-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PIuDMYjGM9nYgwWjB7k/1Rd77mpn5Zp5IIaHmB2uu/v2P7gChMKAcKjzsWVWI/O6 OixwOcl/ZHe6Myi+6QWOzQ== 0000912057-01-529389.txt : 20010820 0000912057-01-529389.hdr.sgml : 20010820 ACCESSION NUMBER: 0000912057-01-529389 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 14 FILED AS OF DATE: 20010817 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KAGAN WORLD MEDIA INC CENTRAL INDEX KEY: 0001157536 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 770225377 STATE OF INCORPORATION: DE FISCAL YEAR END: 1203 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-04 FILM NUMBER: 1717909 BUSINESS ADDRESS: STREET 1: SIMPSON THACHER & BARTLETT STREET 2: 425 LEXINGOTN AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 MAIL ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MCMULLEN ARGUS PUBLISHING INC CENTRAL INDEX KEY: 0001011512 STANDARD INDUSTRIAL CLASSIFICATION: PERIODICALS: PUBLISHING OR PUBLISHING AND PRINTING [2721] IRS NUMBER: 952663753 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-07 FILM NUMBER: 1717912 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 MAIL ADDRESS: STREET 1: 745 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KAGAN SEMINARS INC CENTRAL INDEX KEY: 0001157537 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 942515843 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-09 FILM NUMBER: 1717914 BUSINESS ADDRESS: STREET 1: SIMPSON THACHER & BARTLETT STREET 2: 425 LEXINGOTN AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 MAIL ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KAGAN MEDIA APPRAISALS INC CENTRAL INDEX KEY: 0001157539 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 77015750 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-10 FILM NUMBER: 1717915 BUSINESS ADDRESS: STREET 1: SIMPSON THACHER & BARTLETT STREET 2: 425 LEXINGOTN AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 MAIL ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRIMEDIA FINANCE SHARED SERVICES INC CENTRAL INDEX KEY: 0001157540 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 13414461 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-39 FILM NUMBER: 1717944 BUSINESS ADDRESS: STREET 1: SIMPSON THACHER & BARTLETT STREET 2: 425 LEXINGOTN AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 MAIL ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEDIACENTRAL LLC CENTRAL INDEX KEY: 0001157532 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 134113602 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-03 FILM NUMBER: 1717908 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HACIENDA PRODUCTIONS INC CENTRAL INDEX KEY: 0001157535 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 134167234 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-14 FILM NUMBER: 1717919 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GAME & FISH PUBLICATIONS INC CENTRAL INDEX KEY: 0001157534 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 134082334 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-16 FILM NUMBER: 1717921 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENO PRODUCTIONS INC CENTRAL INDEX KEY: 0001157533 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 134162379 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-18 FILM NUMBER: 1717923 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADAMS LAUX CO INC CENTRAL INDEX KEY: 0001157531 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 043205143 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-25 FILM NUMBER: 1717930 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADAMS INTERACT INTERNATIONAL INC CENTRAL INDEX KEY: 0001157530 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 953549600 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-26 FILM NUMBER: 1717931 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRIMEDIA INC CENTRAL INDEX KEY: 0000884382 STANDARD INDUSTRIAL CLASSIFICATION: PERIODICALS: PUBLISHING OR PUBLISHING AND PRINTING [2721] IRS NUMBER: 133647573 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804 FILM NUMBER: 1717905 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: 745 5TH AVE CITY: NEW YORK STATE: NY ZIP: 10151 FORMER COMPANY: FORMER CONFORMED NAME: K III COMMUNICATIONS CORP DATE OF NAME CHANGE: 19930328 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRIMEDIA CO INC CENTRAL INDEX KEY: 0001157659 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 134177687 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-01 FILM NUMBER: 1717906 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERTEC PUBLISHING CORP CENTRAL INDEX KEY: 0000884398 STANDARD INDUSTRIAL CLASSIFICATION: PERIODICALS: PUBLISHING OR PUBLISHING AND PRINTING [2721] IRS NUMBER: 481071277 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-02 FILM NUMBER: 1717907 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FORMER COMPANY: FORMER CONFORMED NAME: PRIMEDIA INTERTEC CORP DATE OF NAME CHANGE: 19990319 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SIMBA INFORMATION CENTRAL INDEX KEY: 0001058684 STANDARD INDUSTRIAL CLASSIFICATION: PERIODICALS: PUBLISHING OR PUBLISHING AND PRINTING [2721] IRS NUMBER: 061281600 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-05 FILM NUMBER: 1717910 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: BOWHUNTER MAGAZINE INC STREET 2: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FORMER COMPANY: FORMER CONFORMED NAME: COWLES SIMBA INFORMATION INC DATE OF NAME CHANGE: 19980327 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MIRAMAR COMMUNICATIONS INC CENTRAL INDEX KEY: 0001082243 STANDARD INDUSTRIAL CLASSIFICATION: PERIODICALS: PUBLISHING OR PUBLISHING AND PRINTING [2721] IRS NUMBER: 952845391 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-06 FILM NUMBER: 1717911 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: PRIMEDIA INC STREET 2: 745 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LOWRIDER PUBLISING GROUP INC CENTRAL INDEX KEY: 0001058079 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 954307029 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-08 FILM NUMBER: 1717913 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: SIMPSON THACHER & BARTLETT STREET 2: 425 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTELLICHOICE INC CENTRAL INDEX KEY: 0000849427 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 770168905 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-11 FILM NUMBER: 1717916 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KITPLANES ACQUISITION CO CENTRAL INDEX KEY: 0001058687 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 232667502 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-12 FILM NUMBER: 1717917 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: BOWHUNTER MAGAZINE INC STREET 2: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HPC BRAZIL INC CENTRAL INDEX KEY: 0001157538 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 134083040 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-13 FILM NUMBER: 1717918 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HAAS PUBLISHING COMPANIES INC CENTRAL INDEX KEY: 0000925505 STANDARD INDUSTRIAL CLASSIFICATION: PERIODICALS: PUBLISHING OR PUBLISHING AND PRINTING [2721] IRS NUMBER: 581858150 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-15 FILM NUMBER: 1717920 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2124500100 MAIL ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FILMS FOR THE HUMANITIES & SCIENCES INC CENTRAL INDEX KEY: 0000884399 STANDARD INDUSTRIAL CLASSIFICATION: PERIODICALS: PUBLISHING OR PUBLISHING AND PRINTING [2721] IRS NUMBER: 131932571 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-17 FILM NUMBER: 1717922 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2124500100 MAIL ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CSK PUBLISHING CO INC/NY CENTRAL INDEX KEY: 0001057206 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 133023395 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-19 FILM NUMBER: 1717924 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COVER CONCEPTS MARKETING SERVICES LLC CENTRAL INDEX KEY: 0001057196 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 043370389 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-20 FILM NUMBER: 1717925 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CLIMBING INC CENTRAL INDEX KEY: 0001058679 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 232667502 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-21 FILM NUMBER: 1717926 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: BOWHUNTER MAGAZINE INC STREET 2: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHANNEL ONE COMMUNICATIONS CORP CENTRAL INDEX KEY: 0001011521 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ALLIED TO MOTION PICTURE PRODUCTION [7819] IRS NUMBER: 133783276 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-22 FILM NUMBER: 1717927 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2124500100 MAIL ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CANOE & KAYAK INC CENTRAL INDEX KEY: 0001058678 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 232667502 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-23 FILM NUMBER: 1717928 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: BOWHUNTER MAGAZINE INC STREET 2: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BACONS INFORMATION INC CENTRAL INDEX KEY: 0000871784 STANDARD INDUSTRIAL CLASSIFICATION: NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING [2711] IRS NUMBER: 364011543 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-24 FILM NUMBER: 1717929 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2124500100 MAIL ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HORSE & RIDER INC CENTRAL INDEX KEY: 0001058686 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 232667502 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-27 FILM NUMBER: 1717932 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: BOWHUNTER MAGAZINE INC STREET 2: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GO LO ENTERTAINMENT INC CENTRAL INDEX KEY: 0001057190 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-28 FILM NUMBER: 1717933 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VIRTUAL FLYSHOP INC CENTRAL INDEX KEY: 0001058696 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 232667502 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-29 FILM NUMBER: 1717934 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: BOWHUNTER MAGAZINE INC STREET 2: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYMBOL OF EXCELLENCE PUBLISHERS INC CENTRAL INDEX KEY: 0001011518 STANDARD INDUSTRIAL CLASSIFICATION: NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING [2711] IRS NUMBER: 630845698 STATE OF INCORPORATION: AL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-30 FILM NUMBER: 1717935 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2124500100 MAIL ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COWLES HISTORY GROUP INC CENTRAL INDEX KEY: 0001058683 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 232667502 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-31 FILM NUMBER: 1717936 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: BOWHUNTER MAGAZINE INC STREET 2: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMMUNICATION CONCEPTS INC CENTRAL INDEX KEY: 0001109111 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 880329261 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-32 FILM NUMBER: 1717937 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: 745 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRIMEDIA ENTHUSIAST PUBLICATIONS INC CENTRAL INDEX KEY: 0001058682 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 231577768 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-33 FILM NUMBER: 1717938 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: BOWHUNTER MAGAZINE INC STREET 2: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FORMER COMPANY: FORMER CONFORMED NAME: COWLES ENTHUSIAST MEDIA INC DATE OF NAME CHANGE: 19980327 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOWHUNTER MAGAZINE INC CENTRAL INDEX KEY: 0001058677 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 232667502 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-34 FILM NUMBER: 1717939 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: BOWHUNTER MAGAZINE INC STREET 2: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRIMEDIA WORKPLACE LEARNING INC CENTRAL INDEX KEY: 0001058080 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 752110878 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-35 FILM NUMBER: 1717940 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: SIMPSON THACHER & BARTLETT STREET 2: 425 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRIMEDIA SPECIAL INTEREST PUBLICATIONS INC CENTRAL INDEX KEY: 0001057176 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 521654079 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-36 FILM NUMBER: 1717941 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRIMEDIA MAGAZINES FINANCE INC CENTRAL INDEX KEY: 0001058075 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 133616343 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-37 FILM NUMBER: 1717942 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: SIMPSON THACHER & BARTLETT STREET 2: 425 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRIMEDIA MAGAZINES INC CENTRAL INDEX KEY: 0001058074 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 133636344 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-38 FILM NUMBER: 1717943 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: SIMPSON THACHER & BARTLETT STREET 2: 425 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRIMEDIA INFORMATION INC CENTRAL INDEX KEY: 0001057181 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 133555670 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-40 FILM NUMBER: 1717945 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRIMEDIA HOLDINGS III INC CENTRAL INDEX KEY: 0001058078 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 133617238 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-41 FILM NUMBER: 1717946 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: SIMPSON THACHER & BARTLETT STREET 2: 425 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRIMEDIA ENTERPRISES INC CENTRAL INDEX KEY: 0001157542 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 134113525 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-42 FILM NUMBER: 1717947 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KAGAN PAUL ASSOCIATES INC CENTRAL INDEX KEY: 0001157541 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 134140957 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67804-43 FILM NUMBER: 1717948 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: 745 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10151 S-4 1 a2052089zs-4.txt FORM S-4 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 17, 2001 REGISTRATION NO. 333- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ PRIMEDIA INC. (Exact name of Registrant as specified in its charter) DELAWARE 2721 13-3647573 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification Number)
------------------------------ 745 FIFTH AVENUE NEW YORK, NEW YORK 10151 (212) 745-0100 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) ------------------------------ BEVERLY C. CHELL, ESQ. PRIMEDIA INC. 745 FIFTH AVENUE NEW YORK, NEW YORK 10151 (212) 745-0100 (Name, address, including zip code, and telephone number, including area code, of agent for service) ------------------------------ WITH A COPY TO: GARY I. HOROWITZ, ESQ. SIMPSON THACHER & BARTLETT 425 LEXINGTON AVENUE NEW YORK, NEW YORK 10017 (212) 455-2000 ------------------------------ Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective. If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box: / / If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: / / __________________ If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: / / __________________ ------------------------------ CALCULATION OF REGISTRATION FEE
PROPOSED PROPOSED AMOUNT MAXIMUM MAXIMUM AMOUNT OF TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION SECURITIES TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE(1) FEE 8 7/8% Senior Notes due 2011................................ $500,000,000 100% $500,000,000 $125,000 Guarantees of 8 7/8% Senior Notes due 2011(2)............... $500,000,000 100% $500,000,000 (3)
(1) Estimated solely for the purpose of calculating the registration fee. (2) See inside facing page for additional registrant guarantors. (3) Pursuant to Rule 457(n) under the Securities Act of 1933, as amended, no separate fee for the guarantees is payable. ------------------------------ THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TABLE OF ADDITIONAL REGISTRANT GUARANTORS
EXACT NAME STATE OR OTHER I.R.S. ADDRESS INCLUDING ZIP CODE AND REGISTRANT GUARANTOR JURISDICTION OF EMPLOYER TELEPHONE NUMBER INCLUDING AREA AS SPECIFIED INCORPORATION OR IDENTIFICATION CODE OF REGISTRANT GUARANTOR'S IN ITS CHARTER ORGANIZATION NUMBER PRINCIPAL EXECUTIVE OFFICES -------------------- ---------------- -------------- ------------------------------- Adams/Intertec International, Inc. Delaware 95-3549600 745 Fifth Avenue New York, New York 10151 (212) 745-0100 Adams/Laux Company, Inc. Delaware 04-3250143 745 Fifth Avenue New York, New York 10151 (212) 745-0100 Bacon's Information, Inc. Delaware 36-4011543 745 Fifth Avenue New York, New York 10151 (212) 745-0100 Canoe & Kayak, Inc. Delaware 41-1895510 745 Fifth Avenue New York, New York 10151 (212) 745-0100 Channel One Communications Corporation Delaware 13-3783278 745 Fifth Avenue New York, New York 10151 (212) 745-0100 Climbing, Inc. Delaware 41-1885204 745 Fifth Avenue New York, New York 10151 (212) 745-0100 Cover Concepts Marketing Services, LLC Delaware 04-3370389 745 Fifth Avenue New York, New York 10151 (212) 745-0100 CSK Publishing Company, Inc. Delaware 13-3023395 745 Fifth Avenue New York, New York 10151 (212) 745-0100 ENO Productions, Inc. Delaware 13-4162379 745 Fifth Avenue New York, New York 10151 (212) 745-0100 Films for the Humanities & Sciences, Delaware 13-1932571 745 Fifth Avenue Inc. New York, New York 10151 (212) 745-0100 Game & Fish Publications, Inc. Delaware 13-4082334 745 Fifth Avenue New York, New York 10151 (212) 745-0100 Haas Publishing Companies, Inc. Delaware 58-1858150 745 Fifth Avenue New York, New York 10151 (212) 745-0100 Hacienda Productions, Inc. Delaware 13-4167234 745 Fifth Avenue New York, New York 10151 (212) 745-0100 HPC Brazil, Inc. Delaware 13-4083040 745 Fifth Avenue New York, New York 10151 (212) 745-0100 PRIMEDIA Business Magazines & Media Inc. Delaware 48-1071277 745 Fifth Avenue New York, New York 10151 (212) 745-0100 Kitplanes Acquisition Company Delaware 95-4617433 745 Fifth Avenue New York, New York 10151 (212) 745-0100
EXACT NAME STATE OR OTHER I.R.S. ADDRESS INCLUDING ZIP CODE AND REGISTRANT GUARANTOR JURISDICTION OF EMPLOYER TELEPHONE NUMBER INCLUDING AREA AS SPECIFIED INCORPORATION OR IDENTIFICATION CODE OF REGISTRANT GUARANTOR'S IN ITS CHARTER ORGANIZATION NUMBER PRINCIPAL EXECUTIVE OFFICES -------------------- ---------------- -------------- ------------------------------- Paul Kagan Associates, Inc. Delaware 13-4140957 745 Fifth Avenue New York, New York 10151 (212) 745-0100 PRIMEDIA Enterprises, Inc. Delaware 13-4113525 745 Fifth Avenue New York, New York 10151 (212) 745-0100 PRIMEDIA Finance Shared Services, Inc. Delaware 13-4144616 745 Fifth Avenue New York, New York 10151 (212) 745-0100 PRIMEDIA Holdings III, Inc. Delaware 13-3617238 745 Fifth Avenue New York, New York 10151 (212) 745-0100 PRIMEDIA Information, Inc. Delaware 13-3555670 745 Fifth Avenue New York, New York 10151 (212) 745-0100 PRIMEDIA Magazines, Inc. Delaware 13-3616344 745 Fifth Avenue New York, New York 10151 (212) 745-0100 PRIMEDIA Magazine Finance, Inc. Delaware 13-3616344 745 Fifth Avenue New York, New York 10151 (212) 745-0100 PRIMEDIA Special Interest Publications, Delaware 52-1654079 745 Fifth Avenue Inc. New York, New York 10151 (212) 745-0100 PRIMEDIA Workplace Learning LP Delaware 13-4119787 745 Fifth Avenue New York, New York 10151 (212) 745-0100 Bowhunter Magazine, Inc. Pennsylvania 23-2667502 745 Fifth Avenue New York, New York 10151 (212) 745-0100 PRIMEDIA Enthusiast Publications, Inc. Pennsylvania 23-1577768 745 Fifth Avenue New York, New York 10151 (212) 745-0100 Communication Concepts, Inc. Nevada 88-0329261 745 Fifth Avenue New York, New York 10151 (212) 745-0100 Cowles History Group, Inc. Virginia 54-1606227 745 Fifth Avenue New York, New York 10151 (212) 745-0100 Symbol of Excellence Publishers, Inc. Alabama 63-0845698 745 Fifth Avenue New York, New York 10151 (212) 745-0100 The Virtual Flyshop, Inc. Colorado 84-1318377 745 Fifth Avenue New York, New York 10151 (212) 745-0100 Go Lo Entertainment, Inc. California 95-4301031 745 Fifth Avenue New York, New York 10151 (212) 745-0100 Horse & Rider, Inc. California 33-0480523 745 Fifth Avenue New York, New York 10151 (212) 745-0100
EXACT NAME STATE OR OTHER I.R.S. ADDRESS INCLUDING ZIP CODE AND REGISTRANT GUARANTOR JURISDICTION OF EMPLOYER TELEPHONE NUMBER INCLUDING AREA AS SPECIFIED INCORPORATION OR IDENTIFICATION CODE OF REGISTRANT GUARANTOR'S IN ITS CHARTER ORGANIZATION NUMBER PRINCIPAL EXECUTIVE OFFICES -------------------- ---------------- -------------- ------------------------------- IntelliChoice, Inc. California 77-0168905 745 Fifth Avenue New York, New York 10151 (212) 745-0100 Kagan Media Appraisals, Inc. California 77-0157500 745 Fifth Avenue New York, New York 10151 (212) 745-0100 Kagan Seminars, Inc. California 94-2515843 745 Fifth Avenue New York, New York 10151 (212) 745-0100 Low Rider Publishing Group, Inc. California 95-4307029 745 Fifth Avenue New York, New York 10151 (212) 745-0100 McMullen Argus Publishing, Inc. California 95-2663753 745 Fifth Avenue New York, New York 10151 (212) 745-0100 Miramar Communications, Inc. California 95-2845391 745 Fifth Avenue New York, New York 10151 (212) 745-0100 Simba Information, Inc. Connecticut 06-1281600 745 Fifth Avenue New York, New York 10151 (212) 745-0100 Kagan World Media, Inc. Delaware 77-0225377 745 Fifth Avenue New York, New York 10151 (212) 745-0100 MediaCentral LLC Delaware 13-4113602 745 Fifth Avenue New York, New York 10151 (212) 745-0100 PRIMEDIA Companies Inc. Delaware 13-4177687 745 Fifth Avenue New York, New York 10151 (212) 745-0100
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE OR JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. SUBJECT TO COMPLETION, DATED AUGUST 17, 2001 PROSPECTUS [LOGO] OFFER TO EXCHANGE $500,000,000 8 7/8% SENIOR NOTES DUE 2011 FOR $500,000,000 8 7/8% SENIOR NOTES DUE 2011, WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 UNCONDITIONALLY GUARANTEED ON A SENIOR BASIS BY ALL OUR DOMESTIC WHOLLY-OWNED RESTRICTED SUBSIDIARIES, OTHER THAN SECURITIZATION SUBSIDIARIES THE EXCHANGE OFFER - - We will exchange all old notes that are validly tendered and not validly withdrawn for an equal principal amount of new notes that are freely tradeable, except in limited circumstances described below. - - You may withdraw tenders of old notes at any time before the expiration of the exchange offer. - - The exchange offer expires at 5:00 p.m., New York City time, on , 2001, unless extended. We do not currently intend to extend the expiration date. - - The exchange of old notes for new notes in the exchange offer will not be a taxable event for U.S. federal income tax purposes. - - We will not receive any proceeds from the exchange offer. THE NEW NOTES - - The new notes are being offered in order to satisfy certain of our obligations under the registration rights agreement entered into in connection with the placement of the old notes. - - The terms of the new notes to be issued in the exchange offer are substantially identical to the old notes, except that the new notes will be freely tradeable, except in limited circumstances described below. RESALES OF NEW NOTES - - The new notes may be sold in the over-the-counter market, in negotiated transactions or through a combination of those methods. If you are a broker-dealer and you receive new notes for your own account, you must acknowledge that you will deliver a prospectus in connection with any resale of the new notes. By making that acknowledgment, you will not be deemed to admit that you are an underwriter under the Securities Act of 1933. Broker-dealers may use this prospectus in connection with any resale of new notes received in exchange for old notes where the old notes were acquired by the broker-dealer as a result of market-making activities or trading activities. We will make this prospectus available to any broker-dealer for use in any such resale for a period of up to 180 days from the date on which the exchange offer is consummated, subject to limited exceptions. A broker-dealer may not participate in the exchange offer with respect to old notes acquired other than as a result of market-making activities or trading activities. See "Plan of Distribution." If you are an affiliate of ours or are engaged in, or intend to engage in, or have an agreement or understanding to participate in, a distribution of the new notes, you cannot rely on the applicable interpretations of the Securities and Exchange Commission and you must comply with the registration requirements of the Securities Act in connection with any resale transaction. YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 14 OF THIS PROSPECTUS BEFORE PARTICIPATING IN THE EXCHANGE OFFER. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE DATE OF THIS PROSPECTUS IS , 2001. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT MAKING AN OFFER OF THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THIS PROSPECTUS. TABLE OF CONTENTS
PAGE -------- Where You Can Find More Information......................... ii Incorporation of Certain Documents by Reference............. ii Summary..................................................... 1 Risk Factors................................................ 14 Forward-Looking Statements.................................. 22 Use of Proceeds............................................. 22 The Exchange Offer.......................................... 23 Description of Other Indebtedness and Preferred Stock....... 33 Description of New Notes.................................... 37 Certain United States Federal Income Tax Consequences....... 76 Plan of Distribution........................................ 80 Legal Matters............................................... 81 Experts..................................................... 81
i WHERE YOU CAN FIND MORE INFORMATION We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and file reports, proxy and information statements and other information with the Securities and Exchange Commission which we refer to as the "Commission" or the "SEC". Those reports, proxy and information statements and other information may be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington D.C. 20549 and at the Commission's Regional Offices located at Seven World Trade Center, 13th Floor, New York, New York 10048 and at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of those materials also can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington D.C. 20549, at prescribed rates. The Commission also maintains a web site at http://www.sec.gov, which contains reports, proxy statements and other information regarding registrants that file electronically with the Commission. In addition, reports, proxy statements and other information concerning us may be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE We incorporate by reference into this prospectus the following documents filed with the Commission: (a) our annual report on Form 10-K for the fiscal year ended December 31, 2000; (b) our quarterly reports on Form 10-Q for the quarters ended March 31, 2001 and June 30, 2001; (c) our current reports on Form 8-K or Form 8-K/A dated March 1, 2001, July 6, 2001, July 26, 2001, August 1, 2001 and August 16, 2001; and (d) About.com, Inc.'s consolidated financial statements and accompanying notes as of and for the year ended December 31, 2000 and our unaudited pro forma consolidated financial statements and accompanying notes giving effect to the About.com merger included in our current report on Form 8-K/A dated April 26, 2001. All documents that we file with the Commission under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus will be deemed to be incorporated by reference in this prospectus and to be a part of this prospectus from the date of the filing of those documents. You may obtain copies of those documents from us, free of cost, by contacting us at the following address or telephone number: Corporate Secretary PRIMEDIA Inc. 745 Fifth Avenue New York, New York 10151 (212) 745-0100 Information that we file later with the Commission and that is incorporated by reference in this prospectus will automatically update and supersede information contained in this prospectus. You will be deemed to have notice of all information incorporated by reference in this prospectus as if that information was included in this prospectus. ii SUMMARY THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED INFORMATION AND THE CONSOLIDATED FINANCIAL STATEMENTS AND ACCOMPANYING NOTES INCORPORATED BY REFERENCE IN THIS PROSPECTUS. UNLESS THE CONTEXT OTHERWISE INDICATES, THE TERM "WE" OR "PRIMEDIA" MEANS THE COMBINED BUSINESS OPERATIONS OF PRIMEDIA INC. AND ITS SUBSIDIARIES. YOU SHOULD CAREFULLY CONSIDER THE RISKS INCLUDED UNDER THE CAPTION "RISK FACTORS." MARKET SHARE DATA CONTAINED IN THIS PROSPECTUS ARE BASED UPON A PRODUCT'S SHARE OF ADVERTISING OR CIRCULATION, DEPENDING ON THE PRODUCT, AS COMPARED TO ITS DIRECT COMPETITION. OUR COMPANY PRIMEDIA is the new tradition in media, combining traditional and new media. We are a targeted media company with leading positions in consumer and business-to-business markets. Our properties, which are delivered to over 200 million users, utilize the full media arsenal to deliver content via print (magazines and directories), video (digital broadband, satellite and cable), live events (trade and consumer shows) and the Internet. As of December 31, 2000, approximately 78% of our traditional media products ranked first or second in advertising pages, advertising revenue, circulation or other competitive metrics in their respective markets. We believe that in 2000 we sold the most advertising pages of any magazine publisher in the United States and ranked third in terms of revenue derived from sales of magazine copies at the newsstand in the United States. Our Internet businesses rank seventh in unique visitors in the United States as measured by MEDIA METRIX for June 2001. In 2000, we had net sales of approximately $1.7 billion and EBITDA of approximately $256.7 million. For the six months ended June 30, 2001, we had net sales of approximately $872.3 million and EBITDA of approximately $86.2 million. In 2000, our net loss was approximately $346.8 million, and for the six months ended June 30, 2001, our net loss was approximately $225.5 million. OUR GROWTH STRATEGY We believe that as technology has created a flood of information, it has shifted the role of the media from making information broadly available across all audiences to sifting out and qualifying information for the benefit of specific audiences. As a result, we have organized our business into two operating segments: consumer and business-to-business. Our consumer segment is the largest publisher of specialty magazines and apartment rental guides and one of the largest producers and distributors of special interest videos in the United States. Through the About.com merger, we acquired a network of highly-targeted, topic-specific web sites and the leading producer of original content on the Internet. Our business-to-business segment is a leading publisher of business-to-business magazines, books, directories and databases, addressing the specialized information needs of professionals. Our growth strategy is to deliver information over multiple traditional and new media platforms to highly specific niches in both the consumer and business-to-business markets, thereby attracting both dedicated users of information and the advertisers determined to reach them. We expect to derive our revenue principally from lead generation advertising as well as from subscriptions to our products and brand awareness advertising. Lead generation advertising is advertising focused on triggering a purchase decision by the reader or viewer. We believe lead generation advertising is less susceptible to general economic conditions than general brand awareness advertising. In 2000, we embarked on an initiative to integrate our operating units. One aspect of the integration was to improve productivity through cost reduction as we entered into a strategic sourcing initiative to leverage our purchasing power across all spending for certain manufacturing and non-manufacturing commodities. Significant cost savings were achieved through consolidating the procurement of goods and services, such as paper and printing, and centralizing support services, such as accounting and payroll. During 2000, the strategic sourcing initiative generated approximately 1 $10.5 million in savings. With the About.com merger, we will continue our integration and sourcing efforts and expect to reduce Internet development costs. After the About.com merger, we formed the PRIMEDIA Integrated Sales and Marketing Group to sell integrated marketing packages across all our traditional and new media vehicles. We also formed the PRIMEDIA Internet Resource and Technology Group to centralize and standardize our technology. RECENT DEVELOPMENTS EMAP USA On July 2, 2001, we entered into a definitive agreement to acquire EMAP, Inc. (formerly known as Petersen Publishing) from EMAP plc. In this prospectus, we refer to EMAP, Inc. as EMAP USA. EMAP USA has more than 60 consumer titles reaching over 75 million enthusiasts through a combination of magazines, network and cable television shows, web sites and live consumer events. Upon completion of this acquisition, we will be the second largest magazine company in the United States. Under the terms of our agreement, we will pay $515 million for EMAP USA, consisting of $505 million in cash and warrants granted to an affiliate of EMAP plc to purchase 2 million of our shares of common stock at $9 per share. The transaction is subject to customary closing conditions and is expected to close during August 2001. The acquisition does not include the United States edition of FOR HIM MAGAZINE published by EMAP USA. We believe that our acquisition of EMAP USA will, among other things: - add significant scale to one of our strongest niche sectors, the automotive enthusiast market, and make us more attractive to the new car automotive advertising market as a result of the combination of EMAP USA's MOTOR TREND magazine and our existing automobile titles; - strengthen our position in the teen market with the addition of EMAP USA's TEEN magazine; - add higher growth categories to our enthusiast magazine business, namely EMAP USA's high tech and action sports titles; - enhance our position as the leading provider of niche topic video in the United States through the addition of five more weekly cable television programs; - enable us to further amortize our About.com Internet infrastructure; and - achieve efficiencies as a result of our increased scale of operations in the areas of paper purchasing, circulation, production, technology, finance and others. NEW CREDIT AGREEMENT On June 20, 2001, we entered into a new credit agreement with commitments of $1 billion, of which $558 million was outstanding as of June 30, 2001. The debt under the credit agreement (as well as certain of our other equally and ratably secured indebtedness) is secured by a pledge of the stock of PRIMEDIA Companies Inc., an intermediate holding company that we own directly. 2 The following chart summarizes the businesses of our two segments: [LOGO] - ------------------------ * Subject to completion of the acquisition, EMAP USA will be included in our consumer segment. EMAP USA has more than 60 consumer titles, including MOTOR TREND, HOT ROD, TEEN and STEREOPHILE. We were incorporated on November 22, 1991 in the State of Delaware. Our principal executive offices are located at 745 Fifth Avenue, New York, New York, 10151; telephone number (212) 745-0100. Our domain name is "primedia.com." Our common stock is publicly traded on the New York Stock Exchange under the symbol "PRM." The information on our web site is not part of this prospectus. 3 CONCURRENT TRANSACTIONS We intend to partially finance the acquisition of EMAP USA and related expenses by (1) entering into a $125 million preferred equity financing, which will include warrants for our common stock, with an affiliate of Kohlberg Kravis Roberts & Co. L.P., or KKR, which directly or indirectly owns a majority of our outstanding shares of common stock, (2) drawing upon our revolving credit facility in an amount of approximately $270 million and (3) consummating a private placement of shares of our common stock for aggregate cash proceeds of $125 million, $50 million of which we expect to receive from an affiliate of KKR. An affiliate of KKR has agreed to provide us with additional equity financing up to an aggregate of $125 million. In this prospectus, we refer to these three transactions collectively as the "concurrent transactions." The remainder of the financing will come from cash on hand and the warrants we expect to issue to an affiliate of EMAP plc as discussed under "--Recent Developments--EMAP USA." The shares of our preferred stock and common stock offered in the concurrent transactions have not been registered and, at the time of sale, will not be registered under the Securities Act. These shares may not be offered or sold in the United States absent subsequent registration or an applicable exemption from registration requirements. Pursuant to the preferred equity financing, we intend to issue to KKR or one of its affiliates shares of preferred stock with an aggregate liquidation preference of $125 million. We expect that dividends on the preferred stock will accrue at an annual rate of 12.5% and will be payable quarterly in kind. We expect the preferred stock to be perpetual and to rank PARI PASSU with our existing series of outstanding preferred stock. We expect to have the option to redeem any or all of the shares of preferred stock at any time for cash at 100% of the liquidation preference of each share being redeemed. We also expect that the preferred stock will be convertible into shares of our common stock at any time after the first anniversary of the issue date at a conversion price of $7 per share, subject to adjustments. We also expect to have the option to cause at any time the convertible preferred stock to be exchanged into subordinated debt of ours. Our ability to redeem or exchange the convertible preferred stock into debt will be subject to the approval of a majority of our independent directors. In connection with the equity financing to be made available to us by KKR, we expect to pay KKR or one of its affiliates a commitment fee consisting of warrants to purchase 1.25 million shares of our common stock and grant to KKR or one of its affiliates additional warrants to purchase up to 6.62 million shares of our common stock. We expect the warrants to be exercisable at any time after the first anniversary of the grant date at a price of $7 per share, subject to adjustments. We expect that the warrants constituting the commitment fee and additional warrants to purchase 2.62 million shares of our common stock will vest on the grant date, whereas warrants to purchase up to 4 million shares will be subject to a vesting schedule pursuant to which warrants for 250,000 shares will vest on the three-month anniversary of the grant date, warrants for an additional 1 million shares will vest on the six-month anniversary of the grant date, warrants for an additional 1.25 million shares will vest on the nine-month anniversary of the grant date and the remaining warrants will vest on the 12-month anniversary of the grant date. Any unvested warrants of those subject to the vesting schedule will expire if we redeem all the outstanding shares of convertible preferred stock. We expect that the proceeds from the sale of certain assets, expected to be $250 million, will be used to reduce the leverage of our company. These assets are currently reported as continuing businesses. For a description of the terms of our revolving credit facility, see "Description of Other Indebtedness and Preferred Stock--Bank Credit Facilities." 4 SUMMARY OF TERMS OF THE EXCHANGE OFFER On May 8, 2001, we completed the private offering of the old notes. On that date, we and our domestic wholly-owned restricted subsidiaries, other than securitization subsidiaries, which we refer to as the guarantors, entered into a registration rights agreement with the initial purchasers in the private offering in which we and the guarantors agreed to deliver to you this prospectus as part of the exchange offer and we agreed to complete the exchange offer within 230 days after the date of original issuance of the old notes. You are entitled to exchange in the exchange offer your old notes for new notes which are identical in all material respects to the old notes except: - the new notes have been registered under the Securities Act of 1933; and - the liquidated damages which would be payable on the old notes in specified circumstances are no longer applicable. The Exchange Offer................... We are offering to exchange up to $500,000,000 aggregate principal amount of old notes for up to $500,000,000 aggregate principal amount of new notes. Old notes may be exchanged only in integral multiples of $1,000. Resale............................... Based on an interpretation by the staff of the SEC set forth in no-action letters issued to third parties, including Exxon Capital Holdings Corporation and Morgan Stanley & Co. Incorporated, we believe that the new notes issued in the exchange offer in exchange for old notes may be offered for resale, resold and otherwise transferred by you without compliance with the registration and prospectus delivery provisions of the Securities Act, so long as you: - are not an affiliate of ours within the meaning of Rule 405 under the Securities Act; and - are acquiring the new notes in the ordinary course of your business and have not engaged in, do not intend to engage in, and have no arrangement or understanding with any person to participate in, a distribution of the new notes. Each participating broker-dealer that receives new notes for its own account in the exchange offer in exchange for old notes that were acquired as a result of market-making or other trading activity must acknowledge that it will deliver a prospectus in connection with any resale of the new notes. See "Plan of Distribution." Any holder of old notes who: - is an affiliate of ours within the meaning of Rule 405 under the Securities Act; - does not acquire new notes in the ordinary course of its business; or - tenders in the exchange offer with the intention to participate, or for the purpose of participating, in a distribution of new notes
5 cannot rely on the position of the staff of the SEC enunciated in EXXON CAPITAL HOLDINGS CORPORATION, MORGAN STANLEY & CO. INCORPORATED or similar no-action letters and, in the absence of an exemption from the registration and prospectus delivery requirements of the Securities Act, must comply with those requirements in connection with the resale of the new notes. Expiration Date; Withdrawal of Tender............................... The exchange offer will expire at 5:00 p.m., New York City time, on , 2001, or on a later date and time if we decide to extend the exchange offer. We refer to the date on which the exchange offer will expire as the expiration date. We do not currently intend to extend the expiration date. A tender of old notes in the exchange offer may be withdrawn at any time before the expiration date. Any old notes not accepted for exchange for any reason will be returned without expense to the tendering holder promptly after the expiration or termination of the exchange offer. Material Conditions to the Exchange Offer................................ The exchange offer is subject to customary conditions, which we may waive. Please read the section captioned "The Exchange Offer--Material Conditions to the Exchange Offer" of this prospectus for more information regarding the conditions to the exchange offer. Procedures for Tendering Outstanding Notes................................ If you wish to accept the exchange offer, you must: - complete, sign and date the accompanying letter of transmittal, or a facsimile of the letter of transmittal according to the instructions contained in this prospectus and the letter of transmittal; - mail or otherwise deliver the letter of transmittal, or a facsimile of the letter of transmittal, together with the old notes and any other required documents, to the exchange agent at the address indicated on the cover page of the letter of transmittal; or - if you hold old notes through The Depository Trust Company, or DTC, and wish to participate in the exchange offer, you must comply with the Automated Tender Offer Program procedures of DTC, by which you will agree to be bound by the letter of transmittal. By signing, or agreeing to be bound by the letter of transmittal, you will represent to us that, among other things: - any new notes that you receive will be acquired in the ordinary course of your business; - you have no arrangement or understanding with any person or entity to participate in a distribution of the new notes;
6 - if you are a broker-dealer that will receive new notes for your own account in exchange for old notes that were acquired as a result of market-making activities, that you will deliver a prospectus, as required by law, in connection with any resale of those new notes; and - you are not an affiliate, as defined in Rule 405 of the Securities Act, of ours or, if you are an affiliate, you will comply with any applicable registration and prospectus delivery requirements of the Securities Act. Special Procedures for Beneficial Owners............................... If you are a beneficial owner of old notes which are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender your old notes in the exchange offer, you should contact that registered holder promptly and instruct the registered holder to tender on your behalf. If you wish to tender on your own behalf, you must, prior to completing and executing the letter of transmittal and delivering your old notes, either make appropriate arrangements to register ownership of the old notes in your name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time and may not be able to be completed before the expiration date. Guaranteed Delivery Procedures........................... If you wish to tender your old notes and your old notes are not immediately available or you cannot deliver your old notes, the letter of transmittal or any other documents required by the letter of transmittal or to comply with the applicable procedures under DTC's Automated Tender Offer Program before the expiration date, you must tender your old notes according to the guaranteed delivery procedures set forth in this prospectus under "The Exchange Offer--Guaranteed Delivery Procedures." Effect on Holders of Outstanding Notes.................... Once we complete the exchange of all validly tendered old notes pursuant to the terms of the exchange offer, we will have fulfilled a covenant contained in the registration rights agreement and, accordingly, there will be no liquidated damages paid on the old notes under the circumstances described in the registration rights agreement. If you are a holder of old notes and you do not tender your old notes in the exchange offer, you will continue to hold the old notes and you will be entitled to all the rights and limitations applicable to the old notes in the indenture, except for any rights under the registration rights agreement that by their terms terminate upon the completion of the exchange offer. We expect that the exchange of new notes for old notes will have a material adverse effect on the trading market for old notes.
