charge to net earnings taken by the
Company in accordance with GAAP with respect to its 1994-1995 fiscal year as a
result of implementation of the American Institute of Certified Public
Accountants' Standard Operating Procedure 93-7.
"Stockholders' Equity" shall mean, as at any date of determination
thereof, the sum of the following for the Company and its Consolidated
Subsidiaries determined (without duplication) in accordance with GAAP:
(a) the amount of all capital stock, including all classes of common and
preferred stock, plus
(b) the amount of paid-in capital and retained earnings (or, in the case
of a retained earnings deficit, minus the amount of such deficit), minus
(c) unearned compensation and any other deductions required to be made
under GAAP in the determination of stockholders' equity from time to time.
"Subsidiary" shall mean any corporation of which at least a majority of
the outstanding shares of stock having by the terms thereof ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether any other class of stock might have voting power by
reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by the Company.
1.2. Accounting. Unless otherwise specified herein, all accounting terms
used herein shall be interpreted, all determinations with respect to accounting
matters hereunder shall be made, and all financial statements and certificates
and reports as to financial matters required to be furnished to the Agent or
the Banks hereunder shall be prepared, in accordance with GAAP applied on a
basis consistent with the audited consolidated financial statements of the
Company and the Consolidated Subsidiaries referred to in Section 7.2 hereof
(except for changes concurred in by the Majority Banks); provided, that
notwithstanding any term or provision of this Agreement to the contrary,
Meredith Cable, Inc. shall not be deemed to be a Consolidated Subsidiary and
Page 9 of 40
all consolidated financial statements, certificates and reports provided, and
all consolidated determinations made, hereunder shall exclude Meredith Cable,
Inc.
Section 2. THE TERM LOAN.
2.1. The Term Loan. Each Bank severally agrees, on the terms and subject
to the conditions of this Agreement, to participate in the making of a term
loan to the Company by making a single term loan (all of the term loans made by
all of the Banks under this Agreement being collectively called the "Term
Loan") to the Company in a principal amount equal to the amount of such Bank's
Commitment, which Term Loan shall be made during the period from the date
hereof to January 31, 1995 (on which date the Commitments shall expire).
Subject to the terms and conditions of this Agreement, the Term Loan shall be
subdivided into portions from time to time as specified by the Company in order
to permit the Company to elect to have interest computed on such portions as
provided in this Agreement, each of which portions shall be called a "Loan" and
all or some of which shall be called, collectively, "Loans". The "date" of a
Loan or the "making" of a Loan shall be the date of the making of the Term Loan
or the date on which another Loan or Loans were Converted into such Loan, as
the case may be. Each Loan shall be a Prime Rate Loan or a Eurodollar Loan.
2.2. Notice and Disbursement. The Company shall give the Agent (which
shall promptly notify the Banks) two Business Days' prior written notice of the
borrowing of the Term Loan hereunder, which notice shall specify the amount and
type of each of the Loans that will initially comprise the Term Loan; provided,
that if the Term Loan shall be comprised entirely of Prime Rate Loans on the
date of its borrowing, such notice may be given on the date of the making of
the Term Loan. Such notice shall be delivered to the Agent by 10:00 a.m.,
Chicago time, on the date by which it must be given and shall be effective only
on receipt by the Agent. Not later than 2:00 p.m., Chicago time, on the date
specified for the borrowing of the Term Loan hereunder, each Bank shall make
available the amount of its participation in the Term Loan to the Agent, at
such account as it shall specify, in immediately available funds, for the
account of the Company. The amount so received by the Agent shall, subject to
the terms and conditions of this Agreement, be made available to the Company by
depositing the same, in immediately available funds, in an account of the
Company maintained at the Agent.
2.3. Repayment.
The Company shall repay the principal of the Term Loan in six
installments, one installment being due on each Principal Payment Date set
forth below, each installment being in the amount set forth opposite such
Principal Payment Date:
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Principal Payment Date Amount
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June 1, 1995 $10,000,000
June 1, 1996 $15,000,000
June 1, 1997 $15,000,000
December 1, 1997 $15,000,000
June 1, 1998 $20,000,000
December 31, 1998 $25,000,000
2.4. Prepayment, Conversions and Continuations. Subject to Section 4.4
hereof, the Company shall have the right to prepay the principal of the Term
Loan, or to Convert Loans of one type into Loans of another type or Continue
Eurodollar Loans as such at any time, provided that: (a) the Company shall
give the Agent notice of each such prepayment, Conversion or Continuation as
provided in Section 4.5 hereof; (b) prepayments shall be made only upon prior
notice as provided in Section 4.5 and shall be in a minimum principal amount of
$5,000,000 and in integral multiples of $1,000,000; and (c) Eurodollar Loans
may be prepaid, Continued or Converted only on the last day of an Interest
Period for such Eurodollar Loans. Prepayments shall be applied to installments
of the Term Loan in inverse order of maturity; provided, that any prepayment
made 60 or fewer days before a Principal Payment Date shall be applied to
installments of the Term Loan in direct order of maturity if the Company shall
so request in the relevant notice of prepayment.
2.5. Interest.
(a) The Company promises to pay to the Agent for the account of each Bank
interest on the unpaid principal amount of each Loan made by such Bank for the
period from and including the date of such Loan to but excluding the date such
Loan shall be paid in full, (i) while such Loan is a Prime Rate Loan, at a rate
per annum equal to the Prime Rate (as in effect from time to time); and (ii)
while such Loan is a Eurodollar Loan, for each Interest Period relating
thereto, at a rate per annum equal to the LIBOR Rate for such Loan for such
Interest Period plus .35%.
(b) Notwithstanding the foregoing, the Company will pay to the Agent for
the account of each Bank interest at the Post-Default Rate on any principal of
any Loan made by such Bank, and (to the fullest extent permitted by law) on any
interest or other amount payable by the Company hereunder or under the Note
held by such Bank which shall not be paid in full when due (whether at stated
maturity, by acceleration or otherwise), for each day during the period from
and including the due date thereof to but excluding the date the same is paid
in full.
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(c) Accrued interest shall be payable (i) in the case of a Prime Rate
Loan, quarterly on the Quarterly Dates, (ii) in the case of a Eurodollar Loan,
on the last day of each Interest Period therefor, in the case of a Eurodollar
Loan having an Interest Period of one month or two months, or on the Quarterly
Dates, in the case of any other Eurodollar Loan, and (iii) in the case of any
Loan, upon the payment or prepayment thereof or the Conversion of such Loan to
a Loan of another type (but only on the principal amount so paid, prepaid or
Converted), except that interest payable at the Post-Default Rate shall be
payable from time to time on demand and interest on any Eurodollar Loan that is
Converted into a Prime Rate Loan pursuant to Section 5.4 hereof shall be
payable on the date of Conversion (but only to the extent so Converted).
2.6. Lending Offices. The Loans of each type made by each Bank shall be
made and maintained at such Bank's Applicable Lending Office for Loans of such
type.
2.7. Several Obligations; Remedies Independent. The failure of any Bank
to participate in the making of the Term Loan on the date specified therefor
shall not relieve any other Bank of its obligation to participate in the making
of the Term Loan on such date, but neither any Bank nor the Agent shall be
responsible for the failure of any other Bank to participate in the making of
the Term Loan. The amounts payable by the Company at any time hereunder and
under the Notes to each Bank shall be a separate and independent debt, and each
Bank shall be entitled to protect and enforce its rights arising out of this
Agreement and the Notes, and it shall not be necessary for any other Bank or
the Agent to consent to, or be joined as an additional party in, any
proceedings for such purposes.
2.8. Notes. The participation of each Bank in the Term Loan shall be
evidenced by a promissory note of the Company payable to such Bank in
substantially the form of Exhibit A hereto.
2.9. Business Day Payments. If any Principal Payment Date or the due
date of any other amount hereunder shall fall on a day which shall not be a
Business Day, the due date of the installment of the Term Loan scheduled to be
paid on such Principal Payment Date or the due date of such other amount shall
be postponed to the next Business Day thereafter and interest shall accrue for
the period of such postponement.
Section 3. FEES.
