AMENDMENT AND SUPPLEMENT NO. 1
TO
CREDIT AGREEMENT
AGREEMENT, made as of this 14th day of June, 1999, by and among:
AUDIO BOOK CLUB, INC. a Florida corporation (hereinafter referred to as the
"Borrower" or the "Company");
The financial institutions which have executed the signature page annexed
hereto (individually, a "Lender Party" and collectively, the "Lender Parties");
and
FLEET NATIONAL BANK, as Initial Issuing Bank and Swing Line Bank, and as
administrative agent for the Lender Parties (in such capacity, together with its
successors in such capacity, the "Administrative Agent");
WHEREAS:
(A) The Borrower is indebted to the Lender Parties pursuant to a Credit
Agreement dated December 31, 1998 (as amended and as it is hereby and as it may
hereafter from time to time be amended, modified or supplemented, the "Credit
Agreement");
(B) The Borrower has requested and the Lender Parties have agreed, upon the
terms and conditions set forth herein, (i) to permit the acquisition by ABD
Acquisition Corp. ("ABD"), a wholly-owned subsidiary of the Borrower, of certain
assets of Doubleday Direct, Inc., a New York corporation, (ii) to increase the
Term Facility by an aggregate principal amount of Six Million ($6,000,000)
Dollars, which amount shall be used to finance, in part, such acquisition, (iii)
to change the interest rate applicable to the Advances, (iv) to reflect the
creation of certain new Subsidiaries by the Borrower, each to become a Guarantor
under the Credit Agreement, (v) to permit the Borrower to incur an additional
$4.35 million of Senior Subordinated Debt, and (vi) to revise certain other
provisions of the Credit Agreement;
(C) The Borrower and a Subsidiary of the Borrower (the "Existing
Subsidiary") have formed four new Subsidiaries (the "New Subsidiaries") (one of
which is ABD), which New Subsidiaries are concurrently herewith becoming
Guarantors under the terms of the Subsidiary Guaranty and additional grantors
under the terms of the Security Agreement and the Intellectual Property Security
Agreement to the Lenders, and the Company and the Existing Subsidiary will
pledge the capital stock of the New Subsidiaries to the Administrative Agent in
accordance with the Security Agreement;
(D) The Borrower and certain Subsidiaries have completed certain
intercompany asset transfers and propose to complete certain additional asset
transfers; and
(E) All capitalized terms that are used herein without definition and which
are defined in the Credit Agreement shall have the respective meanings ascribed
thereto therein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
Article I
Amendments to Credit Agreement.
This Amendment and Supplement No. 1 to Credit Agreement shall be deemed to
be an amendment and supplement to the Credit Agreement, and shall not be
construed in any way as a replacement therefor. All of the terms and provisions
of this Amendment and Supplement No. 1 are hereby incorporated by reference into
the Credit Agreement as if such terms and provisions were set forth in full
therein. The Credit Agreement is hereby amended, effective upon the satisfaction
of the conditions precedent set forth in Article V hereof, in the following
respects:
1.1 (a) Article 1, "Definitions", is amended to insert the following new
definition where alphabetically appropriate:
"ABD" means ABD Acquisition Corp., a wholly-owned subsidiary of Borrower.
"Amendment No. 1" means Amendment and Supplement No.1 to this Credit
Agreement dated as of June 14, 1999, among the Borrower, the Lender Parties
signatory thereto and the Administrative Agent.
"Acquisition Agreement" means the Asset Acquisition Agreement dated as of
March 18, 1999, as amended to date, between ABD and Doubleday.
"December 1998 Note" means a certain 9% Convertible Senior Subordinated
Promissory Note due December 31, 2004 in the principal amount of $14,000,000
issued to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ by the Company on December 31, 1998.
"Doubleday Acquisition" means the acquisition by ABD of certain of the
assets of Doubleday, pursuant to an the Acquisition Agreement.
"Doubleday" means Doubleday Direct, Inc., a New York corporation.
"June 1999 Note" means a certain 9% Convertible Senior Subordinated
Promissory Note due December 31, 2004 in the principal amount of $4,350,000
issued to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ by the Borrower on June 11, 1999.
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"Second Tranche Term Borrowing" means the Term Advances made by the Term
Lenders pursuant to the Credit Agreement as amended by Amendment No. 1.
(b) The definition of "Senior Subordinated Debt" set forth in Article 1 is
hereby amended and restated to read in its entirety as follows:
"Senior Subordinated Debt" means the December 1998 Note and
the June 1999 Note and any guaranties thereof permitted to be
issued by the Subsidiaries of the Company from time to time
pursuant to Section 6.2(c)(iv), as the same may be amended,
modified or supplemented from time to time consistent with the
terms of this Agreement.
1.2 The grid set forth in the definition of "Applicable Margin" is amended
and restated to read as follows:
Applicable Margin for
Revolving Credit Advances and Term Advances
Consolidated
Applicable Margin for Applicable Margin for Debt to
Eurodollar Rate Advances Prime Rate Advances EBITDA Ratio
------------------------ ------------------- ------------
3.50% 2.25% Greater than or
equal to 4.0:1.0
3.25% 2.00% Greater than or
equal to 3.0:1.0
but less than
4.0:1.0
3.00% 1.75% Less than
3.0:1.0
1.3 Section 2.1(a), "The Term Advances", is amended and restated to read as
follows:
(a) The Term Advances. The Borrower acknowledges that each of the Term
Lenders has made a Term Advance to the Borrower on the Closing Date in an
amount equal to such Lender Party's Term Commitment as in effect on such
date. Each Lender Party severally agrees, on the terms and conditions
hereinafter set forth, to make a second Term Advance to the Borrower on the
Effective Date (as defined in this Amendment No. 1), each such second Term
Advance to be in the principal amount of $3,000,000 or an aggregate for all
Lender Parties of $6,000,000. Each Term Borrowing shall consist of Term
Advances made simultaneously by the Term Lenders ratably according to their
Term Commitments as in effect on the date of the relevant Term Borrowing.
Amounts borrowed under this Section 2.1(a) and repaid or prepaid may not be
reborrowed.
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1.4 Section 2.1(c), "The Revolving Credit Advances", is amended to
substitute the amount "$37,500,000" for the amount "$31,500,000" appearing in
the table included therein to substitute "September 29, 1999" for the two
references to "June 30, 1999".
