EXHIBIT (d)(7)
BERTELSMANN, INC.
1540 Broadway
New York, NY 10036-4094 As of June 29, 1998
Attn: Mr. Bernhard Derlath
VP Finance and Controller
Amended and Restated Letter Agreement
Gentlemen:
Reference is made to the Letter Agreement, dated as of March 5, 1987, as
amended by the First Amendment through the Thirteenth Amendment thereto,
between Bertelsmann, Inc. and Commerzbank Aktiengesellschaft, Grand Cayman
Branch (as heretofore amended, the "Letter Agreement"). In accordance with our
recent conversations, and in consideration of the mutual promises contained
herein and other good and valuable consideration (including, without
limitation, the inclusion of Four Winds Funding Corporation as an additional
funding source party hereto), the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, upon your acceptance hereof the parties
hereto hereby amend and restate the Letter Agreement in its entirety effective
as of the date hereof as follows:
"We, Commerzbank Aktiengesellschaft (the "Bank"), acting through our
respective Lending Offices (this term and certain other capitalized terms used
herein are defined on Attachment 2 hereof), are pleased to confirm that, on the
terms and conditions set forth herein, we hold available to you, Bertelsmann,
Inc., a Delaware corporation (the "Borrower"), (i) a committed long term
revolving credit facility (the "Revolver") in the aggregate amount of
USD 80,000,000
(USD Eighty Million)
until July 14, 2003 (the "Maturity Date") for borrowings under any of the
borrowing Options set forth below, subject to the terms and conditions hereof;
and (ii) an uncommitted line of credit (the "Line of Credit") in the aggregate
amount of
USD 40,000,000
(USD Forty Million)
until further notice and available for borrowings under any of the borrowing
Options set forth below and for utilizations under the Letter of Credit Option
set forth below, subject to the terms and conditions hereof.
The Borrower and the Bank hereby agree, and by its execution hereof Four
Winds Funding Corporation, a Delaware corporation not affiliated with the Bank
(the "Designated Lender"), hereby acknowledges and agrees, notwithstanding
anything to the contrary herein, that any Loan made under either the Revolver
or the Line of Credit may be funded from time to time by the Designated Lender
in the Designated Lender's sole discretion, provided that the Bank shall fund
any such Loan which the Designated Lender for any reason fails to fund after it
has so elected to fund such Loan. Any Loan actually funded by the Designated
Lender hereunder shall reduce the aggregate amount available to the Borrower
for borrowings or utilizations under the Revolver or the Line of Credit,
respectively, as the case may be, as if the same had been fully funded by the
Bank hereunder. Your indebtedness (a) under the Revolver to the Bank shall be
evidenced by the Committed Revolver Note in the principal amount of USD
80,000,000, substantially in the form of Attachment 1A hereto; (b) under the
Line of Credit to the Bank shall be evidenced by the Line of Credit Note in the
principal amount of USD 40,000,000, substantially in the form of Attachment 1B
hereto; and (c) hereunder to the Designated Lender in respect of any Loans
funded by it under (i) the Revolver shall be evidenced by the DL Tranche A Note
in the principal amount of USD 80,000,000, substantially in the form of
Attachment 1C hereto, and (ii) the Line of Credit shall be evidenced by the DL
Tranche B Note in the principal amount of USD 40,000,000, substantially in the
form of Attachment 1D hereto (the DL Tranche A Note and the DL Tranche B Note
collectively, the "Designated Lender Notes").
It shall be a condition precedent to any borrowings or utilizations
hereunder that the Bank and the Designated Lender shall have received a Letter
of Intent in a form satisfactory to each of them from Bertelsmann AG,
Guetersloh, Germany (the "Parent"), in respect of the credit facilities made
available hereunder.
1. The Revolver; Borrowing Options. Subject to the terms and conditions
herein, we will make advances available to you under any of the Options listed
below from the date of your acceptance of this Agreement to the Maturity Date
in an amount not to exceed USD 80,000,000 at any one time outstanding (such
amount, unless reduced pursuant to Paragraph 6, constituting our "Commitment").