7 Consequences of Failure to Exchange............................. All untendered old notes will continue to be subject to the restrictions on transfer provided for in the old notes and in the indenture. In general, the old notes may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. Other than in connection with the exchange offer, we do not currently anticipate that we will register the old notes under the Securities Act. Material Income Tax Considerations... The exchange of old notes for new notes in the exchange offer will not be a taxable event for United States federal income tax purposes. See "Certain United States Federal Income Tax Consequences." Use of Proceeds...................... We will not receive any cash proceeds from the issuance of new notes in connection with the exchange offer. Exchange Agent....................... The Bank of New York is the exchange agent for the exchange offer. The address and telephone number of the exchange agent are provided in the section captioned "The Exchange Offer--Exchange Agent" of this prospectus.
8 SUMMARY OF TERMS OF THE NEW NOTES Maturity............................. May 15, 2011. Interest Payment Dates............... May 15 and November 15 of each year, commencing November 15, 2001. Optional Redemption.................. At any time on or after May 15, 2006, we may redeem all or a part of the new notes at the redemption price specified in this prospectus under "Description of Notes--Optional Redemption." At any time before May 15, 2004, we may redeem up to 35% of the new notes with the net proceeds of certain equity offerings at a redemption price of 108.875%, as long as at least 65% of the aggregate principal amount of the new notes remains outstanding after the redemption. See "Description of Notes--Optional Redemption." In addition, we may redeem all or a part of the new notes if we become subject to a change of control at any time, at the redemption price described under "Description of Notes--Change of Control--Optional Redemption Upon Change of Control." Change of Control.................... If we become subject to a change of control, we will be required to make an offer to purchase any new notes that we do not redeem as provided under "Optional Redemption" above, at a purchase price of 101% of the principal amount of those new notes, plus accrued and unpaid interest to the date of purchase. Guarantees........................... The new notes will be fully and unconditionally guaranteed, on a senior basis, jointly and severally, by each of our wholly-owned domestic restricted subsidiaries, other than securitization subsidiaries. Ranking.............................. The new notes will be senior obligations secured as described below and will rank PARI PASSU in right of payment to all our existing and future senior indebtedness and senior to any future subordinated indebtedness of ours. The guarantees of the new notes will rank PARI PASSU in right of payment with all existing and future senior indebtedness of our subsidiary guarantors, including those subsidiaries' guarantees of our obligations under our bank credit facilities and our other outstanding senior notes. As of June 30, 2001, we had approximately $1,698.9 million of senior indebtedness consisting of $558.0 million of borrowings under our bank credit facilities, $100.0 million of our 10 1/4% senior notes due 2004, $299.3 million of our 8 1/2% senior notes due 2006, $248.9 million of our 7 5/8% senior notes due 2008 and $492.7 million of the old notes, all of which was guaranteed on a senior basis by our subsidiaries guaranteeing the new notes. All of our senior indebtedness, including the new notes, is secured by a pledge of the stock of PRIMEDIA Companies Inc., an intermediate holding company we own directly. PRIMEDIA Companies Inc. owns all of our operating subsidiaries.
9 As of June 30, 2001, there was $420.4 million available for borrowing under our bank credit facilities. As a result of the concurrent transactions, we expect to draw upon our revolving credit facility in an amount of $270 million. As of June 30, 2001, we had no subordinated indebtedness outstanding. Subject to the financial covenants in our bank credit facilities, we have the option at any time to exchange our outstanding series of preferred stock into subordinated indebtedness in an aggregate principal amount of $562.1 million. Restrictive Covenants................ We will issue the new notes under an indenture containing covenants for your benefit. These covenants restrict our ability and the ability of our subsidiaries, with exceptions, to: - incur additional debt; - create or permit to exist certain liens; - pay dividends on or repurchase or retire capital stock; - make investments in certain subsidiaries; - sell assets or equity interests in subsidiaries; - enter into transactions with affiliates; and - consolidate, merge or transfer all or substantially all of our assets. These covenants are subject to a number of important exceptions and qualifications.
10 SELECTED CONSOLIDATED FINANCIAL INFORMATION The selected consolidated operating and balance sheet data are derived in part from our audited consolidated financial statements contained in our annual reports on Form 10-K for each of the years in the five-year period ended December 31, 2000 and from our unaudited condensed consolidated financial statements contained in our quarterly report on Form 10-Q for the quarter ended June 30, 2001. The historical data are only a summary and should be read in conjunction with the historical consolidated financial statements and related notes contained in the Form 10-K for the year ended December 31, 2000 and the Form 10-Q for the quarter ended June 30, 2001, which have been incorporated by reference in this prospectus. In the opinion of management, the unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial position and results of operations for such periods. The results of operations as of and for the six months ended June 30, 2001 are not necessarily indicative of our results for any other interim period or for the full year.
SIX MONTHS ENDED YEARS ENDED DECEMBER 31, JUNE 30, ------------------------------------------------------------------------ --------------------------- 1996 1997 1998 1999 2000 2000 2001 ------------ ------------ ------------ ------------ ------------ ------------ ------------ (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) OPERATING DATA: Sales, net.............. $1,374,449 $1,487,595 $1,573,573 $1,716,102 $1,690,952 $829,977 $872,284 Depreciation of property and equipment......... 38,233 37,334 42,214 47,653 52,920 26,906 30,845 Amortization of intangible assets, excess of purchase price over net assets acquired and other.... 152,469 146,831 176,755 176,361 128,355 66,422 117,738 Other (income) charges(1)............ -- 138,640 (7,216) 62,208 41,570 12,780 29,030 Operating income (loss)(2)............. 85,901 (20,793) 118,157 54,332 33,834 22,190 (91,436) Provision for the impairment of investments(3)........ -- -- -- -- 188,526 -- 30,807 Interest expense........ 124,601 136,625 144,442 164,909 143,988 75,319 66,854 Income tax benefit (expense)(4).......... 53,300 1,685 -- (6,500) (41,200) -- -- Income (loss) before extraordinary charge................ 17,597 (157,439) (37,736) (120,113) (346,826) (46,499) (225,488) Extraordinary charge-- extinguishment of debt(5)............... 9,553 15,401 -- -- -- -- -- Net income (loss)(2).... 8,044 (172,840) (37,736) (120,113) (346,826) (46,499) (225,488) Preferred stock dividends and related accretion(6).......... 43,526 65,073 63,285 53,062 53,063 26,531 27,347 Loss applicable to common shareholders... 35,482 237,913 101,021 173,175 399,889 73,030 252,835 Basic and diluted loss applicable to common shareholders per common share: Loss before extraordinary charge.............. $0.20 $1.72 $0.71 $1.19 $2.48 $0.47 $1.28 Net loss.............. $0.27 $1.84 $0.71 $1.19 $2.48 $0.47 $1.28 Basic and diluted common shares outstanding.... 128,781,518 129,304,900 142,529,024 145,418,441 161,104,053 155,145,878 198,271,477
11
SIX MONTHS ENDED YEARS ENDED DECEMBER 31, JUNE 30, ------------------------------------------------------------------------ --------------------------- 1996 1997 1998 1999 2000 2000 2001 ------------ ------------ ------------ ------------ ------------ ------------ ------------ (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) OTHER DATA: EBITDA(7)............... $276,603 $302,012 $329,910 $340,554 $256,679 $128,298 $86,177 Additions to property, equipment and other, net................... 28,790 31,108 55,238 69,488 77,579 35,442 26,114 Net cash provided by (used in) operating activities............ 150,192 125,360 140,804 107,298 52,546 (22,277) (139,757) Net cash provided by (used in) investing activities............ (721,709) (185,725) (609,621) 186,081 (54,644) 35,436 57,206 Net cash provided by (used in) financing activities............ 580,946 46,688 470,377 (289,256) (2,873) (10,592) 72,161 Deficiency of earnings to fixed charges(8)(9)......... 35,703 159,124 37,736 113,613 295,489 45,775 196,183 Deficiency of earnings to fixed charges and preferred stock dividends and related accretion(8)(9)....... 79,229 224,197 101,021 166,675 348,552 72,306 223,530 BALANCE SHEET DATA: Cash and cash equivalents........... $36,655 $22,978 $24,538 $28,661 $23,690 $31,228 $13,300 Working capital(10)..... (44,705) (146,245) (234,045) (200,458) (346,447) (128,685) (142,946) Total assets............ 2,552,215 2,485,990 3,041,074 2,714,552 2,677,479 2,660,970 3,060,323 Long-term debt(11)...... 1,577,469 1,682,224 1,956,997 1,732,896 1,503,188 1,557,435 1,720,207 Exchangeable preferred stock................. 442,729 470,280 557,841 559,689 561,324 560,508 562,141 Total shareholders' equity (deficiency)... 81,557 (162,223) (83,703) (144,238) (236,026) (32,338) 149,716
- ------------------------------ (1) Represents non-cash compensation and non-recurring charges of $35,210 for the year ended December 31, 2000 and $24,544 and $12,727 for the six months ended June 30, 2000 and 2001, respectively, a provision for severance, closures and integration costs of $22,000 and $20,798 for the years ended December 31, 1999 and 2000, respectively, and $16,718 and $12,502 for the six months ended June 30, 2000 and 2001, respectively, other integration costs related to the About.com merger and other company-wide integration efforts of $4,304 for the six months ended June 30, 2001, (gain) loss on the sales of businesses and other, net of $138,640, $(7,216), $(235,580) and $(14,438) for the years ended December 31, 1997, 1998, 1999 and 2000, respectively, and $(28,482) and $(503) for the six months ended June 30, 2000 and 2001, respectively, and a provision for the impairment of long-lived assets of $275,788 for the year ended December 31, 1999. (2) The adoption of a change in method of accounting for internal use software costs effective January 1, 1998 resulted in an increase in operating income and an equal decrease in net loss of approximately $12,450, $9,000 and $12,500 for the years ended December 31, 1998, 1999 and 2000, respectively. (3) Represents a provision for the impairment of our investment in CMGI, Inc. of approximately $155,500, a provision for the impairment of our investment in Liberty Digital, Inc. of approximately $21,900 and a provision for the impairment of various PRIMEDIA Ventures' investments of approximately $11,200 for the year ended December 31, 2000 and a provision for the impairment of various of our investments of approximately $30,800 for the six months ended June 30, 2001. (4) At December 31, 1997, 1998 and 1999, our management determined that no adjustment to net deferred income tax assets was required. In prior years, management determined that a portion of the net deferred income tax assets would likely be realized and accordingly, we recorded an income tax benefit of $53,300 in 1996. For the year ended December 31, 1997, we recorded an income tax carryback claim of $1,685. In 1999, we recorded income tax expense of $6,500 related to a provision for current state and local taxes incurred as a result of the gain on the sale of the supplemental education group. During 2000, we increased our valuation allowance due to historical operating losses and the impairment of investments, resulting in a provision for income taxes of $41,200. At December 31, 2000, we 12 had aggregate net operating and capital loss carryforwards of approximately $1,028,000 which will be available to reduce future taxable income. (5) Represents the write-off of unamortized deferred financing costs and the premiums paid on the redemptions of the 10 5/8% senior notes. (6) Includes the premiums paid on the redemptions of our $11.625 Series B exchangeable preferred stock and our $2.875 senior exchangeable preferred stock in 1998 and 1997, respectively. In 1997, we recorded a preferred stock dividend accrual in the amount of $9,517. Of the total dividend accrual recorded in 1997, the amounts that relate to prior periods were not material. (7) Represents earnings before interest, taxes, depreciation, amortization and other (income) charges including non-cash compensation and non-recurring charges of $35,210 for the year ended December 31, 2000 and $24,544 and $12,727 for the six months ended June 30, 2000 and 2001, respectively, a provision for severance, closures and integration costs of $22,000 and $20,798 for the years ended December 31, 1999 and 2000, respectively, and $16,718 and $12,502 for the six months ended June 30, 2000 and 2001, respectively, other integration costs related to the About.com merger and other company-wide integration efforts of $4,304 for the six months ended June 30, 2001, (gain) loss on the sales of businesses and other, net of $138,640, $(7,216), $(235,580) and $(14,438) for the years ended December 31, 1997, 1998, 1999 and 2000, respectively, and $(28,482) and $(503) for the six months ended June 30, 2000 and 2001, respectively, and a provision for the impairment of long-lived assets of $275,788 for the year ended December 31, 1999. EBITDA is not intended to represent cash flow from operating activities and should not be considered as an alternative to net income (loss) (as determined in conformity with generally accepted accounting principles) as an indicator of our operating performance or to cash flows as a measure of liquidity. We believe EBITDA is a standard measure commonly reported and widely used by analysts, investors and other interested parties in the media industry. Accordingly, this information has been disclosed in this prospectus to permit a more complete comparative analysis of our operating performance relative to other companies in our industry. EBITDA should not be considered in isolation or as a substitute for other measures of financial performance or liquidity. The primary difference between EBITDA and cash flows provided by operating activities relates to changes in working capital requirements and payments made for interest and income taxes. Additionally, EBITDA is not available for our discretionary use as there are legal requirements to pay preferred stock dividends and repay debt, among other payments. EBITDA as presented may not be comparable to similarly titled measures reported by other companies, since not all companies necessarily calculate EBITDA in identical manners, and therefore, is not necessarily an accurate measure of comparison between companies. (8) For purposes of determining the deficiency of earnings to fixed charges and preferred stock dividends and related accretion, "earnings" consist of loss before income taxes, fixed charges and equity in losses of investees, and "fixed charges" consist of interest on all indebtedness, amortization of deferred financing costs and that portion of rental expenses that management believes to be representative of interest and "preferred stock dividends and related accretion" consist of dividends on our preferred stock, the accretion of our preferred stock and premiums paid on the redemption of our $11.625 Series B exchangeable preferred stock in 1998. (9) Loss before income taxes includes non-cash and non-recurring charges for depreciation and amortization of property and equipment, other intangible assets, excess of purchase price over net assets acquired and deferred financing costs, gain (loss) on the sales of businesses and other, net, provision for severance, closures and integration costs, non-cash compensation and non-recurring charges, provision for the impairment of long-lived assets, provision for the impairment of investments, write-off of deferred financing costs and non-cash interest expense on an acquisition obligation, distribution advance and other current liabilities. These charges totaled $198,895, $333,219, $224,063, $294,982 and $419,144 for the years ended December 31, 1996, 1997, 1998, 1999 and 2000, respectively and $109,999 and $218,055 for the six months ended June 30, 2000 and 2001, respectively. Adjusted to eliminate those charges, earnings would have exceeded fixed charges and fixed charges plus cash preferred stock dividends and related accretion by $163,192 and $136,248, $174,095 and $113,473, $186,327 and $123,042, $181,369 and $128,307 and $123,655 and $70,592 for the years ended December 31, 1996, 1997, 1998, 1999 and 2000, respectively, and by $64,224 and $37,693 for the six months ended June 30, 2000. Adjusted to eliminate those charges for the six months ended June 30, 2001, earnings would have exceeded fixed charges by $21,872 but, earnings would have been insufficient to cover fixed charges plus preferred stock dividends and related accretion by $5,475. (10) Includes current maturities of long-term debt and net assets held for sale, where applicable. Consolidated working capital reflects certain industry working capital practices and accounting principles, including the expensing of certain editorial and product development costs when incurred and the recording of deferred revenue from subscriptions as a current liability. Advertising costs are expensed when the promotional activities occur except for certain direct-response advertising costs which are capitalized and amortized over the estimated period of future benefit. (11) Excludes current maturities of long-term debt. 13 RISK FACTORS RISK FACTORS RELATING TO OUR BUSINESS WE MAY NOT BE ABLE TO ACHIEVE THE EXPECTED RESULTS FROM THE MERGER WITH ABOUT.COM, OUR CONTEMPLATED ACQUISITION OF EMAP USA OR ANY FUTURE ACQUISITIONS AND INVESTMENTS. We may not be able to continue to integrate the business of About.com or integrate the business of EMAP USA into our existing businesses without encountering difficulties. In addition, we may make acquisitions and investments in the future. The integration of About.com, EMAP USA and other businesses we may acquire is and will be a complex, time consuming and expensive process involving a number of issues, including: - difficulty integrating acquired technologies, operations and personnel with our existing businesses; - diversion of management attention in connection with both negotiating the acquisitions and integrating the assets; - strain on managerial and operational resources as management tries to oversee larger operations; - exposure to unforeseen liabilities of acquired companies; - potential issuance of securities in connection with a future acquisition with rights that are superior to the rights of holders of our currently outstanding securities; and - the requirement to record potentially significant additional future operating costs for the amortization of certain intangible assets. Our future operating results will depend to a significant degree on our ability to address these issues. In addition, we have invested and may invest in the future in some early-stage companies with limited operating histories and limited or no revenues. We may not be able to successfully develop these young companies and, in some cases, we may not own enough equity in them to control their development. GENERAL ECONOMIC TRENDS MAY REDUCE OUR ADVERTISING REVENUES. Our advertising revenues are subject to the risks arising from adverse changes in domestic and global economic conditions. A decline in the level of business activity of our advertisers has had and could continue to have an adverse effect on our revenues and profit margins. Because of the recent economic slowdown in the United States, many advertisers, particularly business-to-business advertisers, are reducing advertising expenditures. If the current economic slowdown continues or worsens, our results of operations may be adversely affected. WE HAVE SUBSTANTIAL INDEBTEDNESS AND OTHER MONETARY OBLIGATIONS, WHICH CONSUME A SUBSTANTIAL PORTION OF THE CASH FLOW THAT WE GENERATE. We have substantial indebtedness and expect to incur additional indebtedness under our bank credit facilities or otherwise. As of June 30, 2001, we had approximately $1,728.3 million of outstanding indebtedness and $562.1 million of outstanding preferred stock. In addition, as a result of the concurrent transactions, we expect to draw upon our revolving credit facility in an amount of $270 million. A substantial portion of our cash flow is dedicated to the payment of principal and interest on indebtedness and to the payment of dividends on our preferred stock, which reduces funds available for capital expenditures and business opportunities and may limit our ability to respond to adverse developments in our business or in the economy. For the year ended December 31, 2000, we paid $117.7 million of principal and $141.9 million of interest, and for the six months ended June 30, 14 2001, we paid $59.8 million of interest. In addition, for the year ended December 31, 2000, we made cash dividend payments of $53.1 million on our outstanding preferred stock, and for the six months ended June 30, 2001, we made cash dividend payments of $26.5 million on our outstanding preferred stock. As a result of the concurrent transactions, we expect our annual interest payments to increase by approximately $15 million. As of June 30, 2001, borrowings under our bank credit facilities were approximately $558 million. In addition, to partially finance our acquisition of EMAP USA, we expect to borrow an additional $270 million under our revolving credit facility. These borrowings bear interest at floating rates based on the federal funds rate, the prime lending rate or LIBOR. Increases in interest rates on indebtedness under our bank credit facilities would increase our interest payment obligations and could have an adverse effect on us. The weighted average interest rate on our bank credit facilities was 6.46% at June 30, 2001. Our ability to make payments with respect to our indebtedness will depend on our future operating performance, which will be affected by prevailing economic conditions and financial, business, competitive and other factors. We will not be able to control many of these factors, such as the economic conditions in the markets in which we operate and initiatives taken by our competitors. Based on the outstanding principal amount of our debt under our bank credit facilities and outstanding senior notes as of June 30, 2001, we will be required to repay $127.4 million of indebtedness on or prior to December 31, 2004, and we will have to repay substantial additional indebtedness and redeem a significant amount of preferred stock thereafter. We may not be able to repay that debt or redeem the preferred stock from available cash sources and may not be able to refinance that debt or preferred stock on commercially reasonable terms, if at all. If we are unable to repay, redeem or refinance these amounts on or prior to their due dates, we may need to sell assets or take other actions that could be detrimental to the holders of our common stock. In that event, we may not be able to generate sufficient cash from asset sales to satisfy our cash needs. If we are unable to repay, redeem or refinance our indebtedness and preferred stock on or prior to their due dates, we will be in default and all of our indebtedness could be accelerated. OUR DEBT INSTRUMENTS LIMIT OUR BUSINESS FLEXIBILITY BY IMPOSING OPERATING AND FINANCIAL RESTRICTIONS ON OUR OPERATIONS. The agreements governing our indebtedness impose specific operating and financial restrictions on us. These restrictions prohibit or limit us from, among other things: - changing the nature of our business; - incurring additional indebtedness; - creating liens on our assets; - selling assets; - engaging in mergers, consolidations or transactions with our affiliates; - making investments in or loans to specific subsidiaries; - making guarantees or specific restricted payments; and - declaring or making dividend payments on our common or preferred stock. As of June 30, 2001, under our most restrictive debt covenants, we must maintain a minimum interest coverage ratio of 1.80 to 1 and a minimum fixed charge coverage ratio of 1.05 to 1. Our maximum allowable debt leverage ratio is 6.0 to 1. The minimum interest coverage ratio and maximum debt coverage ratio we must maintain become more restrictive over time. The maximum leverage ratio 15 decreases to 5.75 to 1, 5.5 to 1, 5.0 to 1 and 4.5 to 1, respectively, on July 1, 2003, January 1, 2004, January 1, 2005 and January 1, 2006. The minimum interest coverage ratio increases to 2.0 to 1, 2.25 to 1 and 2.5 to 1, respectively, on July 1, 2003, January 1, 2004 and January 1, 2005. For the twelve months ended June 30, 2001, our interest coverage ratio, fixed charge coverage ratio and debt leverage ratio were 2.34 to 1, 1.28 to 1 and 5.43 to 1, respectively. These restrictions, in combination with our leveraged nature, could limit our ability to effect future acquisitions or financings or otherwise restrict corporate activities. Our failure to comply with the terms and covenants in our indebtedness could lead to a default under the terms of those documents, which would entitle the lenders to accelerate the indebtedness and declare all amounts owed due and payable. Moreover, the instruments governing almost all of our indebtedness, including the notes, contain cross-default provisions so that a default under any of our indebtedness may result in a default under our other indebtedness. If a cross-default occurs, the maturity of almost all of our indebtedness could be accelerated and become immediately due and payable. We may not be able to comply with these restrictions in the future, or in order to comply with these restrictions we may have to forgo opportunities that might otherwise be beneficial to us. OUR EARNINGS HAVE BEEN INSUFFICIENT TO PAY OUR FIXED CHARGES AND PREFERRED STOCK DIVIDENDS. Our earnings were inadequate to cover fixed charges and fixed charges plus preferred stock dividends and related accretion by $295.5 million and $348.6 million, respectively, for the year ended December 31, 2000 and by $196.2 million and $223.5 million, respectively, for the six months ended June 30, 2001. Earnings consist of loss before income taxes, fixed charges and equity in losses of investees, and fixed charges consist of interest on all indebtedness, amortization of deferred financing costs and that portion of rental expenses that management believes to be representative of interest. Although our earnings were affected by substantial non-cash and non-recurring charges (including depreciation and amortization of property and equipment, other intangible assets, excess of purchase price over net assets acquired and deferred financing costs, write-off of deferred financing costs, gain on the sales of businesses and other, net, provision for severance, closures and integration costs, non-cash compensation and non-recurring charges, provision for the impairment of investments and non-cash interest expense on an acquisition obligation and other current liabilities of approximately $419.1 million for the year ended December 31, 2000 and $218.1 million for the six months ended June 30, 2001), we cannot assure you that our cash flow will be sufficient in future periods to permit us to make our required payments on our indebtedness and preferred stock. KOHLBERG KRAVIS ROBERTS & CO. L.P., OR KKR, HAS CONTROL OF OUR COMMON STOCK AND HAS THE POWER TO ELECT ALL THE MEMBERS OF OUR BOARD OF DIRECTORS AND TO APPROVE ANY ACTION REQUIRING STOCKHOLDER APPROVAL. As of July 31, 2001, approximately 59.5% of the shares of our common stock were held by investment partnerships, of which KKR Associates, L.P., a New York limited partnership, and KKR GP 1996 LLC, a Delaware limited liability company, each an affiliate of KKR, are the general partners. KKR Associates and KKR GP 1996 have sole voting and investment power with respect to those shares. In addition, concurrently with this offering, we expect to issue shares of our common stock with an aggregate value of $50 million to KKR 1996 Fund L.P., an affiliate of KKR, to issue to KKR or one of its affiliates shares of preferred stock with an aggregate liquidation preference of $125 million and convertible into shares of our common stock at any time after the first anniversary of the issue date at a conversion price per share of $7 and, in connection with the equity financing to be made available to us by KKR, to grant warrants to KKR or one of its affiliates to purchase up to 7.87 million shares of our common stock. As a result of their majority ownership, our stockholders that are affiliated with KKR and their respective general partners and members, four of whom are also our directors, control us and have the power to elect all of our directors and approve any action requiring stockholder approval, including adopting amendments to our certificate of incorporation and approving mergers or 16 sales of all or substantially all of our assets. Our stockholders that are affiliated with KKR will also be able to prevent change of control events or cause a change of control at any time. The interest of our KKR affiliated stockholders and their affiliates may conflict with the interest of holders of our debt securities, including the new notes. INCREASES IN PAPER AND POSTAGE COSTS MAY HAVE AN ADVERSE IMPACT ON OUR FUTURE FINANCIAL RESULTS. The price of paper is a significant expense relating to our print products and direct mail solicitations. Paper price increases may have an adverse effect on our future results. Postage for product distribution and direct mail solicitations is also a significant expense. We use the U.S. Postal Service for distribution of many of our products and marketing materials. Postage costs increased in January 2001 and can be expected to increase in the future. We may not be able to pass these cost increases through to our customers. WE DEPEND ON SOME IMPORTANT EMPLOYEES, AND THE LOSS OF ANY OF THOSE EMPLOYEES MAY HARM OUR BUSINESS. Our performance is substantially dependent on the performance of our executive officers and other key employees. In addition, our success is dependent on our ability to attract, train, retain and motivate high quality personnel, especially for our management team. Competition for those employees is intense. The loss of the services of any of our executive officers or key employees may harm our business. OUR TRADITIONAL BUSINESS IS SUBJECT TO COMPETITION FROM THE RAPIDLY INCREASING AND COMPETITIVE MARKET FOR NEW MEDIA PRODUCTS AND SERVICES. We derive a substantial portion of our revenues from our traditional businesses. The increased availability of information on the Internet subjects our traditional business to additional competition, which may adversely affect our future operating results. Our strategies for obtaining sustained revenue growth and profitability in the market for new media products and services may not be sufficient to compensate for any losses of revenue in our traditional businesses resulting from competition with new media. Numerous well-established companies and smaller entrepreneurial companies are focusing significant resources on developing and marketing products and services that will compete with our products and services. Competition in the market for Internet products and services may intensify in the future. In addition, our current and potential competitors may have greater financial, technical, operational and marketing resources. Competitive pressures may also force prices for Internet goods and services down and those price reductions may adversely affect us. IF THE UNITED STATES OR OTHER GOVERNMENTS REGULATE THE INTERNET MORE CLOSELY, OUR NEW MEDIA BUSINESSES MAY BE HARMED. Any new law or regulation pertaining to the Internet or the application or interpretation of existing laws could decrease the demand for our Internet businesses, increase the cost of doing business of About.com and our other new media businesses or otherwise have a material adverse effect on our business, results of operations and financial condition. There are and will be an increasing number of laws and regulations pertaining to the Internet. These laws or regulations may relate to liability for information retrieved from or transmitted over the Internet, online content regulation, user privacy, taxation and the quality of products and services. In addition, the applicability to the Internet of existing laws governing intellectual property ownership and infringement, copyright, trademark, trade secret, obscenity, libel, employment, personal privacy and other issues is uncertain and developing. 17 IN ORDER FOR OUR NEW MEDIA BUSINESSES TO SUCCEED, WE MUST RESPOND TO THE RAPID CHANGES IN TECHNOLOGY. The markets for Internet products and services are characterized by: - rapidly changing technology; - evolving industry standards; - frequent new product and service introductions; and - changing customer demands. The success of our new media businesses will depend on our ability to adapt to this rapidly evolving marketplace. We may not be able to adequately adapt its products and services or to acquire new products and services that can compete successfully. In addition, we may not be able to establish and maintain effective distribution channels. THE SUCCESS OF OUR NEW MEDIA BUSINESSES DEPENDS ON USE OF THE INTERNET BY BUSINESSES AND INDIVIDUALS. The success of our new media businesses depends on use of the Internet for advertising, marketing, providing services and conducting business. Our new media businesses may suffer if commercial use of the Internet fails to grow in the future. Commercial use of the Internet is currently at an early stage of development and the future of the Internet is not clear. Internet usage may be inhibited for any of the following reasons: - the Internet infrastructure may not be able to support the demands placed on it, and its performance and reliability may decline as usage grows; - security and authentication concerns with respect to the transmission over the Internet of confidential information, such as credit card numbers, and attempts by unauthorized computer users, so-called hackers, to penetrate online security systems; and - privacy concerns, including those related to the ability of web sites to gather user information without the user's knowledge or consent. In addition, it is not clear how effective advertising on the Internet is in generating business as compared to more traditional types of advertising such as print, television and radio. The adoption of Internet advertising, particularly by those entities that have historically relied upon traditional media for advertising, requires the acceptance of a new way of conducting business, exchanging information and advertising products and services. Advertisers that have traditionally relied upon other advertising media may be reluctant to advertise on the Internet. These businesses may find Internet advertising to be less effective than traditional advertising media for promoting their products and services. WE FACE SPECIFIC SECURITY RISKS REGARDING THE TRANSMISSION OF CONFIDENTIAL INFORMATION. Consumer concerns about the security of transmissions of confidential information over public telecommunications facilities is a significant barrier to electronic commerce and communications. Many factors may cause compromises or breaches of our security systems or other Internet sites used to protect proprietary information, including advances in computer and software functionality or new discoveries in the field of cryptography. A compromise of security on the Internet would have a negative effect on the use of the Internet for commerce and communications and negatively impact our businesses. Security breaches of our activities or the activities of our customers and sponsors involving the storage and transmission of proprietary information, such as credit card numbers, may expose us to a risk of loss or litigation and possible liability. Our security measures designed to prevent security breaches and insurance programs we obtain to address the potential losses or liabilities may not be sufficient to cover any such losses or liabilities. 