3.1. Facility Fee. Promptly upon the execution and delivery of this
Agreement, the Company shall pay to the Agent for distribution to the Banks a
facility fee in an amount equal to 1/10 of 1% of the Commitments. Such fee
shall be nonrefundable, whether or not the Term Loan shall be made.
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3.2. Agency Fee. The Company shall pay to the Agent for the account of
the Agent such fee as shall be set forth in a letter agreement dated the date
of this Agreement between the Agent and the Company.
Section 4. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
4.1. Payments.
(a) Except to the extent otherwise provided herein, all payments and
prepayments of principal, interest, fees and other amounts to be made by the
Company under this Agreement and the Notes shall be made in Dollars, in
immediately available funds, without deduction, set-off or counterclaim, to the
Agent at such account as it may specify, not later than 11:00 a.m. Chicago time
on the date on which such payment shall become due (each such payment made
after such time to be deemed to have been made on the next succeeding Business
Day).
(b) The Agent may (but shall not be obligated to) debit the amount of any
payment which is required to be made by the Company under this Agreement or any
Note to any ordinary deposit account of the Company with the Agent on or after
the due date of such payment.
(c) Each payment received by the Agent under this Agreement or any Note
for the account of a Bank shall be paid promptly to such Bank, in immediately
available funds, for the account of such Bank's Applicable Lending Office for
the Loan in respect of which such payment is made.
4.2. Pro Rata Treatment. Except to the extent otherwise provided herein:
(a) the borrowing from the Banks of the Term Loan under Section 2.1 hereof
shall be made from the Banks, and the payment of the facility fee under Section
3.1 hereof shall be made for the account of the Banks, pro rata according to
the amounts of their respective Commitments; (b) the making, Conversion and
Continuation of Loans by a particular type (other than Conversions provided for
by Section 5.4 hereof) shall be pro rata among the Banks according to the
amounts of their respective Commitments, and the then current Interest Period
for each Loan of such type shall be coterminous; (c) each payment or prepayment
of principal of the Term Loan by the Company shall be made for the account of
the Banks pro rata in accordance with the respective unpaid principal amounts
of the Term Loan held by the Banks; and (d) each payment of interest on Loans
by the Company shall be made for the account of the Banks pro rata in
accordance with the amounts of interest due and payable to the respective
Banks.
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4.3. Computations. Interest shall be computed on the basis of a year of
360 days and actual days elapsed (including the first day but excluding the
last day) occurring in the period for which payable.
4.4. Minimum Amounts. Except for Conversions or prepayments made
pursuant to Section 5.4 hereof, each Conversion and prepayment of principal of
Loans shall be in an amount at least equal to $5,000,000, and in integral
multiples of $1,000,000, in the case of Prime Rate Loans, and $5,000,000, and
in integral multiples of $1,000,000, in the case of Eurodollar Loans
(prepayments or Conversions of or into Loans of different types or, in the case
of Eurodollar Loans, having different Interest Periods at the same time
hereunder to be deemed separate Conversions and prepayments for purposes of the
foregoing, one for each type or Interest Period). Anything in this Agreement
to the contrary notwithstanding, the aggregate principal amount of Eurodollar
Loans having the same Interest Period shall be at least equal to $5,000,000
and, if any Eurodollar Loans would otherwise be in a lesser principal amount
for any period, such Loans shall be Prime Rate Loans during such period.
4.5. Certain Notices.
(a) Notices by the Company to the Agent of Conversions, Continuations and
prepayments of Loans, of type of Loans and of the duration of Interest Periods
shall be irrevocable and shall be effective only if received by the Agent not
later than 10:00 a.m. Chicago time on the number of Business Days prior to the
date of the relevant Conversion, Continuation or prepayment or the first day of
such Interest Period specified below:
Business
Days Prior
----------
Prepayment of, or
Conversions into, Prime Rate Loans one
Prepayment of, Conversions
into, Continuations as, or duration of
Interest Period for, Eurodollar Loans two
(b) Each such notice of Conversion, Continuation or prepayment shall
specify the Loans to be borrowed, Converted, Continued or prepaid and the
amount (subject to Section 4.4 hereof) and type of the Loans to be Converted,
Continued or prepaid and the date of Conversion, Continuation or prepayment
(which shall be a Business Day). Each such notice of the duration of an
Interest Period shall specify the Loans to which such Interest Period is to
relate. The Agent shall promptly notify the Banks of the contents of each such
notice.
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(c) In the event that the Company fails to select the type of Loan, or
the duration of any Interest Period for any Eurodollar Loan within the time
period and otherwise as provided in this Section 4.5, such Loan (if outstanding
as a Eurodollar Loan) will be automatically Converted into a Prime Rate Loan on
the last day of the then current Interest Period for such Loan or (if
outstanding as a Prime Rate Loan) will remain as a Prime Rate Loan.
4.6. Non-Receipt of Funds by the Agent. Unless the Agent shall have been
notified by a Bank or the Company (the "Payor") prior to the date on which the
Payor is scheduled to make a payment to the Agent (a "Required Payment"), which
notice shall be effective upon receipt, that the Payor does not intend to make
the Required Payment to the Agent, the Agent may assume that the Required
Payment has been made and may in reliance upon such assumption (but shall not
be required to) make the amount thereof available to the intended recipient(s)
on such date and, if the Payor has not in fact made the Required Payment to the
Agent, the recipient(s) of such payment shall, on demand, repay to the Agent
the amount so made available together with interest thereon in respect of each
day during the period commencing on the date such amount was so made available
by the Agent until the date the Agent recovers such amount at a rate per annum
equal to (if the recipient is the Company) the Prime Rate for such day, and (if
the recipient is a Bank) the overnight federal funds rate for such day as
determined by the Agent; and if such recipient(s) shall fail promptly to make
such payment, the Agent shall be entitled to recover such amount, on demand,
from the Payor, together with interest as aforesaid at the Prime Rate (if the
Payor is the Company) or the overnight federal funds rate (if the Payor is a
Bank).
4.7. Set-off and Sharing of Payments, Etc.
(a) The Company agrees that in addition to any right of set-off, banker's
lien or counterclaim a Bank may otherwise have, each Bank shall be entitled to
offset balances and other claims of the Company at any of such Bank's offices,
in Dollars or in any other currency, against any amount payable to such Bank
hereunder which is not paid when due (regardless of whether such balances and
other claims are then due).
(b) If any Bank shall obtain payment of any principal of or interest on
any Loan through the exercise of any right of set-off, banker's lien or
counterclaim or similar right or otherwise and, as a result of such payment,
such Bank shall have received a greater percentage of the principal or interest
then due hereunder by the Company to such Bank than the percentage received by
any other Banks, it shall promptly purchase from such other Banks
participations in the Loans made by such other Banks in such amounts, and make
such other adjustments from time to time as shall be equitable, to the end that
Page 15 of 40
all the Banks shall share the benefit of such excess payment pro rata in
accordance with the unpaid principal and/or interest on the Loans held by each
of the Banks. To such end all the Banks shall make appropriate adjustments
among themselves (by the resale of participations sold or otherwise) if such
payment is rescinded or must otherwise be restored.
(c) The Company agrees that any Bank so purchasing a participation may
exercise all rights of set-off, banker's lien, counterclaim or similar rights
with respect to such participation as fully as if such Bank were a direct
holder of Loans in the amount of such participation.
(d) Nothing contained herein shall require any Bank to exercise any such
right or shall affect the right of any Bank to exercise, and retain the
benefits of exercising, any such right with respect to any other Indebtedness
or obligation of the Company.
Section 5. YIELD, CAPITAL MAINTENANCE AND TAXES PROVISIONS.
5.1. Additional Costs.
(a) The Company shall pay directly to each Bank from time to time such
amounts as such Bank may determine to be necessary to compensate it for any
costs which such Bank determines are attributable to its making or maintaining
of any Eurodollar Loans or its obligation to make any Eurodollar Loans
hereunder, or any reduction in any amount receivable by such Bank hereunder in
respect of any of such Loans or such obligation (such increases in costs and
reductions in amounts receivable being herein called "Additional Costs"),
resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts payable to such Bank
under this Agreement or its Note in respect of any of such Loans (other than
taxes on the overall net income of such Bank or its Applicable Lending Office
imposed by the United States of America or by the jurisdiction in which such
Bank has its principal office or such Applicable Lending Office); or
(ii) imposes or modifies any reserve, special deposit or similar
requirements (other than, in the case of any Bank for any period as to which
the Company is required to pay any amount under paragraph (e) below, the
reserves against "Eurocurrency liabilities" referred to therein) relating to
any extensions of credit or other assets of, or any deposits with or other
liabilities of, such Bank or the Commitment of such Bank; or
(iii) imposes any other condition affecting this Agreement or its Note
(or any of such extensions of credit or liabilities) or Commitment.