Within the limits of the Commitment, you may borrow, prepay in accordance with
Paragraph 7 and reborrow, provided that each such Loan shall be repaid in full
not later than the Maturity Date.
2
(a) Eurodollar Rate Option: Eurodollar Rate Loans under the Revolver
may be made at the Eurodollar Lending Office in minimum principal amounts
of USD 500,000.00 and in integral multiples of USD 100,000.00 for fixed
Interest Periods selected by the Borrower and agreed to by the Bank. The
principal amount of each Eurodollar Rate Loan shall be repaid on the last
day of the Interest Period therefor with accrued interest. The interest
rate per annum for each Eurodollar Rate Loan will be negotiated not later
than two Business Days prior to the requested drawdown and will equal the
Eurodollar Rate plus 0.25% per annum. Interest for any Interest Period
longer than three months shall also be payable on the last day of each
calendar quarter after such loan is made.
(b) Prime Rate Option: Prime Rate Loans under the Revolver may be
made at the Domestic Lending Office either for an agreed-upon period or
without a fixed maturity date (in each case not beyond the Maturity Date),
as the parties may agree, at an interest rate per annum equal to our
fluctuating Prime Rate. The principal amount of any Prime Rate Loan shall
be repaid on the earlier of any agreed-upon maturity date or the Maturity
Date and may be repaid, in whole or in part, on any earlier date selected
by the Borrower, in each case with accrued interest on the principal
amount repaid. Interest shall also be payable on the last day of each
calendar quarter on any Prime Rate Loan then outstanding.
2. The Line of Credit; Letter of Credit Option: The Line of Credit is not
a commitment to extend credit but rather sets forth the procedures to be used
in connection with your requests for uncommitted Loans under either interest
Option set forth above and for the issuance of letters of credit by the Bank
from time to time and, in the event that any such Loans are made or letters of
credit are so issued, your obligations to us with respect thereto. The Bank, in
its sole discretion, may notify the Borrower at any time orally or in writing
that Loans and/or letters of credit are no longer available hereunder, but no
such notice shall affect any outstanding Loan or letter of credit or the
Borrower's obligations in respect thereof and hereunder. The Line of Credit may
be used at the Domestic Lending Office to open documentary and/or stand-by
letters of credit for the Borrower's account (not expiring after the Maturity
Date), subject to the Bank's prevailing terms and conditions for such letters
of credit, including without limitation execution of the Domestic Lending
Office's standard letter of credit application and agreement and payment of a
letter of credit commission and customary fees and charges. So long as no Event
of Default exists at such time, any disbursement by the Bank under a letter of
credit shall, unless otherwise reimbursed on or before the date of such
disbursement, be repaid by means of a Loan under the Line of Credit which shall
accrue interest as selected by the Borrower in compliance with Paragraphs 4 and
10 hereof at either (a) the
3
Eurodollar Rate plus 0.25% per annum or (b) the Prime Rate; provided that if
the Borrower fails to make any such selection, such Loan shall accrue interest
as a Prime Rate Loan, payable on demand. At any time, the Line of Credit shall
be deemed to have been utilized to the extent of the sum of outstanding Loans
borrowed directly or resulting from unreimbursed letter of credit drawings
hereunder plus the aggregate unexpired stated amount of outstanding letters of
credit issued hereunder.
3. The Notes. Your indebtedness hereunder shall be evidenced by the
Committed Revolver Note, the Line of Credit Note and the Designated Lender
Notes, respectively.