1.5 The grid set forth in Section 2.4, "Repayment of Advances", is amended
and restated to read as follows:
--------------------------------------------------------------------------------
Date Amount
--------------------------------------------------------------------------------
March 31, 1999 $250,000
--------------------------------------------------------------------------------
Each of June 30, 1999, September 30, 1999 and $330,000
December 31, 1999
--------------------------------------------------------------------------------
Each of March 31, 2000, June 30, 2000, September $930,000
30, 2000 and December 31, 2000
--------------------------------------------------------------------------------
Each of March 31, 2001, June 30, 2001, September $1,550,000
30, 2001 and December 31, 2001
--------------------------------------------------------------------------------
Each of March 31, 2002, June 30, 2002, September $2,170,000
30, 2002 and December 31, 2002
--------------------------------------------------------------------------------
Each of March 31, 2003, June 30, 2003, September $2,790,000
30, 2003 and December 31, 2003
--------------------------------------------------------------------------------
1.6 Section 2.14, "Use of Proceeds" is amended and restated to read as
follows:
SECTION 2.14 Use of Proceeds. (a) The proceeds of the Advances and
issuances of Letters of Credit shall be available, and the Borrower shall
use such proceeds and Letters of Credit solely (i) to finance in part the
Acquisitions, (ii) to pay fees and expenses incurred in connection with the
Acquisitions, (iii) to repay existing indebtedness of the Borrower, and
(iv) to finance working capital and capital expenditures of the Borrower,
and (b) the proceeds of the Second Tranche Term Borrowing shall be used to
finance, in part, the Doubleday Acquisition.
1.7 Section 6.2(c)(viii)(A) is changed to amend and restate the first
parenthetical set forth therein to read in its entirety as follows : "(but, in
respect of the Senior Subordinated Debt, such principal amount may be increased
but not to exceed Nineteen Million Five Hundred Thousand ($19,500,000) Dollars
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whether such increase is effected by the initial holder of the Senior
Subordinated Debt or in respect of the first refinancing of the Senior
Subordinated Debt that exists on the Closing Date or as of the date of Amendment
No. 1); and the reference to $18,500,000 in subsection 6.2(c)(viii)(C) is
changed to read $19,500,000".
1.8 Section 6.11(B) is amended and restated to read in its entirety as
follows:
"(B) notwithstanding any other provisions of the Loan Documents, including
Sections 5.12 and 6.20 hereof, payment of such amounts, if any, which are
payable by the Borrower pursuant to the terms and conditions of that
certain letter agreement, dated on or about the date of Amendment No. 1
(which amended and restated that certain letter agreement dated as of
December 31, 1998), as it may be amended from time to time with the consent
of the Senior Lenders (as so amended, the "Letter Agreement") between the
Borrower and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ executed and delivered in connection with the
Senior Subordinated Debt;"
1.9 Section 6.12, "Amendment, Etc. of Acquisition Documents", is amended to
add immediately following the words "Acquisition Document", the first time they
appear in Section 6.12, the following: "(which capitalized term shall, for
purposes of this Section 6.12, be deemed to include reference to the Doubleday
Acquisition Documents as such term is defined in Amendment No. 1)".
1.10 Section 6.13(b)(ii)(A), "Amendment, Etc. of Material Contracts", is
amended to change the final parenthetical contained therein to read in its
entirety as follows:
"(other than an increase not to exceed 11% for the period from October 1,
1999 through December 31, 1999 in respect of the December 1998 Note and
other than an increase not to exceed 11% for the period from July 15, 1999
through December 31, 1999 in respect of the June 1998 Note, in each case so
long as such increase is solely in the form of non-current pay interest
which accrues and is not payable in cash until final maturity of the Senior
Subordinated Debt)."
1.11 Section 6.21, "Shelf Registration", is amended and restated to read in
its entirety as follows:
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SECTION 6.21 Shelf Registration. Fail to cause a shelf registration on Form
S-3 for an offering to be made on a continuous basis pursuant to Rule 415
under the Securities Act of 1933, which shelf registration statement
registers for resale the shares of the Borrower's Common Stock issued in
connection with (or issuable upon exercise of any warrants issued in
connection with) any of the Acquisitions or otherwise issued or issuable on
the Closing Date, to be declared effective on or prior to the 180th day
following the Closing Date (or by February 15, 2000 in respect of the shelf
registration relating to common stock issuable upon exercise of any
warrants issued on the date of Amendment No. 1) (or fail to list the shares
registered under such shelf registration for trading on the AMEX or on the
NASDAQ National Market System, subject to notice of official issuance, by
such 180th day or by February 15, 2000 in respect of the shelf registration
statement relating to common stock issuable upon exercise of any warrants
issued on the date of Amendment No. 1) or fail to have filed within sixty
days after the Closing Date (or by February 15, 2000 in respect of the
shelf registration relating to common stock issuable upon exercise of any
warrants issued on the date of Amendment No. 1) such shelf registration;
and the Borrower shall keep each shelf registration statement effective
(except for periods of not more than 20 consecutive days required in order
to amend, supplement or otherwise correct any disclosures in such
registration statement) until the earlier of (a) the second anniversary of
the effective date of such shelf registration statement (provided, however,
that such two year period shall be extended if required by any other
agreement) and (b) the date that is one week after all shares issued in
connection with any Acquisition (or issuable under such warrants) and
included in the shelf registration statement have been sold.
1.12 Section 8.1, "Minimum EBITDA," is amended to revise and restate the
chart appearing therein to/ read in its entirety as follows:
Period Minimum EBITDA
------ --------------
(a) fiscal quarter ending on $0.00 (i.e., no negative
March 31, 1999 amount)
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(b) two fiscal quarters ending on
June 30, 1999 $ 2,500,000
(c) three fiscal quarters ending on
September 30, 1999 $ 6,500,000
(d) four fiscal quarters ending on the
dates specified below:
December 31, 1999 $11,000,000
March 31, 2000 $12,500,000
June 30, 2000 $13,500,000
September 30, 2000 $14,000,000
December 31, 2000 $15,000,000
December 31, 2001 $17,000,000
December 31, 2002 $18,000,000
December 31, 2003 $19,000,000
1.13 Section 8.2, "Consolidated Senior Debt to EBITDA Ratio" is amended to
delete the text of clause (a) thereof and to replace it with the words
"[intentionally deleted]", and to change the Maximum Ratio under clause (b)
thereof from "4.00 to 1.00" to "4.5 to 1.00", and to change the Maximum Ratio
opposite December 31, 1999 to read "3.25 to 1.00".