18 WE MAY HAVE LIABILITY FOR INFORMATION RETRIEVED FROM THE INTERNET. Because materials may be downloaded from the Internet and subsequently distributed to others, we may be subject to claims for defamation, negligence, copyright or trademark infringement, personal injury or other theories based on the nature, content, publication and distribution of those materials. WE MAY NOT BE ABLE TO PROTECT OUR INTELLECTUAL PROPERTY, AND WE MAY BE LIABLE FOR INFRINGING THE INTELLECTUAL PROPERTY OF OTHERS. Third parties may infringe or misappropriate our and our subsidiaries' patents, trademarks or other intellectual property, which could have a material adverse effect on our business, results of operations or financial condition. While we and our subsidiaries enter into confidentiality agreements with our material employees, guides, consultants and strategic partners, and generally control access to and distribution of our proprietary information, the steps we and our subsidiaries have taken to protect our intellectual property may not prevent misappropriation. In addition, we and our subsidiaries do not know whether we will be able to defend our proprietary rights since the validity, enforceability and scope of protection of proprietary rights in Internet-related industries is still evolving. Third parties may assert infringement claims against us or our subsidiaries. From time to time in the ordinary course of business we and our subsidiaries have been, and we expect to continue to be, subject to claims of alleged infringement of the trademarks and other intellectual property rights of third parties. These claims and any resultant litigation, should it occur, could subject us and our subsidiaries to significant liability for damages. In addition, even if we and our subsidiaries prevail, litigation could be time-consuming and expensive to defend and could result in the diversion of our time and attention. Any claims from third parties may also result in limitations on our and our subsidiaries' ability to use the intellectual property subject to these claims unless we are able to enter into agreements with the third parties making these claims. RISK FACTORS RELATING TO THE EXCHANGE OFFER IF YOU FAIL TO TENDER YOUR OLD NOTES IN THE EXCHANGE OFFER, THEN THE LIQUIDITY OF THE MARKET FOR YOUR NOTES MAY BE SUBSTANTIALLY LIMITED. We expect that a substantial portion of the old notes will be tendered and accepted in the exchange offer and exchanged for new notes. When the exchange offer is completed, the amount of old notes will be reduced by the amount of new notes that we will issue. Accordingly, we expect that the liquidity of the market for the old notes after the exchange offer is completed will be substantially limited. IF YOU FAIL TO EXCHANGE YOUR OLD NOTES IN THE EXCHANGE OFFER, YOUR OLD NOTES WILL CONTINUE TO BE SUBJECT TO TRANSFER RESTRICTIONS. If you do not exchange your old notes for new notes in the exchange offer your old notes will continue to be subject to the transfer restrictions outlined in the offering memorandum distributed in connection with the offering of the old notes. In general, the old notes may not be offered or sold unless they are registered or exempt from registration under the Securities Act and applicable state securities laws. Except as required by the registration rights agreements, we do not intend to register resales of the old notes under the Securities Act. 19 RISK FACTORS RELATING TO THE NEW NOTES WE ARE A HOLDING COMPANY AND OUR ABILITY TO MEET INTEREST AND PRINCIPAL PAYMENTS DEPENDS UPON DISTRIBUTIONS FROM OUR SUBSIDIARIES. We are a holding company and conduct all of our operations through our subsidiaries and currently have no significant operating assets other than our investments in our operating subsidiaries. As a result, we must rely on dividends and other advances and transfers of funds from our subsidiaries to meet our debt service and other obligations. The ability of our subsidiaries to pay dividends or make other advances and transfers of funds will depend on their respective operating results and may be restricted by, among other things, the laws of their jurisdiction of organization which limit the amount of funds available for the payment of dividends and agreements of those subsidiaries. Although the indenture will limit the ability of most of those subsidiaries to enter into consensual restrictions on their ability to pay dividends or make other advances and transfers of funds to us, those limitations are subject to a number of significant qualifications and exceptions. Although most of our subsidiaries will guarantee the new notes, some will not, and in any event these guarantees may not be enforceable. See "--A court may be able to void the guarantees of the new notes and require holders of the new notes to return payments received from our subsidiaries." NOT ALL OF OUR SUBSIDIARIES GUARANTEE OUR OBLIGATIONS UNDER THE NEW NOTES, AND THE ASSETS OF THE NON-GUARANTOR SUBSIDIARIES MAY NOT BE AVAILABLE TO MAKE PAYMENTS ON THE NEW NOTES. Our present and future foreign subsidiaries and our partially owned domestic subsidiaries will not be guarantors of the new notes. Our present and future wholly-owned domestic subsidiaries will guarantee the new notes, except domestic subsidiaries that engage only in the business of financing accounts receivable or that may be designated as unrestricted with respect to the indenture. Payments on the new notes are only required to be made by us and the subsidiary guarantors. As a result, no payments are required to be made from assets of subsidiaries that do not guarantee the new notes, unless those assets are transferred by dividend or otherwise to us or a subsidiary guarantor. In the event of a bankruptcy, liquidation or reorganization of any of the non-guarantor subsidiaries, holders of their indebtedness, including their trade creditors, would generally be entitled to payment of their claims from the assets of those subsidiaries before any assets are made available for distribution to us. As a result, the new notes are effectively subordinated to the indebtedness of the non-guarantor subsidiaries. For the year ended December 31, 2000 and for the six months ended June 30, 2001, our non-guarantor subsidiaries had net sales of $62.0 million and $63.2 million, respectively. The non-guarantor subsidiaries historically have had negative EBITDA but could turn profitable in the future. WE MAY NOT BE PERMITTED OR HAVE THE ABILITY TO PURCHASE THE NEW NOTES UPON A CHANGE OF CONTROL AS REQUIRED BY THE INDENTURE. Our ability to repurchase new notes in connection with a change of control may be limited by a number of factors. The occurrence of certain events that constitute a change of control would constitute a default under our bank credit facilities and would require us to make an offer to purchase our other outstanding notes. In that event, we must repay our borrowings under our bank credit facilities and repurchase any new notes and any of our other outstanding notes that are tendered for repurchase. We may also incur future indebtedness that may require us to offer to repurchase that indebtedness upon a change of control. We may not have sufficient funds to repay or repurchase all that indebtedness. Our failure to repay outstanding indebtedness under our bank credit facilities, make a change of control offer when required or to purchase tendered notes when tendered would constitute 20 an event of default under the indenture related to the new notes and the indentures governing our other outstanding notes. In addition, certain events that may constitute a change of control under our bank credit facilities and cause us to be required to repay our borrowings under the bank credit facilities may not constitute a change of control under the indenture related to the new notes. In that case, we may not have sufficient funds to repurchase that indebtedness, which would cause us to be in default under the bank credit facilities, the new notes and all our outstanding notes. Our and our subsidiaries' future indebtedness may also contain prohibitions of certain events that would constitute a change of control or require indebtedness to be repurchased upon a change of control. A COURT MAY BE ABLE TO VOID THE GUARANTEES OF THE NEW NOTES AND REQUIRE HOLDERS OF THE NEW NOTES TO RETURN PAYMENTS RECEIVED FROM OUR SUBSIDIARIES. Under federal bankruptcy law and comparable provisions of state fraudulent transfer laws, a guarantee could be voided, or claims in respect of a guarantee could be subordinated to all other debts of the guarantor if, among other things, the subsidiary guarantor, at the time that the subsidiary guarantor issued the guarantee: - issued the guarantee to delay, hinder or defraud present or future creditors; or - received less than reasonably equivalent value or fair consideration for issuing the guarantee and at the time it issued the guarantee: - was insolvent or rendered insolvent by reason of issuing the guarantee and the application of the proceeds of the guarantee; - was engaged or about to engage in a business or transaction for which the guarantor's remaining unencumbered assets constituted unreasonably small capital to carry on its business; - intended to incur, or believed that it would incur, debts beyond its ability to pay the debts as they mature; or - it was a defendant in an action for money damages, or had a judgment for money damages docketed against it if, in either case, after final judgment, the judgment is unsatisfied. In addition, any payment by the guarantor under its guarantee could be voided and required to be returned to the guarantor or to a fund for the benefit of the creditors of the guarantor or the guarantee could be subordinated to other debt of the subsidiary guarantor. The measures of insolvency for purposes of fraudulent transfer laws vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, a person would be considered insolvent if, at the time it incurred the debt: - the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or - it could not pay its debts as they become due. We cannot be sure as to the standard that a court would use to determine whether or not the guarantor subsidiaries were solvent at the relevant time, or, regardless of the standard that the court uses, that the issuance of the guarantee of the notes would not be voided or the guarantee of the notes would not be subordinated to that subsidiary guarantor's other debt. If such a case were to occur, any guarantee of the new notes incurred by one of the subsidiary guarantors could also be subject to the claim that, since the guarantee was incurred for our benefit, and 21 only indirectly for the benefit of the subsidiary guarantor, the obligations of the applicable guarantor were incurred for less than fair consideration. A court could therefore void the obligations under the guarantees or subordinate the guarantees to the applicable guarantor's other debt or take action detrimental to holders of the notes. FORWARD-LOOKING STATEMENTS This prospectus contains or incorporates by reference forward-looking statements under the captions "Summary--Our Growth Strategy," "Risk Factors" and elsewhere. In some cases these statements are identified by our use of forward-looking words or phrases such as "believe," "expect," "anticipate," "intend," "estimate," "continue," "may increase," "may fluctuate" and similar expressions or by our use of future or conditional verbs such as "will," "should," "would" and "could." Forward-looking statements may also use different words and phrases. We have based the forward-looking statements on our current assumptions, expectations and projections about future events. Although the expectations reflected in these forward-looking statements represent management's best judgment at the time they were made, we can give no assurance that these expectations will prove to be correct. These forward-looking statements involve risks and uncertainties, including: - risks relating to our ability to successfully integrate our businesses following the merger with About.com, our acquisition of EMAP USA and our continuing strategy of expanding our business through acquisitions of and investments in businesses, technologies, products and services from other businesses; - the U.S. economy and its impact on advertising revenues; and - other risks and uncertainties, including those listed under the caption "Risk Factors." For more information see "Risk Factors." We caution prospective purchasers not to place undue reliance on these forward-looking statements. USE OF PROCEEDS There will be no cash proceeds to us from the exchange offer. 22 THE EXCHANGE OFFER PURPOSE AND EFFECT OF THE EXCHANGE OFFER We have entered into a registration rights agreement with the initial purchasers of the old notes in which we and our subsidiaries agreed, under some circumstances, to file a registration statement relating to an offer to exchange the old notes for new notes. We and some of our subsidiaries also agreed to use our reasonable best efforts to cause the offer to be consummated within 230 days following the original issue of the old notes. The new notes will have terms substantially identical to the old notes, except that the new notes will not contain terms with respect to transfer restrictions, registration rights and liquidated damages for failure to observe some obligations in the registration rights agreement. The old notes were issued on May 8, 2001. Under the circumstances set forth below, we will use our reasonable best efforts to cause the SEC to declare effective a shelf registration statement with respect to the resale of the old notes and keep the statement effective for up to two years after the effective date of the shelf registration statement. These circumstances include if: (a) we are not required to file the exchange offer registration statement or permitted to consummate the exchange offer because the exchange offer is not permitted by applicable law or SEC policy; or (b) any holder of old notes notifies us prior to the 20th day following consummation of the exchange offer that: (1) it is prohibited by law or SEC policy from participating in the exchange offer; or (2) it may not resell the new notes acquired by it in the exchange offer to the public without delivering a prospectus and the prospectus contained in the exchange offer registration statement is not available for such resales; or (3) it is a broker-dealer and owns old notes acquired directly from us or an affiliate of ours. If we fail to comply with some obligations under the registration rights agreement, we will be required to pay liquidated damages to each holder of old notes. See "Description of New Notes--Exchange Offer; Registration Rights." Each holder of old notes that wishes to exchange old notes for transferable new notes in the exchange offer will be required to make the following representations: - any new notes will be acquired in the ordinary course of its business; - the holder has no arrangement with any person to participate in the distribution of the new notes; - the holder is not an "affiliate," as defined in Rule 405 of the Securities Act, of ours or if it is an affiliate, that it will comply with applicable registration and prospectus delivery requirements of the Securities Act; - if the holder is not a broker-dealer, that it is not engaged in, and does not intend to engage in, the distribution of the new notes; and - if the holder is a broker-dealer, that it will receive new notes for its own account in exchange for old notes that were acquired as a result of market-making activities or other trading activities and that it will be required to acknowledge that it will deliver a prospectus in connection with any resale of the new notes. See "Plan of Distribution." 23 RESALE OF EXCHANGE NOTES Based on interpretations of the SEC staff outlined in no action letters issued to unrelated third parties, we believe that new notes issued under the exchange offer in exchange for old notes may be offered for resale, resold and otherwise transferred by any new note holder without compliance with the registration and prospectus delivery provisions of the Securities Act, if: - the holder is not an "affiliate" of ours within the meaning of Rule 405 under the Securities Act; - the new notes are acquired in the ordinary course of the holder's business; and - the holder does not intend to participate in the distribution of the new notes. Any holder who tenders in the exchange offer with the intention of participating in any manner in a distribution of the new notes: - cannot rely on the position of the staff of the SEC enunciated in EXXON CAPITAL HOLDINGS CORPORATION or similar interpretive letters; and - must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction. This prospectus may be used for an offer to resell, for the resale or for other retransfer of new notes only as specifically set forth in this prospectus. With regard to broker-dealers, only broker-dealers that acquired the old notes as a result of market-making activities or other trading activities may participate in the exchange offer. Each broker-dealer that receives new notes for its own account in exchange for old notes, where the old notes were acquired by the broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of the new notes. Please read the section captioned "Plan of Distribution" for more details regarding the transfer of new notes. TERMS OF THE EXCHANGE OFFER Upon the terms and subject to the conditions included in this prospectus and in the accompanying letter of transmittal, we will accept for exchange any old notes properly tendered and not withdrawn prior to the expiration date. We will issue $1,000 principal amount of new notes in exchange for each $1,000 principal amount of old notes surrendered under the exchange offer. Old notes may be tendered only in integral multiples of $1,000. The form and terms of the new notes will be substantially identical to the form and terms of the old notes except the new notes will be registered under the Securities Act, will not bear legends restricting their transfer and will not provide for any liquidated damages upon our failure to fulfill our obligations under the registration rights agreement to file, and cause to be effective, a registration statement. The new notes will evidence the same debt as old notes. The new notes will be issued under and entitled to the benefits of the same indenture that authorized the issuance of the old notes. The exchange offer is not conditioned upon any minimum aggregate principal amount of old notes being tendered for exchange. As of the date of this prospectus, $500.0 million aggregate principal amount of the old notes are outstanding. This prospectus and a letter of transmittal are being sent to all registered holders of old notes. There will be no fixed record date for determining registered holders of old notes entitled to participate in the exchange offer. We intend to conduct the exchange offer in accordance with the provisions of the registration rights agreement, the applicable requirements of the Securities Act and the Exchange Act and the rules and regulations of the SEC. Old notes that are not tendered for exchange in the exchange offer 24 will remain outstanding and continue to accrue interest and will be entitled to the rights and benefits the holders have under the indenture relating to the old notes, except for any rights under the registration rights agreement that by their terms terminate upon the consummation of the exchange offer. We will be deemed to have accepted for exchange properly tendered old notes when we have given oral or written notice of the acceptance to the exchange agent. The exchange agent will act as agent for the tendering holders for the purposes of receiving the new notes from us and delivering new notes to the holders. Under the terms of the registration rights agreement, we reserve the right to amend or terminate the exchange offer, and not to accept for exchange any old notes not previously accepted for exchange, upon the occurrence of any of the conditions specified below under the caption "--Material Conditions to the Exchange Offer." Holders who tender old notes in the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of old notes. We will pay all charges and expenses, other than certain applicable taxes described below, in connection with the exchange offer. It is important that you read the section labeled "--Fees and Expenses" below for more details regarding fees and expenses incurred in the exchange offer. EXPIRATION DATE; EXTENSIONS; AMENDMENTS The exchange offer will expire at 5:00 p.m., New York City time on , 2001, unless in our sole discretion we extend it. In order to extend the exchange offer, we will notify the exchange agent orally or in writing of any extension. We will notify the registered holders of old notes of the extension no later than 9:00 a.m., New York City time, on the business day after the previously scheduled expiration date. We reserve the right, in our sole discretion: - to delay accepting for exchange any old notes; - to extend the exchange offer or to terminate the exchange offer and to refuse to accept old notes not previously accepted if any of the conditions set forth below under "--Material Conditions to the Exchange Offer" have not been satisfied, by giving oral or written notice of such delay, extension or termination to the exchange agent; or - under the terms of the registration rights agreement, to amend the terms of the exchange offer in any manner. Any delay in acceptance, extension, termination, or amendment will be followed as promptly as practicable by oral or written notice to the registered holders of old notes. If we amend the exchange offer in a manner that we determine constitutes a material change, we will promptly disclose the amendment in a manner reasonably calculated to inform the holder of old notes of the amendment. Without limiting the manner in which we may choose to make public announcements of any delay in acceptance, extension, termination or amendment of the exchange offer, we will have no obligation to publish, advertise, or otherwise communicate any public announcement, other than by making a timely release to a financial news service. MATERIAL CONDITIONS TO THE EXCHANGE OFFER Despite any other term of the exchange offer, we will not be required to accept for exchange, or exchange any new notes for, any old notes, and we may terminate the exchange offer as provided in this prospectus before accepting any old notes for exchange if in our reasonable judgment: 25 - the new notes to be received will not be tradable by the holder, without restriction under the Securities Act, the Exchange Act and without material restrictions under the blue sky or securities laws of substantially all of the states of the United States; - the exchange offer, or the making of any exchange by a holder of old notes, would violate applicable law or any applicable interpretation of the staff of the SEC; or - any action or proceeding has been instituted or threatened in any court or by or before any governmental agency with respect to the exchange offer that, in our judgment, would reasonably be expected to impair our ability to proceed with the exchange offer. In addition, we will not be obligated to accept for exchange the old notes of any holder that has not made to us: - the representations described under "Purpose and Effect of the Exchange Offer," "--Procedures for Tendering" and "Plan of Distribution"; and - other representations as may be reasonably necessary under applicable SEC rules, regulations or interpretations to make available to it an appropriate form for registration of the new notes under the Securities Act. We expressly reserve the right, at any time or at various times, to extend the period of time during which the exchange offer is open. Consequently, we may delay acceptance of any old notes by giving oral or written notice of the extension to their holders. During any extensions, all old notes previously tendered will remain subject to the exchange offer, and we may accept them for exchange. We will return any old notes that we do not accept for exchange for any reason without expense to their tendering holder as promptly as practicable after the expiration or termination of the exchange offer. We expressly reserve the right to amend or terminate the exchange offer, and to reject for exchange any old notes not previously accepted for exchange, upon the occurrence of any of the conditions of the exchange offer specified above. We will give oral or written notice of any extension, amendment, non-acceptance, or termination to the holders of the old notes as promptly as practicable. Those conditions are for our sole benefit and we may assert them regardless of the circumstances that may give rise to them or waive them in whole or in part at any or at various times in our sole discretion. If we fail at any time to exercise any of these rights, this failure will not constitute a waiver of this right. Each right will be deemed an ongoing right that we may assert at any time or at various times. In addition, we will not accept for exchange any old notes tendered, and will not issue new notes in exchange for any old notes, if at the time any stop order will be threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indenture under the Trust Indenture Act. PROCEDURES FOR TENDERING Only a holder of old notes may tender the old notes in the exchange offer. To tender in the exchange offer, a holder must: - complete, sign and date the accompanying letter of transmittal, or a facsimile of the letter of transmittal; have the signature on the letter of transmittal guaranteed if the letter of transmittal so requires; and mail or deliver the letter of transmittal or facsimile to the exchange agent prior to the expiration date; or - comply with the DTC's Automated Tender Offer Program procedures described below. In addition, either: 26 - the exchange agent must receive the old notes along with the accompanying letter of transmittal; or - the exchange agent must receive, prior to the expiration date, a timely confirmation of book-entry transfer of the old notes into the exchange agent's account at the DTC according to the procedures for book-entry transfer described below or a properly transmitted agent's message; or - the holder must comply with the guaranteed delivery procedures described below. To be tendered effectively, the exchange agent must receive any physical delivery of a letter of transmittal and other required documents at the address set forth below under "--Exchange Agent" prior to the expiration date. The tender by a holder of old notes that is not withdrawn prior to the expiration date will constitute an agreement between the holder of old notes and us in accordance with the terms and subject to the conditions set forth in this prospectus and in the accompanying letter of transmittal. The method of delivery of old notes, the letter of transmittal and all other required documents to the exchange agent is at the holder's election and risk. Rather than mail these items, we recommend that holders use an overnight or hand delivery service. In all cases, holders should allow sufficient time to assure delivery to the exchange agent before the expiration date. Holders should not send the letter of transmittal or old notes to us. Holders may request their respective brokers, dealers, commercial banks, trust companies or other nominees to effect the above transactions for them. Any beneficial owner whose old notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the registered holder promptly and instruct it to tender on the owners' behalf. If the beneficial owner wishes to tender on its own behalf, it must, prior to completing and executing the accompanying letter of transmittal and delivering its old notes either: - make appropriate arrangements to register ownership of the old notes in such owner's name; or - obtain a properly completed bond power from the registered holder of old notes. The transfer of registered ownership may take considerable time and may not be completed prior to the expiration date. Signatures on a letter of transmittal or a notice of withdrawal described below must be guaranteed by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or another "eligible institution" within the meaning of Rule 17Ad-15 under the Exchange Act, unless the old notes are tendered: - by a registered holder who has not completed the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" on the accompanying letter of transmittal; or - for the account of an eligible institution. If the accompanying letter of transmittal is signed by a person other than the registered holder of any old notes listed on the old notes, the old notes must be endorsed or accompanied by a properly completed bond power. The bond power must be signed by the registered holder as the registered holder's name appears on the old notes and an eligible institution must guarantee the signature on the bond power. If the accompanying letter of transmittal or any old notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, these persons should so indicate when signing. Unless waived by us, they should also submit evidence satisfactory to us of their authority to deliver the accompanying letter of transmittal. 27 The exchange agent and the DTC have confirmed that any financial institution that is a participant in the DTC's system may use the DTC's Automated Tender Offer program to tender. Participants in the program may, instead of physically completing and signing the accompanying letter of transmittal and delivering it to the exchange agent, transmit their acceptance of the exchange offer electronically. They may do so by causing the DTC to transfer the old notes to the exchange agent in accordance with its procedures for transfer. The DTC will then send an agent's message to the exchange agent. The term "agent's message" means a message transmitted by the DTC, received by the exchange agent and forming part of the book-entry confirmation, to the effect that: - the DTC has received an express acknowledgment from a participant in its Automated Tender Offer Program that is tendering old notes that are the subject of the book-entry confirmation; - the participant has received and agrees to be bound by the terms of the accompanying letter of transmittal, or, in the case of an agent's message relating to guaranteed delivery, that the participant has received and agrees to be bound by the applicable notice of guaranteed delivery; and - the agreement may be enforced against that participant. We will determine in our sole discretion all outstanding questions as to the validity, form, eligibility, including time or receipt, acceptance of tendered old notes and withdrawal of tendered old notes. Our determination will be final and binding. We reserve the absolute right to reject any old notes not properly tendered or any old notes the acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to particular old notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the accompanying letter of transmittal, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of old notes must be cured within the time as we will determine. Although we intend to notify holders of defects or irregularities with respect to tenders of old notes, neither we, the exchange agent nor any other person will incur any liability for failure to give any notification. Tenders of old notes will not be deemed made until any defects or irregularities have been cured or waived. Any old notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned to the exchange agent without cost to the tendering holder, unless otherwise provided in the letter of transmittal, as soon as practicable following the expiration date. In all cases, we will issue new notes for old notes that we have accepted for exchange under the exchange offer only after the exchange agent timely receives: - old notes or a timely book-entry confirmation of the old notes into the exchange agent's account at the DTC; and - a properly completed and duly executed letter of transmittal and all other required documents or a properly transmitted agent's message. By signing the accompanying letter of transmittal or authorizing the transmission of the agent's message, each tendering holder of old notes will represent or be deemed to have represented to us that, among other things: - any new notes that the holder receives will be acquired in the ordinary course of its business; - the holder has no arrangement or understanding with any person or entity to participate in the distribution of the new notes; - if the holder is not a broker-dealer, that is not engaged in and does not intend to engage in the distribution of the new notes; 28 - if the holder is a broker-dealer that will receive new notes for its own account in exchange for old notes that were acquired as a result of market-making activities, that it will deliver a prospectus, as required by law, in connection with any resale of any new notes; and - the holder is not an "affiliate," as defined in Rule 405 of the Securities Act, of ours or, if the holder is an affiliate, it will comply with any applicable registration and prospectus delivery requirements of the Securities Act. BOOK-ENTRY TRANSFER The exchange agent will make a request to establish an account with respect to the old notes at the DTC for purposes of the exchange offer promptly after the date of this prospectus. Any financial institution participating in the DTC's system may make book-entry delivery of old notes by causing the DTC to transfer the old notes into the exchange agent's account at the DTC in accordance with the DTC's procedures for transfer. Holders of old notes who are unable to deliver confirmation of the book-entry tender of their old notes into the exchange agent's account at the DTC or all other documents required by the letter of transmittal to the exchange agent on or prior to the expiration date must tender their old notes according to the guaranteed delivery procedures described below. GUARANTEED DELIVERY PROCEDURES Holders wishing to tender their old notes but whose old notes are not immediately available or who cannot deliver their old notes, the accompanying letter of transmittal or any other required documents to the exchange agent or comply with the applicable procedures under the DTC's Automated Tender Offer Program prior to the expiration date may tender if: - the tender is made through an eligible institution; - prior to the expiration date, the exchange agent receives from the eligible institution either a properly completed and duly executed notice of guaranteed delivery, by facsimile transmission, mail or hand delivery, or a properly transmitted agent's message and notice of guaranteed delivery: - setting forth the name and address of the holder, the registered number(s) of the old notes and the principal amount of old notes tendered; - stating that the tender is being made thereby; and - guaranteeing that, within three New York Stock Exchange trading days after the expiration date, the accompanying letter of transmittal, or facsimile of the letter of transmittal, together with the old notes or a book-entry confirmation, and any other documents required by the accompanying letter of transmittal will be deposited by the eligible institution with the exchange agent; and - the exchange agent receives the properly completed and executed letter of transmittal, or facsimile of the executed letter of transmittal, as well as all tendered old notes in proper form for transfer or a book-entry confirmation, and all other documents required by the accompanying letter of transmittal, within three New York Stock Exchange trading days after the expiration date. Upon request to the exchange agent, a notice of guaranteed delivery will be sent to holders who wish to tender their old notes according to the guaranteed delivery procedures set forth above. WITHDRAWAL OF TENDERS Except as otherwise provided in this prospectus, holders of old notes may withdraw their tenders at any time prior to the expiration date. 29 For a withdrawal to the effective: - the exchange agent must receive a written notice of withdrawal, which notice may be by telegram, telex, facsimile transmission or letter of withdrawal at one of the addresses set forth below under "--Exchange Agent"; or - holders must comply with the appropriate procedures of the DTC's Automated Tender Offer Program system. Any notice of withdrawal must: - specify the name of the person who tendered the old notes to be withdrawn; - identify the old notes to be withdrawn, including the principal amount of the old notes; and - where certificates for old notes have been transmitted, specify the name in which the old notes were registered, if different from that of the withdrawing holder. If certificates for old notes have been delivered or otherwise identified to the exchange agent, then, prior to the release of the certificates, the withdrawing holder must also submit: - the serial numbers of the particular certificates to be withdrawn; and - a signed notice of withdrawal with signatures guaranteed by an eligible institution unless the holder is an eligible institution. If old notes have been tendered pursuant to the procedure for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at the DTC to be credited with the withdrawn old notes and otherwise comply with the procedures of that facility. We will determine all questions as to the validity, form and eligibility, including time of receipt, of the notices, and our determination will be final and binding on all parties. We will deem any old notes so withdrawn not to have validly tendered for exchange for purposes of the exchange offer. Any old notes that have been tendered for exchange but that are not exchanged for any reason will be returned to their holder without cost to the holder, or, in the case of old notes tendered by book-entry transfer into the exchange agent's account at the DTC according to the procedures described above, the old notes will be credited to an account maintained with the DTC for old notes, as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. Properly withdrawn, old notes may be retendered by following one of the procedures described under "--Procedures for Tendering" above at any time on or prior to the expiration date. 30 EXCHANGE AGENT The Bank of New York has been appointed as exchange agent for the exchange offer. You should direct questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal and requests for the notice of guaranteed delivery to the exchange agent as follows: FOR DELIVERY BY REGISTERED OR CERTIFIED MAIL: FOR OVERNIGHT DELIVERY ONLY: The Bank of New York The Bank of New York 101 Barclay Street 101 Barclay Street New York, New York 10286 New York, New York 10286 Attention: Reorganization Section/7E Attention: Reorganization Section/7E BY HAND: BY FACSIMILE TRANSACTION The Bank of New York (for eligible institutions only): 101 Barclay Street New York, New York 10286 Attention: Reorganization Section/7E Confirm facsimile by telephone only:
