Exhibit 10.1
FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
(this "Amendment") is made and entered into as of April 27, 2006, by and among
KABLE NEWS COMPANY, INC., an Illinois corporation ("KNC"), KABLE DISTRIBUTION
SERVICES, INC., a Delaware corporation ("KDS"), KABLE NEWS EXPORT, LTD., a
Delaware corporation ("KEXP"), KABLE NEWS INTERNATIONAL, INC., a Delaware
corporation ("XXXX"), XXXXX FULFILLMENT SERVICES, INC., a Delaware corporation
("KFS") and KABLE FULFILLMENT SERVICES OF OHIO, INC., a Delaware corporation
("KFSO," and collectively, the "Borrowers"), and LASALLE BANK NATIONAL
ASSOCIATION., a national banking association (the " Lender "). All capitalized
terms used herein and not otherwise defined shall have the meaning given to them
in the Credit Agreement (defined below).
W I T N E S S E T H:
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WHEREAS, the Lender and the Borrowers are parties to, among other things,
that certain Amended and Restated Loan and Security Agreement dated as of April
28, 2005 (the "Existing Credit Agreement" and, after giving effect to the terms
and conditions contained in this Amendment, and as same is amended, restated,
replaced or otherwise modified from time to time, the "Credit Agreement"); and
WHEREAS, Borrowers have requested Lender to amend the Existing Credit
Agreement to: (i) amend and renew Facility C-1 and Facility C-2, (ii) add a new
Facility C-3 for the Fulfillment Borrowers, (iii) add a new Facility E for KDS,
(iv) add a facility key as an Exhibit to aid reviewing of the Credit Agreement
and (v) amend certain other sections of the Existing Credit Agreement as set
forth herein; and
WHEREAS, Lender is willing to so amend the Existing Credit Agreement on the
terms and subject to the conditions contained herein and in the other
agreements, documents and instruments contemplated under the terms of this
Amendment.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
GENERAL PROVISIONS
1. The recitals contained herein are incorporated by reference into this
Amendment, the Existing Credit Agreement and each of the other Loan Documents
(collectively, the foregoing documents may be referred to herein as the "Loan
Documents").
2. In order to induce Lender to enter into this Amendment, Borrowers hereby
represent and warrant to Lender that: (a) each of the foregoing recitals is true
and correct; (b) all of the representations, warranties and covenants in the
Loan Documents are true and complete in all material respects on the date hereof
with the same force and effect as if made on such date; (c) the Loan Documents,
including giving effect to this Amendment and the other agreements, documents
and instruments delivered in connection herewith, are in full force and effect
and no Borrower has any offsets, defenses, claims, causes of action or
counterclaims with respect thereto or otherwise against Lender.
AMENDMENTS TO EXISTING CREDIT AGREEMENT
3. Modifications to the Definitions Contained in Section 1.1 of the
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Existing Credit Agreement. (a) The following definitions are hereby added to
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Section 1.1 of the Existing Credit Agreement in proper alphabetical sequence:
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"Xxxxx" shall mean Xxxxxxxx Xxxxx Verlag Beteiligungs GMBH, a German
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corporation authorized to do business in New Jersey.
"Xxxxx Collateral" shall mean any Collateral which is a Xxxxx Related
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Account and any proceeds thereof.
"Xxxxx Related Accounts" shall mean all Accounts owning to KDS from
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distributors of magazines provided by Xxxxx in connection with the
Distribution Agreement.
"Distribution Agreement" shall mean that certain Distribution
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Agreement dated as of January 3, 2006 between Xxxxx and KDS.
"KDS Borrowing Base Amount" shall mean the lesser of (a) an amount
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equal to forty percent (40%) of the net amount (after deduction of such
reserves and allowances deemed appropriate by the Lender in its good faith
discretion based upon its customary business lending practices) of all
Xxxxx Related Accounts, and (b) Ten Million and 00/100 Dollars
($10,000,000.00).
"Facility C-3 Interest Rate" shall mean, with respect to each Facility
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C-3 Loan, 6.25% per annum.
"Facility C-3 Loan" and "Facility C-3 Loans" shall mean, respectively,
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each direct advance and the aggregate of all such direct advances from time
to time made by the Lender to the Fulfillment Borrowers in the form of a
Facility C-3 Loan under and pursuant to Section 2.5 A of this Agreement.
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"Facility C-3 Loan Commitment" shall mean an amount equal to One
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Million Four Hundred Seventy Thousand and 00/100 Dollars ($1,470,000.00).
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"Facility C-3 Loan Prepayment Date" shall have the meaning set forth
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in Section 2.5 A(c)(ii) hereof.
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"Facility C-3 Loan Prepayment Premium" shall have the meaning set
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forth in Section 2.5 A(c)(ii) hereof.
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"Facility C-3 Note" shall mean a capex note in the form prepared by
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and acceptable to the Lender, dated as of the date hereof, in the amount of
the Facility C-3 Loan Commitment and maturing on the Facility C Loan
Maturity Date, duly executed by the Fulfillment Borrowers and payable to
the order of the Lender, together with any and all renewal, extension,
modification or replacement notes executed by the Fulfillment Borrowers and
delivered to the Lender and given in substitution therefor.
"Facility D-1 Interest Rate" and "Facility D-2 Interest Rate" shall
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means the interest rates determined in accordance with Section 2.5(g)
below.