4. Borrowing Procedure. Subject to the satisfaction of the applicable
conditions of Paragraph 10 hereof, all borrowings outstanding on the date
hereof under the (i) July 2002 Eurodollar Note (as defined in the Thirteenth
Amendment to the Letter Agreement) shall automatically constitute Eurodollar
Rate Loans under the Revolver, and (ii) New Line of Credit Promissory Note (as
defined in the Letter Agreement) shall automatically constitute Eurodollar Rate
Loans under the Line of Credit, in each case subject to the existing interest
periods and terms applicable thereto as of the date hereof. Subject to the
foregoing and the terms hereof, Loans will be made at your request upon notice
to us made by telephone, telex or letter, and we shall be entitled to rely upon
any such request which we reasonably believe in good faith has been made by an
officer or other person authorized to borrow on the Borrower's behalf. We will
confirm each Loan by sending you a confirmation containing the relevant terms
and conditions, which confirmation shall constitute a supplement to and part of
this Agreement. You agree to confirm the terms of each Loan by returning to the
Bank a signed copy of the respective confirmation, but notwithstanding such
confirmation, you shall be deemed to have incurred indebtedness from the Bank
on terms and conditions set forth herein in the principal amount of any credit
made to your current account with us or, if you have no account with us, equal
to any amount transferred by us on your behalf. In the event of any conflict
between the terms of any such confirmation and this Agreement, this Agreement
shall control.
Each confirmation or other document or instrument executed in connection
with this Agreement shall be signed on your behalf by individuals duly
authorized for such purposes by your borrowing resolution most recently
delivered to us. Our obligation to make Loans hereunder is subject to the
condition precedent that the corresponding funding in the relevant market and
amount, and for the relevant period, is available to the respective Lending
Office.
5. Interest. Interest shall be calculated on the exact number of days
elapsed based on a year of 360 days. Any amount of principal and, to the extent
4
permitted by law, interest on any Loan hereunder and accrued letter of credit
commissions and fees hereunder which is not paid when due, and any unreimbursed
disbursements under any letter of credit occurring at any time when an Event of
Default exists, shall bear interest until paid in full at a rate per annum
equal to 2% above (a) the Prime Rate or, if less, (b) the rate in effect for
the relevant Loan prior to the due date of such amount.
6. Commitment Fee; Reduction of Commitment. You agree to pay the Bank a
commitment fee of 0.125 of 1% per annum on the average daily unused portion of
the Commitment from the date of your acceptance of this Agreement until the
Maturity Date or any earlier date on which the Commitment hereunder terminates
in whole or in part, payable on the last day of each March, June, September and
December during the term of the Commitment and on the Maturity Date or such
termination date, respectively. On at least two Business Days' notice, you may
terminate or reduce the unused portion of the Commitment.
7. Prepayment. On at least two Business Days' notice you may, or if it
becomes unlawful for the Bank or the Designated Lender, as the case may be, to
continue to fund or maintain outstanding any extension of credit or to perform
its respective obligations hereunder then upon the Bank's demand (for itself or
on behalf of the Designated Lender) you shall (and upon such demand the
Commitment shall terminate), prepay each Loan with accrued interest to the date
of prepayment on the amount prepaid, provided that if due to any such
prepayment, or any other prepayment made by you hereunder (including without
limitation prepayment made under Paragraph 9 or 13), we receive payment of
principal of any such credit other than on the last day of the Interest Period
(if any) therefor, you agree to compensate us upon our demand for any
applicable Prepayment Costs in respect of the prepayment requested by the
Borrower.
Borrower hereby agrees that, upon the occurrence of any Event of Default
referred to in Paragraph 13, it will deposit with the Domestic Lending Office
the principal amount of each undrawn or partially-drawn unexpired letter of
credit then opened hereunder. Such deposit shall be held by the Bank as
collateral for (and the Borrower hereby grants to the Bank a security interest
in such deposit in order to secure) the payment and performance of the
Borrower's obligation to reimburse the Bank for Loans made hereunder as a
result of letter of credit payments by the Bank, provided that promptly upon
expiration of any letter of credit with any portion thereof remaining undrawn,
if no Event of Default (or event which, with or without the passage of time or
giving of notice or both, would constitute such Event) shall have occurred and
then be continuing, a ratable portion of the deposit shall be returned to the
Borrower.
5
8. Payments and Notices. All payments of principal, interest and
commitment fee hereunder shall be made in immediately available funds to the
Federal Reserve Bank of New York, for the account of Commerzbank
Aktiengesellschaft, New York Branch, ABA no. 026008-044, reference:
Bertelsmann, Inc., Account No. 150/1000264/00, for the account of the
respective Lending Office.