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY OF THE LETTER OF TRANSMITTAL. FEES AND EXPENSES We will bear the expenses of soliciting tenders. The principal solicitation is being made by mail; however, we may make additional solicitations by telephone or in person by our officers and regular employees and those of our affiliates. We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to broker-dealers or others soliciting acceptance of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and reimburse it for its related reasonable out-of-pocket expenses. We will pay the cash expenses to be incurred in connection with the exchange offer. The expenses are estimated in the aggregate to be approximately $500,000. They include: - SEC registration fees; - fees and expenses of the exchange agent and trustee; - accounting and legal fees and printing costs; and - related fees and expenses. TRANSFER TAXES We will pay all transfer taxes, if any, applicable to the exchange of old notes under the exchange offer. The tendering holder, however, will be required to pay any transfer taxes, whether imposed on the registered holder or any other person, if: - certificates representing old notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be issued in the name of, any person other than the registered holder of old notes tendered; - tendered old notes are registered in the name of any person other than the person signing the letter of transmittal; or 31 - a transfer tax is imposed for any reason other than the exchange of old notes under the exchange offer. If satisfactory evidence of payment of the taxes is not submitted with the letter of transmittal, the amount of the transfer taxes will be billed to that tendering holder. Holders who tender their old notes for exchange will not be required to pay any transfer taxes. However, holders who instruct us to register new notes in the name of, or request that old notes not tendered or not accepted in the exchange offer be returned to, a person other than the registered tendering holder will be required to pay any applicable transfer tax. CONSEQUENCES OF FAILURE TO EXCHANGE Holders of old notes who do not exchange their old notes for new notes under the exchange offer will remain subject to the restrictions on transfer of the old notes: - as set forth in the legend printed on the old notes as a consequence of the issuance of the old notes under the exemption from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws; and - otherwise as set forth in the prospectus distributed in connection with the private offering of the old notes. In general, you may not offer or sell the old notes unless they are registered under the Securities Act, or if the offer or sale is exempt from registration under the Securities Act and applicable state securities laws. Except as required by the registration rights agreement, we do not intend to register resales of the old notes under the Securities Act. Based on interpretations of the SEC staff, new notes issued under the exchange offer may be offered for resale, resold or otherwise transferred by their holders (other than any holder that is our "affiliate" within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that the holders acquired the new notes in the ordinary course of the holders' business and the holders have no arrangement or understanding with respect to the distribution of the new notes to be acquired in the exchange offer. Any holder who tenders in the exchange offer for the purpose of participating in a distribution of the new notes: - cannot rely on the applicable interpretations of the SEC; and - must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction. ACCOUNTING TREATMENT We will record the new notes in our accounting records at the same carrying value as the old notes, which is the aggregate principal amount net of issuance discount, as reflected in our accounting records on the date of exchange. Accordingly, we will not recognize any gain or loss for accounting purposes in connection with the exchange offer. The expenses of the exchange offer will be deferred and amortized over the term of the related notes. OTHER Participation in the exchange offer is voluntary, and you should carefully consider whether to accept. You are urged to consult your financial and tax advisors in making your own decision on what action to take. We may in the future seek to acquire untendered old notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise. We have no present plans to acquire any old notes that are not tendered in the exchange offer or to file a registration statement to permit resales of any untendered old notes. 32 DESCRIPTION OF INDEBTEDNESS AND PREFERRED STOCK BANK CREDIT FACILITIES On June 20, 2001, we completed a refinancing of our existing bank credit facilities pursuant to new bank credit facilities with The Chase Manhattan Bank, Bank of America, N.A, The Bank of New York and The Bank of Nova Scotia, as agents. Borrowings under the bank credit facilities are guaranteed by each of our wholly owned domestic restricted subsidiaries. The guarantees are full, unconditional and joint and several. Certain of our subsidiaries, which primarily represent Internet assets and businesses, including About.com, as well as our foreign and securitization subsidiaries, are not guarantors of the bank credit facilities. The borrowings under the bank credit facilities may be used for general corporate and working capital purposes as well as to finance certain future acquisitions. The bank credit facilities consist of the following: - a $475.0 million revolving loan facility, of which $33.0 million was outstanding at June 30, 2001; - a term loan A, of which $100.0 million was outstanding at June 30, 2001; and - a term loan B, of which $425.0 million was outstanding at June 30, 2001. As of June 30, 2001, we had $558.0 million borrowings outstanding, $22.0 million letters of credit outstanding and unused bank commitments of approximately $420.4 million under our bank credit facilities. We intend to draw on our revolving loan facility in an amount of $270 million to partially finance our acquisition of EMAP USA. With the exception of the term loan B, the amounts borrowed bear interest, at our option, at either the higher of the base rate plus an applicable margin ranging from 0.125% to 1.50% or the Eurodollar Rate plus an applicable margin ranging from 1.125% to 2.50%. Additionally, until we issue financial statements for the period ending December 31, 2001, the applicable margin for the amounts borrowed will be a minimum of 0.75% for the base rate option and 1.75% for the Eurodollar rate option. The term loan B bears interest at the base rate plus 1.75% or LIBOR plus 2.75%. At June 30, 2001, the weighted average variable interest rate on all outstanding borrowings under the bank credit facilities was 6.46%. Under the bank credit facilities, we have agreed to pay commitment fees at a per annum rate of either 0.375% or 0.50%, depending on our debt to EBITDA ratio as defined in our new credit agreement, on the daily average aggregate unutilized commitment under the revolving loan commitment. We also have agreed to pay certain fees with respect to the issuance of letters of credit and an annual administration fee. The commitments under the revolving loan commitment are subject to mandatory reductions semiannually on June 30 and December 31 commencing December 31, 2004 with the final reduction on June 30, 2008. The aggregate mandatory reductions of the revolving loan commitments under the bank credit facility are $23.75 million in 2004, $47.5 million in 2005, $71.25 million in 2006, $142.5 million in 2007 and a final reduction of $190.0 million in 2008. To the extent that the total revolving credit loans outstanding exceed the reduced commitment amount, these loans must be paid down to an amount equal to or less than the reduced commitment amount. However, if the total revolving credit loans outstanding do not exceed the reduced commitment amount, then there is no requirement to pay down any of the revolving credit loans. Aggregate term loan payments under the bank credit facility are $2.125 million in 2001, $4.25 million in 2002 and 2003, $16.75 million in 2004, $29.25 million in 2005, 2006 and 2007, $16.75 million in 2008 and $393.125 million in 2009. The bank credit facilities, among other things, limit our ability to change the nature of our businesses, incur indebtedness, create liens, sell assets, engage in mergers, consolidations or transactions 33 with affiliates, make investments in or loans to certain subsidiaries, issue guarantees and make certain restricted payments including dividend payments on our common stock in excess of $75.0 million in any given year. Under our most restrictive debt covenants, we must maintain a minimum interest coverage ratio of 1.80 to 1 and a minimum fixed charge coverage ratio of 1.05 to 1. Our maximum allowable debt leverage ratio is 6.0 to 1. The maximum leverage ratio decreases to 5.75 to 1, 5.5 to 1, 5.0 to 1 and 4.5 to 1, respectively, on July 1, 2003, January 1, 2004, January 1, 2005 and January 1, 2006. The minimum interest coverage ratio increases to 2.0 to 1, 2.25 to 1 and 2.5 to 1, respectively, on July 1, 2003, January 1, 2004 and January 1, 2005. The bank credit facilities required us to create a new intermediate holding company to own, directly or indirectly, our restricted subsidiaries. We pledged the stock of this new intermediate holding company to secure our obligations under the bank credit facilities and our outstanding notes. As a result of the refinancing of our existing bank credit facilities, we wrote-off the remaining balance of deferred financing costs originally recorded. 10 1/4% SENIOR NOTES DUE 2004 The 10 1/4% senior notes are our senior obligations in an aggregate principal amount of $100 million. They mature on June 1, 2004, with no sinking fund requirements, and have interest payable semiannually in June and December at an annual rate of 10 1/4%. The 10 1/4% senior notes are fully, unconditionally and jointly and severally guaranteed by each of our domestic restricted subsidiaries. They are currently redeemable at 101.65% with annual reductions to 100% in 2002 plus accrued and unpaid interest. If we become subject to a change of control, each holder of the notes will have the right to require us to purchase any or all of the notes at a purchase price equal to 101% of the aggregate principal amount of the notes plus accrued and unpaid interest, if any, to the date of purchase. 8 1/2% SENIOR NOTES DUE 2006 The 8 1/2% senior notes are our senior obligations in an aggregate principal amount of $300 million. They mature on February 1, 2006, with no sinking fund requirements, and have interest payable semiannually in February and August at an annual rate of 8 1/2%. The 8 1/2% senior notes are fully, unconditionally and jointly and severally guaranteed by each of our domestic restricted subsidiaries. Beginning in 2001 and thereafter, the 8 1/2% senior notes are redeemable in whole or in part, at our option, at prices ranging from 104.25% with annual reductions to 100% in 2003 plus accrued and unpaid interest. If we become subject to a change of control, each holder of the notes will have the right to require us to purchase any or all of the note at a purchase price equal to 101% of the aggregate principal amount of the notes plus accrued and unpaid interest, if any, to the date of purchase. 7 5/8% SENIOR NOTES DUE 2008 The 7 5/8% senior notes are our senior obligations in an aggregate principal amount of $250 million. They mature on April 1, 2008, with no sinking fund requirement, and interest is payable semiannually in April and October at the annual rate of 7 5/8% commencing October 1, 1998. They are fully, unconditionally and jointly and severally guaranteed by each of our domestic restricted subsidiaries. The 7 5/8% senior notes may not be redeemed prior to April 1, 2003 other than in connection with a change of control. Beginning on April 1, 2003 and thereafter, the 7 5/8% senior notes are redeemable in whole or in part, at our option, at prices ranging from 103.813% with annual reductions to 100% in 2006 plus accrued and unpaid interest. 34 If we become subject to a change of control, each holder of the notes will have the right to require us to purchase any or all of the note at a purchase price equal to 101% of the aggregate principal amount of the notes plus accrued and unpaid interest, if any, to the date of purchase. $10.00 SERIES D EXCHANGEABLE PREFERRED STOCK In 1996, we completed an offering of 2,000,000 shares of $0.01 par value, Series D preferred stock at $100 per share. Annual dividends of $10 per share on the Series D preferred stock are cumulative and payable quarterly in cash. The liquidation and redemption value is $200 million. On or after February 1, 2001, the Series D preferred stock may be redeemed in whole or in part, at our option, at specified redemption prices plus accrued and unpaid dividends. We are required to redeem the Series D preferred stock on February 1, 2008 at a redemption price equal to the liquidation preference of $100 per share, plus accrued and unpaid dividends. The Series D preferred stock is exchangeable in whole but not in part, at our option, on any scheduled dividend payment date, into 10% Class D subordinated exchange debentures due 2008. If we become subject to a change of control, each holder of a 10% Class D subordinated exchange debenture will have the right to require us to purchase any or all of the 10% Class D subordinated exchange debentures of that holder at a purchase price equal to 101% of the aggregate principal amount of the debentures plus accrued and unpaid interest, if any, to the date of purchase. This right is subject to the repayment of obligations under our bank credit facility, all our outstanding senior notes and the commencement of an offer to purchase and the purchase of all exchange debentures $9.20 SERIES F EXCHANGEABLE PREFERRED STOCK 1,250,000 shares of $9.20 Series F exchangeable preferred stock, $0.01 par value, offered at $100 per share, are outstanding. Annual dividends of $9.20 per share on the Series F exchangeable preferred stock were cumulative and payable quarterly in cash. We are required to redeem the Series F exchangeable preferred stock on November 1, 2009 at a redemption price equal to the liquidation preference of $100 per share, plus accrued and unpaid dividends. Series F exchangeable preferred stock is exchangeable into 9.20% Class F subordinated exchange debentures due 2009, in whole but not in part, at our option on any scheduled dividend payment date. As of December 31, 2000, the liquidation and redemption value of the Series F exchangeable preferred stock was $125 million. If we become subject to a change of control, each holder of a 9.20% Class F subordinated exchange debenture will have the right to require us to purchase any or all of the 9.20% Class F subordinated exchange debentures of that holder at a purchase price equal to 101% of the aggregate principal amount of the debentures plus accrued and unpaid interest, if any, to the date of purchase. This right is subject to the repayment of obligations under our bank credit facility, all our outstanding senior notes and the commencement of an offer to purchase and the purchase of all exchange debentures. $8.625 SERIES H EXCHANGEABLE PREFERRED STOCK 2,500,000 shares of $8.625 Series H exchangeable preferred stock, par value $0.01, offered at $99.40 per share, are outstanding. Annual dividends of $8.625 per share on the Series H exchangeable preferred stock are cumulative and payable quarterly in cash. On or after April 1, 2003, the Series H exchangeable preferred stock may be redeemed in whole or in part, at our option, at prices ranging from 104.313% with annual reductions to 100% in 2006, plus accrued and unpaid dividends. We are required to redeem the Series H exchangeable preferred stock on April 1, 2010 at a redemption price equal to the liquidation preference of $100 per share, plus accrued and unpaid dividends. The liquidation and redemption value of the Series H exchangeable preferred stock is $250 million. The 35 Series H exchangeable preferred stock is exchangeable, in whole but not in part, at our option, on any scheduled dividend payment date into 8.625% Class H subordinated exchange debentures due 2010. If we become subject to a change of control, each holder of an 8.625% Class H subordinated exchange debenture will have the right to require us to purchase any or all of the 8.625% Class H subordinated exchange debentures of that holder at a purchase price equal to 101% of the aggregate principal amount of the debentures plus accrued and unpaid interest, if any, to the date of purchase. This right is subject to the repayment of obligations under our bank credit facility, all our outstanding senior notes and the commencement of an offer to purchase and the purchase of all exchange debentures. SERIES J CONVERTIBLE PREFERRED STOCK To partially finance our acquisition of EMAP USA, we intend to issue to KKR or one of its affiliates shares of Series J convertible preferred stock, par value $0.01 per share, with an aggregate liquidation preference of $125 million. We expect annual dividends at a rate of 12.5% on the Series J convertible preferred stock to be cumulative and payable quarterly in kind. We expect the preferred stock to be perpetual and to rank PARI PASSU with our existing series of outstanding preferred stock. We expect to have the option to redeem any or all of the shares of preferred stock at any time for cash at 100% of the liquidation preference of each share being redeemed. We also expect that the preferred stock will be convertible into shares of our common stock at any time after the first anniversary of the issue date at a conversion price of $7 per share, subject to adjustments. We also expect to have the option to cause at any time the preferred stock to be exchanged into subordinated debt of ours. Our ability to redeem or exchange the convertible preferred stock into debt will be subject to the approval of a majority of our independent directors. 36 DESCRIPTION OF NEW NOTES THE FOLLOWING IS A SUMMARY DESCRIPTION OF THE NEW NOTES, WHICH WE REFER TO IN THIS SECTION AS THE NOTES. GENERAL PRIMEDIA will issue the notes under an indenture (the "Indenture") among PRIMEDIA, the Guarantors and The Bank of New York, as trustee (the "Trustee"). The terms of the notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended. The notes are subject to all those terms, and holders of the notes are referred to the Indenture and the Trust Indenture Act for a statement of those terms. You can find the definitions of certain terms used in the following description under "--Certain Definitions." The notes: - are general obligations of PRIMEDIA; - rank PARI PASSU in right of payment with all existing and future senior indebtedness of PRIMEDIA, including PRIMEDIA's obligations under the Credit Facilities and the Outstanding Notes; - are senior in right of payment to any future subordinated indebtedness of PRIMEDIA; - are fully and unconditionally guaranteed on a senior basis by each domestic, wholly-owned Restricted Subsidiary of PRIMEDIA, other than any Securitization Subsidiary; and - are secured, together with all of PRIMEDIA's other senior indebtedness by a pledge of the stock of PRIMEDIA Companies Inc., an intermediate holding company owned directly by PRIMEDIA. PRIMEDIA Companies Inc. owns all of PRIMEDIA's operating subsidiaries. As of June 30, 2001, PRIMEDIA had approximately $1,698.9 million of senior indebtedness, consisting of $558.0 million of borrowings under the Credit Facilities, $100.0 million of PRIMEDIA's 10 1/4% senior notes due 2004, $299.3 million of PRIMEDIA's 8 1/2% senior notes due 2006, $248.9 million in aggregate principal amount of PRIMEDIA's 7 5/8% senior notes due 2008 and $492.7 million of the old notes. In addition, as a result of the concurrent transactions, PRIMEDIA expects to draw upon its revolving credit facility in an amount of $270 million. The notes will rank PARI PASSU in right of payment with all this indebtedness. As of June 30, 2001, PRIMEDIA had no subordinated indebtedness outstanding. Subject to the financial covenants in the Credit Facilities, PRIMEDIA has the option at any time to exchange its outstanding series of preferred stock into subordinated indebtedness in an aggregate principal amount of $562.1 million. The Guarantors have guaranteed PRIMEDIA's obligations under the Credit Facilities and the Outstanding Notes. As of June 30, 2001, the Guarantors had on a combined basis approximately $28.9 million of additional senior indebtedness, all of which is secured by a pledge of the stock of PRIMEDIA Companies Inc. The guarantees under the notes will rank PARI PASSU in right of payment with all of the guarantees under the Credit Facilities and the Outstanding Notes. PRINCIPAL, MATURITY, AND INTEREST The notes initially are limited in aggregate principal amount to $500.0 million and will mature on May 15, 2011. The notes will be issued in registered form, without coupons, in denominations of $1,000 and integral multiples of $1,000. Additional notes may be issued from time to time after this offering, subject to the provisions of the Indenture described below under the caption "--Certain Covenants--Incurrence of Indebtedness." The new notes offered under this prospectus, the old notes and any additional notes subsequently issued would be treated as a single class for all purposes under the Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase. Unless the context otherwise requires, for all purposes of the Indenture and this "Description of New 37 Notes," references to the notes include any additional notes actually issued. Interest on the notes will accrue at the rate of 8 7/8% per annum and will be payable semiannually on May 15 and November 15, commencing on November 15, 2001, to holders of record on the immediately preceding May 1 and November 1. Interest on the notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the original date of issuance. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months. We may be obligated to pay liquidated damages with respect to the old notes in certain circumstances under the Registration Rights Agreement. See "--Registration Rights; Liquidated Damages." The notes will be payable both as to principal and interest at the office or agency of PRIMEDIA maintained for that purpose within or without the City and State of New York or, at the option of PRIMEDIA, payment of interest may be made by check mailed to the holders of the notes at their respective addresses set forth in the register of holders of notes. Until otherwise designated by PRIMEDIA, its office or agency in New York will be the office of the Trustee maintained for that purpose. OPTIONAL REDEMPTION At any time before May 15, 2004, PRIMEDIA may on any one or more occasions redeem up to 35% of the aggregate principal amount of notes (which includes additional notes, if any) originally issued under the Indenture at a redemption price of 108.875% of the principal amount of those notes, plus accrued and unpaid interest to the redemption date, with the net cash proceeds of one or more Equity Offerings; PROVIDED that: (1) at least 65% of the aggregate principal amount of notes (which includes additional notes, if any) originally issued remains outstanding immediately after the occurrence of each of those redemptions (excluding notes held by PRIMEDIA and its Subsidiaries); and (2) any redemption must occur within 60 days of the date of closing of that Equity Offering. Except as provided in the preceding paragraph and other than in connection with a Change of Control, as described below, PRIMEDIA may not redeem the notes before May 15, 2006. On or after May 15, 2006, PRIMEDIA may, at its option, redeem the notes, in whole or in part, upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of the principal amount) set forth below, plus accrued and unpaid interest on the notes being redeemed to the applicable redemption date, if redeemed during the 12-month period beginning May 15 of the years indicated below:
YEAR PERCENTAGE - ---- ---------- 2006........................................................ 104.438% 2007........................................................ 102.958% 2008........................................................ 101.479% 2009 and thereafter......................................... 100.000%
If the optional redemption date is on or after an interest record date and on or before the related interest payment date, the accrued and unpaid interest, if any, will be paid to the person or entity in whose name the note is registered at the close of business on that record date, and no additional interest will be payable to holders whose notes will be subject to redemption by PRIMEDIA. The Credit Facilities restrict the optional redemption or the prepayment of the notes, and the indentures governing the Outstanding Notes make that redemption or prepayment a Restricted Payment (as defined in the indentures governing the Outstanding Notes). 38 SINKING FUND There will be no sinking fund payments for the notes. CHANGE OF CONTROL HOLDERS' RIGHT TO REQUIRE REPURCHASE UPON CHANGE OF CONTROL If a Change of Control occurs, each holder will have the right to require PRIMEDIA to repurchase all or any part (equal to $1,000 or any integral multiple of $1,000) of that holder's notes pursuant to the offer described below (the "Change of Control Offer") at a purchase price equal to 101% of the aggregate principal amount plus accrued and unpaid interest, if any, to the date of purchase (the "Change of Control Payment"). The redemption prices for optional redemptions in the event of a Change of Control described in the next subsection would in all cases be equal to or greater than this repurchase price. Because of the highly leveraged nature of PRIMEDIA, there can be no assurance that PRIMEDIA will have sufficient funds to repurchase the notes in the event of a Change of Control. The right of the holders of the notes to require PRIMEDIA to repurchase the notes in the event of a Change of Control cannot be waived by the Trustee, PRIMEDIA or PRIMEDIA's board of directors. Within 40 days following any Change of Control, PRIMEDIA will mail a notice to each holder stating: (1) that the Change of Control Offer is being made pursuant to the CHANGE OF CONTROL covenant and that all notes tendered will be accepted for payment; (2) the purchase price and the purchase date, which will be no earlier than 30 days nor later than 60 days from the date that notice is mailed (the "Change of Control Payment Date"); (3) that any notes not tendered will continue to accrue interest; (4) that, unless PRIMEDIA defaults in the payment of the Change of Control Payment, all notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest after the Change of Control Payment Date; (5) that holders electing to have any notes purchased pursuant to a Change of Control Offer will be required to surrender the notes, with the form entitled "Option of Holder to Elect Purchase" on the reverse of each note completed, to the paying agent at the address specified in the notice before the close of business on the Business Day preceding the Change of Control Payment Date; (6) that holders will be entitled to withdraw their election if the paying agent receives, not later than the close of business on the third Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the holder, the principal amount of the notes delivered for purchase and a statement that that holder is withdrawing his election to have those notes purchased; and (7) that holders whose notes are being purchased only in part will be issued new notes equal in principal amount to the unpurchased portion of the notes surrendered. On the Change of Control Payment Date, PRIMEDIA will, to the extent lawful: (1) accept for payment notes or portions of notes tendered pursuant to the Change of Control Offer; (2) deposit with the paying agent an amount equal to the Change of Control Payment in respect of all notes or portions of notes so tendered; and 39 (3) deliver or cause to be delivered to the Trustee the notes so accepted together with an officers' certificate stating the notes or portions of notes that were tendered to PRIMEDIA. The paying agent will promptly mail to each holder of notes so accepted payment in an amount equal to the purchase price for those notes, and the Trustee will promptly authenticate and mail to that holder a note equal in principal amount to any unpurchased portion of the notes surrendered; PROVIDED that each of those notes will be in a principal amount of $1,000 or integral multiples of $1,000. PRIMEDIA will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. Indebtedness under the Credit Facilities will automatically accelerate upon the earlier of (i) 30 days from the Change of Control and the Change of Control Payment Date. If PRIMEDIA has insufficient funds with which to repay the indebtedness under the Credit Facilities and to repurchase the notes and any other senior indebtedness that is required to be repurchased upon a Change of Control, including the Outstanding Notes, the holders of notes will have a claim on the funds of PRIMEDIA equal to that of the lenders under the Credit Facilities and of the holders of any such other senior indebtedness, including the holders of the Outstanding Notes. The provisions described above that require PRIMEDIA to make a Change of Control Offer following a Change of Control will be applicable whether or not any other provisions of the Indenture are applicable to that Change of Control. Except as described above with respect to a Change of Control, the Indenture does not contain provisions that permit the holders of the notes to require that PRIMEDIA repurchase or redeem the notes in the event of a takeover, recapitalization or similar transaction. PRIMEDIA will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements included in the Indenture applicable to a Change of Control Offer made by PRIMEDIA and purchases all notes validly tendered and not withdrawn under that Change of Control Offer. OPTIONAL REDEMPTION UPON CHANGE OF CONTROL In addition to the rights set forth under "Optional Redemption," PRIMEDIA may, at its option, redeem the notes, in whole or in part, at any time within 160 days after a Change of Control upon not less than 30 nor more than 60 days' prior notice to each holder of notes to be redeemed, at a redemption price equal to the sum of (i) the then outstanding principal amount of the notes being redeemed plus (ii) accrued and unpaid interest, if any, to the redemption date plus (iii) the Applicable Premium. The following definitions are used to determine the Applicable Premium: "Applicable Premium" with respect to the notes will be calculated with respect to the date of redemption and will equal the greater of (i) 1.0% of the then outstanding principal amount of the notes and (ii) the excess of (A) the present value of the required interest and principal payments due on the notes, computed using a discount rate equal to the Treasury Rate plus the Applicable Spread, over (B) the then outstanding principal amount of the notes. "Applicable Spread," for purposes of the Indenture, is defined as one half of one percent. "Treasury Rate," for purposes of the Indenture, is defined as the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled by and published in the most recent Federal Reserve Statistical Release H.15 (519) which has become publicly available at least two Business Days prior to the date fixed for prepayment (or, if that Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal 40 to the then remaining Average Life of the notes; PROVIDED, that if the Average Life of the notes is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Treasury Rate will be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which those yields are given, except that if the Average Life of the notes is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used. The redemption prices in an optional redemption upon a Change of Control will in all cases be equal to or higher than the price applicable to a repurchase upon a Change of Control required by a holder. If PRIMEDIA were to effect an optional Change of Control redemption before the Change of Control Payment Date, holders that had previously tendered notes to PRIMEDIA for repurchase could withdraw those tenders before the Change of Control Payment Date so as to participate in the optional redemption. However, PRIMEDIA would have no obligation to announce an optional Change of Control redemption before the closing of the mandatory Change of Control Offer. PRIMEDIA will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations promulgated under that act to the extent those laws and regulations are applicable in connection with the repurchase of the notes triggered by a Change of Control. SELECTION AND NOTICE If less than all of the notes are to be redeemed at any time, the Trustee will select notes for redemption as follows: (1) if the notes are listed, in compliance with the requirements of the principal national securities exchange on which the notes are listed; or (2) if the notes are not so listed, on a pro rata basis, by lot or by such method as the Trustee will deem fair and appropriate. No notes of $1,000 or less will be redeemed in part. Notice of redemption will be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each holder of notes to be redeemed at its registered address. If any note is to be redeemed in part only, the notice of redemption that relates to that note will state the portion of the principal amount of that note to be redeemed. A note in principal amount equal to the unredeemed portion of that note will be issued in the name of the holder of that note upon cancellation of the original notes. On and after the redemption date, interest ceases to accrue on notes or portions of them called for redemption. CERTAIN COVENANTS LIMITATIONS ON RESTRICTED PAYMENTS PRIMEDIA will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make any distribution on account of PRIMEDIA or any of its Restricted Subsidiaries' Capital Stock or other Equity Interests, other than (A) dividends or distributions payable in Equity Interests, other than Redeemable Stock, of PRIMEDIA or that Restricted Subsidiary, (B) dividends or distributions payable to PRIMEDIA or any of its Restricted Subsidiaries or (C) dividends or distributions by a Partially Owned Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by that Partially Owned Restricted Subsidiary, PRIMEDIA or a Restricted Subsidiary of PRIMEDIA receives at least its pro rata share of 41 that dividend or distribution in accordance with its Equity Interests in that class or series of securities; (ii) (A) voluntarily purchase, redeem or otherwise acquire or retire for value any preferred stock of PRIMEDIA or any of its Restricted Subsidiaries which, by its terms, is exchangeable for any Indebtedness ("Exchangeable Preferred Stock") that is PARI PASSU with or subordinated in right of payment to the notes or (B) purchase, redeem or otherwise acquire or retire for value any Equity Interests (other than Exchangeable Preferred Stock) of PRIMEDIA or any of its Restricted Subsidiaries, other than any Equity Interests purchased from PRIMEDIA or any of its Restricted Subsidiaries; (iii) voluntarily purchase, repay, redeem, defease (including, but not limited to, covenant or legal defeasance) or otherwise acquire or retire for value any Indebtedness that is subordinated in right of payment to the notes (other than in connection with the refunding or refinancing of that Indebtedness), except a payment of interest or principal at the stated maturity of that Indebtedness or in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of that payment, and other than Indebtedness between and among PRIMEDIA and its Restricted Subsidiaries; or (iv) make Investments in Restricted Payment Unrestricted Subsidiaries (the foregoing actions set forth in clauses (i) through (iv) being referred to as "Restricted Payments"), if, at the time of that Restricted Payment: (a) a Default or Event of Default shall have occurred and be continuing or shall occur as a consequence thereof; or (b) PRIMEDIA could not incur at least $1.00 of additional Indebtedness under the first paragraph of the INCURRENCE OF INDEBTEDNESS covenant (without giving effect to clauses (i) through (xvi) of the second paragraph of that covenant), which calculation will be made on a pro forma basis deducting from Adjusted Consolidated Net Income the amount of any Investment PRIMEDIA has made in an Unrestricted Subsidiary during the relevant period and any Investment PRIMEDIA intends to make in an Unrestricted Subsidiary, to the extent that that Investment is made with amounts included in Adjusted Consolidated Net Income as a result of Transfers described in clause (c)(x) below or clause (c)(y) of the INVESTMENTS IN UNRESTRICTED SUBSIDIARIES covenant; or (c) that Restricted Payment, together with the aggregate of all other Restricted Payments made after May 13, 1992, exceeds the sum of the following: (w) 50% of the amount of the Adjusted Consolidated Net Income (other than amounts included in the next succeeding clause (c)(x)) of PRIMEDIA for the period (taken as one accounting period) from the beginning of the first quarter commencing immediately after May 13, 1992 through the end of PRIMEDIA's fiscal quarter ending immediately prior to the time of that Restricted Payment (or, if Adjusted Consolidated Net Income for that period is a deficit, 100% of that deficit); PLUS (x) 100% of the amount of all Transfers from a Restricted Payment Unrestricted Subsidiary up to the aggregate amount of the Investment (after taking into account all prior Transfers from that Restricted Payment Unrestricted Subsidiary) in that Restricted Payment Unrestricted Subsidiary (valued in each case as provided in the definition of "Investment"); PLUS (y) in the event of a designation of a Restricted Payment Unrestricted Subsidiary as a Restricted Subsidiary, 100% of an amount equal to the greater of (A) the fair market value of that Subsidiary as determined by the board of directors of PRIMEDIA in 42 good faith (or, if that fair market value may exceed $25.0 million, as determined in writing by an independent investment banking firm of nationally recognized standing) at the time of the redesignation of that Restricted Payment Unrestricted Subsidiary as a Restricted Subsidiary and (B) the Consolidated Net Cash Flow generated by that Subsidiary for the period (taken as one accounting period) from the beginning of its first fiscal quarter commencing immediately after the date of its designation as a Restricted Payment Unrestricted Subsidiary