Page 16 of 40
(b) Without limiting the effect of the provisions of Section 5.1(a)
hereof, in the event that, by reason of any Regulatory Change, any Bank either
(i) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities of
such Bank which includes deposits by reference to which the interest rate on
Eurodollar Loans is determined or (ii) becomes subject to restrictions on the
amount of such a category of liabilities or assets which it may hold, then, if
such Bank so elects by notice to the Company (with a copy to the Agent), the
obligation of such Bank to make or Continue, or to Convert Prime Rate Loans
into, Eurodollar Loans hereunder shall be suspended until such Regulatory
Change ceases to be in effect (in which case the provisions of Section 5.4
hereof shall be applicable).
(c) Without limiting the effect of the foregoing provisions of this
Section 5.1 (but without duplication), the Company shall pay directly to each
Bank from time to time on request such amounts as such Bank may determine to be
necessary to compensate such Bank for any costs which it determines are
attributable to the maintenance by such Bank (or any Applicable Lending Office)
of capital in respect of its Commitment or Loans as a result of any Regulatory
Change, such compensation to include, without limitation, an amount equal to
any reduction of the rate of return on assets or equity of such Bank (or any
Applicable Lending Office) to a level below that which such Bank (or any
Applicable Lending Office) could have achieved but for such Regulatory Change.
(d) Each Bank will notify the Company of any event occurring after the
date of this Agreement that will entitle such Bank to compensation under
paragraph (a) or (c) of this Section 5.1 as promptly as practicable. Each Bank
will furnish to the Company a certificate setting forth the basis and amount of
each request by such Bank for compensation under paragraph (a) or (c) of this
Section 5.1. Determinations and allocations by any Bank for purposes of this
Section 5.1 of the effect of any Regulatory Change, law, regulation or request
of any central bank or other monetary authority and computations of amounts
payable set forth in the certificate referred to in the preceding sentence
shall be conclusive and binding on the Company in the absence of manifest
error.
(e) Without limiting the effect of the foregoing, the Company shall pay
to each Bank on the last day of each Interest Period so long as such Bank is
maintaining reserves against "Eurocurrency liabilities" under Regulation D (or,
unless the provisions of paragraph (b) above are applicable, so long as such
Bank is, by reason of any Regulatory Change, maintaining reserves against any
other category of liabilities which includes deposits by reference to which the
interest rate on Eurodollar Loans is determined as provided in this Agreement
or against any category of extensions of credit or other assets of such Bank
which includes any Eurodollar Loans) an additional amount (determined by such
Bank and notified to the Company through the Agent) equal to the product of the
following for each Eurodollar Loan for each day during such Interest Period:
Page 17 of 40
(i) the principal amount of such Eurodollar Loan outstanding on such day;
and
(ii) the remainder of (x) a fraction the numerator of which is the LIBOR
Rate (expressed as a decimal) at which interest accrues on such Eurodollar Loan
for such Interest Period as provided in this Agreement and the denominator of
which is one minus the effective rate (expressed as a decimal) at which such
reserve requirements are imposed on such Bank on such day minus (y) such
numerator; and
(iii) 1/360.
5.2. Limitation on Types of Loans. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any LIBOR Base Rate
for any Interest Period:
(a) the Agent determines (which determination shall be conclusive) that
quotations of interest rates for the relevant deposits referred to in the
definition of "LIBOR Rate" are not being provided on the Dow Jones Telerate
Screen for purposes of determining rates of interest for Eurodollar Loans as
provided herein; or
(b) the Majority Banks determine (which determination shall be
conclusive) and notify the Agent that the relevant rates of interest referred
to in the definition of "LIBOR Rate" upon the basis of which the rate of
interest for Eurodollar Loans for such Interest Period is to be determined are
not likely adequately to cover the cost to such Banks of making or maintaining
such type of Loans for such Interest Period;
then the Agent shall give the Company and each Bank prompt notice thereof, and
so long as such condition remains in effect, the Banks shall be under no
obligation to make or Continue Eurodollar Loans or to Convert Prime Rate Loans
and the Company shall, on the last day(s) of the then current Interest
Period(s) for the outstanding Eurodollar Loans, either prepay such Loans or
Convert such Loans into Prime Rate Loans in accordance with Section 2.4 hereof.
5.3. Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Bank or its Applicable Lending
Office to honor its obligation to make or maintain Eurodollar Loans hereunder,
then such Bank shall promptly notify the Company thereof (with a copy to the
Agent) and such Bank's obligation to make or Continue, or to Convert Prime Rate
Loans into, Eurodollar Loans shall be suspended until such time as such Bank
may again make and maintain Eurodollar Loans (in which case the provisions of
Section 5.4 hereof shall be applicable).
Page 18 of 40
5.4. Treatment of Affected Loans.
(a) If the obligation of any Bank to make or Continue, or to Convert
Prime Rate Loans into, Eurodollar Loans is suspended pursuant to Section 5.1,
5.2 or 5.3 hereof, such Bank's Eurodollar Loans shall be automatically
Converted into Prime Rate Loans on the last day(s) of the then current Interest
Period(s) for the Eurodollar Loans (or, in the case of a Conversion required by
Section 5.3 hereof, on such earlier date as such Bank may specify to the
Company with a copy to the Agent) and, unless and until such Bank gives notice
as provided below that the circumstances specified in Section 5.1, 5.2 or 5.3
hereof which gave rise to such Conversion no longer exist:
(i) to the extent that such Bank's Eurodollar Loans have been so
Converted, all payments and prepayments of principal which would otherwise be
applied to such Bank's Eurodollar Loans shall be applied instead to its Prime
Rate Loans; and
(ii) all Loans which would otherwise be made or Continued by such Bank as
Eurodollar Loans shall be made or Continued instead as Prime Rate Loans and all
Loans of such Bank which would otherwise be Converted into Eurodollar Loans
shall remain as Prime Rate Loans.
(b) If such Bank gives notice to the Company (with a copy to the Agent)
that the circumstances specified in Section 5.1, 5.2 or 5.3 hereof which gave
rise to the Conversion of such Bank's Eurodollar Loans pursuant to this Section
5.4 no longer exist (which such Bank agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Loans are
outstanding, such Bank's Prime Rate Loans shall be automatically Converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Eurodollar Loans to the extent necessary so that, after giving effect thereto,
all Eurodollar Loans are held pro rata (as to principal amounts, types and
Interest Periods) in accordance with the Commitments.
5.5. Compensation.
(a) The Company shall pay to the Agent for the account of each Bank, upon
the request of such Bank through the Agent, such amount or amounts as shall be
sufficient (in the reasonable opinion of such Bank) to compensate it for any
loss, cost or expense which such Bank determines are attributable to (i) any
payment, prepayment or Conversion of a Eurodollar Loan made by such Bank for
any reason (including, without limitation, the acceleration of the Loans
pursuant to Section 9 hereof or a prepayment pursuant to Section 2.4 hereof) on
a date other than the last day of the Interest Period for such Loan; or (ii)
any failure by the Company for any reason (including, without limitation, the
failure of any of the conditions precedent specified in Section 6 hereof to be
Page 19 of 40
satisfied) to borrow a Eurodollar Loan from such Bank on the date of the making
of the Term Loan specified in the relevant notice of borrowing given pursuant
to Section 2.2 hereof.
(b) Without limiting the effect of Section 5.5(a), such compensation
shall include an amount equal to the excess, if any, of (i) the amount of
interest which otherwise would have accrued on the principal amount so paid,
prepaid or Converted or not borrowed for the period from the date of such
payment, prepayment, Conversion or failure to borrow to the last day of the
then current Interest Period for such Loan (or, in the case of a failure to
borrow, the Interest Period for such Loan which would have commenced on the
date specified for such borrowing) at the applicable rate of interest for such
Loan over (ii) the interest component of the amount such Bank would have bid in
the London interbank market for Dollar deposits of leading banks in amounts
comparable to such principal amount and with maturities comparable to such
period (as reasonably determined by such Bank).