If any payment becomes due hereunder or under the Notes, or any Interest
Period for a Loan would otherwise end, on a day which is not a Business Day,
then such payment shall be made, and such Interest Period shall end, on the
next succeeding Business Day and such extension of time shall be included in
the computation of interest due, but if, in the case of a Eurodollar Rate Loan,
such payment or termination would occur in a new calendar month then the same
shall occur instead on the next preceding Business Day.
All notices and other communications hereunder shall be sent to you at
your above address, or by telefax to 212-782-1005, or by telephone to 212-782-
1110, in each case Attention: Mr. Bernhard Derlath; and to the Bank (subject to
Paragraph 3 above) at 2 World Financial Center, New York, New York 10281- 1050,
or by telex to 177338 CZBNY or by telephone to 212-266-7200, in each case
Attention: Corporate Banking Department.
9. Increased Costs. If the Bank or the Designated Lender, as the case may
be, shall determine that (a) due to any Legal Event, there shall be any
increase in its cost of funding, making or maintaining any Loan or maintaining
outstanding any letter of credit hereunder, or (b) due to any Legal Event
regarding capital adequacy, the rate of return on its capital shall be reduced,
as a consequence of any extension of credit hereunder, to a level below that
which it could have achieved but for such Legal Event, then and in any such
event you shall have the option of either (i) paying to the respective lender
an amount necessary to compensate it for such increased cost and/or reduction
or (ii) prepaying the principal amount of the relevant Loan plus accrued
interest to the date of prepayment and/or making a deposit as described in
Paragraph 7 above, together with any applicable Prepayment Costs.
10. Closing Conditions. Each Loan will be made available to you upon your
fulfillment of the applicable conditions precedent set forth on Attachment 3
hereto.
11. Representations and Warranties. The Borrower hereby represents and
warrants as follows:
6
(a) It is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware.
(b) The execution, delivery and performance by it of this Agreement
and the Notes are within its corporate powers, have been duly authorized
by all necessary corporate action, and do not contravene its charter or
by-laws or any law or contractual restriction binding on or affecting it.
(c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required
for the due execution, delivery or performance by it of this Agreement or
the Notes.
(d) This Agreement is, and the Notes when delivered hereunder will
be, its legal, valid and binding obligations enforceable against it in
accordance with their respective terms.
(e) There is no pending or threatened action or proceeding before any
court, governmental agency or arbitrator which, if determined adversely,
may materially adversely affect its financial condition or operations,
except as disclosed in its financial statements for the year ending June
30, 1997.
(f) No proceeds of any Loan or the Line of Credit will be used to
acquire any security in any transaction which is subject to Sections 13
and 14 of the Securities Exchange Act of 1934, and no proceeds of any Loan
or the Line of Credit will be used to purchase or carry any margin stock
(as defined in Regulation U of the Board of Governors of the Federal
Reserve System) or to extend credit to others for the purpose of
purchasing or carrying any margin stock.
(g) The consolidated balance sheets of the Borrower and its
Subsidiaries as at June 30, 1997, and the related consolidated statements
of income and retained earnings for the fiscal year then ended, copies of
which have been furnished to us, fairly present the consolidated financial
condition of it and its Subsidiaries as at such date and the respective
consolidated results of operations for the period ended on such date, all
in accordance with generally accepted accounting principles consistently
applied, and since June 30, 1997, there has been no material adverse
change in such condition or operations.
7
12. Financial Statements. Applicable banking regulations and our own
internal policies require us to maintain on file credit information sufficient
for an adequate appraisal of our assets. Accordingly, it is hereby agreed that
Borrower will provide to the Bank and Designated Lender, as soon as they become
available, its audited annual consolidated financial statements including,
without limitation, consolidated balance sheets and statements of income and
changes in financial position.