through that Subsidiary's fiscal quarter ending immediately prior to its designation as a Restricted Subsidiary (or if that Consolidated Net Cash Flow for that period is a deficit, 100% of that deficit); PLUS (z) 100% of the aggregate net cash proceeds received by PRIMEDIA from (i) the issuance or sale of Equity Interests of PRIMEDIA (other than Equity Interests issued or sold to a Restricted Subsidiary of PRIMEDIA and other than Redeemable Stock) or (ii) the sale of the stock of an Unrestricted Subsidiary or the sale of all or substantially all of the assets of an Unrestricted Subsidiary to the extent that a liquidating dividend is paid to PRIMEDIA or any Restricted Subsidiary from the proceeds of that sale; PROVIDED, HOWEVER, that for purposes of making Investments in Unrestricted Subsidiaries, if the amount determined in accordance with clauses (w) or (y) above is a deficit, that deficit will be excluded from the computation of this clause (c); PROVIDED, FURTHER, that all those amounts applied under this clause (c) will not be available for application under clause (c) of the INVESTMENTS IN UNRESTRICTED SUBSIDIARIES covenant. As of June 30, 2001, the amount available for Restricted Payments under clause (c) was approximately $702.2 million. The foregoing provisions will not prohibit: (i) the payment of any dividend within 60 days after the date of declaration of that dividend, if at that date of declaration the payment would have complied with the provisions of the Indenture; (ii) (A) the retirement of any shares of PRIMEDIA's Capital Stock (the "Retired Capital Stock") either (1) in exchange for or (2) out of the net proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary of PRIMEDIA) of other shares of, PRIMEDIA's Capital Stock (the "Refunding Capital Stock") other than any Redeemable Stock, and (B) if immediately prior to the retirement of Retired Capital Stock the declaration and payment of dividends on the Retired Capital Stock was permitted under either clause (iii) or (vii) of this paragraph, the declaration and payment of dividends on the Refunding Capital Stock in an aggregate amount per year no greater than the aggregate amount of dividends per year that was declarable and payable on the Retired Capital Stock immediately prior to the retirement; (iii) the declaration and payment of dividends to the holders of Series D Preferred Stock, Series F Preferred Stock and Series H Preferred Stock; (iv) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of PRIMEDIA issued to present and former members of management of PRIMEDIA and its Subsidiaries under subscription and option agreements in effect on the date of the Indenture or under any stock option plan of About.com, Inc. existing on the date of the Indenture and Equity Interests of PRIMEDIA issued to future members of management under subscription agreements executed after the date of the Indenture, containing provisions for the repurchase of those Equity Interests upon death, disability or termination of employment of those persons which are substantially identical to those contained in the subscription agreements in effect on the date of the Indenture; 43 (v) the declaration and payment of dividends on PRIMEDIA's common stock of up to $25.0 million per annum plus 6% per annum of the net proceeds received at any time by PRIMEDIA from (a) the issue or sale of its common stock or (b)(1) the issuance of securities convertible into its common stock (other than any such convertible securities issued to (A) members of PRIMEDIA's management or its board of directors and (B) any Subsidiary of PRIMEDIA) and (2) the conversion of those convertible securities into PRIMEDIA's common stock, in both cases at the time of the conversion into common stock; (vi) the repurchase, redemption or other acquisition or retirement for value of Indebtedness of PRIMEDIA or any Guarantor which is subordinated in right of payment to the notes either (A) in exchange for or (B) with the proceeds of the issuance of, Equity Interests (other than Redeemable Stock) of PRIMEDIA; (vii) the declaration and payment of dividends to holders of any class or series of PRIMEDIA's preferred stock issued after the date of the Indenture (including, without limitation, the declaration and payment of dividends on Refunding Capital Stock in excess of the dividends declarable and payable on Refunding Capital Stock under clause (ii) of this paragraph); PROVIDED that at the time of the issuance PRIMEDIA's Fixed Charge Coverage Ratio, after giving effect to the issuance, would be greater than 1.25 to 1; (viii) the redemption, repurchase or other acquisition or retirement for value of any Indebtedness of PRIMEDIA or any Guarantor which is subordinated in right of payment to the notes (A) with the proceeds of, or in exchange for, Indebtedness incurred pursuant to clause (vii) of the second paragraph of the INCURRENCE OF INDEBTEDNESS covenant or (B) if, after giving effect to that redemption, repurchase or retirement, PRIMEDIA could incur at least $1.00 of Indebtedness under the first paragraph of the INCURRENCE OF INDEBTEDNESS covenant (without giving effect to clauses (i) through (xvi) of the second paragraph of that covenant); (ix) the retirement of the Series D Preferred Stock, Series F Preferred Stock and Series H Preferred Stock in exchange for the issuance of the Class D Subordinated Debentures, Class F Subordinated Debentures and Class H Subordinated Debentures, respectively, under the respective certificates of designations relating to those series of preferred stock; (x) the purchase of Class D Subordinated Debentures, Class F Subordinated Debentures and Class H Subordinated Debentures in accordance with the CHANGE OF CONTROL covenants in the Class D Debenture Indenture, Class F Debenture Indenture and Class H Debenture Indenture, respectively; (xi) Investments in Unrestricted Subsidiaries having an aggregate fair market value, when taken together with all other Investments made under this clause (xi) that are at that time outstanding, not to exceed $50.0 million at the time of that Investment (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value); (xii) the repurchase, retirement or other acquisition for value of Equity Interests of PRIMEDIA which are not held by KKR or any of its Affiliates; PROVIDED, that (A) the aggregate Restricted Payments made under this clause (xii) in any calendar year will not exceed $75.0 million and (B) immediately after giving effect to each Restricted Payment made under this clause (xii) on a pro forma basis, PRIMEDIA could incur at least $1.00 of additional Indebtedness under the first paragraph of the INCURRENCE OF INDEBTEDNESS covenant (without giving effect to clauses (i) through (xvi) of the second paragraph of that covenant); (xiii) other Restricted Payments in an aggregate amount not to exceed $50.0 million; and 44 (xiv) any Investment made in a Securitization Subsidiary in connection with a Qualified Securitization Transaction, which Investment consists of the transfer of Receivables and Other Assets. PROVIDED that in determining the aggregate amount expended for Restricted Payments in accordance with paragraph (c) above: (1) no amounts expended under clauses (ii)(A)(1), (vi)(A), (viii), (ix) and (xiv) of this paragraph will be included; (2) 100% of the amounts expended under clauses (ii)(A)(2), (iv), (v), (vi)(B), (vii), (x), (xi), (xii) and (xiii) of this paragraph will be included; (3) 50% of the amounts expended under clause (iii) of this paragraph will be included; (4) amounts expended under clause (ii)(B) of this paragraph will be included to the extent previously included for the Retired Capital Stock; and (5) 100% of the amounts expended under clause (i) to the extent not included under subclauses (1) through (4) of this proviso will be included. For the purposes of determining compliance with this covenant, in the event that a Restricted Payment meets the criteria of more than one of the categories of permitted Restricted Payments described in clauses (i) through (xiv) above or is entitled to be incurred under the first paragraph of this covenant (including clauses (a), (b) and (c) of this covenant), PRIMEDIA will, in its sole discretion, classify that Restricted Payment in any manner that complies with the covenants described above and that Restricted Payment will be treated as having been made under only one of those clauses or under the first paragraph of this covenant. Not later than the date of making any Restricted Payment, PRIMEDIA will deliver to the Trustee an officer's certificate stating that the Restricted Payment is permitted and setting forth the basis upon which the calculations required by the RESTRICTED PAYMENTS covenant were computed, which calculations may be based on PRIMEDIA's latest available internal financial statements. INVESTMENTS IN UNRESTRICTED SUBSIDIARIES PRIMEDIA will not, and will not permit any Restricted Subsidiary to, directly or indirectly, make any Investment in any Unrestricted Subsidiary, if at the time of that Investment: (a) a Default or Event of Default shall have occurred and be continuing or shall occur as a consequence thereof; or (b) immediately before that Investment, PRIMEDIA would not be permitted to incur at least $1.00 of Indebtedness under the first paragraph of the INCURRENCE OF INDEBTEDNESS covenant (without giving effect to clauses (i) through (xvi) of the second paragraph of that covenant), which calculation will be made on a pro forma basis deducting from Adjusted Consolidated Net Income the amount of any Investment PRIMEDIA has made in an Unrestricted Subsidiary during the relevant period and any Investment PRIMEDIA intends to make in an Unrestricted Subsidiary, to the extent that that Investment is made with amounts included in Adjusted Consolidated Net Income as a result of the Transfers described in clause (c)(x) of the LIMITATIONS ON RESTRICTED PAYMENTS covenant or clause (c)(y) below; or (c) that Investment, together with the aggregate of all other Investments in Unrestricted Subsidiaries made after May 13, 1992, exceeds: (w) the aggregate Consolidated Net Cash Flow of PRIMEDIA for the period (taken as one accounting period) from the beginning of the first quarter immediately after May 13, 1992, to the end of PRIMEDIA's most recently ended fiscal quarter at the time of that Investment; PLUS 45 (x) 100% of the aggregate net cash proceeds received by PRIMEDIA from (i) the issue or sale of Equity Interests of PRIMEDIA (other than Equity Interests issued or sold to a Restricted Subsidiary of PRIMEDIA and other than Redeemable Stock) or (ii) the sale of the stock of an Unrestricted Subsidiary or the sale of all or substantially all of the assets of an Unrestricted Subsidiary to the extent that a liquidating dividend is paid to PRIMEDIA or any Restricted Subsidiary from the proceeds of that sale; PLUS (y) 100% of the amount of all Transfers from a Net Cash Flow Unrestricted Subsidiary up to the aggregate Investment (after taking into account all prior Transfers from that Net Cash Flow Unrestricted Subsidiary) in that Net Cash Flow Unrestricted Subsidiary resulting from those payments or transfers of assets (valued in each case as provided in the definition of "Investment"); PLUS (z) in the event of a designation of a Net Cash Flow Unrestricted Subsidiary as a Restricted Subsidiary, 100% of an amount equal to the greater of (A) the fair market value of that Subsidiary as determined by the board of directors of PRIMEDIA in good faith (or, if the fair market value may exceed $25.0 million, as determined in writing by an independent investment banking firm of nationally recognized standing) at the time of the redesignation of that Net Cash Flow Unrestricted Subsidiary as a Restricted Subsidiary and (B) the Consolidated Net Cash Flow generated by that Subsidiary for the period (taken as one accounting period) from the beginning of its first fiscal quarter commencing immediately after the date of its designation as a Net Cash Flow Unrestricted Subsidiary through that Subsidiary's fiscal quarter ending immediately prior to its designation as a Restricted Subsidiary (or if the Consolidated Net Cash Flow for that period is a deficit, 100% of that deficit); PROVIDED that all those amounts applied under this clause (c) will not be available for application under clause (c) of the RESTRICTED PAYMENTS covenant. As of June 30, 2001, the amount available for Investments under clause (c) was approximately $1.1 billion. The foregoing limitations will not apply to: (i) an Investment to the extent that it is to capitalize a Restricted Payment Unrestricted Subsidiary permitted under the LIMITATIONS ON RESTRICTED PAYMENTS covenant; (ii) an Investment to the extent that it is funded by the issuance of Equity Interests of PRIMEDIA to the extent net proceeds are not used to fund an optional redemption of notes; (iii) any Investment made in a Securitization Subsidiary in connection with a Qualified Securitization Transaction, which Investment consists of the transfer of Receivables and Other Assets; and (iv) Investments in Unrestricted Subsidiaries having an aggregate fair market value, when taken together with all other Investments made under this clause (iv) that are at that time outstanding, not to exceed $50.0 million at the time of that Investment (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value). For the purposes of determining compliance with this covenant, in the event that the making of an Investment in an Unrestricted Subsidiary meets the criteria of more than one of the categories of permitted Investments in Unrestricted Subsidiaries described in clauses (i) through (iv) above or is entitled to be incurred under the first paragraph of this covenant (including clauses (a), (b) and (c) of the first paragraph of this covenant), PRIMEDIA will, in its sole discretion, classify that Investment in an Unrestricted Subsidiary in any manner that complies with the covenants described above and 46 Investment in an Unrestricted Subsidiary will be treated as having been made under only one of those clauses or under the first paragraph of this covenant. Each Net Cash Flow Unrestricted Subsidiary of PRIMEDIA will at all times remain (1) wholly owned, directly or indirectly, by PRIMEDIA or a wholly owned Restricted Subsidiary of PRIMEDIA or (2) a Subsidiary of PRIMEDIA so long as there is no encumbrance or restriction on the ability of that Subsidiary to pay dividends or make any other distributions on its Capital Stock, or pay any Indebtedness or other obligations, to PRIMEDIA or any Restricted Subsidiary of PRIMEDIA. Not later than the date of making any Investment described above, PRIMEDIA will deliver to the Trustee an officer's certificate stating that the Investment is permitted (including, without limitation, whether the Investment is capitalizing a Net Cash Flow Unrestricted Subsidiary or a Restricted Payment Unrestricted Subsidiary) and setting forth the basis upon which the calculations required by the INVESTMENTS IN UNRESTRICTED SUBSIDIARIES covenant were computed, which calculations may be based on PRIMEDIA's latest available internal financial statements. DIVIDENDS AND PAYMENT RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES PRIMEDIA will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any Restricted Subsidiary to: (i) pay dividends or make any other distributions on its Capital Stock, or any other interest or participation in, or measured by, its profits, owned by PRIMEDIA or any of its Restricted Subsidiaries, or pay any Indebtedness owed to PRIMEDIA or any of its Restricted Subsidiaries; (ii) make loans or advances to PRIMEDIA or any of its Restricted Subsidiaries; or (iii) transfer any of its properties or assets to PRIMEDIA or any of its Restricted Subsidiaries. However, the preceding restrictions will not apply to encumbrances or restrictions existing by reason of: (A) the terms, as in effect on the date of the Indenture, of the Existing Indebtedness; (B) the terms, as in effect on the date of the Indenture, of the Bank Credit Facilities and the Outstanding Notes and the indentures governing the Outstanding Notes; (C) the terms of Indebtedness of PRIMEDIA incurred in accordance with the INCURRENCE OF INDEBTEDNESS covenant; PROVIDED that the terms of the Indebtedness constitute no greater encumbrance or restriction on the ability of any Restricted Subsidiary to pay dividends or make distributions, make loans or advances or transfer properties or assets than is permitted by this covenant; (D) the terms of the Indenture and the notes; (E) applicable law; (F) customary non-assignment provisions entered into in the ordinary course of business and consistent with past practices; (G) the terms of purchase money obligations for property acquired in the ordinary course of business, but only to the extent that those purchase money obligations restrict or prohibit the transfer of the property so acquired; (H) the terms of the Class D Subordinated Debentures, the Class D Debenture Indenture, the Class F Subordinated Debentures, the Class F Debenture Indenture, the Class H Subordinated Debentures and the Class H Debenture Indenture; 47 (I) any encumbrance or restriction with respect to a Subsidiary of PRIMEDIA that is not a Subsidiary of PRIMEDIA on the date of the Indenture, which encumbrance or restriction is in existence at the time that person becomes a Subsidiary of PRIMEDIA or is created on the date it becomes a Subsidiary of PRIMEDIA; (J) any encumbrance or restriction with respect to a Subsidiary of PRIMEDIA imposed under an agreement which has been entered into for the sale or disposition of all or substantially all the Capital Stock or assets of that Subsidiary; (K) customary provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business; (L) customary provisions contained in leases and other agreements entered into in the ordinary course of business; (M) the terms of any Indebtedness for borrowed money of any Partially Owned Restricted Subsidiary; (N) in the case of clause (iii) of the first paragraph of this covenant, any encumbrance or restriction contained in mortgages, pledges or other security agreements permitted under the Indenture securing Indebtedness of PRIMEDIA or a Restricted Subsidiary of PRIMEDIA to the extent that encumbrance or restriction restricts the transfer of the property subject to those mortgages, pledges or other security agreements; (O) any contractual requirements incurred with respect to Qualified Securitization Transactions relating exclusively to a Securitization Subsidiary that, in the good faith determination of the board of directors of PRIMEDIA, are customary in Qualified Securitization Transactions; or (P) any encumbrance or restriction existing under any agreement which refinances or replaces the agreements described in clauses (A), (B), (D), (H), (K), (L) and (M), PROVIDED that the terms and conditions of any of those encumbrances or restrictions contained in any of those agreements constitute no greater encumbrance or restriction on the ability of any Restricted Subsidiary to pay dividends or make distributions, make loans or advances or transfer properties or assets than those under or pursuant to the agreement evidencing the Indebtedness or obligations refinanced. Nothing contained in this covenant will prevent PRIMEDIA or a Restricted Subsidiary from entering into any agreement permitting or providing for the incurrence of Liens otherwise permitted by the LIMITATION ON LIENS covenant. INCURRENCE OF INDEBTEDNESS PRIMEDIA will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness unless PRIMEDIA's Debt to Consolidated Cash Flow Ratio for its four full fiscal quarters ending immediately prior to the date that additional Indebtedness is created, incurred, issued, assumed or guaranteed would have been no greater than 6.0 to 1, and that Indebtedness is not senior in right of payment to the notes; PROVIDED that the calculation will give effect to (A) the incurrence of any Indebtedness (after giving effect to the application of the proceeds of that Indebtedness) in connection with the simultaneous acquisition of any person, business, property or assets and (B) the Consolidated Cash Flow generated by that acquired person, business, property or assets, giving effect in each case to the incurrence of Indebtedness, application of proceeds and Consolidated Cash Flow as if that acquisition had occurred at the beginning of that four quarter period. For purposes of the previous paragraph, cash flow generated by any acquired person, business, property or asset will be determined on the same basis as the definition of Consolidated Cash Flow and 48 will be based on the actual earnings before interest, taxes, depreciation and amortization of that acquired person, business, property or asset during the immediately preceding four full fiscal quarters PLUS (y) (i) the savings in cost of goods sold that would have resulted during that period from the effect of using PRIMEDIA's actual costs for comparable goods and services during that period and (ii) other savings in cost of goods sold or eliminations of selling, general and administrative expenses as determined by PRIMEDIA in good faith in its consideration of those acquisitions and consistent with PRIMEDIA's experiences in acquisitions of similar businesses MINUS (z) the incremental expenses that would be included in cost of goods sold and selling, general and administrative expenses that would have been incurred by PRIMEDIA in the operation of that acquired person, business, property or assets during that period. The foregoing limitations will not apply to the incurrence of: (i) Indebtedness under the Credit Facilities (PROVIDED that the principal amount of that Indebtedness will not exceed $1.3 billion, less the amount of all repayments made in respect of term loans and of all permanent commitment reductions with respect to revolving loans (except to the extent, and only to the extent, that any required repayments of principal in connection with that commitment reduction are not made) made under the Credit Facilities (excluding those repayments and commitment reductions which occur substantially contemporaneously with a refinancing or a refunding thereof)), plus any amounts then available under clause (vi) of this paragraph; (ii) Existing Indebtedness; (iii) Indebtedness represented by the Outstanding Notes and the notes (but not any additional notes); (iv) Indebtedness represented by the Class D Subordinated Debentures issued in exchange for all the outstanding Series D Preferred Stock, the Class F Subordinated Debentures issued in exchange for all the outstanding Series F Preferred Stock and the Class H Subordinated Debentures issued in exchange for all the outstanding Series H Preferred Stock; (v) Capital Lease Obligations in an aggregate principal amount which, when aggregated with the principal amount of all other Capital Lease Obligations then outstanding and incurred pursuant to this clause (v) and including all Refinancing Indebtedness (as defined below) incurred to refund, refinance or replace any other Indebtedness incurred under this clause (v), does not exceed 5% of Total Assets; (vi) Indebtedness in an aggregate principal amount equal to the greater of (A) $225.0 million in the aggregate at any one time outstanding for PRIMEDIA and its Restricted Subsidiaries and (B) Indebtedness created, incurred, issued, assumed or guaranteed (x) by PRIMEDIA at any one time outstanding not in excess of 7% of the Consolidated Net Worth of PRIMEDIA at the time of the creation, incurrence, issuance, assumption or guarantee or (y) by any Restricted Subsidiary of PRIMEDIA at any one time outstanding not in excess of 7% of the Consolidated Net Worth of that Restricted Subsidiary at the time of the creation, incurrence, issuance, assumption or guarantee; (vii) Indebtedness created, incurred, issued, assumed or guaranteed in exchange for or the proceeds of which are used to extend, refinance, renew, replace, substitute or refund Indebtedness referred to in clauses (i) through (vi) above, including additional Indebtedness incurred to pay premiums and fees in connection with that additional Indebtedness (the "Refinancing Indebtedness"); PROVIDED, that (A) the principal amount of that Refinancing Indebtedness will not exceed the principal amount of Indebtedness (including unused commitments and additional Indebtedness incurred to pay premiums and fees in connection with that Indebtedness) so extended, refinanced, renewed, replaced, substituted or refunded 49 PLUS any amounts then available under clause (vi) of this paragraph, (B) in the case of Refinancing Indebtedness for Indebtedness permitted under clauses (ii) and (iv) of this paragraph, the Refinancing Indebtedness permitted under clauses (ii) and (iv) of this paragraph will have an Average Life equal to or greater than the Average Life of the Indebtedness being extended, refinanced, renewed, replaced, substituted or refunded and (C) the Refinancing Indebtedness for Indebtedness permitted under clauses (ii) and (iv) of this paragraph will rank, in right of payment, no more senior than that Indebtedness being extended, refinanced, renewed, replaced, substituted or refunded and the Refinancing Indebtedness for Indebtedness permitted under clauses (i), (iii), (v) and (vi) of this paragraph will rank, in right of payment, PARI PASSU with or junior to the notes; (viii) intercompany Indebtedness incurred in connection with Investments in Unrestricted Subsidiaries; PROVIDED that those Investments are permitted by the LIMITATIONS ON RESTRICTED PAYMENTS covenant or the INVESTMENTS IN UNRESTRICTED SUBSIDIARIES covenant; (ix) Indebtedness under Currency Agreements and Interest Rate Agreements, PROVIDED that in the case of Currency Agreements which relate to other Indebtedness, those Currency Agreements do not increase the Indebtedness of PRIMEDIA outstanding other than as a result of fluctuations in foreign currency exchange rates; (x) Indebtedness arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or from guarantees or letters of credit, surety bonds or performance bonds securing any obligations of PRIMEDIA or any Restricted Subsidiary of PRIMEDIA under those agreements, incurred or assumed by the acquired Subsidiary in connection with the acquisition or disposition of any business, assets or Restricted Subsidiary of PRIMEDIA, other than guarantees or similar credit support by PRIMEDIA of Indebtedness incurred by any person acquiring all or any portion of that business, those assets or that Restricted Subsidiary for the purpose of financing that acquisition; PROVIDED that the maximum aggregate liability in respect of all that Indebtedness in the nature of those guarantees will at no time exceed the gross proceeds actually received from the sale of that business, those assets or that Restricted Subsidiary; (xi) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts, which will not be, and will not be deemed to be, inadvertent) drawn against insufficient funds in the ordinary course of business, PROVIDED that that Indebtedness is extinguished within three business days of its incurrence; (xii) Indebtedness of an entity at the time it is acquired as a Restricted Subsidiary, PROVIDED that that Indebtedness was not incurred or assumed by that entity in connection with or in anticipation of that acquisition; (xiii) Indebtedness between PRIMEDIA and any Restricted Subsidiary; PROVIDED that any subsequent transfer of any Capital Stock which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of such Indebtedness (other than to PRIMEDIA or another Restricted Subsidiary) shall be deemed in each case to constitute the incurrence of such Indebtedness by the obligor thereon; (xiv) Non-Compete Notes, not to exceed $50.0 million in aggregate principal amount less the amount of all principal repayments made in respect of those notes; (xv) PRIMEDIA's Obligations arising from the repurchase, redemption or other acquisitions of Capital Stock from management investors to the extent permitted by the LIMITATIONS ON RESTRICTED PAYMENTS covenant; and 50 (xvi) Indebtedness incurred by a Securitization Subsidiary in connection with a Qualified Securitization Transaction that is Non-Recourse Indebtedness with respect to PRIMEDIA and its Restricted Subsidiaries (except for Standard Securitization Undertakings); PROVIDED that in the event such Securitization Subsidiary ceases to qualify as a Securitization Subsidiary or such Indebtedness ceases to constitute such Non-Recourse Indebtedness, such Indebtedness will be deemed, in each case, to be incurred at such time. For the purposes of determining the aggregate Indebtedness of any referent person, Indebtedness will not include guarantees by any other person of that Indebtedness. For the purposes of determining compliance with this covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xvi) above or is entitled to be incurred under the first paragraph of this covenant, (A) PRIMEDIA will, in its sole discretion, classify that item of Indebtedness in any manner that complies with the covenants described above; PROVIDED that any Indebtedness classified as incurred pursuant to clause (vi) above may later be reclassified as having been incurred pursuant to the first paragraph of this covenant to the extent such reclassified Indebtedness could be incurred pursuant to the first paragraph at the time of such reclassification; and (B) that item of Indebtedness will be treated as having been incurred pursuant to only one of those clauses or pursuant to the first paragraph of this covenant except as otherwise set forth in the proviso to clause (A) above. Accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness will not be deemed to be an incurrence of Indebtedness for purposes of this covenant. LIMITATIONS ON LIENS PRIMEDIA will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien (other than Permitted Liens) on any of its assets or any income or profits from any of its assets or assign or convey any right to receive income from any of its assets unless the notes are equally and ratably secured with the Indebtedness secured by that Lien for so long as that Indebtedness is so secured. Upon the release and discharge of the initial Lien, any Lien created in favor of the notes as a result of the initial Lien will be automatically released. LIMITATIONS ON ASSET SALES PRIMEDIA will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, consummate an Asset Sale (including the sale of any of the stock of any Subsidiary) unless at least 100% of the Net Proceeds from that Asset Sale (or, in the case of a Partially Owned Restricted Subsidiary, PRIMEDIA's Pro Rata Portion of the Net Proceeds, after repayment by that Partially Owned Restricted Subsidiary of its Indebtedness) are applied first to repay Obligations or reduce commitments under the Credit Facilities in accordance with the terms of the Credit Facilities and second to offer to redeem at par the Outstanding Notes and third to offer to redeem at par the notes. The foregoing application of Net Proceeds from Asset Sales is not required in the case of: (i) sales or dispositions generating cash proceeds of less than, with respect to PRIMEDIA and its Restricted Subsidiaries, $2,500,000; and (ii) sales and dispositions as to which PRIMEDIA delivers a reinvestment notice and the proceeds are so reinvested in one or more communications, publishing, information, education or media assets or businesses within 12 months of the date the relevant Asset Sale is consummated. 51 Notwithstanding the foregoing, neither PRIMEDIA nor its Restricted Subsidiaries will be required to apply the Net Proceeds from any Asset Sale: (i) to the extent that the aggregate Net Proceeds from that Asset Sale, together with the Net Proceeds, if any, of any other Asset Sale which have not been previously applied, are less than $25,000,000; or (ii) to the extent that, and for so long as, those Net Proceeds cannot be so applied as a result of an encumbrance or restriction permitted under the LIMITATIONS ON LIENS covenant. The procedure for offering to redeem the notes in connection with Asset Sales is substantially the same as the mechanism for redeeming the notes in connection with a Change of Control. TRANSACTIONS WITH AFFILIATES Neither PRIMEDIA nor any of its Restricted Subsidiaries will make any loan, advance, guarantee or capital contribution to, or for the benefit of, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or for the benefit of, or purchase or lease any property or assets from, or enter into or amend any contract, agreement or understanding (each, an "Affiliate Transaction") with, or for the benefit of: (i) any person (or any Affiliate of that person) holding 10% or more of any class of Capital Stock of PRIMEDIA or any of its Restricted Subsidiaries; or (ii) any Affiliate of PRIMEDIA or any of its Restricted Subsidiaries, in each case involving aggregate payments or consideration in excess of $5.0 million, unless: (a) that Affiliate Transaction is on terms that are not materially less favorable to PRIMEDIA or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by PRIMEDIA or that Restricted Subsidiary with an unrelated Person; and (b) PRIMEDIA delivers to the Trustee with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $10.0 million, a resolution adopted by the majority of the board of directors of PRIMEDIA approving that Affiliate Transaction and set forth in an officers' certificate certifying that that Affiliate Transaction complies with clause (a) above. The foregoing restrictions will not apply to: (i) the payment of an annual fee to KKR for the rendering of management consulting and financial services to PRIMEDIA and its Restricted Subsidiaries in an aggregate amount which is reasonable in relation to those services; (ii) the payment of transaction fees to KKR in amounts which are in accordance with past practices for the rendering of financial advice and services, in connection with acquisitions, dispositions and financings by PRIMEDIA and its Subsidiaries; (iii) loans to officers, directors and employees of PRIMEDIA and its Subsidiaries for business or personal purposes and other loans and advances to those officers, directors and employees for travel, entertainment, moving and other relocation expenses made in the ordinary course of business of PRIMEDIA and its Subsidiaries; (iv) any Restricted Payments not prohibited by the LIMITATIONS ON RESTRICTED PAYMENTS covenant or any Investment not prohibited by the INVESTMENTS IN UNRESTRICTED SUBSIDIARIES covenant; (v) transactions between or among any of PRIMEDIA and its Restricted Subsidiaries; 52 (vi) allocation of corporate overhead to Unrestricted Subsidiaries on a basis not materially less favorable to PRIMEDIA than those allocations to Restricted Subsidiaries; (vii) the payment of reasonable and customary fees paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of PRIMEDIA or any Restricted Subsidiary; or (viii) sales or other transfers or dispositions of Receivables and Other Assets transferred to a Securitization Subsidiary in a Qualified Securitization Transaction. MERGER, CONSOLIDATION OR SALE OF ASSETS PRIMEDIA may not consolidate with, merge with or into, or transfer all or substantially all of its assets (as an entirety or substantially as an entirety in one transaction or a series of related transactions), to any person (except a wholly owned Restricted Subsidiary, PROVIDED that in connection with any merger of PRIMEDIA with a Restricted Subsidiary of PRIMEDIA, no consideration (other than common stock in the surviving corporation or PRIMEDIA) will be issued or distributed to the shareholders of PRIMEDIA) or permit any person to merge with or into it unless: (i) PRIMEDIA will be the continuing person, or the person (if other than PRIMEDIA) formed by that consolidation or into which PRIMEDIA is merged or to which the properties and assets of PRIMEDIA are transferred will be a corporation organized and existing under the laws of the United States or any State of the United States or the District of Columbia and will expressly assume, by a supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all of the obligations of PRIMEDIA under the notes and Indenture; and (ii) immediately after giving effect to that transaction on a pro forma basis (a) no Default and no Event of Default under the Indenture will have occurred and be continuing and (b) PRIMEDIA could incur at least $1.00 of additional Indebtedness under the first paragraph of the INCURRENCE OF INDEBTEDNESS covenant (without giving effect to clause (i) through (xvi) of the second paragraph of that covenant) or the Debt to Consolidated Cash Flow Ratio equals or is less than the Debt to Consolidated Cash Flow Ratio immediately prior to that transaction. PAYMENTS FOR CONSENT Neither PRIMEDIA nor any of its Subsidiaries will, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any holder of any notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture or the notes, unless that consideration is offered to be paid or agreed to be paid to all holders of the notes which so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to that consent, waiver or agreement. GUARANTEES GUARANTEES. The new notes will be fully and unconditionally guaranteed on a senior basis, jointly and severally, by each Guarantor. In the event that any guarantee would constitute or result in a violation of any applicable fraudulent conveyance or similar law of any relevant jurisdiction, the liability of any Guarantor under that guarantee would be reduced to the maximum amount permissible under the applicable fraudulent conveyance or similar law. The foregoing guarantees (the "Guarantees") rank PARI PASSU with the guarantees made for the benefit of the lenders under the Credit Facilities and with guarantees made for the benefit of the holders of the Outstanding Notes. No Unrestricted Subsidiary will become a guarantor of any Indebtedness of PRIMEDIA or any Restricted Subsidiaries unless that Unrestricted Subsidiary becomes a guarantor of the notes. In addition, no Securitization Subsidiary will become a guarantor of the notes. 