"Facility E Applicable Margin" shall mean the rate per annum added to
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LIBOR and/or Fixed LIBOR to determine the Facility E Interest Rate as
determined by the ratio of average daily Funded Debt of the Distribution
Borrowers for the prior fiscal quarter to EBITDA of the Distribution
Borrowers for the prior twelve months, effective as of any Interest Rate
Change Date, as set forth below:
Applicable Margin for LIBOR
Ratio of Average Daily Funded Debt Loans and Fixed LIBOR
to EBITDA Loans
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Greater than 1.75 to 1:00 2.50%
Greater than 1.25 to 1.00; less than
or equal to 1.75 to 1.00 2.25%
Greater than .85 to 1.00; less than
or equal to 1.25 to 1.00 2.00%
Less than or equal to .85 to 1:00 1.75%
The Facility E Applicable Margin as of the date hereof is 1.75% for
LIBOR Loans and Fixed LIBOR Loans.
"Facility E Event of Default" means with respect to the Facility E
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Loans, a "material breach" as defined under the Distribution Agreement or
other default by KDS under the Distribution Agreement if it becomes the
basis of an Act of Enforcement (as defined in the Intercreditor Agreement).
"Facility E Interest Rate" shall mean KDS' from time to time option of
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(i) a floating per annum rate of interest equal to the Prime Rate, (ii) the
LIBOR Rate plus the Facility E Applicable Margin or (iii) the Fixed LIBOR
Rate plus the Facility E Applicable Margin.
"Facility E Loan" and "Facility E Loans" shall mean, respectively,
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each direct advance and the aggregate of all such direct advances made by
the Lender to KDS under and pursuant to this Agreement, as set forth in
Section 2.5 B of this Agreement.
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"Facility E Loan Availability" shall mean, at any time, an amount
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equal to the lesser of (a) the Facility E Loan Commitment, or (b) the KDS
Borrowing Base Amount.
"Facility E Loan Commitment" shall mean Ten Million and 00/100 Dollars
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($10,000,000.00) as such amount may be reduced pursuant to Section 2.5
B(c)(ii) hereof.
"Facility E Loan Mandatory Prepayment" shall have the meaning set
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forth in Section 2.5 B(c) (i) hereof.
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"Facility E Note" shall mean a revolving note in the form prepared by
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and acceptable to the Lender, dated as of the date hereof, in the amount of
the Facility E Loan Commitment and maturing on the Revolving Loan Maturity
Date, duly executed by KDS and payable to the order of the Lender, together
with any and all renewal, extension, modification or replacement notes
executed by KDS and delivered to the Lender and given in substitution
therefor.
"Intercreditor Agreement" shall mean that certain Intercreditor
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Agreement dated as of February 6, 2006 among Xxxxx, Lender and KDS, as the
same may be amended, replaced or modified from time to time.
(b) The following definitions found in Section 1.1 of the Existing Credit
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Agreement are hereby deleted in their entirety and the following are substituted
therefor:
"Borrowing Base Certificate" shall mean a certificate to be signed by
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the Distribution Borrowers certifying to the accuracy of the Distribution
Borrowing Base Amount and the KDS Borrowing Base Amount or the Fulfillment
Borrowers certifying to the accuracy of the Fulfillment Borrowing Base
Amount, as applicable, in form and substance satisfactory to the Lender.
"Distribution Borrower Collateral" shall mean all Collateral of the
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Distribution Borrowers other than Xxxxx Related Accounts and the proceeds
thereof.
"Distribution Eligible Account" shall mean an Eligible Account owing
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to a Distribution Borrower except a Xxxxx Related Account.
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"Distribution Event of Default" shall mean an Event of Default (a)
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pertaining solely to any Distribution Borrower or (b) occurring with
respect to any Facility A Loan, Facility C-1 Loan, Facility E Loan and/or
Distribution Letter of Credit, provided, that a Facility E Event of Default
shall not constitute a Distribution Event of Default.
"Distribution Obligations" means all Obligations of the Distribution
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Borrowers.
"Facility C Loan" and "Facility C Loans" shall mean, respectively,
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each Facility C-1 Loan or Facility C-2 Loan or Facility C-3 Loan and the
aggregate of all such Facility C-1 Loans, Facility C-2 Loans and Facility
C-3 Loans.
"Facility C Loan Maturity Date" shall mean with respect to (i) each
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Facility C-1 Loan, May 1, 2010, unless extended by the Lender pursuant to
any modification, extension or renewal note executed by the applicable
Borrowers and accepted by the Lender in its sole and absolute discretion in
substitution for the Facility C-1 Note, (ii) each Facility C-2 Loan, May 1,
2010, unless extended by the Lender pursuant to any modification, extension
or renewal note executed by the applicable Borrowers and accepted by the
Lender in its sole and absolute discretion in substitution for the Facility
C-2 Note and (iii) the Facility C-3 Loan, April 30, 2010, unless extended
by the Lender pursuant to any modification, extension or renewal note
executed by the applicable Borrowers and accepted by the Lender in its sole
and absolute discretion in substitution for the Facility C-3 Note.
"Facility C Notes" shall mean, collectively, the Facility C-1 Note,
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the Facility C-2 Note and the Facility C-3 Note.