1.14 Section 8.3, "Consolidated Debt to EBITDA Ratio" is amended to delete
the text of clause (a) thereof and to replace it with the words "[intentionally
deleted]", and to change the Maximum Ratio under clause (b) thereof from "6.00
to 1.00" to "6.75 to 1.00", and to change the Maximum Ratio opposite December
31, 1999 to read "5.00 to 1.00".
1.15 Schedule I to the Credit Agreement is replaced by Schedule I annexed
hereto as Exhibit A.
1.16 The Schedules annexed hereto as part of Schedule 3 shall be deemed
respectively to replace the Schedules of the respective corresponding number
presently attached to the Credit Agreement.
1.17 Without limiting the generality of any provisions contained in the
Loan Documents, the Borrower covenants that it shall deliver or cause to be
delivered to the Administrative Agent the following:
(a) a bailee letter, in form and substance reasonably satisfactory to the
Administrative Agent, from Doubleday (or its appropriate affiliate)
relating to all items of inventory
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owned by any Loan Party located on premises owned, leased or controlled
directly or indirectly by Doubleday prior to the purchase by any Loan Party
of any such items of inventory respectively; and
(b) within ten days after the date of Amendment No. 1, agreements,
including an amendment to the Intellectual Property Security Agreement, in
form and substance reasonably satisfactory to the Administrative Agent
adding to the schedules attached to the Intellectual Property Security
Agreement any trademarks of any Loan Party not currently listed thereon.
Article II
Increases in Commitment.
2.1 Commencing as of the Effective Date (as defined in Article V below),
the Term Commitment of each of the Term Lenders shall be increased from the
amount set forth, with respect to such Term Lender, on Schedule I to the Credit
Agreement to the respective amounts set forth opposite the name of each of the
Term Lenders on Exhibit A annexed hereto.
2.2 In order to evidence the Term Advances made by each of the Term Lenders
under its Term Commitment as amended hereby, the Borrower shall execute and
deliver to each of the Term Lenders a new note substantially in the form
attached to the Credit Agreement as Exhibit C, reflecting the Term Commitment of
such Lender Party as amended hereby, dated the Effective Date and otherwise duly
completed (collectively, all of the above-described promissory notes are defined
as the "New Notes"). Upon execution and delivery by the Borrower of the New
Notes, the Administrative Agent shall cause each of the Term Notes being
replaced by a New Note to be marked "Replaced by New Note", and returned to the
Borrower.
2.3 All references in the Credit Agreement, Loan Documents and all other
instruments, documents and agreements executed and delivered pursuant to any of
the foregoing, to "the ratable benefit of the Lender Parties", "pro rata", or
terms of similar effect shall be deemed to refer to the ratable interests of the
Lender Parties, as their respective pro rata interests shall be adjusted to
reflect the increase in the Term Commitment of each of the Term Lenders as set
forth on Exhibit A annexed hereto.
Article III
Consent and Waiver
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3.1 Notwithstanding any provisions of the Credit Agreement to the contrary,
the Lender Parties and the Administrative Agent hereby consent to (a) the
acquisition by the Borrower of certain of the assets (the "Acquired Assets") of
Doubleday as set forth in the Doubleday Acquisition Documents (as hereinafter
defined) (the "Doubleday Acquisition"); subject, however, to the fulfillment, to
the satisfaction of the Lender Parties and the Administrative Agent, of the
conditions precedent set forth in Article V hereof.
3.2 Notwithstanding any provisions of the Credit Agreement to the contrary,
the Administrative Agent and the Lenders consent to the formation of the New
Subsidiaries set forth on Schedule 1 to this Amendment No. 1 and to the
completed and proposed intercompany asset transfers set forth on Schedule 2 to
this Amendment No. 1 and waive any Defaults that may have occurred pursuant to
Sections 5.13, 6.15 or 7.1 of the Credit Agreement, as a result of the failure
of Borrower or the Existing Subsidiary to timely notify the Administrative Agent
and/or Lenders of such actions, to timely pledge to the Administrative Agent
stock certificates representing the outstanding capital stock of the New
Subsidiaries, and/or any failure of the New Subsidiaries to timely become
Guarantors under the Subsidiary Guaranty and to timely become grantors under the
Security Agreement and the Intellectual Property Security Agreement and to
execute and deliver any documents necessary to perfect security interests in the
assets transferred or proposed to be transferred. The Administrative Agent and
the Lenders acknowledge that simultaneously with the execution and delivery of
this Amendment No. 1: (a) the Borrower and the Existing Subsidiary, have
delivered to the Lenders stock certificates, together with stock powers executed
in blank, representing all of the outstanding capital stock of the New
Subsidiaries and (b) each of the New Subsidiaries has executed and delivered to
the Administrative Agent appropriate supplements to the Subsidiary Guaranty, the
Security Agreement and the Intellectual Property Security Agreement.
3.3 Notwithstanding any provisions of the Credit Agreement to the contrary,
the Administrative Agent and Lenders consent to: (a) the Borrower executing and
delivering the June 1999 Note (the form of which is attached as Exhibit B to
this Amendment No. 1) to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Co-Chief Executive Officer, a director
and a principal shareholder of the Company, as consideration for a $4,350,000
loan to the Company; (b) the execution and delivery by the New Subsidiaries (set
forth on Schedule 1 to this Amendment No. 1) of a guaranty supplement (the form
of which is attached as Exhibit C to this Amendment No. 1) to become additional
Guarantors under the Subsidiary Guaranty dated as of December 31, 1998 from CH
Acquisitions Corp., ABC Internet Services, Inc., ABC Investment
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Corp., Classic Radio Holding Corp. and Classic Radio Acquisition Corp., as
guarantors in favor of the holder of the December 1998 Note; (c) the execution
and delivery by the Borrower of Amendment No. 1 to the December 1998 Note (the
form of which is attached as Exhibit D to this Amendment No. 1) and (d) the
execution and delivery of a subsidiary guaranty (the form of which is attached
as Exhibit E to this Amendment No. 1) by the Subsidiaries of the Borrower
(including the New Subsidiaries) in favor of the holder of the June 1999 Note.