13. Events of Default. Upon the occurrence of any of the events listed on
Attachment 4 as "Events of Default", the Commitment shall automatically
terminate and the Bank and the Designated Lender severally may declare their
respective Notes and all Loans, interest thereon and all other amounts then
outstanding thereunder to be, whereupon the same shall be, and in the case of
an Event of Default specified in Paragraph 6 of said Attachment the same shall
automatically be, immediately due and payable, without presentment, demand,
protest or further notice of any kind, the same being hereby expressly waived
by you, whereupon all such Loans, interest and amounts shall be immediately due
and payable.
14. Costs and Expenses. The Borrower agrees to pay on demand all losses,
costs and expenses, if any, of the Bank and the Designated Lender in connection
with the enforcement of this Agreement and the Notes including, without
limitation, the reasonable fees and out-of-pocket expenses of external counsel
for the Bank.
15. Binding Effect and Severability. This Agreement and the Notes shall be
binding upon and inure to the benefit of all parties hereto and their
respective successors and assigns, provided that the Borrower shall not have
the right to transfer any of its rights or obligations hereunder without the
Bank and the Designated Lender's prior written consent. If any provision of
this Agreement or the Notes shall be held to be invalid or unenforceable, in
whole or in part, neither the validity nor the enforceability of the remainder
hereof or thereof shall in any way be affected. Nothing herein shall prohibit
(a) the Bank from pledging or assigning its Notes to any Federal Reserve Bank
in accordance with applicable law, or (b) the Designated Lender from assigning
its Notes or any Loan it funds hereunder to the Bank or any affiliate thereof.
16. Governing Law and Jurisdiction. This Agreement and the Notes shall be
governed by and construed in accordance with the law of the State of New York.
Place of jurisdiction for both parties shall be the State and Federal courts
sitting in New York City, New York, to the jurisdiction of which you hereby
irrevocably submit.
8
17. No Bankruptcy Proceedings. The Borrower agrees that it will not
institute, or join with any other party in instituting, against the Designated
Lender any bankruptcy, insolvency, reorganization, arrangement or liquidation
proceeding under any federal or state bankruptcy or similar law, for one year
and one day after the payment in full of the latest outstanding senior
indebtedness issued by the Designated Lender.
18. Effectiveness; Superseding Agreement. It is a condition precedent to
the effectiveness of this Agreement that the Borrower shall have duly executed
and delivered to the Bank and the Designated Lender their respective Notes.
Upon such execution and delivery, the Bank shall return to the Borrower the
July 2002 Eurodollar Note and the New Line of Credit Promissory Note, duly
canceled. This Agreement and the Notes (collectively, the "Credit Documents")
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof, and there are no understandings, promises,
representations or warranties of the Borrower, the Bank or the Designated
Lender relative to the subject matter hereof not expressly set forth in the
Credit Documents. This Agreement supersedes and replaces the Letter Agreement
in its entirety; provided that upon the effectiveness hereof, all borrowings
and letters of credit issued thereunder at such time then outstanding shall
constitute and be deemed to be Loans and letters of credit outstanding
hereunder in accordance with the terms hereof."
9
Kindly express your agreement to the foregoing terms by returning to us
the attached copy of this Agreement, duly signed. We appreciate this
opportunity to be of continued service to your fine company and look forward to
a long and mutually beneficial relationship.
Very truly yours,
COMMERZBANK AG, New York Branch and Grand Cayman Branch
By: By:
--------------------------------------- ------------------------------
Title: David A. Wagner Title: Markus Tappe
Assistant Treasurer Vice President
FOUR WINDS FUNDING CORPORATION
By: COMMERZBANK AG, NEW YORK BRANCH, as Administrator and
Attorney-in Fact
By: By:
--------------------------------------- ------------------------------
Title: Carl H. Jackson Title: James F. Ahern
Vice President Vice President
AGREED AND ACCEPTED:
BERTELSMANN, INC.
By: By:
--------------------------------------- ------------------------------
Name: Bernhard Derlath Name: Robert J. Sorrentino
Title: VP Finance Controller Title: Chief Operating Officer
Date: June 29, 1998
10
BERTELSMANN, INC.