"Fixed LIBOR Loan" or "Fixed LIBOR Loans" shall mean that portion, and
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collectively those portions, of the aggregate outstanding principal balance
of the Loans that bear interest at the Fixed LIBOR Rate plus the Facility A
Applicable Margin or Facility B Applicable Margin or Facility E Applicable
Margin, as applicable.
"Fulfillment Obligations" means all Obligations of the Fulfillment
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Borrowers.
"LIBOR Loan" or "LIBOR Loans" shall mean that portion, and
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collectively those portions, of the aggregate outstanding principal balance
of the Loans that bear interest at the LIBOR Rate plus the Facility A
Applicable Margin or Facility B Applicable Margin or Facility E Applicable
Margin, as applicable.
"Loans" shall mean, collectively, all Revolving Loans, all Facility C
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Loans and all Facility D Loans made by the Lender to one or more of the
Borrowers and all Letter of Credit Obligations, under and pursuant to this
Agreement.
"Note" and "Notes" shall mean, respectively, each of and collectively,
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the Facility A Note, the Facility B Note, the Facility C-1 Notes, the
Facility C-2 Notes, the Facility C-3 Note, the Facility D-1 Notes, the
Facility D-2 Notes and the Facility E Note.
"Revolving Loan" and "Revolving Loans" shall mean, respectively, each
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Facility A Loan or Facility B Loan or Facility E Loan and the aggregate of
all such Facility A Loans, Facility B Loans and or Facility E Loans.
"Revolving Loan Maturity Date" shall mean for (A) the Facility A Loan
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and the Facility B Loan, respectively, the earlier of (i) May 1, 2010 and
(ii) the acceleration of such Loan upon the occurrence of an Event of
Default affecting such Loan, unless extended by the Lender pursuant to any
modification, extension or renewal note executed by the Borrowers and
accepted by the Lender in its sole and absolute discretion in substitution
for the Facility A Note or the Facility B Note, as applicable and (B) the
Facility E Loan, July 31, 2009, unless extended by the Lender pursuant to
any modification, extension or renewal note executed by KDS and accepted by
the Lender in its sole and absolute discretion in substitution for the
Facility E Note.
"Revolving Notes" shall mean, respectively, each of and collectively,
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the Facility A Note, the Facility B Note and the Facility E Note.
4. Addition of Sections to the Existing Credit Agreement. The Existing
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Credit Agreement is hereby amended by adding three new Sections in proper
numerical sequence, which Sections shall read in their entirety as follows:
Section 2.5 A Facility C-3 Loans
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(a) Subject to the terms and conditions of this Agreement and the
other Loan Documents, and in reliance upon the representations and
warranties of the Fulfillment Borrowers set forth herein and in the other
Loan Documents, the Lender agrees to make Facility C-3 Loans at such times
as the Fulfillment Borrowers may from time to time request until, but not
including, May 27, 2006, and in such amounts as the Fulfillment Borrowers
may from time to time request, provided, however, that the aggregate
principal balance of all Facility C-3 Loans outstanding at any time shall
not exceed the lesser of (i) the Facility C-3 Loan Commitment, and (ii) an
amount equal to one hundred percent (100.00%) of the aggregate invoice cost
(excluding transportation and installation costs) of all new Equipment
financed with the proceeds of the Facility C-3 Loans or financed with the
proceeds of other Loans from the Lender which are repaid with the proceeds
of the Facility C-3 Loans. The proceeds of each Facility C-3 Loan shall be
used solely by the Fulfillment Borrowers to purchase Equipment or to repay
Loans from the Lender, the proceeds of which were used to purchase
Equipment.
(b) Facility C-3 Loan Interest. Except as otherwise provided in this
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Section 2.5 A (b), the principal amount of the Facility C-3 Loans
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outstanding from time to time shall bear interest at the Facility C-3
Interest Rate. Any amount of principal or interest on the Facility C-3
Loans which is not paid when due, whether at stated maturity, by
acceleration or otherwise, shall bear interest payable on demand at the
Fulfillment Default Rate. Principal amounts repaid on the Facility C-3 Note
may not be borrowed again.
(c) Facility C-3 Loan Interest and Principal Payments. (i) Accrued and
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unpaid principal of and interest on the aggregate principal balance of the
Facility C-3 Loans outstanding from time to time shall be due and payable
monthly, in arrears, commencing on the last Business Day of the month of
such Facility C-3 Loan and continuing on the last Business Day of each
calendar month thereafter through, but not including the Facility C Loan
Maturity Date. The outstanding principal balance of and accrued interest on
the Facility C-3 Loan shall be repaid in equal monthly aggregate
installments of $34,691.74. On the Facility C Loan Maturity Date, the
Fulfillment Borrowers shall pay to the Lender a final installment equal to
the total principal balance of the Facility C-3 Loan then remaining unpaid,
plus all accrued and unpaid interest thereon.