Article IV
Representations and Warranties.
The Borrower hereby represents and warrants to the Administrative Agent and
the Lender Parties that:
4.1 There exists no Default or Event of Default under the Credit Agreement,
as amended hereby, as of the date hereof.
4.2 Each and every one of the representations and warranties set forth in
Article IV of the Credit Agreement is true in all material respects as of the
date hereof except that certain amended Schedules to the Credit Agreement are
attached hereto as Schedule 3 to this Amendment No. 1, and, to the extent that
any of such representations or warranties apply to any Guarantor, whether as a
"Guarantor", a "Loan Party" or otherwise, each such representation and warranty
shall be deemed to apply to each of the newly-formed Subsidiaries of the
Borrower listed on Schedule 1 annexed hereto (each of such newly-formed
Subsidiaries being hereinafter called a "New Guarantor"; and collectively, the
"New Guarantors").
4.3 Each Loan Party (a) to the extent it is a party thereto, has all
requisite corporate power and authority to execute and deliver this Amendment
No. 1, the New Notes, the Subsidiary Guaranty, the Security Agreement, the
Intellectual Property Security Agreement (or supplements to the foregoing, as
applicable), the amendment to the Security Agreement contemplated by Section 5.5
hereof, and each other agreement, instrument or document contemplated to be
executed or delivered by the Borrower, any New Guarantor or any other Loan Party
pursuant to Amendment No. 1 (all such agreements, instruments and documents
contemplated to be executed or delivered in connection herewith by any Loan
Party are sometimes hereinafter referred to collectively, together with this
Amendment No. 1, as the "New Documents") and to consummate the transactions
contemplated hereby and thereby and (b) has taken all action, corporate or
otherwise, necessary to authorize the execution and delivery of the New
Documents and the consummation of the transactions contemplated hereby and
thereby.
4.4 Neither execution and delivery of the New Documents by any Loan Party
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nor consummation by it of the transactions contemplated hereby and thereby (a)
conflict with, or result in any breach or violation of any provision of, the
certificate of incorporation or by-laws of any Loan Party, (b) conflict with or
result in any breach or violation of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the termination of, or accelerate the performance required by, or
result in the creation of a Lien upon any of the properties or assets of any
Loan Party (other than Liens granted or permitted by the Collateral Documents or
the Credit Agreement, as amended and supplemented to date) under, any of the
terms, conditions or provisions of any material note, bond, mortgage, indenture,
deed of trust, license, lease agreement or other instrument or obligation to
which any Loan Party is a party or to which any of its properties or assets are
subject, where the conflict, breach or default relates to an instrument,
agreement or other document involving assets, revenues or liabilities in excess
of $250,000 individually or $500,000 in the aggregate (with respect to all Loan
Parties) or otherwise could be reasonably expected to have a Material Adverse
Effect, (c) require any consent, approval, authorization or permit of, or filing
with or notification to, any third party or any governmental, judicial,
administrative or regulatory authority of the United States or of any state,
local or foreign government or subdivision thereof (a "Governmental Entity")
other than those listed on Schedule 4.2 to the Credit Agreement (as amended and
restated in the form attached to this Amendment No. 1 as Schedule 3), all of
which have been obtained, taken, given or made are in full force and effect, or
except where the failure to receive any authorization, appraisal, or permit or
to make any filing or give any notification related to an instrument, agreement
or other document involving assets, revenues or liabilities, not exceeding
$250,000 individually or $500,000 in the aggregate (with respect to all Loan
Parties) or otherwise would not be reasonably likely to have a Material Adverse
Effect, or (d) violate any order, writ, injunction, decree, judgment, ruling,
law, statute, rule or regulation of any Governmental Entity, the violation of
which could be reasonably expected to have a Material Adverse Effect.
4.5 This Amendment No. 1, the New Notes and the other New Documents have
each been duly executed and delivered by each Loan Party that is a party thereto
and each constitutes the valid and legally binding obligation of such Loan
Party, except (a) as such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other
similar laws, now or hereafter in effect, relating to or affecting the
enforcement of creditors' rights generally, and to the extent such
enforceability is subject to general principles of equity (whether such
enforcement is sought in a proceeding at law or in equity), and (b) except that
the remedy of specific performance and other equitable remedies are subject to
judicial discretion.
4.6 The Liens and security interests granted pursuant to the Collateral
Documents secure, without limitation, the indebtedness, liabilities and
obligations of the Borrower to the Administrative Agent and the Lender Parties
under the Credit Agreement, as amended hereby, whether or not expressly so
stated in the Collateral Documents, and the terms "Obligations", "Debt" and
"Indebtedness" as used in such Collateral Documents (or any other term
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used therein to describe or refer to the indebtedness, liabilities and
obligations of the Borrower to the Administrative Agent and the Lender Parties)
includes, without limitation, the indebtedness, liabilities and obligations of
the Borrower under the New Notes and the Credit Agreement as amended hereby.
4.7 (a) Borrower and each other Loan Party thereto has the corporate power
to execute and deliver each of the Doubleday Acquisition Documents (defined in
Section 5.6 below) to which it is or will be a party and to perform such
Doubleday Acquisition Documents. Except as set forth on Schedule 4.4 to the
Credit Agreement (as amended and restated in the form attached to this
Amendment), no consent or approval of any Person (including, without limitation,
any stockholder of the Borrower), no consent or approval of any landlord or
mortgagee, no waiver of any Lien or right of distraint or other similar right
and no consent, license, approval, authorization or declaration of any
governmental authority, bureau or agency, is or will be required in connection
with the execution or delivery by the Borrower of any of the Doubleday
Acquisition Documents to which it is or will be a party.