53 RELEASES OF GUARANTEES Upon the sale or disposition (by merger or otherwise) of any Guarantor by PRIMEDIA or any subsidiary of PRIMEDIA to any entity that is not an affiliate of PRIMEDIA or any of its subsidiaries and which sale or disposition is otherwise in compliance with the terms of the Indenture, that Guarantor will be released from its obligations under its Guarantee if that Guarantor is sold or disposed of for at least fair market value, evidenced by a resolution of the board of directors of PRIMEDIA set forth in an officer's certificate delivered to the Trustee; PROVIDED that the foregoing proviso will not apply to the sale or disposition of a Guarantor in a foreclosure proceeding to the extent that that proviso would be inconsistent with the requirements of the Uniform Commercial Code. EVENTS OF DEFAULT AND REMEDIES The Indenture provides that each of the following constitutes an "Event of Default": (i) the failure to make any payment of interest on the notes when the same becomes due and payable and the continuance of that failure for a period of 30 days; (ii) the failure to make any payment when due of principal or premium on the notes, whether at maturity, or upon acceleration, redemption or otherwise; (iii) failure by PRIMEDIA to comply with any of its other agreements in the Indenture or the notes and that Default continues for 30 days after receipt of a written notice from the Trustee or holders of at least 30% of the aggregate principal amount of the notes then outstanding, specifying that Default and requiring that it be remedied; (iv) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by PRIMEDIA or any of its Restricted Subsidiaries (or the payment of which is guaranteed by PRIMEDIA or any of its Restricted Subsidiaries) whether that Indebtedness or guarantee is now existing or thereafter created in the future, if either: (A) that default is the failure to pay the final scheduled principal installment in an amount of at least $10 million in respect of any such Indebtedness on the stated maturity date of that Indebtedness (after giving effect to any extension of the maturity date by the holder of that Indebtedness and after the expiration of any grace period in respect of the final scheduled principal installment contained in the instrument under which that Indebtedness is outstanding); or (B) as a result of that default the maturity of that Indebtedness has been accelerated prior to its express maturity and the principal amount of that Indebtedness, together with the principal amount of any other such Indebtedness the maturity of which has been accelerated, aggregates $20 million or more; PROVIDED that an Event of Default will not be deemed to occur with respect to any accelerated indebtedness which is repaid or prepaid within 20 days after that declaration; (v) failure by PRIMEDIA or any of its Significant Subsidiaries to pay certain final judgments that exceed $15 million individually or $25 million in the aggregate, which judgments are not discharged, satisfied, stayed, annulled or rescinded within 60 days after their entry; (vi) certain events of bankruptcy or insolvency with respect to PRIMEDIA or any of its Significant Subsidiaries; and (vii) except as permitted by the Indenture and the notes, the cessation of the effectiveness of the Guarantees or the finding in any judicial proceeding that the Guarantees are unenforceable or invalid or the denial or disaffirmation by any Guarantor of its obligations under its Guarantee. 54 The term "Default" means any event which is, or after notice or passage of time or both would be, an Event of Default. If a Default or an Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee will mail to each holder of the notes a notice of the Default or Event of Default within 30 days after it occurs or, if later, within 10 days after the Default or Event of Default becomes known to the Trustee, unless the Default or Event of Default has been cured. Except in the case of a Default or Event of Default in the payment of principal of, premium, if any, or interest on any notes or that results from a failure to comply with the CHANGE OF CONTROL covenant, the Trustee may withhold the notice if and so long as a committee of its responsible officers in good faith determines that withholding the notice is in the interest of the holders of the notes. If an Event of Default (other than an Event of Default with respect to PRIMEDIA resulting from bankruptcy, insolvency or reorganization) occurs and is continuing, the Trustee by written notice to PRIMEDIA, or the holders of at least 30% of the principal amount of the notes then outstanding by written notice to PRIMEDIA and the Trustee, may, and the Trustee at the request of those holders will, declare all unpaid principal of, premium, if any, and accrued interest on the notes to be due and payable, as specified below. Upon a declaration of acceleration, the principal, premium, if any, and accrued interest will be due and payable immediately. If an Event of Default resulting from certain events of bankruptcy, insolvency or reorganization occurs with respect to PRIMEDIA, all unpaid principal of, premium, if any, and accrued interest on the notes then outstanding shall IPSO FACTO become and be immediately due and payable without any declaration, notice or other act on the part of the Trustee or any holder. The holders of at least a majority in principal amount of the notes by notice to the Trustee may rescind an acceleration and its consequences upon conditions provided in the Indenture. Subject to certain restrictions set forth in the Indenture, the holders of at least a majority in principal amount of the outstanding notes by notice to the Trustee may waive an existing Default or Event of Default and its consequences (including waivers obtained in connection with a tender offer or exchange offer for notes), except a continuing Default or Event of Default in the payment of principal of, premium, if any, or interest on, the notes (including, without limitation, pursuant to any mandatory or optional redemption obligation under the Indenture). When a Default or Event of Default is waived, it is cured and ceases. A holder of notes may not pursue any remedy with respect to the Indenture, the notes or any Guarantee unless: (1) the holder gives to the Trustee written notice of a continuing Event of Default; (2) the holders of at least 30% in principal amount of the notes outstanding make a written request to the Trustee to pursue the remedy; (3) the holder or holders offer to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense (including, without limitation, fees of counsel); (4) the Trustee does not comply with the request within 30 days after receipt of the request and the offer of indemnity; and (5) during that 30-day period the holders of a majority in principal amount of the outstanding notes do not give the Trustee a direction which is inconsistent with the request. PRIMEDIA is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and PRIMEDIA is required upon becoming aware of any Default or Event of Default to deliver a statement to the Trustee specifying that Default or Event of Default. 55 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND SHAREHOLDERS No director, officer, employee, incorporator or shareholder of PRIMEDIA, as such, will have any liability for any obligations of PRIMEDIA under the notes, the Indenture, the Guarantees or the Registration Rights Agreement or for any claim based on, in respect of, or by reason of, those obligations or their creation. Each holder of the notes by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the notes. That waiver may not be effective to waive liabilities under the federal securities laws, and it is the view of the Commission that such a waiver is against public policy. LEGAL DEFEASANCE AND COVENANT DEFEASANCE PRIMEDIA may, at its option and at any time, elect to have all of its obligations discharged with respect to the outstanding notes ("Legal Defeasance"), except for: (1) the rights of holders of outstanding notes to receive payments in respect of the principal of, premium, if any, and interest on the notes when those payments are due from the trust referred to below; (2) PRIMEDIA's obligations with respect to the notes concerning issuing temporary notes, registration of notes, mutilated, destroyed, lost or stolen notes and the maintenance of an office or agency for payment and money for security payments held in trust; (3) the rights, powers, trusts, duties and immunities of the Trustee, and PRIMEDIA's obligations in connection with those rights, powers, trusts, duties and immunities; and (4) the Legal Defeasance provisions of the Indenture. In addition, PRIMEDIA may, at its option and at any time, elect to have the obligations of PRIMEDIA released with respect to certain covenants that are described in the Indenture ("Covenant Defeasance") and thereafter any omission to comply with those covenants will not constitute a Default or Event of Default with respect to the notes. In the event Covenant Defeasance occurs, certain events (not including non-payment or bankruptcy, receivership, rehabilitation and insolvency events) described under "Events of Default" will no longer constitute an Event of Default with respect to the notes. In order to exercise either Legal Defeasance or Covenant Defeasance: (1) PRIMEDIA must irrevocably deposit or cause to be deposited with the Trustee or the paying agent, in trust, money or direct noncallable obligations of or guaranteed by the United States of America in an amount sufficient, without reinvestment, to pay the principal of and interest on the outstanding notes on the stated maturity or on the applicable redemption date, as the case may be; (2) in the case of Legal Defeasance, PRIMEDIA will have delivered to the Trustee an opinion of counsel from nationally recognized counsel acceptable to the Trustee or a tax ruling from the Internal Revenue Service to the effect that the holders of the outstanding notes will not recognize income, gain or loss for federal income tax purposes as a result of the Legal Defeasance and will be subject to federal income tax on the same amount, in the same manner and at the same times as would have been the case if the Legal Defeasance had not occurred; (3) in the case of Covenant Defeasance, PRIMEDIA will have delivered to the Trustee an opinion of counsel from nationally recognized counsel acceptable to the Trustee confirming that the holders of the outstanding notes will not recognize income, gain or loss for federal income tax purposes as a result of the Covenant Defeasance and will be subject to federal 56 income tax on the same amount, in the same manner and at the same times as would have been the case if the Covenant Defeasance had not occurred; (4) no Default or Event of Default will have occurred and be continuing (A) on the date of the deposit or (B) insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of the deposit; and (5) PRIMEDIA must deliver to the Trustee an officer's certificate and an opinion of counsel, each stating that all conditions precedent provided for relating to the Legal Defeasance or the Covenant Defeasance have been complied with. TRANSFER AND EXCHANGE A holder may transfer or exchange notes in accordance with the Indenture. The registrar and the Trustee may require a holder, among other things, to furnish appropriate endorsements and transfer documents, and PRIMEDIA may require a holder to pay any taxes and fees required by law or permitted by the Indenture. PRIMEDIA is not required to transfer or exchange any note selected for redemption. Also, PRIMEDIA is not required to transfer or exchange any note for a period of 15 days before a selection of notes to be redeemed. The registered holder of a note will be treated as the owner of it for all purposes. AMENDMENT, SUPPLEMENT AND WAIVER Except as provided in the next succeeding paragraph, the Indenture, the Guarantees or the notes may be amended or supplemented with the consent of the holders of at least a majority in principal amount of the notes then outstanding (including consents obtained in connection with a tender offer or exchange offer for notes), and any existing default or compliance with any provision of the Indenture or the notes may be waived with the consent of the holders of a majority in principal amount of the then outstanding notes (including consents obtained in connection with a tender offer or exchange offer for notes). Without the consent of each holder affected, an amendment or waiver may not (with respect to any notes held by a non-consenting holder of notes): (i) reduce the principal amount of notes whose holders must consent to an amendment, supplement or waiver; (ii) reduce the principal of or change the fixed maturity of any notes or alter the provisions with respect to the redemption or purchase price in connection with repurchases of the notes with proceeds of Asset Sales, upon a Change of Control or otherwise; (iii) reduce the rate of or change the time for payment of interest on any notes; (iv) waive a Default or Event of Default in the payment of principal of or premium, if any, or interest on the notes (except a rescission of acceleration of the notes by the holders of at least a majority in aggregate principal amount of the notes); (v) make any notes payable in money other than that stated in the notes; (vi) make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of holders of notes to receive payments of principal of or interest on the notes; (vii) waive a redemption payment with respect to any note; or (viii) make any change in the foregoing. 57 Notwithstanding the foregoing, without the consent of any holder of the notes, PRIMEDIA and the Trustee may amend or supplement the Indenture or the notes to: (1) cure any ambiguity, defect or inconsistency; (2) provide for uncertificated notes in addition to or in place of certificated notes; (3) provide for the assumption of PRIMEDIA's obligations to holders of the notes in the case of a merger or consolidation; (4) make any change that would provide any additional rights or benefits to the holders of the notes or that does not adversely affect the legal rights under the Indenture of any such holder; or (5) comply with requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act. CONCERNING THE TRUSTEE The Indenture contains certain limitations on the rights of the Trustee, should it become a creditor of PRIMEDIA, to obtain payment of claims in certain cases or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate that conflict within 90 days, apply to the Commission for permission to continue or resign. The holders of a majority in principal amount of the then outstanding notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. The Indenture provides that in case an Event of Default occurs (which is not cured), the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent person in the conduct of its own affairs. Subject to those provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any of the holders of the notes, unless they offer to the Trustee security and indemnity satisfactory to it against any loss, liability or expense. EXCHANGE OFFER, REGISTRATION RIGHTS On May 8, 2001, PRIMEDIA, the Guarantors and the initial purchasers entered into the Registration Rights Agreement. Under the Registration Rights Agreement, PRIMEDIA agreed, for the benefit of the holders of the Transfer Restricted Securities, that PRIMEDIA will, at its cost, (1) cause to be filed, on or before 120 days after the Closing Date, the Exchange Offer Registration Statement with the SEC under the Securities Act concerning the Exchange Offer, and (2) (a) use its reasonable best efforts to cause the Exchange Offer Registration Statement to be declared effective by the SEC on or before 200 days after the closing Date and (b) cause the Exchange Offer to remain open for the minimum period required by applicable federal and state securities laws, PROVIDED, HOWEVER, that in no event will that period be less than 20 business days. For each Transfer Restricted Security surrendered to PRIMEDIA and accepted for exchange in the exchange offer, the holder of that Transfer Restricted Security will receive a new note having a principal amount equal to that of the surrendered Transfer Restricted Security. Based upon no-action letters issued by the staff of the SEC to third parties, PRIMEDIA believes that the new notes issued in the exchange offer in exchange for Transfer Restricted Securities would in general be freely transferable after the exchange offer without further registration under the Securities Act if the holder of the new notes represents (1) that it is not an "affiliate" as defined in Rule 405 under the Securities Act, of PRIMEDIA, (2) that it is acquiring the new notes in the ordinary course of its business and (3) that it has no arrangement or understanding with any person to participate in 58 the distribution, within the meaning of the Securities Act, of the new notes, PROVIDED that, in the case of broker-dealers, a prospectus meeting the requirements of the Securities Act be delivered as required. However, the SEC has not considered the exchange offer in the context of a no-action letter and there can be no assurance that the staff of the SEC would make a similar determination with respect to the exchange offer as in those other circumstances. Holders of Transfer Restricted Securities wishing to accept the exchange offer must represent to PRIMEDIA that those conditions have been met. Each broker-dealer that receives new notes for its own account in the exchange offer, where it acquired the new notes exchanged for the new notes for its own account as a result of market-making or other trading activities, must acknowledge that it will deliver a prospectus in connection with the resale of the new notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an underwriter within the meaning of the Securities Act. A holder of Transfer Restricted Securities other than certain specified holders, who wishes to exchange those Transfer Restricted Securities for new notes in the exchange offer will be required to represent that any new notes to be received by it will be acquired in the ordinary course of its business, and that at the time of the commencement of the exchange offer it has no arrangement or understanding with any person to participate in the distribution, within the meaning of the Securities Act, of the new notes and that it is not an "affiliate" of PRIMEDIA, as defined in Rule 405 under the Securities Act, or if it is an affiliate, that it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable. If the exchange offer is not permitted by applicable law or SEC policy or (2) if any Holder of Transfer Restricted Securities will notify PRIMEDIA within 20 business days following the consummation of the exchange offer that (a) the holder was prohibited by law or SEC policy from participating in the exchange offer or (b) the holder may not resell the new notes acquired by it in the exchange offer to the public without delivering a prospectus and the Prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for the resales by the holders or (c) the holder is a broker-dealer and holds old notes acquired directly from the Company or any of its affiliates, then PRIMEDIA will, at its cost, (A) cause to be filed a shelf registration statement (the "Shelf Registration Statement") covering resales of the Transfer Restricted Securities, (B) use its reasonable best efforts to cause the shelf Registration Statement to be declared effective under the Securities Act and (C) use its reasonable best efforts to keep the Shelf Registration Statement effective until two years after its effective date or any shorter period ending when all resales of Transfer Restricted Securities covered by the Shelf Registration Statement have been made. A holder selling those Transfer Restricted Securities under the Shelf Registration Statement generally would be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with those sales and will be bound by the provisions of the Registration Rights Agreement which are applicable to that holder, including certain indemnification obligations. If (a) PRIMEDIA fails to file any of the registration statements required by the Registration Rights Agreement on or before the date specified for such filing; (b) any of such registration statements is not declared effective by the Commission on or prior to the date specified for such effectiveness (the "Effectiveness Target Date"); (c) PRIMEDIA fails to consummate the exchange offer within 30 days of the Effectiveness Target Date with respect to the Exchange Offer Registration Statement; or 59 (d) the Shelf Registration Statement or the Exchange Offer Registration Statement is declared effective but thereafter ceases to be effective or usable in connection with resales of Transfer Restricted Securities during the periods specified in the Registration Rights Agreement (each such event referred to in clauses (a) through (d) above a "Registration Default"), then PRIMEDIA will pay liquidated damages to each holder of Transfer Restricted Securities ("Liquidated Damages"). Liquidated Damages will accrue, with respect to the first 90-day period (or portion thereof) immediately following the occurrence of the first Registration Default, at a rate of 0.25% per annum of the aggregate principal amount of the outstanding notes on the date of such Registration Default, payable in cash semiannually in arrears on each interest payment date, commencing on the date of such Registration Default. The rate of the Liquidated Damages will increase by an additional 0.25% per annum at the beginning of each subsequent 90-day period (or portion thereof) until all Registration Defaults have been cured, up to a maximum rate of Liquidated Damages for all Registration Defaults of 0.50% per annum. The Registration Rights Agreement will provide that the Liquidated Damages specified above will be the exclusive remedy available to holders of Transfer Restricted Securities for any failure by PRIMEDIA to comply with the registration requirements of the Registration Rights Agreement. The summary in this prospectus of certain provisions of the Registration Rights Agreement does not purport to be complete and is subject to, and is qualified in its entirety by, all of the provisions of the Registration Rights Agreement. BOOK-ENTRY; DELIVERY AND FORM The notes will initially be represented in the form of one or more global notes in definitive, fully-registered book-entry form, without interest coupons that will be deposited with or on behalf of The Depository Trust Company, or DTC, and registered in the name of DTC or its participants. Except as set forth below, the global notes may be transferred, in whole and not in part, solely to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the global notes may not be exchanged for notes in physical, certificated form except in the limited circumstances described below. DEPOSITORY PROCEDURES The following description of the operations and procedures of the DTC are provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to changes by them. PRIMEDIA takes no responsibility for these operations and procedures and urges investors to contact the system or their participants directly to discuss these matters. The DTC has advised PRIMEDIA that the DTC is a limited-purpose trust company created to hold securities for its participating organizations (collectively, the "Participants") and to facilitate the clearance and settlement of transactions in those securities between Participants through electronic book-entry changes in accounts of its Participants. The Participants include securities brokers and dealers (including the initial purchasers), banks, trust companies, clearing corporations and certain other organizations. Access to DTC's system is also available to other entities, such as banks, brokers, dealers and trust companies, that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, the "Indirect Participants"). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or the Indirect Participants. The ownership interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the Participants and Indirect Participants. 60 The DTC has also advised PRIMEDIA that, pursuant to procedures established by it: (1) upon deposit of the Global Notes, the DTC will credit the accounts of Participants designated by the initial purchasers with portions of the principal amount of the Global Notes; and (2) ownership of these interests in the Global Notes will be shown on, and the transfer of ownership of these interests will be effected only through, records maintained by the DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interest in the Global Notes). The laws of some states require that certain persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in a Global Note to those persons will be limited to that extent. Because the DTC can act only on behalf of Participants, which in turn act on behalf of Indirect Participants, the ability of a person having beneficial interests in a Global Note to pledge those interests to persons that do not participate in the DTC system, or otherwise take actions in respect of those interests, may be affected by the lack of a physical certificate evidencing those interests. EXCEPT AS DESCRIBED BELOW, OWNERS OF INTERESTS IN THE GLOBAL NOTES WILL NOT HAVE NOTES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE PHYSICAL DELIVERY OF NOTES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE REGISTERED OWNERS OR HOLDERS OF THE GLOBAL NOTES UNDER THE INDENTURE FOR ANY PURPOSE. Payments in respect of the principal of, and interest and premium and liquidated damages, if any, on a Global Note registered in the name of the DTC or its nominee will be payable to the DTC in its capacity as the registered holder under the indenture. Under the terms of the indenture, PRIMEDIA and the trustee will treat the persons in whose names the notes, including the Global Notes, are registered as the owners of the notes for the purpose of receiving payments and for all other purposes. Consequently, neither PRIMEDIA, the trustee nor any agent of PRIMEDIA or the trustee has or will have any responsibility or liability for: (1) any aspect of the DTC's records or any Participant's or Indirect Participant's records relating to or payments made on account of beneficial ownership interest in the Global Notes or for maintaining, supervising or reviewing any of the DTC's records or any Participant's or Indirect Participant's records relating to the beneficial ownership interests in the Global Notes; or (3) any other matter relating to the actions and practices of the DTC or any of its Participants or Indirect Participants. The DTC has advised PRIMEDIA that its current practice, upon receipt of any payment in respect of securities, such as the notes (including principal and interest), is to credit the accounts of the relevant Participants with the payment on the payment date unless the DTC has reason to believe it will not receive payment on that payment date. Each relevant Participant is credited with an amount proportionate to its beneficial ownership of an interest in the principal amount of the relevant security as shown on the records of the DTC. Payments by the Participants and the Indirect Participants to the beneficial owners of notes will be governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect Participants and will not be the responsibility of the DTC, the trustee or PRIMEDIA. Neither PRIMEDIA nor the trustee will be liable for any delay by the DTC or any of its Participants in identifying the beneficial owners of the notes, and PRIMEDIA and the trustee may conclusively rely on and will be protected in relying on instructions from the DTC or its nominee for all purposes. Transfers between Participants in the DTC will be effected in accordance with the DTC's procedures, and will be settled in same-day funds. The DTC has advised PRIMEDIA that it will take any action permitted to be taken by a holder of notes only at the direction of one or more Participants to whose account the DTC has credited the 61 interests in the Global Notes and only in respect of such portion of the aggregate principal amount of the notes as to which the Participant or Participants has or have given that direction. However, if there is an Event of Default under the notes, the DTC reserves the right to exchange the Global Notes for legended notes in certificated form and to distribute those notes to its Participants. Although the DTC has agreed to the foregoing procedures to facilitate transfers of interests in the Global Notes among participants in the DTC, they are under no obligation to perform or to continue to perform such procedures, and may discontinue such procedures at any time. Neither PRIMEDIA nor the trustee nor any of their respective agents will have any responsibility for the performance by the DTC or their respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations. EXCHANGE OF GLOBAL NOTES FOR CERTIFICATED NOTES A Global Note is exchangeable for definitive notes in registered certificated form ("Certificated Notes") if: (1) the DTC (a) notifies PRIMEDIA that it is unwilling or unable to continue as depositary for the Global Notes and PRIMEDIA fails to appoint a successor depositary or (b) has ceased to be a clearing agency registered under the Exchange Act; (2) PRIMEDIA, at its option, notifies the trustee in writing that it elects to cause the issuance of the Certificated Notes; or (3) there has occurred and is continuing a Default or Event of Default with respect to the notes. In addition, beneficial interests in a Global Note may be exchanged for Certificated Notes upon prior written notice given to the trustee by or on behalf of the DTC in accordance with the indenture. In all cases, Certificated Notes delivered in exchange for any Global Note or beneficial interests in Global Notes will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depositary (in accordance with its customary procedures). SAME-DAY SETTLEMENT AND PAYMENT PRIMEDIA will make payments in respect of the notes represented by the Global Notes (including principal, premium, if any, interest and liquidated damages, if any) by wire transfer of immediately available funds to the accounts specified by the Global Note Holder. PRIMEDIA will make all payments of principal, interest and premium and liquidated damages, if any, with respect to Certificated Notes by wire transfer of immediately available funds to the accounts specified by the holders of the Certificated Notes or, if no such account is specified, by mailing a check to each such holder's registered address. CERTAIN DEFINITIONS Set forth below are certain defined terms used in the Indenture. Reference is made to the Indenture for a full disclosure of all those terms, as well as any other capitalized terms used in this prospectus for which no definition is provided. "Adjusted Consolidated Net Income" means, with respect to any person for any period: (i) the Consolidated Net Income of such person for such period, plus (ii) in the case of PRIMEDIA and its Restricted Subsidiaries, all cash received during such period by PRIMEDIA or any Restricted Subsidiary from its Unrestricted Subsidiaries from the payment of dividends or distributions (including tax sharing payments and loans or advances which are junior in right of payment to the notes and have a longer Average Life than the notes), but only to the extent such cash payments are not otherwise included in "Adjusted Consolidated Net Income." 62 Each item of Adjusted Consolidated Net Income will be determined in conformity with GAAP, except that, for purposes of the application of Accounting Principles Board Opinions Nos. 16 and 17, such person may select any amortization practice allowable by GAAP up to 40 years, notwithstanding the use of a different amortization in such person's consolidated financial statements. Any designation of a Subsidiary of PRIMEDIA as a Restricted Subsidiary or Unrestricted Subsidiary at or prior to the time of the calculation of Adjusted Consolidated Net Income of a Subsidiary will be treated as if it had occurred at the beginning of the applicable period. "Affiliate" of any specified person means any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified person. A person shall be deemed to "control" (including the correlative meanings, the terms "controlling," "controlled by" and "under common control with") another person if the controlling person possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled person, whether through ownership of voting securities, by agreement or otherwise. "Asset Sale" means, with respect to any person, the sale, lease, conveyance, disposition or other transfer by the referent person of any of its assets (including by way of a sale-and-leaseback and including the sale or other transfer of any of the Capital Stock of any Subsidiary of the referent person); PROVIDED that, notwithstanding the foregoing, the term "Asset Sale" shall not include the sale, lease, conveyance, disposition or other transfer of: (i) with respect to any Unrestricted Subsidiary, (A) any assets not constituting all or substantially all of the assets of any Net Cash Flow Unrestricted Subsidiary and (B) any Capital Stock or any assets of any Restricted Payment Unrestricted Subsidiary; (ii) all or substantially all of the assets of PRIMEDIA, as permitted pursuant to the MERGER, CONSOLIDATION OR SALE OF ASSETS covenant; (iii) any assets between PRIMEDIA, any Restricted Subsidiary or any Unrestricted Subsidiary; (iv) (A) cash and cash equivalents, (B) inventory in the ordinary course of business and (C) any other tangible or intangible asset, in each case in the ordinary course of business of PRIMEDIA or its Restricted Subsidiaries; (v) the sale or discount, in each case without recourse, of accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof; or (vi) Receivables and Other Assets pursuant to a Qualified Securitization Transaction. "Average Life" means, as of the date of determination, with respect to any debt security, the quotient obtained by dividing: (i) the sum of the products of the numbers of years from the date of determination to the dates of each successive scheduled principal payment (assuming the exercise by the obligor of such debt security of all unconditional (other than as to the giving of notice) extension options of each such scheduled payment date) of such debt security multiplied by the amount of such principal payment by (ii) the sum of all such principal payments. "Bank Credit Facilities" means (1) the Credit Agreement, dated as of March 11, 1999, among PRIMEDIA, the lending institutions listed therein, The Bank of New York and Bankers Trust Company, as Co-Syndication Agents, The Bank of Nova Scotia, as Documentation Agent, and The 63 Chase Manhattan Bank, as Administrative Agent and (2) the Credit Agreement, dated as of May 24, 1996, among PRIMEDIA, the lending institutions listed therein, The Bank of New York and Bankers Trust Company, as Co-Syndication Agents, The Bank of Nova Scotia, as Documentation Agent, and The Chase Manhattan Bank, as Administrative Agent. "Business Day" means any day other than a Saturday, a Sunday or a day on which banking institutions in The City of New York or at a place of payment are authorized or obligated by law, regulation or executive order to remain closed. "Capital Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease which would at such time be so required to be capitalized on the balance sheet in accordance with GAAP. "Capital Stock" means any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock. "Change of Control" means such time as: (i) a "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act), other than KKR and its Affiliates, becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of more than (A) 35 percent (35%) of the total voting power of the then outstanding voting stock of PRIMEDIA and (B) the total voting power of the then outstanding voting stock of PRIMEDIA beneficially owned by KKR and its Affiliates; or (ii) during any period of two consecutive calendar years, individuals who at the beginning of such period constituted PRIMEDIA's board of directors (together with any new directors whose election by PRIMEDIA's board of directors or whose nomination for election by PRIMEDIA's shareholders was approved by a vote of at least two-thirds of the Directors then still in office who either were Directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the directors then in office. "Class D Debenture Indenture" means the indenture governing the Class D Subordinated Debentures. "Class D Subordinated Debentures" means the 10% Class D Subordinated Exchange Debentures due 2008 of PRIMEDIA issuable in exchange for the Series D Preferred Stock. "Class F Debenture Indenture" means the indenture governing the Class F Subordinated Debentures. "Class F Subordinated Debentures" means the 9.20% Class F Subordinated Exchange Debentures due 2009 of PRIMEDIA issuable in exchange for the Series F Preferred Stock. "Class H Debenture Indenture" means the indenture governing the Class H Subordinated Debentures. "Class H Subordinated Debentures" means the 8 5/8% Class H Subordinated Exchange Debentures due 2010 of PRIMEDIA issuable in exchange for the Series H Preferred Stock. 