(ii) Provided that no Event of Default then exists, the
Fulfillment Borrowers may from time to time prepay the Facility C-3
Loans in a minimum amount equal to One Hundred Thousand Dollars and
00/100ths ($100,000) and integral multiples thereof or the aggregate
principal amount of the Facility C-3 Loans if such amount is less than
One Hundred Thousand Dollars and 00/100ths ($100,000). Any prepayment
of a Facility C-3 Loan that is not made out of excess cash flow from
internally generated funds shall be subject to the following
conditions:
(A) Not less than ten (10) days prior to the date upon which
the Fulfillment Borrowers desire to make such prepayment, the
Fulfillment Borrowers shall deliver to the Lender written notice
of their intention to prepay the Facility C-3 Loans, which notice
shall be irrevocable and state the prepayment amount and the
prepayment date (the "Facility C-3 Loan Prepayment Date");
(B) The Fulfillment Borrowers shall pay to the Lender,
concurrently with such prepayment, a prepayment premium (the
"Facility C-3 Loan Prepayment Premium") equal to the greater of
(1) the Yield Amount (as hereinafter defined), and (2) the Fixed
Amount (as hereinafter defined), provided, however, no Facility
C-3 Loan Prepayment Premium shall be owing if such prepayment is
made on or after the date which is ninety (90) days prior to the
Facility C Loan Maturity Date; and
(C) The Fulfillment Borrowers shall pay to the Lender all
accrued and unpaid interest on the Facility C-3 Loans through the
date of such prepayment on the principal balance being prepaid.
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Each prepayment of the Facility C-3 Loans shall be applied to the
scheduled installments of the Facility C-3 Loans in inverse order
of maturity.
(iii) For purposes of the Facility C-3 Loans and the Facility C-3
Note, the "Fixed Amount" shall mean one percent (1.00%) of the amount
prepaid, and the "Yield Amount" shall be the amount calculated as
follows:
(A) The Lender shall first determine, as of the Facility C-3
Loan Prepayment Date, the amount, if any, by which the Facility
C-3 Interest Rate exceeds the yield to maturity percentage (the
"Current Yield") for the United States Treasury Security closest
in maturity to the Facility C Loan Maturity Date as published in
The Wall Street Journal on the fifth Business Day preceding the
Facility C-3 Loan Prepayment Date. If publication of (1) The Wall
Street Journal, or (2) the Current Yield of the Treasury Security
in The Wall Street Journal is discontinued, the Lender, in its
sole discretion, shall designate another daily financial or
governmental publication of national circulation to be used to
determine the Current Yield;
(B) The difference calculated pursuant to clause (iii)(A)
above shall be multiplied by the amount to be prepaid on the
Facility C-3 Loan Prepayment Date;
(C) The product calculated pursuant to clause (iii)(B) above
shall be multiplied by the quotient, rounded to the nearest
one-hundredth of one percent, obtained by dividing (1) the number
of days from and including the Facility C-3 Loan Prepayment Date
to and including the Facility C Loan Maturity Date, by (2) 365;
and
(D) The product calculated pursuant to clause (iii)(C) above
shall be discounted at the annual rate of the Adjusted Current
Yield (where the "Adjusted Current Yield" means the Current Yield
adjusted to reflect the difference in timing of semi-annual
payments of interest on the Treasury Security and monthly
payments under the Facility C-3 Note) to the present value
thereof as of the Facility C-3 Loan Prepayment Date, on the
assumption that such sum would be received in equal monthly
installments on each monthly anniversary of the Facility C-3 Loan
Prepayment Date prior to the Facility C Loan Maturity Date, with
the final such installment to be deemed received on the Facility
C Loan Maturity Date;
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provided that the Fulfillment Borrowers shall not be entitled in any event
to a credit against, or a reduction of, the indebtedness being prepaid if
the Adjusted Current Yield exceeds the Facility C-3 Interest Rate or for
any other reason.
Section 2.5 B Facility E Loans.
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(a) Facility E Loan Commitment. Subject to the terms and conditions of
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this Agreement and the other Loan Documents, and in reliance upon the
representations and warranties of the Distribution Borrowers set forth
herein and in the other Loan Documents, the Lender agrees to make such
Facility E Loans at such times as KDS may from time to time request until,
but not including, the Revolving Loan Maturity Date, and in such amounts as
KDS may from time to time request, provided, however, that the aggregate
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principal balance of all Facility E Loans outstanding at any time shall not
exceed the Facility E Loan Availability. Facility E Loans made by the
Lender may be repaid and, subject to the terms and conditions hereof,
borrowed again up to, but not including the Revolving Loan Maturity Date
unless the Facility E Loans are otherwise accelerated, terminated or
extended as provided in this Agreement. The Facility E Loans shall be used
by KDS for the purpose of paying its accounts payable to Xxxxx under the
Distribution Agreement.
(b) Facility E Loan Interest and Payments. Except as otherwise
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provided in this Section 2.5 B (b), the principal amount of the Facility E
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Loans outstanding from time to time shall bear interest at the applicable
Facility E Interest Rate. Accrued and unpaid interest on the unpaid
principal balance of all Facility E Loans outstanding from time to time
shall be due and payable monthly, in arrears, commencing on the last
Business Day of April, 2006 and continuing on the last Business Day of each
calendar month thereafter, and on the Revolving Loan Maturity Date. Any
amount of principal or interest on the Facility E Loans which is not paid
when due, whether at stated maturity, by acceleration or otherwise, shall
bear interest payable on demand at the Distribution Default Rate.
(c) Facility E Loan Principal Payments.