1540 Broadway
New York, New York 10036-4094
Attention: Mr. Robert J. Sorrentino July 26, 2000
President & Chief Executive Officer
Limited Waiver for Amended and Restated Letter Agreement
Ladies and Gentlemen:
Pursuant to your request, and solely in connection with your intended
acquisition of certain shares of capital stock of CDNOW, Inc. (the
"Transaction"), we, Commerzbank Aktiengesellschaft, New York and Grand Cayman
Branches, and Four Winds Funding Corporation, in our capacities as lenders
under and parties to that certain Amended and Restated Letter Agreement dated
as of June 29, 1998 (the "Credit Agreement") among Bertelsmann, Inc. and the
undersigned, do hereby waive the first clause of numbered paragraph 11(f) of
the Credit Agreement with respect only to the use of proceeds thereunder for
any transaction subject to sections 13 and 14 of the Securities Exchange Act of
1934, as amended.
This Limited Waiver is restricted in scope solely to the terms specified
herein as applied to the Transaction and shall have no effect with respect to
any other circumstances or transaction, whether similar or otherwise, arising
in the future or presently contemplated. The Credit Agreement as heretofore
amended by the First Amendment thereto shall remain in full force and effect
except and only to the extent as specified in this Limited Waiver.
Very truly yours,
COMMERZBANK AG FOUR WINDS FUNDING
CORPORATION
New York and Grand Cayman Branches By: COMMERZBANK AG, New
York Branch as Administrator and
Attorney-in-Fact
By: By:
--------------------------------------- ------------------------------
Title: Andreas Schwung Title: James F. Ahern
Vice President Senior Vice President
By: By:
--------------------------------------- ------------------------------
Title: Isabel Zeissig Title: David A. Wagner
Assistant Treasurer Assistant Treasurer
AGREED TO AND ACCEPTED:
BERTELSMANN, INC.
By:
------------------------------------
Title: President and CEO
3
BERTELSMANN, INC.
1540 Broadway
New York, New York 10036-4094
Attention: Mr. Robert J. Sorrentino
Executive Vice President &
Chief Operating Officer July 13, 2000
Second Amendment
Ladies and Gentlemen:
Reference is made to the Amended and Restated Letter Agreement, dated as
of June 29, 1998, as amended, among Bertelsmann, Inc. (the "Borrower"),
Commerzbank Aktiengesellschaft, New York and Grand Cayman Branches (the "Bank")
and Four Winds Funding Corporation (the "Designated Lender"), a Delaware
corporation not affiliated with the Bank (the "Letter Agreement"; unless
otherwise indicated herein, capitalized terms herein have the meanings assigned
thereto in the Letter Agreement).
In accordance with our recent conversations, and in consideration of the
mutual promises contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties hereto,
upon your acceptance hereof the parties hereto hereby make the following
amendments to the Letter Agreement:
1. The date set forth as the defined term "Maturity Date" for the Revolver
on the first page, second paragraph of the Letter Agreement is hereby amended
to read as follows:
"July 14, 2005"
2. Your indebtedness under the Revolver of the Letter Agreement, as hereby
amended shall be evidenced by an amended and restated committed revolver
promissory note substantially in the form of Attachment 1A hereto in the amount
of $80,000,000.00. Upon receipt by the Bank of the executed copy of Attachment
1A, which shall thereby constitute the Committed Revolver Note for
the purposes of the Letter Agreement, the Bank will return to you your current
Committed Revolver Note date as of July 13, 1999 now in our possession.
3. Each reference in the Letter Agreement shall be deemed to be a
reference to the Letter Agreement as amended hereby.
Except as expressly modified herein, the Letter Agreement shall remain in
full force and effect and is hereby confirmed and ratified in all respects.
This Second Amendment to Letter Agreement shall be governed by and
construed in accordance with the law of the State of New York.
2
We kindly ask you to express your acceptance of the above amended terms by
executing and returning to us the attached execution copies of (i) this Second
Amendment to Letter Agreement and (ii) the Committed Revolver Note.