5.6. Taxes. The Company covenants and agrees that:
(a) All payments on account of the principal of and interest on the Loans
and all other amounts payable by the Company under or in respect of this
Agreement or the Notes or the letter agreement referred to in Section 3.2
hereof, including amounts payable under paragraph (c) of this Section 5.6,
shall be made free and clear of and without reduction by reason of any present
and future income, stamp and other taxes, levies, deductions, charges and
withholdings whatsoever imposed, assessed, levied or collected by any state,
nation or other governmental authority (other than taxes on the overall net
income of such Bank or its Applicable Lending Office imposed by the United
States of America or the jurisdiction in which such Bank has its principal
office or such Applicable Lending Office) or any political subdivision or
taxing authority thereof or therein (each, a "Taxing Authority"), and interest
thereon and penalties with respect thereto, if any, on or in respect of (i)
this Agreement, the Notes or the Loans or the letter agreement referred to in
Section 3.2 hereof, (ii) the registration, notarization or other formalization
of any thereof, (iii) any payments of principal, interest, charges, fees or
other amounts made on, under or in respect thereof, or (iv) any of the income,
profits or revenues of the Bank or any Applicable Lending Office as a result of
the transactions contemplated hereby (collectively, "Taxes"), all of which will
be paid by the Company, for its own account, prior to the date on which
penalties attach thereto.
(b) The Company will indemnify the Agent and each Bank against, and
reimburse the Agent and each Bank on demand for, any Taxes and any loss,
liability, claim or expense, including interest, penalties and legal fees,
which the Agent or any Bank may incur at any time arising out or in connection
with any failure of the Company to make any payment of Taxes when due.
Page 20 of 40
(c) In the event that the Company is required by applicable law, decree
or regulation to deduct or withhold any Taxes from any amount payable on, under
or in respect of this Agreement or the Notes or the letter agreement referred
to in Section 3.2 hereof, the Company shall withhold such amount and pay it to
the relevant Taxing Authority and shall pay to the Agent or the Banks such
additional amount as may be required, after such deduction or withholding, to
enable the Agent or the Banks to receive from the Company an amount equal to
the full amount stated to be payable under this Agreement or the Notes or the
letter agreement referred to in Section 3.2 hereof.
(d) The Company shall furnish to the Agent original or certified copies
of tax receipts in respect of any withholding of Taxes required under this
Section 5.6 within thirty (30) days after the date of the payment of interest
or other amount in respect of which any withholding was made, and the Company
shall promptly furnish to the Agent any other information, documents and
receipts that the Agent may require, in its sole discretion from time to time,
to establish to its satisfaction that full and timely payment has been made of
all Taxes required to be paid hereunder.
(e) The covenants and agreements of the Company under this Section 5.6
shall survive the repayment of the Term Loan and payment of other amounts
payable under this Agreement, the Notes and the letter agreement referred to in
Section 3.2 hereof.
Section 6. CONDITIONS PRECEDENT.
The obligation of each Bank to participate in the Term Loan hereunder is
subject to the receipt by the Agent of the following documents and payments,
each of which documents shall be satisfactory to the Agent in form and
substance:
(a) Corporate Action. Certified copies of the restated articles of
incorporation and by-laws of the Company and all corporate action taken by the
Company authorizing this Agreement and the Notes and borrowing by the Company
hereunder (including a certificate setting forth the resolutions of the Board
of Directors of the Company authorizing the transactions contemplated hereby).
(b) Incumbency. A certificate of the Company naming and setting forth
the specimen signature of each of the officers of the Company (i) who is
authorized to sign on its behalf this Agreement or the Notes and (ii) who will,
until replaced by another officer or officers duly authorized for that purpose,
act as its representative for the purposes of signing documents and giving
notices and other communications in connection with this Agreement and the
transactions contemplated hereby.
Page 21 of 40
(c) Officer's Certificate. A certificate of a senior officer of the
Company dated the date of the Term Loan to the effect that on and as of such
date: (i) no Default shall have occurred and be continuing; and (ii) the
representations and warranties made by the Company in Section 7 hereof are true
and correct with the same force and effect as if made on and as of such date.
(d) Opinion of General Counsel of Company. An opinion of Mr. Thomas
Slaughter, General Counsel of the Company, substantially in the form of Exhibit
B hereto.
(e) Notes. The Notes, duly completed and executed.
(f) Other Documents. Such other documents as the Agent or any Bank may
reasonably request.
Section 7. REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants to the Agent and the Banks that:
7.1. Corporate Existence and Related Matters. Each of the Company and
each of its Subsidiaries: (a) is a corporation duly organized and validly
existing under the laws of the jurisdiction of its incorporation; (b) has all
requisite corporate power, and has all material governmental licenses,
authorizations, consents and approvals, necessary to own its property and carry
on its business as now being or as proposed to be conducted; and (c) is duly
qualified to do business in all jurisdictions in which such qualification is
required in view of the property owned and business conducted by the Company or
such Subsidiary. The Company has duly filed all reports and made all other
filings required to be made to the Securities and Exchange Commission.
7.2. Financial Condition.
(a) The consolidated balance sheet of the Company and its Consolidated
Subsidiaries as at June 30, 1994 and the related consolidated statements of
income, stockholders' equity and cash flows of the Company and its Consolidated
Subsidiaries for the fiscal year ended on said date, with the opinion thereon
of KPMG Peat Marwick, and the unaudited consolidated balance sheets of the
Company and its Consolidated Subsidiaries as at September 30, 1994 and the
related consolidated statements of income, stockholders' equity and cash flows
of the Company and its Consolidated Subsidiaries for the three-month period
ended on such date, heretofore furnished to each of the Banks, fairly present
in all material respects the consolidated financial condition of the Company
and its Consolidated Subsidiaries as at said dates, and the consolidated
results of their operations for the fiscal year and three-month period ended on
said dates in accordance with GAAP, subject to normal year-end adjustments in
the case of such interim financial statements.
Page 22 of 40
(b) Neither the Company nor any of its Subsidiaries had on said dates any
contingent liabilities, liabilities for taxes, unusual forward or long-term
commitments, or unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in the
consolidated balance sheet of the Company and the Consolidated Subsidiaries or
the notes thereto as at said dates.
(c) Since June 30, 1994 there has been no material adverse change in the
consolidated financial condition, operations, business or prospects of the
Company and its Consolidated Subsidiaries from that set forth in said financial
statements as at said date.
7.3. Litigation. There are no legal or arbitral proceedings or any
proceedings by or before any governmental or regulatory authority or agency,
now pending or, to the knowledge of the Company, threatened against the Company
or any of its Subsidiaries which could reasonably be expected to have a
material adverse effect on the consolidated financial condition, operations,
business or prospects taken as a whole of the Company and its Consolidated
Subsidiaries.
7.4. No Breach. The execution, delivery and performance of this
Agreement and the Notes will not conflict with or result in a breach of, or
cause the creation of a Lien or require any consent under, the certificate of
incorporation or by-laws of the Company, or any applicable law or regulation,
or any order, injunction or decree of any court or governmental authority or
agency, or any agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which any of them is bound.
7.5. Corporate Power and Action; Binding Effect. The Company has all
necessary corporate power and authority to execute, deliver and perform its
obligations under this Agreement and the Notes; the execution, delivery and
performance by the Company of this Agreement and the Notes have been duly
authorized by all necessary corporate action on its part; and this Agreement
has been duly and validly executed and delivered by the Company and
constitutes, and each of the Notes when executed and delivered for value will
constitute, legal, valid and binding obligations, enforceable in accordance
with their respective terms.
7.6. Approvals. No authorizations, approvals or consents of, and no
filings or registrations with, any governmental or regulatory authority or
agency are necessary for the execution, delivery or performance by the Company
of this Agreement or the Notes or for the validity or enforceability thereof.