(b) The execution and delivery by any Loan Party of each of the Doubleday
Acquisition Documents to which it is or will be a party and the performance by
each such Loan Party under each of the Doubleday Acquisition Documents to which
it is or will be a party does not (i) violate any provision of law (including,
without limitation, the ▇▇▇▇▇▇▇▇ Act, Sections 13 and 14 of the Securities
Exchange Act of 1934, and the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, and Regulations T, U, and X of the Board of Governors of the Federal
Reserve System and the rules and regulations promulgated thereunder) or (ii)
conflict with or result in a breach of any order, writ, injunction, ordinance,
resolution, decree, or other similar document or instrument of any Governmental
Entity, or any certificate of incorporation or by-laws of or applicable to any
Loan Party or create (with or without the giving of notice or lapse of time, or
both) a default under or breach of or conflict with any material agreement,
instrument, document, bond, note or indenture to which Loan Party is a party, or
by which it is bound or any of its properties or assets is affected where the
breach or default relates to an agreement, instrument, document, note or
indenture involving assets, revenues or liabilities in excess of $250,000
individually or $500,000 in the aggregate (in respect of all Loan Parties) or
otherwise could reasonably be expected to have a Material Adverse Effect, or
result in the imposition of any Lien of any nature whatsoever upon any of the
properties or assets owned by or used in connection with the business of any
Loan Party or any other Loan Party, except for the Liens created and granted or
permitted under the Collateral Documents or Credit Agreement, as amended and
supplemented to date.
(c) Upon consummation of the Doubleday Acquisition, (i) ownership of all of
the Acquired Assets shall have vested in ABD free and clear of all Liens, other
than those created or permitted by the Collateral Documents or the Credit
Agreement, each as amended and supplemented to date. None of the parties to any
of the Doubleday Acquisition Documents has waived compliance by any of the other
parties thereto with any term, covenant or condition thereof, and no party
thereto has breached any covenant set forth therein or failed to perform any
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of its obligations thereunder which waiver, breach or failure to perform is of a
material term or condition or could reasonably be expected to materially and
adversely affect the Acquired Assets or otherwise have a Material Adverse
Effect. The representation in the preceding sentence as to any party to the
Doubleday Acquisition Documents which is not a Loan Party is made to the best
knowledge of the Borrower. Upon consummation of the Doubleday Acquisition, such
Acquisition shall have been consummated in substantially the manner and in all
material respects as set forth in the Doubleday Acquisition Documents and in
accordance with applicable law.
(d) Each Doubleday Acquisition Document to which any Loan Party or any of
its respective Subsidiaries is a party has been duly executed and delivered by
such Loan Party or such Subsidiary, as the case may be, and, to the best
knowledge of the Borrower, each Doubleday Acquisition Document has been duly
executed and delivered by the parties thereto other than the Borrower and its
Subsidiaries, and is in full force and effect. The representations and
warranties of any Loan Party and each of its respective Subsidiaries contained
in each Doubleday Acquisition Document to which such Loan Party or such
Subsidiary, as the case may be, is a party are true and correct in all material
respects on the date hereof, except to the extent specifically made as of an
earlier date, and the Administrative Agent and each Lender Party shall be
entitled to rely upon such representations and warranties with the same force
and effect as if they were incorporated in this Agreement and made to the
Administrative Agent and each Lender Party directly as of the date hereof.
(e) True and correct copies of each of the Doubleday Acquisition Documents
have been delivered to the Administrative Agent, and as of the Effective Date,
the Doubleday Acquisition shall have been consummated in accordance therewith,
and no party thereto shall have waived any material term or condition contained
therein.
(f) Each Doubleday Acquisition Document to which any Loan Party or the
seller thereunder (the "Seller") is a party, when duly executed and delivered by
such Loan Party and the Seller, constitutes the valid and legally binding
obligation of each such Loan Party or (to the best knowledge of the Borrower)
the Seller, as the case may be, enforceable in accordance with its terms, except
that the remedy of specific performance and other equitable remedies are subject
to judicial discretion and except as (i) such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium, or other similar laws, now or hereafter in effect, relating to or
affecting the enforcement of creditors' rights generally, and (ii) to the extent
such enforceability is subject to general principles of equity (whether such
enforcement is sought in a proceeding at law or in equity).
4.8 All of the assets subject to the intercompany asset transfers described
in Schedule 2 annexed to this Amendment No. 1 that have been completed, were
transferred and assigned or, if to be transferred and assigned after the date of
this Amendment, shall be transferred and assigned, subject in all cases to the
Administrative Agent's Lien, and, as of the date hereof and
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after giving affect to any such transfer, each of such assets remains subject to
such Lien which remains in full force and effect as a first priority security
interest in favor of the Administrative Agent for the ratable benefit of the
Lender Parties (except for Liens expressly permitted under the Collateral
Documents or the Credit Agreement, each as amended and supplemented to date),
except to the extent that any common law trademark so transferred has since the
date of the Credit Agreement been registered with the U.S. Patent Trademark
Office, in which case, appropriate filings with such Governmental Entity may be
required to perfect the Lien of the Administrative Agent on such federally
registered marks.
Article V
Conditions.
The effectiveness of this Amendment No. 1 shall be subject to the
fulfillment by the Borrower, in a manner satisfactory to the Administrative
Agent and the Lender Parties, of all of the conditions precedent set forth in
this Article V, and the date on which all such conditions shall have been
fulfilled to the satisfaction of the Administrative Agent and the Lender
Parties, and this Amendment No. 1 shall have become effective, shall be herein
called the "Effective Date":
5.1 (a) The representations and warranties contained herein and each other
agreement, instrument, certificate or other writing delivered to the
Administrative Agent or any Lender Party pursuant hereto or to the Credit
Agreement shall be correct on and as of the date hereof after giving effect to
this Amendment No. 1 as though made on and as of such date except to the extent
modified hereby and (b) no Default or Event of Default shall have occurred and
be continuing on the Effective Date or would result from the taking effect of
this Amendment No. 1, or the transactions contemplated hereby, including the
Doubleday Acquisition.
5.2 The Borrower shall have:
(a) executed and delivered to the Administrative Agent this Amendment No.
1;
(b) executed and delivered to each of the Term Lenders its respective New
Note;
(c) paid to the Administrative Agent, for the ratable benefit of the Lender
Parties, a fee in the amount of $240,000 with respect to this Amendment,
together with such other fees as may be due from the Borrower to the Lender
Parties with respect hereto;
(d) paid all reasonable fees and expenses of Winston & ▇▇▇▇▇▇, counsel to
the Administrative Agent and to Fleet National Bank, incurred in connection
herewith; and
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(e) otherwise complied in all respects with the terms hereof and of any
other agreement, document, instrument or other writing to be delivered by the
Borrower in connection herewith.