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(i) Facility E Loan Mandatory Payments. All Facility E Loans
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hereunder shall be repaid by KDS on the Revolving Loan Maturity Date
for Facility E Loans, unless payable sooner pursuant to the provisions
of this Agreement. In the event the aggregate outstanding principal
balance of all Facility E Loans hereunder exceeds the Facility E Loan
Availability, KDS shall, without notice or demand of any kind,
immediately make such repayments of the Facility E Loans or take such
other actions as are satisfactory to the Lender as shall be necessary
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to eliminate such excess. Also, if KDS chooses not to convert any
Facility E Loan which is a LIBOR Loan to a Prime Loan as provided in
Section 2.6(a) and Section 2.6(b), then such Facility E Loan shall
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immediately be due and payable on the last Business Day of the then
existing LIBOR Interest Period or on such earlier date as required by
law, all without further demand, presentment, protest or notice of any
kind, all of which are hereby waived by KDS.
(ii) Optional Prepayments; Voluntary Reductions or Termination of
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the Facility E Commitment. KDS may from time to time prepay the
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Facility E Loans, in whole or in part, without any prepayment penalty
whatsoever, provided that any prepayment of the entire principal
balance shall include accrued interest on such Facility E Loans to the
date of such prepayment. KDS may from time to time on at least five
Business Days' prior written notice received by the Lender permanently
reduce the Facility E Commitment to an amount not less than the
amounts then Outstanding under any Facility E Loans. Any such
reduction shall be in an amount not less than $100,000 or a higher
integral multiple of $50,000. Concurrently with any reduction of the
Facility E Loan Commitment to zero, KDS shall pay all interest on the
Facility E Loans and all non-use fees.
Section 13.14 Joint and Several Obligations.
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(a) Each Distribution Borrower agrees that the covenants and
agreements of the Distribution Borrowers and each of them contained in this
Agreement and any related document shall be joint and several obligations
of such parties unless otherwise specifically set forth herein or therein
in consideration of the financial accommodation to be provided by Lender
hereunder for the mutual benefit, directly and indirectly, of each of the
Distribution Borrowers and in consideration of the undertakings of each of
the Distribution Borrowers to accept joint and several liability for the
obligations of each of them hereunder. Each of the Distribution Borrowers,
jointly and severally, hereby irrevocably and unconditionally accepts, not
merely as a surety but also as a co-debtor, joint and several liability
with the other Distribution Borrowers with respect to the payment and
performance of all of the obligations of the Distribution Borrowers and
each of them arising under this Agreement and related documents, it being
the intention of the parties hereto that all such obligations shall be the
joint and several obligations of each of the Distribution Borrowers without
preferences or distinction among them. Distribution Borrowers and each of
them, jointly and severally, irrevocably, absolutely and unconditionally
guarantee(s) prompt payment of all obligations of the Distribution
Borrowers and each of them under this Agreement, the applicable Notes and
any document executed in connection herewith in full when due, whether by
acceleration or otherwise, and waive(s) any right to require that any
action be brought against the other Distribution Borrowers or any guarantor
of such obligations and any right to require that resort be had to any
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security for payment of the such obligations and waive(s) any other
defenses available to a surety or guarantor under applicable law. Each
Distribution Borrower shall be liable under this Agreement and applicable
Notes for the maximum amount of such liability that can be incurred without
rendering this Agreement or such Notes, as they relate to such Distribution
Borrower, voidable under applicable law relating to fraudulent conveyance
or fraudulent transfer, and not for any greater amount.
(b) Each Fulfillment Borrower agrees that the covenants and agreements
of the Fulfillment Borrowers and each of them contained in this Agreement
and any related document shall be joint and several obligations of such
parties unless otherwise specifically set forth herein or therein in
consideration of the financial accommodation to be provided by Lender
hereunder for the mutual benefit, directly and indirectly, of each of the
Fulfillment Borrowers and in consideration of the undertakings of each of
the Fulfillment Borrowers to accept joint and several liability for the
obligations of each of them hereunder. Each of the Fulfillment Borrowers,
jointly and severally, hereby irrevocably and unconditionally accepts, not
merely as a surety but also as a co-debtor, joint and several liability
with the other Fulfillment Borrowers with respect to the payment and
performance of all of the obligations of the Fulfillment Borrowers and each
of them arising under this Agreement and related documents, it being the
intention of the parties hereto that all such obligations shall be the
joint and several obligations of each of the Fulfillment Borrowers without
preferences or distinction among them. Fulfillment Borrowers and each of
them, jointly and severally, irrevocably, absolutely and unconditionally
guarantee(s) prompt payment of all obligations of the Fulfillment Borrowers
and each of them under this Agreement, the applicable Notes and any
document executed in connection herewith in full when due, whether by
acceleration or otherwise, and waive(s) any right to require that any
action be brought against the other Fulfillment Borrowers or any guarantor
of such obligations and any right to require that resort be had to any
security for payment of the such obligations and waive(s) any other
defenses available to a surety or guarantor under applicable law. Each
Fulfillment Borrower shall be liable under this Agreement and applicable
Notes for the maximum amount of such liability that can be incurred without
rendering this Agreement or such Notes, as they relate to such Fulfillment
Borrower, voidable under applicable law relating to fraudulent conveyance
or fraudulent transfer, and not for any greater amount.