Page 23 of 40
7.7. Margin Stock. Neither the Company nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of buying or carrying Margin Stock, and no
part of the proceeds of any Loan hereunder, will be used to buy or carry any
Margin Stock.
7.8. ERISA.
(a) The Company and the ERISA Affiliates and the plan administrator of
each Plan covering any employees of the Company or any Subsidiary have
fulfilled in all material respects their respective obligations under ERISA and
the Code with respect to such Plan and such Plan is currently in material
compliance with the applicable provisions of ERISA and the Code.
(b) With respect to each Plan covering any employees of the Company or
any Subsidiary, there has been no (i) "reportable event" within the meaning of
Section 4043 of ERISA and the regulations thereunder which is not subject to
the provision for waiver of the 30-day notice requirement to the PBGC; (ii)
failure to make or properly accrue any contribution which is due to any Plan;
(iii) action under Section 4041 of ERISA to terminate any Plan; (iv) withdrawal
from any Plan with two or more contributing sponsors or the termination of any
such Plan resulting in liability pursuant to Section 4063 or 4064 of ERISA; (v)
institution by PBGC of proceedings to terminate any Plan, or the occurrence of
any event or condition which might constitute grounds under ERISA for the
termination of, or the appointment of a trustee to administer, any Plan; (vi)
the imposition of liability pursuant to Sections 4062(e), 4069 or 4212(c) of
ERISA; (vii) complete or partial withdrawal (within the meaning of Sections
4003 and 4205 of ERISA) from any Plan which is a Multiemployer Plan that it is
in reorganization or insolvency pursuant to Sections 4241 or 4245 of ERISA, or
that it intends to terminate or has terminated under Sections 4041A or 4042 of
ERISA; (viii) to the knowledge of the Company, prohibited transaction described
in Section 406 of ERISA or 4975 of the Code which could give rise to the
imposition of any material fines, penalties, taxes or related charges; (ix)
assertion of a claim (other than routine claims for benefits) against any Plan
(other than a Multiemployer Plan) which could reasonably be expected to be
successful; (x) receipt from the Internal Revenue Service of notice of the
failure of any Plan to qualify under Section 401(a) of the Code, or the failure
of any trust forming part of any Plan to fail to qualify for exemption from
taxation under Section 501(a) of the Code, if applicable; or (xi) imposition of
a Lien pursuant to Section 401(a)(29) or the Code or 412(n) of ERISA.
7.9. Taxes. United States federal income tax returns of the Company and
the Subsidiaries have been examined and closed or agreement with the Internal
Revenue Service with respect thereto reached through the fiscal year of the
Company ended 1990. The Company and its Subsidiaries have filed all United
States federal income tax returns and all other state or foreign tax returns
Page 24 of 40
which are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Company or any of
its Subsidiaries. The charges, accruals and reserves on the books of the
Company and its Subsidiaries in respect of taxes and other governmental charges
are, in the opinion of the Company, adequate in all material respects.
7.10. Investment Company Act. The Company is not an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
7.11. Credit Agreements. As of the date hereof, Schedule 2 hereto is a
complete and correct list of each credit, loan or purchase agreement, Guarantee
or other arrangement providing for any Indebtedness or any extension of credit
to, or Guarantee by, the Company or any of its Subsidiaries, and the aggregate
principal or face amount outstanding or which may become outstanding under each
such arrangement is correctly described in said Schedule 2.
7.12. Environmental Laws.
(a) The Company and each of its Subsidiaries have obtained all permits,
licenses and other authorizations which are required under all Environmental
Laws and are in compliance in all material respects with any applicable
Environmental Laws.
(b) Other than a request for information received by the Company from the
Environmental Protection Agency in 1989 with respect to the property of an
adjoining landowner (to which request the Company duly responded), on or prior
to the date hereof, no notice, demand, request for information, citation,
summons or order has been issued, no complaint has been filed, no penalty has
been assessed and no investigation or review is pending or threatened by any
governmental or other Person with respect to any alleged or suspected failure
by the Company or any of its Subsidiaries to comply in any respect with any
Environmental Laws.
(c) There are no Liens arising under or pursuant to any Environmental
Laws on any of the property owned or leased by the Company or any of its
Subsidiaries nor any actual or alleged liability of the Company or any
Subsidiary in respect of remediation, clean up or similar obligations under any
Environmental Law.
7.13. Subsidiaries, Etc. Set forth in Schedule 3 hereto is a complete
and correct list of all Subsidiaries of the Company and the respective
jurisdiction of incorporation of each such Subsidiary and of all Investments
(other than Permitted Investments) held by the Company or any of its
Subsidiaries in any joint venture or other Person as of the date hereof. All
Page 25 of 40
Subsidiaries are Consolidated Subsidiaries. The Company owns, free and clear
of Liens, all outstanding shares of such Subsidiaries, except as indicated on
Schedule 3, and the Company (or the respective Subsidiary) also owns, free and
clear of Liens, all such Investments, except as indicated on Schedule 3.
7.14. Liens. The Company and each of its Subsidiaries have good title
to, or a valid leasehold in, all of the property and assets reflected on the
consolidated balance sheet as of June 30, 1994 referred to in Section 7.2(a).
As of the date hereof, no property of the Company or any Subsidiary is subject
to any Lien, except Liens permitted by clauses (a) through (e) and clause (g)
of Section 8.6 hereof.
Section 8. COVENANTS.
The Company agrees that, so long as the Commitments are in effect and
until payment in full of the Term Loan and all other amounts payable by the
Company hereunder:
8.1. Financial Statements and other Information. The Company shall
deliver to each of the Banks:
(a) within 45 days after the end of each of the first three fiscal
quarterly periods of each fiscal year of the Company, consolidated statements
of income, stockholders' equity and cash flow of the Company and its
Consolidated Subsidiaries for such period and for the period from the beginning
of the respective fiscal year to the end of such period, and the related
consolidated balance sheet as at the end of such period, setting forth in each
case in comparative form the corresponding consolidated figures for the
corresponding period in the preceding fiscal year, accompanied by a certificate
of a senior financial officer of the Company which shall state that said
financial statements fairly present in all material respects the consolidated
financial condition and results of operations of the Company and its
Consolidated Subsidiaries in accordance with GAAP for such period, subject to
normal year-end adjustments;
(b) within 90 days after the end of each fiscal year of the Company,
consolidated statements of income, stockholders' equity and cash flow of the
Company and its Consolidated Subsidiaries for such year and the related
consolidated balance sheets as at the end of such year, setting forth in each
case in comparative form the corresponding consolidated figures for the
preceding fiscal year, and accompanied by an unqualified opinion thereon of
independent certified public accountants of recognized national standing which
shall state that said consolidated financial statements fairly present in all
material respects the consolidated financial condition and results of
operations of the Company and its Consolidated Subsidiaries as at the end of,
and for, such fiscal year;
Page 26 of 40
(c) promptly upon their becoming available, copies of all registration
statements and reports which the Company shall have filed with the Securities
and Exchange Commission;
(d) promptly upon the mailing thereof to the shareholders of the Company
generally, copies of all financial statements, reports and proxy statements so
mailed;
(e) as soon as possible, and in any event within ten days after the
Company knows that any of the events or conditions specified in Section 7.8(b)
with respect to any Plan or Multiemployer Plan has occurred or exists, a
statement signed by a senior financial officer of the Company setting forth
details respecting such event or condition and the action, if any, which the
Company or its ERISA Affiliate proposes to take with respect thereto (and a
copy of any report or notice required to be filed with or given to PBGC by the
Company or an ERISA Affiliate with respect to such event or condition);
(f) promptly after the Company knows that any Default has occurred, a
notice of such Default describing the same in reasonable detail and, together
with such notice or as soon thereafter as possible, a description of the action
that the Company has taken and proposes to take with respect thereto;
(g) promptly upon receipt thereof, a copy of any notice, demand, request
for information, citation, summons, complaint, order or other communication
from any governmental or other Person with respect to any alleged failure by
the Company or a Subsidiary to comply in any respect with any Environmental
Laws or any assertion or allegation of any Lien or liability thereunder;
(h) promptly after receipt thereof, all letters and reports to management
of the Company prepared by its independent certified public accountants; and
(i) from time to time such other information regarding the business,
affairs or financial condition of the Company or any of its Subsidiaries as any
Bank or either Agent may reasonably request.