5.3 The Administrative Agent shall have received, on or before the date
hereof, the following, each in form and substance satisfactory to the
Administrative Agent:
(a) copies of the resolutions adopted by the Borrower's Board of Directors,
certified by an authorized officer thereof, authorizing (i) the execution,
delivery and performance by the Borrower of this Amendment No. 1 and the other
New Documents, and (ii) the Borrower's subsidiary's investment in the Acquired
Assets and the execution, delivery and consummation of the Doubleday Acquisition
Documents; and
(b) a certificate of an authorized officer of the Borrower, certifying the
names and true signatures of the officer authorized to sign the New Documents,
together with evidence of the incumbency of such authorized officer; and a
compliance certificate executed by the Chief Financial Officer of the Borrower
dated the date hereof certifying that the conditions set forth in Section 5.1
and otherwise in this Article V shall have been satisfied (together with a
detailed computation of compliance with financial covenants set forth in the
Credit Agreement).
5.4 With respect to each of the New Guarantors, the Administrative Agent
shall have received each of the following duly executed by such New Guarantor,
and otherwise in form and substance satisfactory to the Administrative Agent:
(a) a Subsidiary Guaranty (or supplement or agreement of joinder to the
existing Subsidiary Guaranty) guarantying to the Administrative Agent and the
Lender Parties the prompt payment, when and as due, of all Obligations of the
Loan Parties under the Loan Documents, including all obligations under any
hedging agreement;
(b) a Security Agreement (or supplement or agreement of joinder to the
existing Security Agreement) granting to the Administrative Agent, for the
ratable benefit of the Lender Parties, a security interest in all of the
Collateral of such New Guarantor, together with:
(i) proper financing statements under the Uniform Commercial Code of all
jurisdictions that the Administrative Agent may deem necessary or desirable in
order to perfect and protect the first priority Liens and security interests
created under the Security Agreement, covering the Collateral described in the
Security Agreement which are able to be perfected by filing;
(ii) to the extent required by the Administrative Agent, completed requests
for information, dated on or before the Effective Date (or if not received prior
to the Effective Date,
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received within fifteen days following the Effective Date), listing all
effective financing statements filed that name such New Guarantor as debtor,
together with copies of such financing statements;
(iii) evidence of the completion of all other recordings and filings of or
with respect to the Security Agreement (which evidence may be delivered promptly
following the filing of the foregoing) that the Administrative Agent may deem
necessary or desirable in order to perfect and protect the Liens created
thereby;
(iv) evidence of the insurance required by the terms of the Security
Agreement;
(v) copies of the Assigned Agreements, if any, referred to in the Security
Agreement, together with a consent (to the extent required by the Administrative
Agent) to such assignments, if any, duly executed by each party to such Assigned
Agreements other than such New Guarantor;
(vi) a Note Assignment Agreement covering (and together with) all
intercompany notes, if any, made by such New Guarantor payable to the Borrower
and duly endorsed to the Administrative Agent; and
(vii) evidence that all other action that the Administrative Agent may deem
necessary or desirable in order to perfect the first priority liens and security
interests created under the Security Agreement has been taken;
(c) an Intellectual Property Security Agreement (or a supplement or joinder
to the existing Intellectual Property Security Agreement) granting to the
Administrative Agent for the ratable benefit of the Lender Parties a security
interest in all of such New Guarantor's intellectual property, together with
evidence that all action that the Administrative Agent may deem necessary or
desirable in order to perfect and protect the first priority Liens and security
interests created under the Intellectual Property Security Agreement has been
taken;
(d) a supplement or joinder to the Intercompany Subordination Agreement
pursuant to which the New Subsidiaries agree to be bound by the provisions of
such Agreement and to become parties thereto;
(e) certified copies of resolutions of the Board of Directors of such New
Guarantor approving the Credit Agreement, and of each Loan Party approving this
Amendment No. 1 and each other Loan Document to which it is a party, and of all
documents evidencing other necessary corporate action and governmental and other
third party approvals and consents, if any, with respect to the Credit
Agreement, this Amendment No.1, and each other Loan Document;
(f) a copy of the charter of such New Guarantor and each amendment
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thereto, certified (as of a date reasonably near the date of the Effective Date)
by the Secretary of State of the jurisdiction of its incorporation as being a
true and correct copy thereof;
(g) a copy of a certificate of the Secretary of State of the jurisdiction
of such New Guarantor's incorporation, dated within five (5) Business Days of
the date of the Effective Date, listing the charter of such New Guarantor and
each amendment thereto on file in its office and certifying that (A) such
amendments are the only amendments to such New Guarantor's charter on file in
its office, (B) to the extent obtainable, that such New Guarantor has paid all
franchise taxes to the date of such certificate and (c) such New Guarantor is
duly incorporated and in good standing or existing, as the case may be, under
the laws of the jurisdiction of its incorporation;
(h) a copy of a certificate of the Secretary of State of each State listed
on Schedule 1 hereto, or on Schedule 4.2 to the Credit Agreement (as amended and
restated in the form annexed hereto as part of Schedule 3) dated reasonably near
the Effective Date, stating that such New Guarantor is duly qualified and in
good standing or existence as a foreign corporation in such State and has filed
all annual reports required to be filed to the date of such certificate;
(i) a certificate of the Secretary or an Assistant Secretary of such New
Guarantor certifying the names and true signatures of the officers of such New
Guarantor authorized to sign this Amendment No. 1, and each other Loan Document
to which they are or are to be parties and the other documents to be delivered
hereunder and thereunder; and
(j) such financial, business and other information regarding such New
Guarantor as any of the Lender Parties shall have reasonably requested.
5.5 The Borrower or the relevant Subsidiary of the Borrower shall have
taken all action necessary to allow the Administrative Agent to obtain a valid
and enforceable, first priority, perfected security interest in 100% of the
stock of each New Guarantor, and delivered or caused to be delivered to the
Administrative Agent certificates representing such pledged shares accompanied
by undated stock powers executed in blank and irrevocable proxies, and the
Security Agreement shall have been amended to reflect the foregoing, upon terms
and conditions reasonably satisfactory to the Administrative Agent.