64 "Consolidated Cash Flow" means, with respect to any person for any period, the Adjusted Consolidated Net Income of such person for such period plus (a) (i) with respect to any Restricted Subsidiary other than a Partially Owned Restricted Subsidiary, provision for taxes based on income or profits to the extent such provision for taxes was included in computing Adjusted Consolidated Net Income and (ii) with respect to any Partially Owned Restricted Subsidiary, the Pro Rata Portion of any provision for taxes based on income or profits to the extent such provision for taxes was included in computing Adjusted Consolidated Net Income, plus (b) (i) with respect to any Restricted Subsidiary other than a Partially Owned Restricted Subsidiary, consolidated Interest Expense, whether paid or accrued, to the extent such expense was deducted in computing Adjusted Consolidated Net Income (including amortization of original issue discount and non-cash interest payments), and (ii) with respect to any Partially Owned Restricted Subsidiary, the Pro Rata Portion of consolidated Interest Expense, whether paid or accrued, to the extent such expense was deducted in computing Adjusted Consolidated Net Income (including amortization of original issue discount and non-cash interest payments), plus (c) (i) with respect to any Restricted Subsidiary other than a Partially Owned Restricted Subsidiary, depreciation, amortization and other non-cash charges to the extent such depreciation, amortization and other non-cash charges were deducted in computing Adjusted Consolidated Net Income (including amortization of goodwill and other intangibles) and (ii) with respect to any Partially Owned Restricted Subsidiary, the Pro Rata Portion of depreciation, amortization and other non-cash charges to the extent such depreciation, amortization and other non-cash charges were deducted in computing Adjusted Consolidated Net Income (including amortization of goodwill and other intangibles); PROVIDED, with respect to the calculation of a person's Debt to Consolidated Cash Flow Ratio, that if, during such period, (a) such person or any of its Subsidiaries shall have made any Asset Sales (other than, in the case of PRIMEDIA and its Restricted Subsidiaries, sales of the Capital Stock of or any assets of Unrestricted Subsidiaries which constitute Asset Sales), Consolidated Cash Flow of such person for such period shall be reduced by an amount equal to the Consolidated Cash Flow (if positive), to the extent such Consolidated Cash Flow was included in computing Consolidated Cash Flow, directly attributable to the assets or Capital Stock which are the subject of such Asset Sales for such period or increased by an amount equal to the Consolidated Cash Flow (if negative), to the extent such Consolidated Cash Flow was included in computing Consolidated Cash Flow, directly attributable thereto for such period and (b) such person or any of its Subsidiaries (other than, in the case of PRIMEDIA and its Restricted Subsidiaries, Unrestricted Subsidiaries) has made any acquisition of assets or Capital Stock (occurring by merger or otherwise), including without limitation, any acquisition of assets or Capital Stock occurring in connection with a transaction causing a calculation to be made hereunder, Consolidated Cash Flow of such person shall be calculated (notwithstanding clause (i) of the definition of Consolidated Net Income) as if such acquisition of assets or Capital Stock (including the incurrence of any Indebtedness in connection with any such acquisition and the application of the proceeds thereof) took place on the first day of such period. Consolidated Cash Flow of such person shall be determined for any period without regard to changes in Working Capital of such person and its Subsidiaries during such period. "Consolidated Fixed Charges" means, with respect to any person for any period, the (a) consolidated Interest Expense, whether paid or accrued, to the extent such expense was deducted in 65 computing Adjusted Consolidated Net Income (including amortization of original issue discount and non-cash interest payments) and (b) the amount of all cash dividend payments on all series of preferred stock other than cash dividends on preferred stock of Unrestricted Subsidiaries and cash dividends paid to such person or its Subsidiaries; PROVIDED, that with respect to Partially Owned Restricted Subsidiaries, only the Pro Rata Portion of any amounts covered by clauses (a) and (b) above shall be included in calculating Consolidated Fixed Charges; PROVIDED FURTHER that if during such period (i) such person or any of its Subsidiaries shall have made any Asset Sales (other than, in the case of PRIMEDIA and its Restricted Subsidiaries, sales of the Capital Stock of or any assets of Unrestricted Subsidiaries which constitute Asset Sales), Consolidated Fixed Charges of such person for such period shall be reduced by an amount equal to the Consolidated Fixed Charges directly attributable to the assets which are the subject of such Asset Sales for such period and (ii) such person or any of its Subsidiaries (other than, in the case of PRIMEDIA and its Restricted Subsidiaries, Unrestricted Subsidiaries) has made any acquisition of assets or Capital Stock (occurring by merger or otherwise), including, without limitation, any acquisition of assets or Capital Stock occurring in connection with the transaction causing a calculation to be made hereunder, Consolidated Fixed Charges of such person shall be calculated as if such acquisition of assets or Capital Stock (including the incurrence of any Indebtedness in connection with any such acquisition and the application of the proceeds thereof) took place on the first day of such period. "Consolidated Net Cash Flow" means, with respect to any person for any period, the aggregate Consolidated Cash Flow of such person for such period, MINUS (a) capital expenditures of such person and its Subsidiaries (and in the case of PRIMEDIA and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of Partially Owned Restricted Subsidiaries, including only the Pro Rata Portion thereof), MINUS (b) the aggregate amount of all cash dividends paid by such person and its Subsidiaries (and in the case of PRIMEDIA and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of Partially Owned Restricted Subsidiaries, including only the Pro Rata Portion thereof) to holders of its Capital Stock other than to such person or its Subsidiaries, MINUS (c) the aggregate amount of all taxes based on income or profits paid by such person and its Subsidiaries (and in the case of PRIMEDIA and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of Partially Owned Restricted Subsidiaries, including only the Pro Rata Portion thereof) other than to such person or its Subsidiaries, MINUS (d) cash Interest Expense of such person and its Subsidiaries (and in the case of PRIMEDIA and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of Partially Owned Restricted Subsidiaries, including only the Pro Rata Portion thereof), MINUS (e) repayments of principal of Indebtedness by such person and its Subsidiaries (and in the case of PRIMEDIA and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of Partially Owned Restricted Subsidiaries, including only the Pro Rata Portion thereof), MINUS (f) any increases in Working Capital of such person and its Subsidiaries (and in the case of PRIMEDIA and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of Partially Owned Restricted Subsidiaries, including only the Pro Rata Portion thereof), and PLUS (g) any decreases in Working Capital of such person and its Subsidiaries (and in the case of PRIMEDIA and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the 66 case of Partially Owned Restricted Subsidiaries, including only the Pro Rata Portion thereof), in each case, for such period and determined in accordance with GAAP; PROVIDED that in calculating the amount referred to in clause (f) or (g) above, as the case may be, for any period during which PRIMEDIA or any of its Restricted Subsidiaries has consummated an Asset Sale (other than, in the case of PRIMEDIA and its Restricted Subsidiaries, sales of Capital Stock of, cash or any assets of Unrestricted Subsidiaries which constitute Asset Sales), the portion of the change in Working Capital for such period attributable to the entity or business sold or purchased shall be based (x) in the case of such an Asset Sale, on the change in Working Capital attributable to the entity or business sold from the first day of such period to the date of the consummation of such sale and (y) in the case of an acquisition, on the change in Working Capital attributable to the entity or business acquired from the date of consummation of such acquisition to the last day of such period. "Consolidated Net Income" means, with respect to any person for any period, the aggregate net income (or loss) of such person and its Subsidiaries (and in the case of PRIMEDIA and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, with respect to any Partially Owned Restricted Subsidiary, including only the Pro Rata Portion of the net income (or loss) of such Partially Owned Restricted Subsidiary as of any date of determination of Consolidated Net Income for PRIMEDIA and its Restricted Subsidiaries) for such period, on a consolidated basis, determined in accordance with GAAP, PROVIDED that: (i) the net income (or loss) of any person which is not a Subsidiary or is accounted for by the equity method of accounting shall be included only to the extent of the amount of cash dividends or distributions (including tax sharing payments and loans or advances which are junior in right of payment to the notes and have a longer Average Life than the notes) paid to the referent person or a Subsidiary of the referent person; (ii) except to the extent includable pursuant to the foregoing clause (i), the income (or loss) of any person accrued prior to the date it becomes a Subsidiary of such person or is merged into or consolidated with such person or any of its Subsidiaries or that person's assets are acquired by such person or any of its Subsidiaries shall be excluded; (iii) any gains or losses attributable to Asset Sales net of related tax costs or tax benefits, as the case may be, shall be excluded; and (iv) the net income of any Unrestricted Subsidiary (and, solely for purposes of the RESTRICTED PAYMENTS covenant, the net income of any Partially Owned Restricted Subsidiary) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Unrestricted Subsidiary (or, solely for the purposes of the RESTRICTED PAYMENTS covenant, any Partially Owned Restricted Subsidiary) of that net income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary or its stockholders that, in each such case, has not been legally waived or otherwise satisfied. In addition, "Consolidated Net Income" will not include, without limitation: (A) any non-capitalized transaction costs and expenses incurred in connection with financings, investments or acquisitions, including, but not limited to, financing and refinancing fees; 67 (B) any extraordinary or nonrecurring charges relating to any premium or penalty paid, write-off of deferred financing costs or other financial recapitalization charges in connection with the redemption or retirement of any Indebtedness prior to its stated maturity; and (C) any non-recurring charges arising out of the restructuring or consolidation of the operations of any persons or business either alone or together with PRIMEDIA or any Restricted Subsidiary of PRIMEDIA, incurred within 18 months following the acquisition of those persons or businesses by PRIMEDIA or any Restricted Subsidiary of PRIMEDIA. "Consolidated Net Worth" means, at any date of determination, the sum of the Capital Stock and additional paid-in capital plus retained earnings (or minus accumulated deficit) of the referent person and its Subsidiaries on a consolidated basis, less amounts attributable to Redeemable Stock, each item to be determined in conformity with GAAP (excluding the effects of foreign currency exchange adjustments under Financial Accounting Standards Board Statement of Financial Accounting Standards No. 52), except that all effects of the application of Accounting Principles Board Opinions Nos. 16 and 17 and related interpretations shall be disregarded. "Credit Facilities" means, with respect to PRIMEDIA or any of its Restricted Subsidiaries, one or more debt facilities (including, without limitation, the Bank Credit Facilities) or commercial paper facilities with banks or other institutional lenders providing for revolving credit loans, term loans or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time. "Currency Agreement" means the obligations of any person pursuant to any foreign exchange contract, currency swap agreement or other similar agreement or arrangement designed to protect such person or any of its subsidiaries against fluctuations in currency values. "Debt to Consolidated Cash Flow Ratio" means the ratio of all Indebtedness of PRIMEDIA and its Restricted Subsidiaries to Consolidated Cash Flow. "Equity Interests" means Capital Stock, warrants, options or other rights to acquire Capital Stock (but excluding any debt security which is convertible into, or exchangeable for, Capital Stock). "Equity Offering" means any public or private offering of Equity Interests (other than Redeemable Stock) of PRIMEDIA. "Existing Indebtedness" means Indebtedness of PRIMEDIA and its Subsidiaries (other than the Bank Credit Facilities and the Outstanding Notes) in existence on the date of the Indenture, until such amounts are repaid. "Fixed Charge Coverage Ratio" means the ratio of Consolidated Cash Flow to Consolidated Fixed Charges. "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession, which are applicable to the circumstances as of the date of the Indenture. "Guarantor" means each domestic Restricted Subsidiary of PRIMEDIA, other than any Securitization Subsidiary, which is wholly owned, directly or indirectly, by PRIMEDIA. "Indebtedness" of any person is defined as any indebtedness, contingent or otherwise, in respect of borrowed money (whether or not the recourse of the lender is to the whole of the assets of such 68 person or only to a portion thereof), or evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement obligations with respect thereto) or representing the balance deferred and unpaid of the purchase price of any property (including pursuant to financing leases), if and to the extent any of the foregoing indebtedness would appear as a liability upon a balance sheet of such person prepared in accordance with GAAP (except that any such balance that constitutes a trade payable and/or an accrued liability arising in the ordinary course of business shall not be considered Indebtedness), and shall also include, to the extent not otherwise included, any Capital Lease Obligations, the maximum fixed repurchase price of any Redeemable Stock, indebtedness secured by a Lien to which the property or assets owned or held by such person is subject, whether or not the obligations secured thereby shall have been assumed, guarantees of items that would be included within this definition to the extent of such guarantees (exclusive of whether such items would appear upon such balance sheet), and net liabilities in respect of Currency Agreements and Interest Rate Agreements. For purposes of the preceding paragraph, the maximum fixed repurchase price of any Redeemable Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Redeemable Stock as if such Redeemable Stock were repurchased on any date on which Indebtedness shall be required to be determined pursuant to the Indenture, PROVIDED that if such Redeemable Stock is not then permitted to be repurchased, the repurchase price shall be the book value of such Redeemable Stock. The amount of Indebtedness of any person at any date shall be without duplication: (i) the outstanding balance at such date of all unconditional obligations as described above and the maximum liability of any such contingent obligations at such date; and (ii) in the case of Indebtedness of others secured by a Lien to which the property or assets owned or held by such person is subject, the lesser of the fair market value at such date of any asset subject to a Lien securing the Indebtedness of others and the amount of the Indebtedness secured. For the purpose of determining the aggregate Indebtedness of PRIMEDIA and its Restricted Subsidiaries, such Indebtedness shall exclude: (a) the Indebtedness of any Unrestricted Subsidiary of PRIMEDIA or any Unrestricted Subsidiary of a Restricted Subsidiary; and (b) with respect to any Partially Owned Restricted Subsidiary, the Pro Rata Portion of any Indebtedness of any Partially Owned Restricted Subsidiary of PRIMEDIA or any Partially Owned Restricted Subsidiary of a Restricted Subsidiary pursuant to which the lender thereunder does not have recourse to any of the assets of PRIMEDIA or any of its Restricted Subsidiaries. "Interest Expense" means, with respect to any person, for any period, the aggregate amount of interest in respect of Indebtedness (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financing and the net cost (benefit) associated with Interest Rate Agreements, and excluding amortization of deferred finance fees and interest recorded as accretion in the carrying value of liabilities (other than Indebtedness) recorded at a discounted value) and all but the principal component of rentals in respect of Capital Lease Obligations, paid, accrued or scheduled to be paid or accrued by such person during such period. "Interest Rate Agreements" means the obligations of any person pursuant to any interest rate swap agreement, interest rate collar agreement or other similar agreement or arrangement designed to protect such person or any of its subsidiaries against fluctuations in interest rates. 69 "Investment" means any direct or indirect advance, loan (other than advances to customers in the ordinary course of business, which are recorded as accounts receivable on the balance sheet of any person or its Subsidiaries) or other extension of credit or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition of Capital Stock, bonds, notes, debentures or other securities issued by any other person. For the purposes of the RESTRICTED PAYMENTS and INVESTMENT IN UNRESTRICTED SUBSIDIARIES covenants described above: (i) "Investment" shall include and be valued at the fair market value of the net assets of any Restricted Subsidiary at the time that such Restricted Subsidiary is designated an Unrestricted Subsidiary and shall exclude the fair market value of the net assets of any Unrestricted Subsidiary at the time that such Unrestricted Subsidiary is designated a Restricted Subsidiary; and (ii) any property transferred to or from an Unrestricted Subsidiary shall be valued at fair market value at the time of such transfer, in each case as determined by the board of directors of PRIMEDIA in good faith. "Lien" means any mortgage, lien, pledge, charge, security interest or encumbrance of any kind, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement or lease in the nature thereof). "Net Cash Flow Unrestricted Subsidiary" means an Unrestricted Subsidiary which is not a Restricted Payment Unrestricted Subsidiary. "Net Proceeds" shall mean, with respect to any Asset Sale, the aggregate cash proceeds (including any cash received by way of deferred payment pursuant to a note receivable issued in connection with such Asset Sale, other than the portion of such deferred payment constituting interest, and including any amounts received as disbursement or withdrawals from any escrow or similar account established in connection with any such Asset Sale, but, in either such case, only as and when so received) received by PRIMEDIA or any of its Subsidiaries in respect of such Asset Sale, net of: (i) the cash expenses of such sale (including, without limitation, the payment of principal, premium, if any, and interest on Indebtedness required to be paid as a result of such Asset Sale (other than the Outstanding Notes and the notes and amounts repaid pursuant to the Credit Facilities) and legal, accounting and investment banking fees and sales commissions); (ii) taxes paid or payable as a result thereof; (iii) any portion of cash proceeds which PRIMEDIA determines in good faith should be reserved for post-closing adjustments, it being understood and agreed that on the day that all such post-closing adjustments have been determined, the amount (if any) by which the reserved amount in respect of such Asset Sale exceeds the actual post-closing adjustments payable by PRIMEDIA or any of its Subsidiaries shall constitute Net Proceeds on such date; and (iv) any relocation expenses and pension, severance and shutdown costs incurred as a result thereof. "Non-Compete Notes" means the promissory notes issued by PRIMEDIA pursuant to the Non-Competition Agreement, dated as of June 17, 1991, among PRIMEDIA Holdings, Inc., News America Holdings Incorporated and the other parties thereto in an aggregate principal amount not to exceed $50.0 million, as such notes may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof. "Non-Recourse Indebtedness" means Indebtedness (i) as to which neither PRIMEDIA nor any Restricted Subsidiary (other than a Securitization Subsidiary) (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly 70 or indirectly liable (as a guarantor or otherwise) or (c) constitutes the lender, (ii) as to which no default (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) any holder of any other Indebtedness of PRIMEDIA or any Restricted Subsidiary (other than a Securitization Subsidiary) to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity and (iii) as to which the lenders have been notified in writing they will not have recourse to the shares or assets of PRIMEDIA or any Restricted Subsidiary (other than a Securitization Subsidiary). "Obligations" means any principal, interest, penalties, fee, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness. "Outstanding Notes" means the 10 1/4% Senior Notes due 2004, the 8 1/2% Senior Notes due 2006 and the 7 5/8% Senior Notes due 2008 of PRIMEDIA, as each may be amended, supplemented or otherwise modified from time to time. "Partially Owned Restricted Subsidiary" means any Restricted Subsidiary other than a wholly owned Restricted Subsidiary. "Permitted Liens" means: (i) Liens for taxes, assessments, governmental charges or claims which are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted and for which a reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made; (ii) statutory Liens of landlords and carriers', warehousemen's, mechanics', suppliers', materialmen's, repairmen's or other like Liens arising in the ordinary course of business and with respect to amounts not yet delinquent or being contested in good faith by appropriate proceedings, if a reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor; (iii) Liens incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security; (iv) Liens incurred or deposits made to secure the performance of tenders, bids, leases, statutory obligations, surety and appeal bonds, government contracts, performance and return-of-money bonds and other obligations of a like nature incurred in the ordinary course of business (exclusive of obligations for the payment of borrowed money); (v) easements, rights-of-way, restrictions, minor defects or irregularities in title and other similar charges or encumbrances not interfering in any material respect with the business of PRIMEDIA or any of its Subsidiaries incurred in the ordinary course of business; (vi) Liens (including extensions and renewals thereof) upon real or tangible personal property acquired after the date of the Indenture, PROVIDED that (a) any such Lien is created solely for the purpose of securing Indebtedness representing, or incurred to finance, refinance or refund, the cost (including the cost of construction) of the item of property subject thereto, (b) the principal amount of the Indebtedness secured by such Lien does not exceed 100% of such cost, (c) such Lien does not extend to or cover any other property other than such item of property and any improvements on such item and (d) the incurrence of such Indebtedness is permitted by the INCURRENCE OF INDEBTEDNESS covenant; (vii) Liens securing reimbursement obligations with respect to letters of credit which encumber documents and other property relating to such letters of credit and the products and proceeds thereof; 71 (viii) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods; (ix) judgment and attachment Liens not giving rise to an Event of Default; (x) leases or subleases granted to others not interfering in any material respect with the business of PRIMEDIA or any of its Subsidiaries; (xi) Liens encumbering customary initial deposits and margin deposits, and other liens incurred in the ordinary course of business and which are within the general parameters customary in the industry, in each case securing Indebtedness under Interest Rate Agreements and Currency Agreements; (xii) Liens encumbering deposits made to secure obligations arising from statutory, regulatory, contractual or warranty requirements of PRIMEDIA or its Subsidiaries; (xiii) Liens arising out of consignment or similar arrangements for the sale of goods entered into by PRIMEDIA or any of its Subsidiaries in the ordinary course of business of PRIMEDIA and its Subsidiaries; (xiv) any interest or title of a lessor in the property subject to any Capital Lease Obligation or operating lease; (xv) Liens arising from filing Uniform Commercial Code financing statements regarding leases; (xvi) Liens permitted by the Credit Facilities as in effect on the date of the Indenture; (xvii) Liens securing Indebtedness described in clause (xii) of the second paragraph of the INCURRENCE OF INDEBTEDNESS covenant; (xviii) Liens between PRIMEDIA and any Restricted Subsidiary or between Restricted Subsidiaries; (xix) Liens securing letters of credit in an amount not to exceed $75 million in the aggregate at any one time; (xx) Liens in an amount not to exceed $50 million in the aggregate at any one time; (xxi) Liens incurred by Partially Owned Restricted Subsidiaries which do not exceed 10% of Total Assets in the aggregate at any one time; and (xxii) Liens on assets of a Securitization Subsidiary arising in connection with a Qualified Securitization Transaction. "Pro Rata Portion" means, with respect to any Partially Owned Restricted Subsidiary, the percentage of such Partially Owned Restricted Subsidiary's outstanding Equity Interests beneficially owned by PRIMEDIA and its Restricted Subsidiaries. "Qualified Securitization Transaction" means any transaction or series of transactions that may be entered into by PRIMEDIA or any Restricted Subsidiary pursuant to which PRIMEDIA or any Restricted Subsidiary may sell, convey or otherwise transfer to (a) a Securitization Subsidiary (in the case of a transfer by PRIMEDIA or of any Restricted Subsidiary) and (b) any other person (in the case of a transfer by a Securitization Subsidiary), or may grant a security interest in, Receivables and Other Assets. "Receivables and Other Assets" means, with respect to any person, all of the following property and interests in property of such person, whether now existing or existing in the future or hereafter acquired or arising: (1) accounts; (2) accounts receivable or other similar rights to future payments in respect of assets sold or to be sold, rights granted or to be granted or services rendered or to be rendered, including, without 72 limitation, all rights to payment created by or arising from sales of goods, lease of goods or the rendition of services no matter how evidenced, whether or not earned by performance; (3) all unpaid seller's or lessor's rights, including, without limitation, recession, replevin, reclamation and stoppage in transit, relating to any of the foregoing or arising therefrom; (4) all rights to any goods or merchandise represented by any of the foregoing, including, without limitation, returned or repossessed goods; (5) all reserves and credit balances with respect to any such accounts receivable or account debtors; (6) all letters of credit, security or guarantees of any of the foregoing; (7) all insurance policies or reports relating to any of the foregoing; (8) all collection or deposit accounts relating to any of the foregoing; (9) all proceeds of any of the foregoing; and (10) all books and records relating to any of the foregoing. "Redeemable Stock" means any Equity Interest which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable before the stated maturity of the notes), or upon the happening of any event, matures or is mandatorily redeemable, in whole or in part, prior to the stated maturity of the notes, or is, by its terms or upon the happening of any event, redeemable at the option of the holder thereof, in whole or in part, at any time prior to the stated maturity of the notes except for Equity Interests of PRIMEDIA issued to present and former members of management of PRIMEDIA and its Subsidiaries pursuant to subscription and option agreements in effect on the date of the Indenture or under any stock option plan of About.com, Inc. existing on the date of the Indenture and common stock and options of PRIMEDIA issued to future members of management of PRIMEDIA and its Subsidiaries pursuant to subscription agreements executed subsequent to the date of the Indenture containing provisions for the repurchase of such common stock and options upon death, disability or termination of employment of such persons which are substantially identical to those contained in the subscription agreements in effect on the date of the Indenture; PROVIDED that for purposes of the "LIMITATION OF RESTRICTED PAYMENTS" covenant and for purposes of the definition of Indebtedness, Redeemable Stock does not include the Series D Preferred Stock, the Series F Preferred Stock or the Series H Preferred Stock. "Registration Rights Agreement" means (a) the registration rights agreement, dated May 8, 2001, among PRIMEDIA, the Guarantors and Salomon Smith Barney Inc., J.P. Morgan Securities Inc. and Banc of America Securities LLC, as representatives of the initial purchasers, and (b) with respect to each issuance of additional notes issued in a transaction exempt from the registration requirements of the Securities Act, the registration rights agreement, if any, among PRIMEDIA and the persons purchasing such additional notes under the related purchase agreement. "Restricted Payment Unrestricted Subsidiary" means an Unrestricted Subsidiary which was capitalized exclusively with a permitted Restricted Payment or with the proceeds from the issuance of an Equity Interest by PRIMEDIA or with the proceeds of the sale of stock or substantially all of the assets of any other Unrestricted Subsidiary which was capitalized with such funds to the extent that a liquidating dividend is paid to PRIMEDIA for any Restricted Subsidiary from the proceeds of such sale. "Restricted Subsidiary" means a Subsidiary of PRIMEDIA which at the time of determination is not an Unrestricted Subsidiary. "Securitization Subsidiary" means any person to which PRIMEDIA or any Restricted Subsidiary of PRIMEDIA transfers Receivables and Other Assets that engages in no activities other than in 73 connection with financing of Receivables and Other Assets and that is designated by the board of directors as a Securitization Subsidiary and (A) no portion of the Indebtedness or any other Obligations (contingent or otherwise) of which (i) is guaranteed by PRIMEDIA or any Restricted Subsidiary (excluding guarantees of Obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings); (ii) is recourse to or obligates PRIMEDIA or any Restricted Subsidiary (other than such Securitization Subsidiary) in any way other than pursuant to Standard Securitization Undertakings; (iii) subjects any property or asset of PRIMEDIA or any Restricted Subsidiary (other than such Securitization Subsidiary), directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings; (B) with which neither PRIMEDIA nor any Restricted Subsidiary (other than such Securitization Subsidiary) has any material contract, agreement, arrangement or understanding other than on terms no less favorable to PRIMEDIA or such Restricted Subsidiary than those that might be obtained at the time from persons that are not Affiliates of PRIMEDIA, other than fees payable in the ordinary course of business in connection with servicing Receivables and Other Assets of such entity; and (C) to which neither PRIMEDIA nor any Restricted Subsidiary (other than such Securitization Subsidiary) has any obligation to maintain or preserve such entity's financial condition or cause such entity to achieve certain levels of operating results. Any designation of a Securitization Subsidiary will be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the board of directors of PRIMEDIA giving effect to the designation and an officers' certificate certifying that the designation complied with the preceding conditions and was permitted by the Indenture. "Series D Preferred Stock" means PRIMEDIA's $10.00 Series D Exchangeable Preferred Stock Redeemable 2008, par value $0.01 per share. "Series F Preferred Stock" means PRIMEDIA's $9.20 Series F Exchangeable Preferred Stock Redeemable 2009, issuable in exchange for the Series E Preferred Stock and containing terms identical to the Series E Preferred Stock. "Series H Preferred Stock" means PRIMEDIA's $8.625 Series H Exchangeable Preferred Stock Redeemable 2010 issuable in exchange for the Series G Preferred Stock and containing terms identical to the Series G Preferred Stock. "Significant Subsidiary" means any Subsidiary that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date of the Indenture. "Standard Securitization Undertakings" means representations, warranties, covenants and indemnities entered into by PRIMEDIA or any Restricted Subsidiary that are reasonably customary in a Qualified Securitization Transaction. "Subsidiary" of any person means any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such person or one or more of the other Subsidiaries of that person or a combination thereof. "Total Assets" means the total consolidated assets of the Company and its Restricted Subsidiaries. 74 "Transfers" means: (i) any payment of interest on Indebtedness, dividends or repayments of loans or advances; and (ii) any other transfers of assets, in each case from an Unrestricted Subsidiary to PRIMEDIA or any of its Restricted Subsidiaries. "Unrestricted Subsidiary" means: (i) each of the following Subsidiaries of the Company, unless and until such Subsidiary ceases to be a Subsidiary of the Company or is designated as a Restricted Subsidiary pursuant to the terms of the Indenture: PRIMEDIANet Inc.; PRIMEDIA Ventures, Inc.; PRIMEDIA Teenclick Corp.; PRIMEDIA Digital Video Holdings LLC; About.com, Inc.; HPC Interactive, LLC; Media Central Acquisition, LLC; Kagan World Media Limited; Kagan Asia Media, Ltd.; In New York LLC; and PRIMEDIA International, Inc.; (ii) any other Subsidiary of PRIMEDIA which at the time of determination is an Unrestricted Subsidiary (as designated by the board of directors of PRIMEDIA, as provided below); and (iii) any subsidiary of an Unrestricted Subsidiary. The board of directors of PRIMEDIA may designate any Subsidiary of PRIMEDIA (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary owns any Capital Stock of, or owns, or holds any Lien on, any property of, any other Subsidiary of PRIMEDIA which is not a Subsidiary of the Subsidiary to be so designated; PROVIDED that: (a) PRIMEDIA certifies that such designation complies with the LIMITATION ON RESTRICTED PAYMENTS AND INVESTMENTS IN UNRESTRICTED SUBSIDIARIES covenants; and (b) the Subsidiary to be so designated has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness pursuant to which the lender has recourse to any of the assets of PRIMEDIA or any of its Restricted Subsidiaries. The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED that immediately after giving effect to such designation, PRIMEDIA could incur at least $1.00 of additional Indebtedness pursuant to the first paragraph of the INCURRENCE OF INDEBTEDNESS covenant (without giving effect to clauses (i) through (xvi) of the second paragraph of that covenant) on a pro forma basis taking into account such designation. "Working Capital" means, with respect to any person for any period, the current assets of such person and its Subsidiaries (and in the case of PRIMEDIA and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of Partially Owned Restricted Subsidiaries, including only the Pro Rata Portion thereof) on a consolidated basis, after excluding therefrom cash and cash equivalents and deferred income taxes, less the current liabilities of such person and its Subsidiaries (and in the case of PRIMEDIA and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of Partially Owned Restricted Subsidiaries, including only the Pro Rata Portion thereof) on a consolidated basis, after excluding therefrom, in each case to the extent otherwise included therein, all short-term Indebtedness for borrowed money, the current portion of any long-term Indebtedness, liabilities arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts, which will not be, and will not be deemed to be, inadvertent) drawn against insufficient funds in the ordinary course of business, PROVIDED that such liabilities are extinguished within three business days of this incurrence, and deferred income taxes of such person and its Subsidiaries (and in the case of PRIMEDIA and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of Partially Owned Restricted Subsidiaries, including only the Pro Rata Portion thereof). 75 CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES The following is a summary of certain U.S. federal income tax consequences of the acquisition, ownership and disposition of new notes as of the date of this prospectus. Except where noted, this summary deals only with new notes that are acquired in connection with this exchange offer and held as capital assets and does not deal with taxpayers subject to special treatment under the U.S. federal income tax laws, including if you are one of the following: - a dealer in securities or currencies; - a financial institution; - an insurance company; - a tax exempt organization; - a person holding the new notes as part of a hedging, integrated or conversion transaction, a constructive sale or straddle; - a trader in securities that has elected the mark-to-market method of accounting for your securities; - a person liable for alternative minimum tax; or - a U.S. person whose "functional currency" is not the U.S. dollar. If a partnership holds the new notes, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. If you are a partner of a partnership holding the new notes, you should consult your own tax advisors. The discussion below is based upon the provisions of the Internal Revenue Code of 1986, as amended, and regulations, rulings and judicial decisions as of the date of this prospectus. Those authorities may be changed, perhaps retroactively, so as to result in U.S. federal income tax consequences different from those discussed below. IF YOU ARE CONSIDERING THE ACQUISITION OF NEW NOTES, YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE FEDERAL INCOME TAX CONSEQUENCES TO YOU AND ANY CONSEQUENCES ARISING UNDER THE LAWS OF ANY FOREIGN, STATE, LOCAL OR OTHER TAXING JURISDICTION. CONSEQUENCES OF THE EXCHANGE The exchange of the old notes for the new notes in the exchange offer (see "The Exchange Offer") will not constitute a taxable event to you. As a result: - you will not realize any gain or loss upon receipt of a new note; - the holding period of the new note will include the holding period of the old note exchanged for the new note; and - the adjusted basis of the new note will be the same as the adjusted tax basis of the old note exchanged for the new note immediately before the exchange. CONSEQUENCES TO U.S. HOLDERS The following is a summary of certain U.S. federal tax consequences that will apply to you if you are a U.S. holder of new notes. The material consequences to "non-U.S. holders" of new notes, who are beneficial owners of exchange notes and who are not U.S. holders, are described below under "Consequences to Non-U.S. Holders". 