The Company will furnish to each Bank, at the time it furnishes each set of
financial statements pursuant to paragraph (a) or (b) above, a certificate of a
senior financial officer of the Company (i) to the effect that no Default has
occurred and is continuing (or, if any Default has occurred and is continuing,
describing the same in reasonable detail and describing the action that the
Company has taken and proposes to take with respect thereto) and (ii) setting
forth in reasonable detail the computations necessary to determine whether the
Company is in compliance with Sections 8.7, 8.8, 8.9 and 8.12 hereof as of the
end of the respective fiscal quarter or fiscal year, as applicable (which
computation with respect to Section 8.8 shall show any SOP 93-7 Charge as a
specific line item).
Page 27 of 40
8.2. Litigation. The Company will promptly give to each Bank notice of
all legal or arbitral proceedings, and of all proceedings by or before any
governmental or regulatory authority or agency, and any material development in
respect of such legal or other proceeding, affecting the Company or any of its
Subsidiaries, except proceedings which, if adversely determined, would not have
a material adverse effect on the consolidated financial condition, operations,
business or prospects taken as a whole of the Company and its Consolidated
Subsidiaries.
8.3. Corporate Existence, Etc. The Company will, and will cause each of
its Subsidiaries to: (a) preserve and maintain its corporate existence and all
of its material rights, privileges and franchises (provided that nothing in
this Section 8.3 shall prohibit any transaction permitted under Section 8.5
hereof); (b) comply in all material respects with the requirements of all
applicable laws, rules, regulations and orders of governmental or regulatory
authorities, including all Environmental Laws; (c) pay and discharge all taxes,
assessments and governmental charges or levies imposed on it or on its income
or profits or on any of its property prior to the date on which penalties
attach thereto, except for any such tax, assessment, charge or levy the payment
of which is being contested in good faith and by proper proceedings and against
which adequate reserves are being maintained, (d) maintain all of its material
properties used or useful in its business in good working order and condition,
ordinary wear and tear excepted; and (e) upon request, permit representatives
of any Bank or the Agent, during normal business hours, to examine, copy and
make extracts from its books and records, to inspect its properties, and to
discuss its business and affairs with its senior officers.
8.4. Insurance. The Company will, and will cause each of its
Subsidiaries to, keep insured by financially sound and reputable insurers all
property of a character usually insured by corporations engaged in the same or
similar business similarly situated against loss or damage of the kinds and in
the amounts customarily insured against by such corporations and carry such
other insurance as is usually carried by such corporations.
8.5. Fundamental Transactions.
(a) The Company will not, nor will it permit any of its Subsidiaries to,
enter into any transaction of merger or consolidation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution); provided, that any
Subsidiary of the Company may be merged or consolidated with or into the
Company if the Company shall be the continuing or surviving corporation; and
any Subsidiary or the Company may be merged or consolidated with or into any
other Person if (A) such Subsidiary or the Company shall be the surviving or
continuing corporation and (B) immediately before and after giving effect to
such transaction, no Default shall exist.
Page 28 of 40
(b) The Company will not, and will not permit any of its Subsidiaries to,
acquire any business, assets or capital stock of, or be a party to any
acquisition of, any Person; provided, that the Company or any Subsidiary may
engage in any such transaction if immediately before and after giving effect
thereto, no Default shall exist.
(c) The Company will not, and will not permit any of its Subsidiaries to,
convey, sell, lease, transfer or otherwise dispose of, in one transaction or a
series of transactions, any of the assets of the Company; provided, the Company
or any Subsidiary may engage in any such transaction if immediately before and
after giving effect thereto, no Default shall exist.
(d) The Company will not, and will not permit any of its Subsidiaries to,
form any new Subsidiary that is not a Consolidated Subsidiary.
8.6. Limitation on Liens. The Company will not, nor will it permit any
of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
any of its property, whether now or hereafter owned, held pursuant to lease or
otherwise acquired, except:
(a) Liens imposed by any governmental authority for taxes, assessments or
charges not yet due or which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are
maintained on the books of the Company or any of its Subsidiaries, as the case
may be, in accordance with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's or
other like Liens arising in the ordinary course of business providing that
payments which such Liens secure are not overdue for a period of more than 30
days;
(c) pledges or deposits under workers' compensation, unemployment
insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(e) Easements, rights-of-way, zoning restrictions and other similar
encumbrances incurred or existing in the ordinary course of business, licenses,
restrictions on the use of property or minor imperfections in title thereto
which, in the aggregate, are not material in amount, and which do not in any
case materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the business of the Company or any of
its Subsidiaries;
Page 29 of 40
(f) Liens securing Indebtedness in an aggregate amount which shall not
exceed $15,000,000;
(g) Liens arising under leases, conditional sale and other title
retention agreements under which the aggregate rent, purchase price or other
obligations of the Company and its Subsidiaries do not exceed $2,000,000 in any
fiscal year; and
(h) any extension, renewal or replacement of the foregoing, provided,
however, that the Liens permitted hereunder shall not be spread to cover any
additional Indebtedness or property.
Notwithstanding the foregoing, the Company will not, nor will it permit
any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien
on any capital stock or Indebtedness held by the Company or any Subsidiary.
8.7. Indebtedness. The Company will not, and will not permit any of its
Subsidiaries to, create, incur or suffer to exist any Indebtedness except:
(a) Indebtedness to the Banks hereunder;
(b) Other Indebtedness incurred to finance the Company's ordinary working
capital or other needs in an amount at any time outstanding not to exceed the
sum of (i) $40,000,000 plus (ii) one-half of the amount by which $100,000,000
exceeds the outstanding principal amount of the Term Loan; and
(c) Guarantees to the extent permitted pursuant to Section 8.12 hereof.
8.8. Stockholders' Equity. The Company will not permit the sum of (i)
Stockholders' Equity plus (ii) any SOP 93-7 Charge at any time to be less than
$225,000,000.
8.9. Fixed Charges Ratio. The Company will not permit the Fixed Charge
Ratio to be less than 1.5 to 1 for any period of four consecutive fiscal
quarters of the Company.
8.10. Arm's-Length Transactions. The Company will not, nor will it
permit any of its Subsidiaries to, directly or indirectly enter into any
transaction with any Person (including any Subsidiary) except on arm's-length
terms
8.11. Use of Proceeds. The Company will use the proceeds of the Term
Loan solely to finance the acquisition of substantially all of the assets of
WSMV-TV, Nashville, Tennessee.
Page 30 of 40
8.12. Maximum Amount of Guarantees. The Company will not, nor will it
permit any of its Subsidiaries to, be or become liable in respect of any
Guarantees, except Guarantees of Indebtedness in an aggregate amount not to
exceed $15,000,000.
8.13. Indemnity. The Company hereby agrees to indemnify the Agent and
each Bank and their respective directors, officers, employees and agents from,
and hold each of them harmless against, any and all losses, liabilities,
claims, damages or expenses incurred by any of them arising out of or by reason
of any investigation or litigation or other proceedings, whether or not the
Agent or any Bank is a party thereto (including any threatened investigation or
litigation or other proceedings), relating to any actual or proposed use by the
Company or any Subsidiary of the Commitments or the proceeds of the Term Loan,
including, without limitation, the amount of any settlement payment made in
respect thereof by the Agent or any Bank and the reasonable fees and
disbursements of counsel incurred in connection with any such investigation or
litigation or other proceedings (but excluding any such losses, liabilities,
claims, damages or expenses incurred by reason of the gross negligence or
willful misconduct of the Person to be indemnified).
Section 9. EVENTS OF DEFAULT.