Very Truly Yours,
COMMERZBANK AG
New York and Grand Cayman Branches
By: By:
--------------------------------------- ------------------------------
Title: Andreas Schwung Title: Isabel Zeissig
Vice President Assistant Treasurer
FOUR WINDS FUNDING CORPORATION
By: COMMERZBANK AG, NEW YORK BRANCH, as Administrator and
Attorney-in-Fact
By: By:
--------------------------------------- ------------------------------
Title: Tom Ausfahl Title: Carl H. Jackson
Vice President Senior Vice President
Agreed to and Accepted:
BERTELSMANN, INC.
By:
---------------------------------------
Title: President and CEO
Date: August 1, 2000
Bernhard U. Derlath
Vice President
Finance & Controller
3
BERTELSMANN, INC.
1540 Broadway
New York, New York 10036-4094
Attention: Mr. Bernhard Derlath
VP Finance and Controller July 13, 1999
First Amendment
Ladies and Gentlemen:
Reference is made to the Amended and Restated Letter Agreement, dated as
of June 29, 1998, among Bertelsmann, Inc. (the "Borrower"), Commerzbank
Aktiengesellschaft, New York and Grand Cayman Branches (the "Bank") and Four
Winds Funding Corporation (the "Designated Lender"), a Delaware corporation not
affiliated with the Bank (the "Letter Agreement"; unless otherwise indicated
herein, capitalized terms herein have the meanings assigned thereto in the
Letter Agreement).
In accordance with our recent conversations, and in consideration of the
mutual promises contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties hereto,
upon your acceptance hereof the parties hereto hereby make the following
amendments to the Letter Agreement:
1. The date set forth as the defined term "Maturity Date" for the Revolver
on the first page, second paragraph of the Letter Agreement is hereby amended
to read as follows:
"July 14, 2004".
2. Your indebtedness under the Revolver of the Letter Agreement, as hereby
amended, shall be evidenced by an amended and restated committed revolver
promissory note substantially in the form of Attachment 1A hereto in the amount
of $80,000,000.00. Upon receipt by the Bank of the executed copy of Attachment
1A, which shall thereby constitute the Committed Revolver Note for the purposes
of the Letter Agreement, the Bank will return to you your current Committed
Revolver Note dated as of June 29, 1998 now in our possession.
3. The following new paragraph 19 shall be added to the Letter Agreement:
"19. Year 2000 Compliance. The Borrower is performing a continuing review
of its day-to-day internal operations to assess whether its business will be
vulnerable to a Year 2000 Problem and based on the review completed to date,
the Borrower does not believe that an Event of Default or a material adverse
effect in the financial condition, operations, business assets or prospects of
the Borrower could result from a Year 2000 Problem. "Year 2000 Problem" means
any significant risk that the performance or functionality of the Borrower's
proprietary and third party computer hardware and software systems or equipment
containing embedded chips (collectively, "Systems") will be adversely affected
by the receipt, transmission, processing, manipulation, storage, retrieval,
retransmission or other use of data containing or dependent on dates or time
periods before, during or after the year 2000."
4. Each reference in the Letter Agreement shall be deemed to be a
reference to the Letter Agreement as amended hereby.
Except as expressly modified herein, the Letter Agreement shall remain in
full force and effect and is hereby confirmed and ratified in all respects.
This First Amendment to Letter Agreement shall be governed by and
construed in accordance with the law of the State of New York.
2
We kindly ask you to express your acceptance of the above amended terms by
executing and returning to us the attached execution copies of (i) this First
Amendment to Letter Agreement and (ii) the Committed Revolver Note.
Very truly yours,
COMMERZBANK AG
New York and Grand Cayman Branches
By: By:
--------------------------------------- ------------------------------
Title: Peter T. Doyle Title: Andreas Schwung
Assistant Vice President Vice President
FOUR WINDS FUNDING CORPORATION
By: COMMERZBANK AG, NEW YORK BRANCH, as Administrator and
Attorney-in-Fact
By: By:
--------------------------------------- ------------------------------
Title: James F. Ahern Title:
Vice President
Agreed to and Accepted:
BERTELSMANN, INC.
By:
---------------------------------------
Title:
Date: July 15, 1999
Bernhard U. Derlath
Vice President
Finance & Controller
3