5. Modification of Certain Sections of the Existing Credit Agreement.
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Certain Sections of the Existing Credit Agreement are hereby amended as follows:
(a) Section 2.1(c)(ii) is amended by deleting the term "Revolving
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Commitment" in the last sentence thereof and substituting therefor the term
"Facility A Loan Commitment."
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(b) Section 2.2(c)(ii) is amended by deleting the term "Revolving
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Commitment" in the last sentence thereof and substituting therefor the term
"Facility B Loan Commitment."
(c) Section 2.3(a) is amended by deleting the date "May 1, 2006" in
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the fifth line thereof and substituting therefor the date "May 1, 2007".
(d) Section 2.3(c)(iii)(B) is amended by deleting the term "Facility
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D-2 Loan Prepayment Date" in the second line thereof and substituting
therefor the term "Facility C-1 Loan Prepayment Date."
(e) Section 2.4(a) is amended by deleting the date "May 1, 2006" in
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the fifth line thereof and substituting therefor the date "May 1, 2007".
(f) Section 2.4(c)(iii)(B) is amended by deleting the term "Facility
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D-2 Loan Prepayment Date" in the second line thereof and substituting
therefor the term "Facility C-2 Loan Prepayment Date."
(g) Section 2.5(b)(iv)(B) is amended by deleting the term "Facility
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D-2 Loan Prepayment Date" in the second line thereof and substituting
therefor the term "Facility D-1 Loan Prepayment Date."
(h) Section 2.5(b)(iv) is amended by deleting the term "Facility D-1
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Loan Interest Rate" in the third line of the last paragraph thereof and
substituting therefor the term "Facility D-1 Interest Rate."
(i) Section 2.5(d)(iv) is amended by deleting the term "Facility D-2
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Loan Interest Rate" in the third line of the last paragraph thereof and
substituting therefor the term "Facility D-2 Interest Rate."
(j) Section 3.2 is amended by adding the following clause at the end
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of such Section:
(c) in the case of a Facility E Loan, a Distribution Event of
Default or Facility E Event of Default shall have occurred and be
continuing.
(k) Section 5.1(c) is amended by deleting the first sentence thereof
--------------
in its entirety and substituting therefor the following sentence:
Each Revolving Loan may be advanced either as a Prime Loan, a
Fixed LIBOR Loan or a LIBOR Loan, provided, however, that at any time,
the Distribution Borrowers may identify no more than five (5) Facility
A Loans which may be LIBOR Loans, the Fulfillment Borrowers may
identify no more than five (5) Facility B Loans which may be LIBOR
Loans and KDS may identify no more than five (5) Facility E Loans
which may be LIBOR Loans.
12
(l) Section 6.1 is amended by (i) deleting clause (a) thereof and
------------
substituting the following therefor:
(a) the Distribution Obligations each of the Distribution
Borrowers do hereby pledge, assign, transfer and deliver to the Lender
and do hereby grant to the Lender an unconditional first priority
security interest in and to the Distribution Borrower Collateral and,
subject only to such priority of Lien as is accorded Xxxxx under the
Intercreditor Agreement, an unconditional security interest in and to
the Xxxxx Collateral;
and by (ii) adding the following sentence at the end of said Section:
Any other reference in this Agreement to the priority of Lender's Lien
in and to Collateral shall be subject to such priority of Lien as is
accorded Xxxxx under the Intercreditor Agreement.
(m) Section 6.2 is amended by deleting clause (b) thereof and
------------
substituting the following therefor:
(b) unless a Distribution Event of Default or Facility E Event of
Default exists hereunder, the Distribution Borrowers or KDS, as
applicable, shall be entitled to possession or use of the Collateral
(other than Instruments or Documents, Tangible Chattel Paper,
Investment Property consisting of certificated securities and other
Collateral required to be delivered to the Lender pursuant to this
Section 6)
----------
(n) Section 6.9 is amended by (i) deleting the phrase "on account of
-----------
the Facility A Loans" in the fourth sentence of clause (a) thereof, and
(ii) by adding the following clause at the end of said Section:
(c) KDS shall direct all of its Xxxxx Related Account debtors to
make all payments on the Xxxxx Related Accounts directly to the
Distribution Lockbox. At all times the Xxxxx Related Account payments
shall be traceable by KDS' accounting system in order for such
payments to be transferred to a separate KDS/Xxxxx demand deposit
account to be established by KDS with Lender.
(o) Section 8.24 is amended by adding the following clause thereto in
------------
proper alphabetical sequence:
(c) the Distribution Borrowers agree to pay to the Lender a
non-utilization fee equal to one-quarter of one percent of the total
of (i) the Facility E Loan Commitment, minus (ii) the daily average of
-----
the aggregate principal amount of all Facility E Loans outstanding
which non-utilization fee shall be (x) calculated on the basis of a
year consisting of 365 days, (y) paid for the actual number of days
elapsed, and (z) payable quarterly in arrears on the last day of each
13
April, July, October and January, commencing on April 30, 2006, and on
the Revolving Loan Maturity Date.
(p) Section 11 is amended by adding the following section thereto in
----------
proper numerical sequence:
11.12 Facility E Event of Default. The occurrence of a Facility E
---------------------------
Event of Default, which shall apply solely to the Facility E Loans.