If one or more of the following events (each, an "Event of Default") shall
occur and be continuing:
(a) The Company shall default in the payment (i) of any principal of the
Term Loan when due or (ii) of any interest on any Loan or any fees or other
amount payable by it hereunder or under the letter agreement referred to in
Section 3.2 and such default shall continue for three days; or
(b) The Company or any of its Subsidiaries shall default in the payment
when due of any payment in respect of the principal of or interest on any of
its other Indebtedness in the aggregate amount of $10,000,000 or more; or any
event specified in any note, agreement, indenture or other document creating,
evidencing or securing any such Indebtedness shall occur if the effect of such
event is to cause, or to permit the holder or holders of such Indebtedness (or
a trustee or agent on behalf of such holder or holders) to cause, such
Indebtedness to become due, or to be prepaid, redeemed, repurchased or retired,
prior to its stated maturity; or
(c) Any representation, warranty or certification made or deemed made
herein or in any certificate or other writing furnished to any Bank or the
Agent pursuant to the provisions hereof shall prove to have been false or
misleading as of the time made or furnished in any material respect; or
Page 31 of 40
(d) The Company shall default in the performance of any of its other
obligations in this Agreement and such default shall continue unremedied for a
period of 30 days; or
(e) The Company or any of its Subsidiaries shall admit in writing its
inability to, or be generally unable to, pay its debts as such debts become
due; or
(f) The Company or any of its Subsidiaries shall (i) apply for or consent
to the appointment of, or the taking of possession by, a receiver, custodian,
trustee or liquidator of itself or of all or a substantial part of its
property, (ii) make a general assignment for the benefit of its creditors,
(iii) commence a voluntary case under the Bankruptcy Code (as now or hereafter
in effect), (iv) file a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, winding-up, or composition
or readjustment of debts, (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against it in an
involuntary case under the Bankruptcy Code, or (vi) take any corporate action
for the purpose of effecting any of the foregoing; or
(g) A proceeding or case shall be commenced, without the application or
consent of the Company or any of its Subsidiaries, in any court of competent
jurisdiction, seeking (i) its liquidation, reorganization, dissolution or
winding-up, or the composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of the
Company or such Subsidiary or of all or any substantial part of its assets, or
(iii) similar relief in respect of the Company or such Subsidiary under any law
relating to bankruptcy, insolvency, reorganization, winding-up, or composition
or adjustment of debts; and such proceeding or case shall continue undismissed,
or an order, judgment or decree approving or ordering any of the foregoing
shall be entered and continue unstayed and in effect, for a period of 60 or
more days; or an order for relief against the Company or such Subsidiary shall
be entered in an involuntary case under the Bankruptcy Code; or
(h) A final judgment or judgments for the payment of money in excess of
$15,000,000 in the aggregate shall be rendered against the Company and/or any
of its Subsidiaries and shall not be satisfied or stayed pending appeal for a
period of at least 30 days; or
(i) An event or condition specified in Section 7.8 hereof shall occur or
exist with respect to any Plan or Multiemployer Plan and shall not be cured
within 30 days (if susceptible to cure) and as a result of such event or
condition, together with all other such events or conditions, the Company or
any ERISA Affiliate shall incur, or in the opinion of the Majority Banks shall
be reasonably likely to incur, a liability to a Plan, a Multiemployer Plan or
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PBGC (or any combination of the foregoing) which is, in the determination of
the Majority Banks, material in relation to the consolidated financial
condition, business, operations or prospects taken as a whole of the Company
and its Consolidated Subsidiaries; or
(j) Mr. E.T. Meredith, his spouse, his descendants, their spouses and/or
trusts the sole beneficiaries of which are Mr. E.T. Meredith, his spouse, his
descendants and/or their spouses shall cease to own, beneficially and of
record, common stock of the Company which possesses a majority of the voting
power of all common stock of the Company (other than in respect of matters as
to which class voting of classes of common stock is required); or
(k) individuals who were directors of the Company on the date of this
Agreement shall cease to constitute a majority of the Board of Directors of the
Company;
THEREUPON: (i) in the case of an Event of Default (other than one referred to
in clause (f) or (g) of this Section 9 with respect to the Company), the Agent,
upon request of the Majority Banks, shall, by notice to the Company, cancel the
Commitments and/or declare the principal amount then outstanding of, and the
accrued interest on, the Term Loan and all other amounts payable by the Company
hereunder and under the Notes (including, without limitation, any amounts
payable under Section 5.5 hereof) to be forthwith due and payable, whereupon
such amounts shall be immediately due and payable without presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by the Company; and (ii) in the case of the occurrence of an Event of
Default referred to in clause (f) or (g) of this Section 9 with respect to the
Company, the Commitments shall automatically be canceled and the principal
amount then outstanding of, and the accrued interest on, the Term Loan and all
other amounts payable by the Company hereunder and under the Notes (including,
without limitation, any amounts payable under Section 5.5 hereof) shall
automatically become immediately due and payable without presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by the Company.
Section 10. THE AGENT.
10.1. Appointment, Powers and Immunities. Each Bank hereby irrevocably
appoints and authorizes the Agent to act as its agent hereunder with such
powers as are specifically delegated to the Agent by the terms of this
Agreement, together with such other powers as are reasonably incidental
thereto. The Agent: (a) shall not have any duties or responsibilities except
those expressly set forth in this Agreement, and shall not by reason of this
Agreement be a trustee for any Bank; (b) shall not be responsible to the Banks
for any recitals, statements, representations or warranties contained in this
Page 33 of 40
Agreement, or in any certificate or other documents referred to or provided for
in, or received by any of them under, this Agreement, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement, any Note or any other document referred to or provided for herein or
for any failure by the Company or any other Person to perform any of its
obligations hereunder or thereunder; (c) shall not be required to initiate or
conduct any litigation or collection proceedings hereunder; and (d) shall not
be responsible for any action taken or omitted to be taken by it hereunder or
under any other document or instrument referred to or provided for herein or in
connection herewith, except for its own gross negligence or willful misconduct.
The Agent may employ agents and attorneys-in-fact and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it in good faith. The Agent may deem and treat the payee of any
Note as the holder thereof for all purposes hereof unless and until a written
notice of the assignment or transfer thereof shall have been filed with the
Agent.
10.2. Reliance by Agent. The Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone or telecopy) believed by it to be genuine and correct and to have
been signed or sent by or on behalf of the proper Person or Persons, and upon
advice and statements of legal counsel, independent accountants and other
experts selected by the Agent. As to any matters not expressly provided for by
this Agreement, the Agent shall in all cases be fully protected in acting, or
in refraining from acting, hereunder in accordance with instructions signed by
the Majority Banks, and such instructions of the Majority Banks and any action
taken or failure to act pursuant thereto shall be binding on all of the Banks.
10.3. Defaults. The Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default unless the Agent has received notice from
a Bank or the Company specifying such Default and stating that such notice is a
"Notice of Default." In the event that the Agent receives such a notice of the
occurrence of a Default, the Agent shall give prompt notice thereof to the
Banks. The Agent shall (subject to Section 10.1 and Section 10.7 hereof) take
such action with respect to such Default as shall be directed by the Majority
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 as it shall deem
advisable in the best interest of the Banks.
10.4. Rights as a Bank. With respect to its Commitment and its
participation in the Term Loan, The Northern Trust Company in its capacity as a
Bank hereunder shall have the same rights and powers hereunder as any other
Bank and may exercise the same as though it were not acting as the Agent, and
the term "Bank" or "Banks" shall, unless the context otherwise indicates,
include The Northern Trust Company in its individual capacity. The Northern
Page 34 of 40
Trust Company and its affiliates may (without having to account therefor to any
Bank) accept deposits from, lend money to and generally engage in any kind of
banking, trust or other business with the Company (and any of its affiliates)
as if it were not acting as the Agent, and The Northern Trust Company and its
affiliates may accept fees and other consideration from the Company for
services in connection with this Agreement or otherwise without having to
account for the same to the Banks.
10.5. Indemnification. The Banks agree to indemnify the Agent (to the
extent not reimbursed under Section 11.3 hereof, but without limiting the
obligations of the Company under said Section 11.3), ratably in accordance with
the aggregate principal amount of the Loans made by the Banks (or, if no Loans
are at the time outstanding, ratably in accordance with their respective
Commitments), for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of this Agreement or
any other documents contemplated by or referred to herein or the transactions
contemplated hereby (including, without limitation, the costs and expenses
which the Company is obligated to pay under Section 11.3 hereof but excluding,
unless a Default has occurred and is continuing, normal administrative costs
and expenses incident to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or of any such other documents, provided
that no Bank shall be liable for any of the foregoing to the extent they arise
from the gross negligence or willful misconduct of the Agent.