5.6 (a) The Administrative Agent shall have received a true, correct and
complete copy of the Acquisition Agreement (including all exhibits, annexes and
schedules thereto) and all agreements, instruments, and documents executed and
delivered in connection therewith, and all exhibits, annexes and schedules
annexed thereto, and all amendments and modifications to any of the foregoing
(collectively, all of the foregoing, are referred to as the "Doubleday
Acquisition Documents"), which Doubleday Acquisition
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Documents shall be certified as true, correct and complete by an officer of the
Borrower, and shall be satisfactory to the Administrative Agent and the Lender
Parties in all respects;
(b) the Borrower shall have executed and delivered to the Administrative
Agent such lien searches and UCC-1 financing statements in connection with the
Acquired Assets as the Administrative Agent may have requested, in form
sufficient for filing; and
(c) upon the Administrative Agent's request, the Borrower shall have (i)
delivered to the Administrative Agent the original of all instruments, documents
and chattel paper, and all other Collateral of which the Administrative Agent
determines it should have physical possession in order to perfect its security
interest therein, duly pledged, endorsed or assigned to the Administrative Agent
without restriction, (ii) obtained and delivered to the Administrative Agent
landlord waivers, in form and substance reasonably satisfactory to the
Administrative Agent, with respect to any Inventory or other tangible Collateral
located at a location that is not owned by the Borrower or a Subsidiary, (iii)
delivered to the Administrative Agent warehouse receipts covering any portion of
the Inventory or other Collateral located in warehouses and for which warehouse
receipts are issued, and (iv) taken all such other actions and obtain all such
other agreements as the Administrative Agent may reasonably deem necessary or
desirable in respect of any Collateral, and otherwise complied with the
provisions of Section 5.13 of the Credit Agreement.
5.7 Each of the parties hereto shall have executed and delivered this
Amendment No. 1 to the Administrative Agent.
5.8 The Administrative Agent shall have received satisfactory evidence of
the increase in principal amount of the Senior Subordinated Debt, the proceeds
of which shall be applied by the Borrower to finance, in part, the Doubleday
Acquisition, together with such amendments of the Senior Subordinated Debt
Documents (which may include the Letter Agreement, the Intercreditor Agreement,
the Senior Subordinated Security Agreement, and the 9% Convertible Senior
Subordinated Promissory Notes) and such other agreements and documents as may be
necessary to reflect such increase, each of which shall be reasonably
satisfactory to the Administrative Agent in all respects.
5.9 The Administrative Agent shall have received a favorable written
opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, counsel to the Borrower and Guarantors, and of
such other counsel as the Administrative Agent may require, as to such matters
relating to the transactions contemplated by this Amendment No. 1 (including the
Doubleday Acquisition), the New Notes and the Collateral Documents executed by
each of the New Guarantors in form and substance as the Lender Parties may
reasonably request.
5.10 All proceedings in connection with the transactions contemplated by
this Amendment No. 1 including the Doubleday Acquisition, and all documents
incidental
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thereto shall be reasonably satisfactory to the Administrative Agent, the Lender
Parties and their respective counsel, and each such Person shall have received
all such information and such counterpart originals or certified copies of
documents as may have been reasonably requested.
Article VI
Acknowledgments, Confirmations and General Amendments.
6.1 Each of the Guarantors hereby (i) acknowledges and consents to this
Amendment No. 1 (whether or not its consent is required); (ii) confirms and
agrees that the Subsidiary Guaranty to which it is a party is, and shall
continue to be, in full force and effect and is hereby ratified and confirmed in
all respects, and all references in any such Subsidiary Guaranty to "the Credit
Agreement," "thereof," "thereunder" or words of like import referring to the
Credit Agreement shall mean the Credit Agreement as amended by this Amendment
No.1; (iii) confirms and agrees that, the "Guaranteed Obligations" as defined in
such Subsidiary Guaranty include the Obligations of the Borrower to the Lender
Parties under the Credit Agreement as amended by this Amendment No. 1, and under
the New Notes; and (iv) confirms and agrees that the Liens and security
interests granted by each of them pursuant to the Collateral Documents secure,
without limitation, the indebtedness, liabilities and obligations of the
Guarantors to the Lender Parties and the Administrative Agent under the
Subsidiary Guaranty, including without limitation, the Guaranteed Obligations
which obligations include the obligations of the Borrower under the New Notes
and the Credit Agreement as amended hereby.
6.2 All references in the Credit Agreement and every other agreement,
instrument and document executed and delivered by each of the Loan Parties in
connection therewith, including, without limitation, any of the Collateral
Documents, to "Credit Agreement" and "Agreement", as applicable, and also, in
the case of the Credit Agreement to "this Agreement", shall be deemed to refer
to the Credit Agreement as amended and supplemented hereby.
6.3 All references in the Credit Agreement, the Collateral Documents or any
other agreement, instrument and document executed and delivered in connection
therewith to "Notes" shall be deemed to include, without limitation, the New
Notes.
6.4 All references in the Credit Agreement, the Collateral Documents or any
other agreement, instrument or document executed and delivered in connection
therewith to the "Term Advances" or "Advances" (or any other term or terms used
in any of such documents to describe or refer to Advances made by the Lender
Parties to the Borrower under the Credit Agreement) shall be deemed to refer to
Advances made by the Lender Parties to the Borrower pursuant to the Credit
Agreement as amended and supplemented hereby.
-19-
6.5 The Credit Agreement, the Collateral Documents and all agreements,
instruments and documents executed and delivered in connection with any of the
foregoing, shall each be deemed amended hereby to the extent necessary, if any,
to give effect to the provisions of this Amendment No. 1.
Article VII
Continued Effectiveness of Credit Agreement.
The Credit Agreement and the other agreements to which the Borrower is a
party delivered in connection herewith or with the Credit Agreement are, and
shall continue to be, in full force and effect, and are hereby ratified and
confirmed in all respects except that on and after the date hereof (a) all
references in the Credit Agreement to "this Agreement", "hereto", "hereof",
"hereunder" or words of like import referring to the Credit Agreement shall mean
the Credit Agreement as amended and supplemented by this Amendment No. 1 and (b)
all references in the Credit Agreement and such other agreement to which the
Borrower is a party to the "Credit Agreement", "thereto", "thereof",
"thereunder" or words of like import referring to the Credit Agreement shall
mean the Credit Agreement as amended and supplemented by this Amendment No. 1.
Article VIII
Miscellaneous.
8.1 Except as specifically amended herein, the Credit Agreement shall
remain in full force and effect in accordance with its terms.
8.2 This Amendment No. 1 shall be governed and construed in accordance with
the laws of the State of New York.