(q) Section 11 is amended by deleting the first sentence of the last
----------
paragraph thereof in its entirety and substituting therefor the following
sentence:
For the avoidance of doubt and notwithstanding any other
provision of this Agreement, the parties hereto expressly covenant and
agree that for the purposes of this Agreement and the other Loan
Documents, (i) except as set forth in clauses (vi) and (vii) below,
the Facility A Loan, the Facility C-1 Loans and the Facility E Loans
to the Distribution Borrowers shall be fully cross-collateralized by
all of the assets of the Distribution Borrowers and cross-defaulted
with each other and (ii) the Facility B Loan, the Facility C-2 Loans,
the Facility C-3 Loans and the Facility D Loans to the Fulfillment
Borrowers shall be fully cross-collateralized by all of the assets of
the Fulfillment Borrowers and cross-defaulted with each other, (iii)
the Loans to the Distribution Borrowers and the Loans to the
Fulfillment Borrowers are neither cross-collateralized nor
cross-defaulted one with another, (iv) the occurrence of a
Distribution Event of Default or a Distribution Unmatured Event of
Default shall not constitute a Fulfillment Event of Default or a
Fulfillment Unmatured Event of Default, (v) the occurrence of a
Fulfillment Event of Default or a Fulfillment Unmatured Event of
Default shall not constitute a Distribution Event of Default or a
Distribution Unmatured Event of Default, (vi) the occurrence of a
Facility E Event of Default or other default by KDS under the
Distribution Agreement shall not constitute a Distribution Event of
Default, it being understood, however, that Lender may apply the
remaining Xxxxx Collateral proceeds under the circumstances
contemplated Section 4(a)(ii)(3) of the Intercreditor Agreement in
accordance with the provisions of this Agreement and (vii) the
Obligations related to the Facility E Loans shall be secured solely by
the Xxxxx Collateral but the Xxxxx Collateral shall also secure the
Facility A Loan and the Facility C-1 Loans, in each case as governed
by the provisions of the Intercreditor Agreement.
(r) Section 12.8 is amended by inserting the phrase "except items
-------------
pertaining to the Xxxxx Related Accounts" after the term "Distribution
Borrowers" the first time it appears in clause (a) of said Section 12.8 and
(ii) by adding the following clause at the end of the first sentence of
said Section:
(c) within a time period consistent with the terms of the
Distribution Lockbox Agreement after receipt of cash or solvent
credits from collection of items of payment, proceeds of Collateral or
14
any other source pertaining to the Xxxxx Related Accounts, apply the
whole or any part thereof first, against the Obligations under the
Facility E Loan, then, make any remaining balance available to KDS for
application to the obligations of KDS under the Distribution Agreement
and then apply any remaining balance against the other Obligations of
the Distribution Borrowers secured hereby. Any balance made available
to KDS for application to the obligations of KDS under the
Distribution Agreement shall be used by KDS for such purpose.
(s) The exhibits to the Existing Credit Agreement are amended by
adding in proper alphabetical sequence Exhibit C attached to this
Amendment.
MISCELLANEOUS PROVISIONS
6. The amendments to the Existing Credit Agreement set forth above shall
become effective upon satisfaction of all of the following conditions precedent:
(i) Lender shall have received all of the following, each in form and
substance satisfactory to Lender:
(a) Four original counterparts of this Amendment duly executed by
Borrowers.
(b) One original copy of the Facility C-3 Note duly executed by the
Fulfillment Borrowers.
(c) One original copy of the Facility E Note duly executed by KDS.
(d) Such other documents as Lender may reasonably request, including
the documents appearing on the Closing Checklist for this Amendment
prepared by counsel to the Lender.
(ii) No Event of Default or Default under the Loan Documents shall have
occurred and be continuing.
7. The Borrowers hereby agree to reimburse the Lender upon demand for all
out-of-pocket costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) incurred by the Lender in the participation,
negotiation and execution of this Amendment and all other agreements, documents,
instruments and certificates relating to this Amendment. The Borrowers further
agree to pay or reimburse the Lender for (a) any stamp or other taxes (excluding
income or gross receipts taxes) which may be payable with respect to the
execution, delivery or recording of this Amendment or any other writing executed
or delivered in connection herewith, and (b) the cost of any filings and
searches. All of the obligations of the Borrowers under this paragraph shall
survive the termination of the Loan Documents.
15
8. Each of the Borrowers and the Lender hereby waives any right to a trial
by jury in any action or proceeding to enforce or defend any right under this
Amendment or any of the balance of the Loan Documents or arising from the
lending relationship which is the subject of the Credit Agreement, including
this Amendment, and agree that any such action or proceeding shall be tried
before a court and not before a jury.
9. To induce the Lender to enter into this Amendment, the Borrowers
irrevocably agree that, subject to the Lender's sole and absolute election, all
actions or proceedings in any way, manner or respect arising out of or from or
related to this Amendment or the balance of the Loan Documents or the Collateral
shall be litigated only in courts having situs within the City of Chicago, State
of Illinois. The Borrowers hereby consent and submit to the jurisdiction of any
local, state or federal court located within said city and state. The Borrowers
hereby waive any rights they may have to transfer or change the venue of any
litigation brought in accordance with this paragraph.
10. This Amendment shall be binding upon and inure to the benefit of the
Borrowers and the Lender and their respective successors and assigns, except
that no Borrower may assign, transfer or delegate any of its rights or
obligations hereunder.