10.6. Non-Reliance on Agent and other Banks. Each Bank agrees that it
has, independently and without reliance on the Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Company and its Subsidiaries and decision to enter
into this Agreement and 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 analysis and
decisions in taking or not taking action under this Agreement. The Agent shall
not be required to keep itself informed as to the performance or observance by
the Company of this Agreement or any other document referred to or provided for
herein or to inspect the properties or books of the Company or any of its
Subsidiaries. Except for notices, reports and other documents and information
expressly required to be furnished to the Banks by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Bank with any
credit or other information concerning the affairs, financial condition or
business of the Company or any of its Subsidiaries (or any of their affiliates)
which may come into the possession of the Agent or any of its affiliates.
Page 35 of 40
10.7. Failure to Act. Except for action expressly required of the Agent
hereunder, the Agent shall in all cases be fully justified in failing or
refusing to act hereunder unless it shall receive further assurances to its
satisfaction from the Banks of their indemnification obligations under Section
10.5 hereof against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action.
10.8. Resignation of Agent. Subject to the appointment and acceptance of
a successor Agent as provided below, the Agent may resign at any time by giving
30 days' notice thereof to the Banks and the Company. Upon any such
resignation, the Majority Banks shall have the right to appoint a successor to
the resigning Agent. If no successor shall have been so appointed by the
Majority Banks and shall have accepted such appointment within 30 days after
the Agent's giving of notice of resignation, then the resigning Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a bank which has
an office in Chicago, Illinois. Upon the acceptance of any appointment as the
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning Agent, and the resigning Agent shall be discharged from its
duties and obligations hereunder. After the resigning Agent's resignation
hereunder, the provisions of this Section 10 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as the Agent.
Section 11. MISCELLANEOUS.
11.1. Waiver. No failure on the part of the Agent or any Bank to
exercise, no delay in exercising, and no course of dealing with respect to, any
right, power or privilege under this Agreement or any Note shall operate as a
waiver thereof, nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The remedies provided herein are cumulative and not exclusive of
any remedies provided by law.
11.2. Notices. All notices and other communications provided for herein
shall be given or made by telecopy or in writing and telecopied, mailed or
delivered, in the case of the Company or the Agent, to its respective address
set forth on the signature pages hereof, and in the case of a Bank, to its
notice address specified in Schedule 1 hereto or, as to any party, at such
other address as shall be designated by such party in a notice to each other
party. Except as otherwise provided in this Agreement, all such communications
shall be deemed to have been duly given when properly transmitted by telecopier
or personally delivered or, in the case of a mailed notice, upon receipt, in
each case given or addressed as aforesaid. Any party sending a notice or other
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communication by telecopy shall simultaneously call the intended recipient by
telephone (at the telephone number set forth below such party's address) to
advise such recipient of the sending of such telecopy.
11.3. Expenses, Etc. The Company agrees to pay or reimburse each of the
Banks and the Agent for: (a) all reasonable out-of-pocket costs and expenses
of the Agent (including, without limitation, the reasonable fees and expenses
of Gardner, Carton & Douglas, special counsel to the Agent), in connection with
(i) the negotiation, preparation, execution and delivery of this Agreement and
the Notes, (ii) any amendment, modification or waiver of any of the terms of
this Agreement or any of the Notes, and (iii) any examination and inspection of
the Company by the Agent pursuant to Section 8.3(e) hereof, (b) all reasonable
costs and expenses of the Banks and the Agent (including reasonable counsels'
fees) in connection with any Default and any enforcement or collection
proceedings resulting therefrom; and (c) all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement, the Notes or any other document
referred to herein.
11.4. Amendments, Etc. Except as otherwise expressly provided in this
Agreement, any provision of this Agreement may be waived, amended or modified
only by an instrument in writing signed by the Company, the Agent and the
Majority Banks; provided that no amendment, modification or waiver shall,
unless by an instrument signed by the Agent and all of the Banks: (i) increase
or extend the term of the Commitments, (ii) extend any date fixed for the
payment of any principal of or interest on any Loan, (iii) reduce the amount of
any payment of principal thereof or the rate at which interest is payable
thereon or any fee is payable hereunder, (iv) alter the terms of this Section
11.4, (v) amend the definition of the term "Majority Banks" or (vi) waive any
of the conditions precedent set forth in Section 6 hereof.
11.5. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
11.6. Assignments and Participations.
(a) The Company may not assign its rights or obligations hereunder or
under the Notes without the prior consent of all of the Banks and the Agent.
(b) No Bank may assign any of its Loans, its Note or its Commitment
without the prior consent of the Company and the Agent. Upon the effectiveness
of any assignment consented to by the Company and the Agent, the assignee shall
have, to the extent of such assignment, the obligations, rights and benefits of
a Bank hereunder holding the Commitment and Loans (or portions thereof)
assigned to it and the assigning Bank shall, to the extent of such assignment,
be released from the Commitment (or portions thereof) so assigned.
Page 37 of 40
(c) No Bank may sell a participation in all or any part of any Loans made
or to be made by it without the prior written consent of the Company, which
shall not be unreasonably withheld. Upon the effectiveness of any
participation consented to by the Company, each participant shall be entitled
to the rights and benefits, and subject to the duties and obligations, of the
provisions of Section 4.7 hereof with respect to its participation as if such
participant were a "Bank" for purposes of said Section, but shall not have any
other rights or benefits under this Agreement or any Note.
(d) A Bank may furnish any information concerning the Company or any of
its Subsidiaries in the possession of such Bank from time to time to actual or
prospective assignees and participants.
11.7. Survival. The obligations of the Company under Sections 5.1, 5.5
and 11.3 hereof shall survive the repayment of the Loans and the termination of
the Commitments.
11.8. Captions. The table of contents and captions and section headings
appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.
11.9. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
one or more of such counterparts.
11.10. Jurisdiction, Service of Process.
(a) Any suit, action or proceeding against the Company with respect to
this Agreement or the Notes or any judgment entered by any court in respect of
any thereof may be brought in the courts of the State of Illinois or in the
U.S. District Court for the Northern District of Illinois as the Banks may
elect, and the Company hereby submits to the non-exclusive jurisdiction of each
such court for the purpose of any such suit, action or proceeding. The Company
consents to the service of process upon it in any such suit, action or
proceeding by regular first class mail addressed to it at its address specified
in Section 11.2. The foregoing shall not, however, limit the right of the
Banks to serve process in any other manner permitted by law or to commence any
suit, action or proceeding or to obtain execution of judgment in any
appropriate jurisdiction. Without limiting the foregoing, the Company further
agrees that the Banks may at their option submit any dispute which may arise in
connection with this Agreement or the Notes to any other court having
jurisdiction over the Company's property.
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(b) The Company hereby irrevocably waives any objection which it may now
or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the Notes brought in the courts
of the State of Illinois or the U.S. District Court for the Northern District
of Illinois, and hereby further irrevocably waives any claim that any such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.
11.11. Governing Law. THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS.
11.12. Waiver of Jury Trial. EACH OF THE COMPANY, THE AGENT AND THE
BANKS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
MEREDITH CORPORATION
By: ____________________________________
Name: Michael Sell
Title: Treasurer
Address: 1716 Locust Street
Des Moines, Iowa 50309-3023
Telecopier No.: (515) 284-3828
Attention: Mr. Michael Sell
Treasurer
Telephone No.: (515) 284-2456
THE NORTHERN TRUST COMPANY,
as Agent
By: ____________________________________
Name: Sara Clissold
Title: Commercial Banking Officer
Address: 50 South LaSalle Street
Chicago, Illinois 60675
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Telecopier No.: (312) 630-1566
Attention: Robert Stegmann
Vice President
Telephone No.: (312) 444-5054
THE NORTHERN TRUST COMPANY
By: ____________________________________
Name: Sara Clissold
Title: Commercial Banking Officer
WACHOVIA BANK OF GEORGIA, N.A.
By: ____________________________________
Name: Terry L. Akins
Title: Senior Vice President
THE FIRST NATIONAL BANK OF BOSTON
By: ____________________________________
Name: David B. Herter
Title: Director
NORWEST BANK IOWA, N.A.
By: ____________________________________
Name: William C. Green, Jr.
Title: Vice President/Manager
Page 40 of 40