8.3 No modification or waiver of or with respect to any provisions of this
Amendment No. 1 and all other agreements, instruments and documents delivered
pursuant hereto or thereto, nor consent to any departure by the Administrative
Agent or the Lender Parties from any of the terms or conditions thereof, shall
in any event be effective unless it shall be in writing and executed in
accordance with the provisions of the Credit Agreement, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No consent to or demand on the Borrower in any case shall, of
itself, entitle it to any other or further notice or demand in similar or other
circumstances. This Amendment No. 1, together with the Credit Agreement, as
amended, embodies the entire agreement and understanding among the Borrower, the
Administrative Agent and the Lender Parties and supersedes all prior agreements
and understandings relating to the subject matter hereof.
8.4 The provisions of this Amendment No. 1 are severable, and if any
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clause or provision shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction and shall not in
any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision in this Amendment No. 1 in any jurisdiction.
8.5 This Amendment No. 1 may be signed in any number of counterparts with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
8.6 This Amendment No. 1 shall be binding upon and inure to the benefit of
the Borrower and its respective successors and to the benefit of the
Administrative Agent and the Lender Parties and their respective successors and
assigns. The rights and obligations of the Borrower under this Amendment No. 1
shall not be assigned or delegated without the prior written consent of the
Lender Parties, and any purported assignment or delegation without such consent
shall be void.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be
duly executed on the date first above written.
AUDIO BOOK CLUB, INC.
By __________________________
Title
FLEET NATIONAL BANK,
as Administrative Agent,
Initial Issuing Bank, Swing
Line Bank, and as a Bank
By ____________________________
Title
ING (U.S.) CAPITAL CORPORATION
By___________________________
Title
The undersigned, whether or not consent is required in respect of any of the
foregoing, hereby confirm, agree to and accept the terms of this Amendment No. 1
and confirm the truth and accuracy of the representations and warranties
relating to any of the undersigned.
ABC INTERNET SERVICES, INC.
By__________________________
Title
CLASSIC RADIO HOLDING CORP.
By__________________________
Title
CLASSIC RADIO ACQUISITION CORP.
By__________________________
Title
ABC INVESTMENT CORP.
By__________________________
Title
CH ACQUISITIONS CORP.
By__________________________
Title
ABD ACQUISITION CORP.
By__________________________
Title
▇▇▇▇▇ ▇▇▇▇▇▇▇, INC.
By__________________________
Title
BOOKSALOUD, INC.
By__________________________
Title
MULTIMEDIA FULFILLMENT, INC.
By__________________________
Title
EXHIBIT A TO AMENDMENT AND
SUPPLEMENT NO. 1 TO THE CREDIT AGREEMENT
SCHEDULE I
TO CREDIT AGREEMENT
COMMITMENTS AND APPLICABLE LENDING OFFICES
====================================================================================================================================
SwingLine
Revolving Commitment
Credit (The SwingLine
Commitment Commitment is
(Letters of Credit are a a Sublimit of
Name of $1,000,000 Sublimit of the Revolving Domestic Eurodollar
Initial Lender the Revolving Term Credit Lending Lending
Party Credit Commitments) Commitment Commitment) Office Office
------------------------------------------------------------------------------------------------------------------------------------
Fleet National Bank $4,500,000 $15,500,000 $1,000,000 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ One Federal Street
Boston, Massachusetts 02110 ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇ Phone: (▇▇▇) ▇▇▇-▇▇▇▇
------------------------------------------------------------------------------------------------------------------------------------
ING (U.S.) Capital $4,500,000 $15,500,000 $0 ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Suite 950
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
====================================================================================================================================
EXHIBIT B TO AMENDMENT AND
SUPPLEMENT NO.1 TO CREDIT AGREEMENT
JUNE 1999 NOTE
EXHIBIT C TO AMENDMENT AND
SUPPLEMENT NO. 1 TO CREDIT AGREEMENT
SUBSIDIARY GUARANTY SUPPLEMENT
EXHIBIT D TO AMENDMENT AND
SUPPLEMENT NO. 1 TO CREDIT AGREEMENT
AMENDMENT NO. 1 TO DECEMBER 1998 NOTE
EXHIBIT E TO AMENDMENT AND
SUPPLEMENT NO. 1 TO CREDIT AGREEMENT
SUBSIDIARY GUARANTY
SCHEDULE 1 TO AMENDMENT AND
SUPPLEMENT NO. 1 TO CREDIT AGREEMENT
Borrower has caused the following wholly-owned subsidiaries to be formed
all of which are "New Guarantors"
Name Jurisdiction of Incorporation Immediate
---- ----------------------------- ---------
Parent
------
ABD Acquisition Corp. Delaware Borrower
▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc. Delaware Borrower
BooksAloud, Inc. Florida Borrower
Multimedia Fulfillment, Inc. Delaware Classic Radio
Holding Corp.
SCHEDULE 2 TO AMENDMENT AND
SUPPLEMENT NO. 1 TO THE CREDIT AGREEMENT
1. Classic Radio Holding Corp., ("CRHC") has orally assigned to ABC
Investment Corp., a wholly-owned subsidiary of the Company ("ABCIC"), certain
common law trademarks previously used by ▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc. Specifically, such
marks are:
(a) "▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc." and design;
(b) "Radio SuperHeros" and design;
(c) "Radio Movie Classics" and design; and
(d) "When Radio Was" and design.
In anticipation of the formal assignment of these marks to ABCIC, ABCIC has
filed applications to register such marks with the U.S. Patent and Trademark
Office (the "PTO").
2. Classic Radio Acquisition Corp. ("CRAC") has orally assigned to ABCIC
its interest in the common law trademark "Adventures in Cassettes" and design,
which ▇▇▇▇ was acquired by it from Metacom, Inc. In anticipation of the
assignment of this trademark to ABCIC, ABCIC has filed an application to
register such trademark with the PTO.
3. CRAC has assigned to ABCIC its interest in two registered trademarks
acquired from Premier: "Video Images7" and "Video Yesteryear7" and the
assignments of these registered marks have been filed with the PTO.
4. Borrower has assigned to ABCIC its interest in two registered
trademarks, "BooksAloud" and "▇▇▇▇▇▇▇▇▇▇.▇▇▇," and the assignments of these
registered marks have been filed with the PTO.
5. CRAC has assigned to ABCIC the following common law marks:
(a) "Radio Yesteryear"
(b) "Radiola"
(c) "▇▇▇▇▇ Hook Records"
(d) "Premier Electronics"