11. Each of the Borrowers hereby represents and warrants to, and covenants
with, the Lender that:
(a) the execution, delivery and performance by each Borrower of this
Amendment is within the powers of such Borrower, has been duly authorized
by all necessary actions by each Borrower and require no action by or in
respect of, or filing with, any governmental or regulatory body, agency or
official or any other person;
(b) the execution, delivery and performance by each Borrower of this
Amendment does not conflict with, or result in a breach of the terms,
conditions or provisions of, or constitute a default under or result in any
violation of, the terms of the organizational documents (including, as
applicable, articles, by-laws, operating or shareholder agreements and the
like) of such Borrower, any applicable law, rule, regulation, order, writ,
judgment or decree of any court or governmental or regulatory agency or
instrumentality or any agreement, document or instrument to which such
Borrower is a party or by which such Borrower or any of its property or
assets is bound or to which such Borrower or any of its property or assets
is subject;
(c) each of this Amendment, the Facility C-3 Note and the Facility E
Note has been duly executed and delivered by each Borrower, as applicable,
and constitutes the legal, valid and binding obligation of such Borrower,
as applicable, enforceable against such Borrower in accordance with its
terms, as applicable, except as such enforceability may be limited by (i)
applicable bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally and (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law); and
16
(d) as of the date of this Amendment, all of the representations and
warranties of each Borrower set forth in the Credit Agreement and the
balance of the Loan Documents are true and correct in all material respects
and no Unmatured Event of Default or Event of Default under or within the
meaning of the Existing Credit Agreement has occurred and is occurring,
except as expressly described herein.
12. Except to the extent specifically amended hereby, all of the terms,
provisions, conditions, covenants, representations and warranties contained in
the Credit Agreement and balance of the Loan Documents shall be and remain in
full force and effect and the same are hereby ratified and confirmed.
13. The Credit Agreement, including this Amendment, and the rights and
obligations of the parties hereunder and thereunder shall be construed in
accordance with and governed by the laws of the State of Illinois without regard
to principles of conflicts of laws.
14. All references in the Existing Credit Agreement to "this Agreement" and
any other references of similar import shall henceforth mean the Existing Credit
Agreement as amended through and including the date hereof, including this
Amendment, and any reference to the Existing Agreement in any other Loan
Document shall mean the Existing Credit Agreement as amended through and
including the date hereof, including this Amendment.
15. In the event of any inconsistency or conflict between this Amendment
and the Existing Credit Agreement, the terms, provisions and conditions
contained in this Amendment shall govern and control.
16. This Amendment may be executed in any number of separate counterparts,
each of which, when so executed, shall be deemed an original, and all of such
counterparts taken together shall be deemed to constitute but one and the same
instrument. A facsimile signature shall be deemed a valid signature for all
purposes.
17. The Lender is hereby authorized to rely upon and accept as an original
this Amendment or any Other Agreements or other communication which is sent to
the Lender by facsimile, telegraphic or other electronic transmission (each, a
"Communication") which the Lender in good faith believes has been signed by one
or more of the Borrowers and has been delivered to the Lender by a properly
authorized representative of the Borrower(s), whether or not that is in fact the
case. Notwithstanding the foregoing, the Lender shall not be obligated to accept
any such Communication as an original and may in any instance require that an
original document be submitted to the Lender in lieu of, or in addition to, any
such Communication.
[SIGNATURE PAGES FOLLOW]
17
IN WITNESS WHEREOF, this Amendment has been duly executed as of the date
first above written.
BORROWERS:
KABLE NEWS COMPANY, INC., an Illinois
corporation
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Senior Vice President
KABLE DISTRIBUTION SERVICES, INC., a
Delaware corporation
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Senior Vice President
KABLE NEWS EXPORT, LTD., a Delaware
corporation
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
KABLE NEWS INTERNATIONAL, INC., a
Delaware corporation
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Treasurer
18
KABLE FULFILLMENT SERVICES, INC., a
Delaware corporation
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
KABLE FULFILLMENT SERVICES OF OHIO,
INC., a Delaware corporation
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
LENDER:
LASALLE BANK NATIONAL ASSOCIATION, a
national banking association
By: /s/ Xxxx X. Xxxxxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: First Vice President
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EXHIBIT C
Facility Key
------------
Facility Applicable Amount
-------- Borrowers ------
---------
Facility A Distribution Borrowers $9,000,000
Facility B Fulfillment Borrowers $11,000,000
Facility C - 1 Distribution Borrowers $1,000,000
Facility C - 2 Fulfillment Borrowers $3,000,000 (less C - 1)
Facility C - 3 Fulfillment Borrowers $1,470,000
Facility D - 1 Fulfillment Borrowers $4,600,000
Facility D - 2 Fulfillment Borrowers $3,000,000
Distribution Borrowers
Facility E (KDS draws only) $10,000,000
Kable News Company, Inc. (KNC)
Kable Distribution Services, Inc. (KDS)
Kable News Export, LTD (KEXP)
Kable News Int'l., Inc. (XXXX)
Xxxxx Fulfillment Services, Inc. (KFS)
Kable Fulfillment of Ohio, Inc. (KFSO)
Distribution Borrowers: KDS, KEXP & XXXX
Fulfillment Borrowers: KFS, KFSO & KNC
20