76 "U.S. holder" means a beneficial owner of a new note that is: - a citizen or resident of the United States; - a corporation or partnership created or organized in or under the laws of the United States or any political subdivision of the U.S.; - an estate the income of which is subject to U.S. federal income taxation regardless of its source; or - a trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person. PAYMENTS OF INTEREST Except as set forth below, interest on a new note will generally be taxable to you as ordinary income from domestic sources at the time it is paid or accrued in accordance with your method of accounting for tax purposes. AMORTIZABLE BOND PREMIUM If you purchased an old note for an amount in excess of the sum of all amounts payable on the old note after the purchase date other than stated interest, you will be considered to have purchased the note at a "premium." You generally may elect to amortize the premium over the remaining term (or an applicable call date as discussed below) of the new note on a constant yield method as an offset to interest when includible in income under your regular method of accounting. The new notes are subject to a call provision at the option of PRIMEDIA at various times, as described in this prospectus under "Description of New Notes--Optional Redemption." You will calculate the amount of amortizable bond premium based on the amount payable at the applicable call date, but only if use of the call date (in lieu of the stated maturity date) results in a smaller amortizable bond premium for the period ending on the call date. If you do not elect to amortize bond premium, that premium will decrease the gain or increase the loss you would otherwise recognize on disposition of the new note. Your election to amortize premium on a constant yield method will also apply to all debt obligations held or subsequently acquired by you on or after the first day of the first taxable year to which the election applies. You may not revoke the election without the consent of the Internal Revenue Service. You should consult your own tax advisor before making this election. CALCULATION OF AMORTIZABLE BOND PREMIUM IS COMPLICATED, AND WE URGE YOU TO CONSULT YOUR OWN TAX ADVISOR CONCERNING THE APPLICATION OF THESE RULES AS THEY APPLY TO YOU. MARKET DISCOUNT If you purchased an old note for an amount that is less than its stated redemption price at maturity, the amount will be treated as "market discount" for United States federal income tax purposes, unless that difference is less than a specified de minimis amount. Under the market discount rules, you will be required to treat any payment, other than stated interest, on, or any gain on the sale, exchange, retirement or other disposition of, a new note as ordinary income to the extent of the market discount that you have not previously included in income and are treated as having accrued on the new note at the time of its payment or disposition. In addition, you may be required to defer, until the maturity of the new note or its earlier disposition in a taxable transaction, the deduction of all or a portion of the interest expense on any indebtedness attributable to the new note. Any market discount will be considered to accrue ratably during the period from the date of acquisition to the maturity date of the new note, unless you elect to accrue on a constant yield interest 77 method. You may elect to include market discount in income currently as it accrues, on either a ratable or constant yield interest method, in which case the rule described above regarding deferral of interest deductions will not apply. Your election to include market discount in income currently, once made, applies to all market discount obligations acquired by you on or after the first taxable year to which your election applies and may not be revoked without the consent of the Internal Revenue Service. You should consult your own tax advisor before making this election. SALE, EXCHANGE AND RETIREMENT OF NOTES When you sell, exchange or retire a new note, you will recognize gain or loss equal to the difference between the amount you receive (less an amount equal to any accrued interest you have not previously included in income, which will be taxable as interest income) and your adjusted basis in the new note. Except as described above with respect to market discount, your gain or loss realized on the sale, exchange or retirement of a new note will generally be treated as capital gain or loss, and will be long-term capital gain or loss if at the time of the sale, exchange or retirement of a new note, you have held the new note for more than one year. Long-term capital gains of individuals are eligible for reduced rates of taxation. The deductability of capital losses is subject to limitations. INFORMATION REPORTING AND BACKUP WITHHOLDING In general, information reporting requirements will apply to certain payments of principal, interest and premium paid on new notes and to the proceeds of sale of a new notes made to you, unless you are an exempt recipient, like a corporation. A backup withholding tax will apply to those payments if you fail to provide a taxpayer identification number, a certification of exempt status, or fail to report in full dividend and interest income. CONSEQUENCES TO NON-U.S. HOLDERS The following is a summary of certain U.S. federal income tax consequences that will apply to you if you are a non-U.S. holder of new notes. This summary does not represent a detailed description of the federal income tax consequences to you in light of your particular circumstances. In addition, it does not deal with non-U.S. holders that are subject to special treatment under the U.S. federal income tax laws (including if you are a controlled foreign corporation, passive foreign investment company, foreign personal holding company, a corporation that accumulates earnings to avoid federal income tax, or in certain circumstances, a United States expatriate). U.S. FEDERAL WITHHOLDING TAX The 30% U.S. federal withholding tax will not apply to any payment of principal or interest on the new notes provided that: - you do not actually, or constructively, own 10% or more of the total combined voting power of all classes of our voting stock within the meaning of the Internal Revenue Code and applicable U.S. Treasury regulations; - you are not a controlled foreign corporation that is related to us through stock ownership; - you are not a bank whose receipt of interest on the exchange notes is described in section 881(c)(3)(A) of the Internal Revenue Code; and - (a) you provide your name and address on an Internal Revenue Service Form W-BEN (or other applicable form), and certify, under penalties of perjury, that you are not a U.S. person or (b) you hold the exchange notes through certain foreign intermediaries and you satisfy the certification requirements of applicable U.S. Treasury regulations. Special certification rules apply to certain non-U.S. holders that are entities rather than individuals. 78 If you cannot satisfy the requirements described above, payments of interest made to you will be subject to the 30% U.S. federal withholding tax, unless you provide us with a properly executed (1) Internal Revenue Service Form W-8BEN (or other applicable form) claiming an exemption from, or reduction in, withholding under the benefit of an applicable tax treaty; or (2) Internal Revenue Service Form W-8ECI (or successor form) stating that interest paid on a new note is not subject to withholding because it is effectively connected with your conduct of a trade or business in the United States, as described below under "U.S. Federal Income Tax". The 30% U.S. federal withholding tax will not generally apply to any gain that you realize on the sale, exchange, retirement or other disposition of the new notes. U.S. FEDERAL ESTATE TAX Your estate will not be subject to U.S. federal estate tax on new notes beneficially owned by you at the time of your death, provided that you are not a U.S. citizen or resident (as specifically defined for U.S. federal estate tax purposes) and (1) you do not own 10% or more of the total combined voting power of all classes of our voting stock (within the meaning of the Internal Revenue Code and the U.S. Treasury regulations) and (2) interest on the new note would not have been, if received at the time of your death, effectively connected with the conduct by you of a trade or business in the United States. U.S. FEDERAL INCOME TAX If you are engaged in a trade or business in the United States and interest on the new notes is effectively connected with the conduct of that trade or business, you will be subject to U.S. Federal income tax on that interest on a net income basis in the same manner as if you were a U.S. person as defined under the Internal Revenue Code, although that interest income will be exempt from the 30% U.S. federal withholding tax. In addition, if you are a foreign corporation, you may be subject to a branch profits tax equal to 30% (or lower applicable treaty rate) of your earnings and profits for the taxable year, subject to certain adjustments. Any gain realized on the disposition of a new note generally will not be subject to U.S. federal income tax unless: - the gain is effectively connected with the conduct by you of a trade or business in the United States, or - you are an individual who is present in the United States for 183 days or more in the taxable year of that disposition, and other conditions are met. INFORMATION REPORTING AND BACKUP WITHHOLDING In general, you will not be subject to backup withholding and information reporting with respect to payments that we make to you provided that we do not have actual knowledge that you are a U.S. person and we have received from you the statement described above under "Consequences to Non-U.S. Holders--U.S. Federal Withholding Tax." In addition, you will not be subject to backup withholding or information reporting with respect to the proceeds of the sale of a new note within the United States or conducted through U.S.-related financial intermediaries, if the payor receives the statement described above and does not have actual knowledge that you are a U.S. person, as defined under the Internal Revenue Code, or you otherwise establish an exemption. 79 PLAN OF DISTRIBUTION Each broker-dealer that receives new notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of the new notes. This prospectus, as it may be amended or supplemented, may be used by a broker-dealer in connection with resales of new notes received in exchange for old notes only where the old notes were acquired as a result of market-making activities or other trading activities. We have agreed that we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any resale for a period of 180 days from the date on which the exchange offer is consummated, or any shorter period as will terminate when all old notes acquired by broker-dealers for their own accounts as a result of market-making activities or other trading activities have been exchanged for new notes and the new notes have been resold by the broker-dealers. We will not receive any proceeds from any sale of new notes by broker-dealers. New notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the new notes or a combination of these methods of resale, at market prices prevailing at the time of resale, at prices related to the prevailing market prices or negotiated prices. Any resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any broker-dealer or the purchasers of any new notes. Any broker-dealer that resells new notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of the new notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any resale of new notes and any commissions or concessions received by these persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. For a period of 180 days from the date on which the exchange offer is consummated, or a shorter period as will terminate when all old notes acquired by broker-dealers for their own accounts as a result of market-making activities or other trading activities have been exchanged for new notes and the new notes have been resold by the broker-dealers, we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests the documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer, including the expenses of one counsel for the holders of the old notes, other than commissions or concessions of any brokers or dealers and the fees of any counsel or other advisors or experts retained by the holders of old notes, except as expressly set forth in the registration rights agreement, and will indemnify the holders of old notes, including any broker-dealers, against certain liabilities, including liabilities under the Securities Act. 80 LEGAL MATTERS Certain legal matters with respect to the new notes and the guarantees are being passed upon on our behalf by Simpson Thacher & Bartlett, New York, New York. EXPERTS The financial statements and the related financial statement schedule incorporated in this prospectus by reference from PRIMEDIA's Annual Report on Form 10-K for the year ended December 31, 2000 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their reports, which are incorporated herein by reference, and have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing. The consolidated financial statements of About.com as of December 31, 2000 and for the year then ended, incorporated by reference in this prospectus from PRIMEDIA's current report on Form 8-K/A dated April 26, 2001, have been audited by Ernst & Young LLP, independent auditors, as stated in their report, which is incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. 81 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- $500,000,000 8 7/8% SENIOR NOTES DUE 2011 [LOGO] OFFER TO EXCHANGE ALL OUTSTANDING $500,000,000 8 7/8% SENIOR NOTES DUE 2011 FOR $500,000,000 8 7/8% SENIOR NOTES DUE 2011, WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 UNCONDITIONALLY GUARANTEED ON A SENIOR BASIS BY ALL OUR DOMESTIC WHOLLY-OWNED RESTRICTED SUBSIDIARIES, OTHER THAN SECURITIZATION SUBSIDIARIES ----------------- P R O S P E C T U S ------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS (a) PRIMEDIA Inc., Adams/Laux Company, Inc., Bacon's Information, Inc., Canoe & Kayak, Inc., Channel One Communications Corp., Climbing, Inc., CSK Publishing Company Inc., ENO Productions, Inc., Films for the Humanities & Sciences, Inc., Game & Fish Publications, Inc., Haas Publishing Companies, Inc., Hacienda Productions, Inc., HPC Brazil, Inc., Intertec Publishing Corp., Kagan World Media, Inc., Kitplanes Acquisition Company, Paul Kagan Associates, Inc., PRIMEDIA Companies Inc., PRIMEDIA Enterprises, Inc., PRIMEDIA Finance Shared Services, Inc., PRIMEDIA Holdings III Inc., PRIMEDIA Information Inc., PRIMEDIA Magazines Inc., PRIMEDIA Magazine Finance Inc. and PRIMEDIA Special Interest Publications Inc. Reference is made to Section 102(b)(7) of the Delaware General Corporation Law (the "DGCL") which enables a corporation in its original certificate of incorporation or an amendment thereto to eliminate or limit the personal liability of a director for violations of the director's fiduciary duty, except (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for liability of directors for unlawful payment of dividends or unlawful stock purchase or redemptions pursuant to Section 174 of the DGCL or (iv) for any transaction from which a director derived an improper personal benefit. Reference also is made to Section 145 of the DGCL, which provides that a corporation may indemnify any persons, including officers and directors, who are, or are threatened to be made, parties to any threatened, pending or completed legal action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person was an officer, director, employee or agent of such corporation or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided such officer, director, employee or agent acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation's best interest and, for criminal proceedings, had no reasonable cause to believe that his conduct was unlawful. A Delaware corporation may indemnify officers and directors in an action by or in the right of the corporation under the same conditions, except that no indemnification is permitted without judicial approval if the officer or director is adjudged to be liable to the corporation. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him against the expenses that such officer or director actually and reasonably incurred. The certificate of incorporations and/or bylaws of PRIMEDIA Inc., Adams/Laux Company, Inc., Bacon's Information, Inc., Canoe & Kayak, Inc., Channel One Communications Corporation, Climbing, Inc., CSK Publishing Company, Inc., ENO Productions, Inc., Films for the Humanities & Sciences, Inc., Game & Fish Publications, Inc., Haas Publishing Companies, Inc., Hacienda Productions, Inc., HPC Brazil, Inc., Intertec Publishing Corp., Kagan World Media, Inc., Kitplanes Acquisition Company, Paul Kagan Associates, Inc., PRIMEDIA Companies Inc., PRIMEDIA Enterprises, Inc., PRIMEDIA Finance Shared Services, Inc., PRIMEDIA Holdings III Inc., PRIMEDIA Information Inc., PRIMEDIA Magazines Inc., PRIMEDIA Magazine Finance Inc. and PRIMEDIA Special Interest Publications Inc. provide for the mandatory indemnification of their directors and officers, and the discretionary indemnification of their employees and other agents, to the maximum extent permitted by the DGCL. II-1 As permitted by sections 102 and 145 of the DGCL, the certificate of incorporation of PRIMEDIA Inc., Adams/Laux Company, Inc., Bacon's Information, Inc., Canoe & Kayak, Inc., Channel One Communications Corp., Climbing, Inc., ENO Productions, Inc., Films for the Humanities & Sciences, Inc., Game & Fish Publications, Inc., Haas Publishing Companies, Inc., Hacienda Productions, Inc., HPC Brazil, Inc., Intertec Publishing Corp., Kagan World Media, Inc., Kitplanes Acquisition Company, Paul Kagan Associates, Inc., PRIMEDIA Companies Inc., PRIMEDIA Enterprises, Inc., PRIMEDIA Finance Shared Services, Inc., PRIMEDIA Holdings III Inc., PRIMEDIA Information Inc., PRIMEDIA Magazines Inc., PRIMEDIA Magazine Finance Inc. and PRIMEDIA Special Interest Publications Inc. eliminate a director's personal liability for monetary damages to the company and its stockholders arising from a breach of a director's fiduciary duty, other than for a breach of a director's duty of loyalty or for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, and except as otherwise provided under the DGCL. (b) Cover Concepts Marketing Services, LLC and MediaCentral LLC Cover Concepts Marketing Services, LLC and MediaCentral LLC (each, a "Company") are permitted by section 18-108 of the Delaware Limited Liability Company Act, subject to the procedures and limitations stated therein, to indemnify any person against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with any threatened, pending or completed action, suit or proceeding in which such person is made a party by reason of his being or having been a director, officer, employee or agent of the Company. The statute provides that indemnification pursuant to its provisions is not exclusive of other rights of indemnification to which a person may be entitled under any agreement, vote of members or disinterested directors or otherwise. The limited liability company agreement of Cover Concepts Marketing Services, LLC and MediaCentral LLC permit indemnification by the company for any loss, damage, cost or expense by reason of any act or omission performed or omitted by a manager on behalf of the company and in a manner believed to be within the scope of his or her authority, subject to certain exceptions. (c) Bowhunter Magazine, Inc. and PRIMEDIA Enthusiast Publications, Inc. Subchapter D of Chapter 17 of the Pennsylvania Business Corporation Law of 1988 (the "PBCL" or "Pennsylvania Law") contains provisions for mandatory and discretionary indemnification of a corporation's directors, officers, employees and agents, and related matters, which are summarized below. Under Section 1741, subject to certain limitations, a corporation has the power to indemnify directors, officers and other parties under certain prescribed circumstances against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with a threatened, pending or completed action or proceeding, whether civil, criminal, administrative or investigative, to which any of them is a party or threatened to be made a party by reason of his being a representative of the corporation or serving at the request of the corporation as a representative of another corporation, partnership, joint venture, trust or other enterprise, if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal proceeding, had no reasonable cause to believe his conduct was unlawful. Section 1742 provides for indemnification with respect to derivative actions similar to that provided by Section 1741. However, indemnification is not provided under Section 1742 in respect of any claim, issue or matter as to which a party has been adjudged to be liable to the corporation unless and only to the extent that the proper court determines upon application that, despite the adjudication of liability II-2 but in view of all the circumstances of the case, the party is fairly and reasonably entitled to indemnity for the expenses that the court deems proper. Section 1743 provides that indemnification against expenses is mandatory to the extent that a party has been successful on the merits or otherwise in defense of any such action or proceeding referred to in Section 1741 or 1742. Section 1744 provides that unless ordered by a court, any indemnification under Section 1741 or 1742 shall be made by the corporation as authorized in the specific case upon a determination that indemnification of a party is proper because the party met the applicable standard of conduct, and such determination will be made by (i) the board of directors by a majority vote of a quorum of directors not parties to the action or proceeding; (ii) if a quorum is not obtainable or if obtainable and a majority of disinterested directors so directs, by independent legal counsel in a written opinion; or (iii) by the shareholders. Section 1745 provides that expenses incurred by a parties in defending any action or proceeding referred to in Subchapter D of Chapter 17 of the PBCL may be paid by the corporation in advance of the final disposition of such action or proceeding upon receipt of an undertaking by or on behalf of the party to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the corporation. Section 1746 provides generally that except in any case where the act or failure to act giving rise to the claim for indemnification is determined by a court to have constituted willful misconduct or recklessness, the indemnification and advancement of expenses provided by Subchapter D of Chapter 17 of the PBCL shall not be deemed exclusive of any other rights to which a Representative seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of shareholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding that office. The by-laws of Bowhunter Magazine, Inc. and PRIMEDIA Enthusiast Publications, Inc. provide that, to the fullest extent permitted by the PBCL, as amended from time to time, will indemnify any and current or former directors or officers, and may indemnify any current or former employee or agents, from and against any and all of the expenses, liabilities, or other matters referred to in the PBCL. (d) Communication Concepts, Inc. Subsection 1 of Section 78.7502 of the Nevada General Corporation Law (the "NGCL") empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit, or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Subsection 2 of Section 78.7502 empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person acted in any of the capacities set forth above against expenses, including amounts paid in settlement and attorneys' fees actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted under similar standards, except that no indemnification II-3 may be made in respect of any claim, issue or matter as to which such person shall have been adjudged by a court of competent jurisdiction to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which such action or suit was brought determines that, despite the adjudication of liability, such person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper. Section 78.7502 further provides that to the extent a director or officer of a corporation has been successful in the defense of any action, suit or proceeding referred to in subsections (1) and (2), or in the defense of the claim, issue or matter, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him. Section 78.751 of the NGCL provides that the indemnification provided for by Section 78.7502 shall not be deemed exclusive or exclude any other rights to which the indemnified party may be entitled and that the scope of indemnification shall continue as to directors, officers, employees or agents who have ceased to hold such positions, and to their heirs, executors and administrators. Article VI of the Articles of Incorporation of Communication Concepts, Inc. provides that, to the fullest extent permitted by the NGCL, as amended from time to time, the company will indemnify its directors from and against any and all of the expense, liabilities or other matters referred to in the NGCL. Article VI further provides that a director shall not be liable for damages for actions of the corporation to stockholder or to any other person (natural or otherwise) unless such director engages in personal fraud affecting such action or actions of the corporation. (e) Cowles History Group, Inc. Cowles History Group, Inc. is permitted by sections 13.1-697 and 13.1-702 of the Virginia Stock Corporation Act ("VSCA"), subject to the procedures and limitations stated therein and in section 13.1-701, to indemnify directors, officers, employees, and agents in civil or criminal actions if they acted in good faith and believed their conduct to be in the best interests of the corporation and, in the case of criminal actions, had no reasonable cause to believe that the conduct was unlawful. Article X of Cowles History Group, Inc.'s Articles of Incorporation states that no director shall be personally liable to the corporation or its shareholders for monetary damages for breach of fiduciary duty to the extent allowable by the VSCA provided that (1) the director did not breach his duty of loyalty to the corporation or its shareholders, (2) the director did not act in good faith or knowingly violated the law, or (3) the director did not derive an improper personal benefit from his actions. (f) Symbol of Excellence Publishers, Inc. Sections 10-2B-8.51 and 10-2B-8.56 of the Code of Alabama gives a corporation power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, against expenses (including attorneys' fees), judgments, penalties, fines and amounts paid in settlement reasonably incurred by him in connection with such action, suit or proceeding. Indemnification is only allowed if the person acted in good faith and in a manner he reasonably believed to be in the best interests of the corporation, when acting in his or her official capacity with the corporation, or, in all other cases, not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The same sections also give a corporation power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding by or in the right of the corporation, against expenses (including attorneys' fees) reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in the best interests of the corporation, when acting in his or her official capacity with the corporation or, in all other cases, not opposed to the best interests of the corporation. No indemnification shall be made, however, in respect of any claim, issue or matter as to II-4 which such person shall have not met the applicable standard of conduct, shall have been adjudged to be liable to the corporation or, in connection with any other action, suit or proceeding charging improper personal benefit to such person, if such person was adjudged liable on the basis that personal benefit was improperly received by him, unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for expenses which the court shall deem proper. Section 10-2B-8.52 further states that, to the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any such action, suit or proceeding, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) reasonably incurred by him in connection therewith, notwithstanding that he has not been successful on any other claim, issue or matter in any such action, suit or proceeding. As permitted by the Code of Alabama, the by-laws of Symbol of Excellence Publishers, Inc. provide that, to the fullest extent permitted by the Code of Alabama, as amended from time to time, the company will indemnify any and current or former directors or officers, and may indemnify any current or former employee or agents, from and against any and all of the expenses, liabilities, or other matters referred to in the Code of Alabama. (g) The Virtual Flyshop, Inc. Article 7-109 of the Colorado Business Corporation Act ("CBCA") authorizes the indemnification of directors and officers against liability incurred by reason of being a director or officer and against expenses (including attorney's fees), judgments, fines and amounts paid in settlement and reasonably incurred in connection with any action seeking to establish liability. In the case of third-party claims, if the officer or director acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and in the case of actions by or in the right of the corporation, if the officer or director acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and if the officer or director shall not have been adjudged liable to the corporation, the CBCA authorizes indemnification unless a court otherwise determines that this would contravene public policy. Indemnification is also authorized with respect to any criminal action or proceeding where the officer or director also had no reasonable cause to believe his conduct was unlawful. As permitted by the CBCA, Article VII(c) of the Articles of Incorporation and the by-laws of The Virtual Flyshop, Inc. provide that, to the fullest extent permitted by the CBCA, as amended from time to time, the company will indemnify any and current or former directors or officers, and may indemnify any current or former employee or agents, from and against any and all of the expenses, liabilities, or other matters referred to in the CBCA. (h) Go Lo Entertainment, Inc., Horse & Rider, Inc., IntelliChoice, Inc., Kagan Media Appraisals, Inc., Kagan Seminars, Inc., Low Rider Publishing Group, Inc., McMullen Argus Publishing, Inc. and Miramar Communications, Inc. Section 317 of the California General Corporations Law ("CGCL") authorizes a court to award, or a corporation's board of directors to grant, indemnity to directors and officers who are parties or are threatened to be made parties to any proceeding (with certain exceptions) by reason of the fact that the person is or was an agent of the corporation, against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with the proceeding if that person acted in good faith and in a manner the person reasonably believed to be in the best interests of the corporation. Section 317 of the CGCL does not extend to acts or omissions of a director in his capacity as an officer. Further, section 317 has no effect on claims arising under federal or state securities laws and does not affect the availability of injunctions and other equitable remedies available to its shareholders for any violation of a director's fiduciary duty to the corporation or its shareholders. II-5 Section 204 of the CGCL provides that the limitation on liability in section 317 has no effect on a director's liability (a) for acts or omissions that involve intentional misconduct or a knowing and culpable violation of law, (b) for acts or omissions that a director believes to be contrary to the best interests of the corporation or its shareholders or that involve the absence of good faith on the part of the director, (c) for any transaction from which a director derived an improper personal benefit, (d) for acts or omissions that show a reckless disregard for the director's duty to the corporation or its shareholders in circumstances in which the director was aware, or should have been aware, in the ordinary course of performing a director's duties, of a risk of a serious injury to the corporation or its shareholders, (e) for acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of the director's duty to the corporation or its shareholders, (f) under Section 310 of the law (concerning contracts or transactions between the corporation and a director), or (g) under Section 316 of the law (directors' liability for improper dividends, loans and guarantees). The certificate of incorporations and/or bylaws of Go Lo Entertainment, Inc., Horse & Rider, Inc., IntelliChoice, Inc., Low Rider Publishing Group, Inc. and McMullen Argus Publishing, Inc. provide for the mandatory indemnification of their directors and officers, and the discretionary indemnification of their employees and other agents, to the maximum extent permitted by the CGCL. The certification of incorporation and by-laws of Miramar Communications, Inc. do not have such a provision, but the board of directors may still indemnify directors pursuant to the CGCL. (i) Simba Information, Inc. Section 33-771 of the Connecticut Stock Corporation Act ("CSCA") authorizes a corporation to indemnify a director who is sued in his official capacity as long as (1) he conducted himself in good faith and (2) he reasonably believed that his official conduct was in the best interests of the corporation or that his conduct was not opposed to the best interests of the corporation. Indemnification is also available in the case of a criminal proceeding if the director had no reasonable cause to believe that his conduct was unlawful. Section 33-772 mandates that a corporation indemnify against reasonable expenses incurred by a director who is wholly successful, on the merits or otherwise, in defense of any proceeding to which he was a party because of his position as a director of the corporation. Section 33-779 of the CSCA limits the provision of indemnification solely to the conditions as specified by the CSCA. Section 33-778 of the CSCA provides that a corporation may obligate itself in advance to provide indemnification according to the requirements of Section 33-771 by a provision in its certificate of incorporation or by-laws or in a resolution approved by the board of directors or shareholders. Simba Information, Inc. contains such a provision in Article V of its by-laws, which states that the corporation will be bound and comply with the provisions of the CSCA pertaining to indemnification of corporate shareholders, officers, directors, employees, agents, and other eligible parties. ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (a) Exhibits
EXHIBIT NUMBER DESCRIPTION - --------------------- ----------- 2.1 Agreement and Plan of Merger among PRIMEDIA Inc., Abracadabra Acquisition Corporation and About. com, Inc. dated as of October 29, 2000. (1) **2.2 Agreement regarding acquisition of EMAP, Inc. 4.1 10 1/4 % Senior Note Indenture (including form of note and form of guarantee). (2) 4.2 8 1/2% Senior Note Indenture (including form of note and form of guarantee). (3) 4.3 Form of Class D Subordinated Debenture Indenture (including form of debenture). (4)
II-6
EXHIBIT NUMBER DESCRIPTION - --------------------- ----------- 4.4 Form of Class F Subordinated Debenture Indenture (including form of debenture). (5) 4.5 Form of Class H Subordinated Debenture Indenture (including form of debenture). (6) 4.6 7 5/8% Senior Note Indenture (including form of note and form of guarantee). (7) *4.7 Indenture, dated as of May 8, 2001, by and among PRIMEDIA Inc., certain of its subsidiaries and The Bank of New York. *4.8 Form of 8 7/8% Senior Note due 2011 (included in Exhibit 4.7). *4.9 Registration Rights Agreement, dated as of May 8, 2011 by and among PRIMEDIA Inc., certain of its subsidiaries and Salomon Smith Barney Inc., on behalf of the other underwriters. *5.1 Opinion of Simpson Thacher & Bartlett as to the legality of the securities being registered. *10.1 Credit Agreement dated as of June 20, 2001 among PRIMEDIA Inc., various lending institutions, Bank of America N.A., as syndication agent, The Bank of New York and The Bank of Nova Scotia, as co-documentation agents and The Chase Manhattan Bank, as administrative agent. *10.2 Amended and Restated About.com, Inc. 1999 Employee Stock Purchase Plan. *12.1 Statement re Computation of Ratios. *21.1 Subsidiaries of PRIMEDIA. *23.1 Consent of Simpson Thacher & Bartlett (contained in Exhibit 5.1). *23.2 Consent of Deloitte & Touche LLP. *23.3 Consent of Ernst & Young LLP. *24.1 Power of Attorney (contained on signature page). *25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York as Trustee. *99.1 Form of Letter of Transmittal. *99.2 Form of Notice of Guaranteed Delivery. *99.3 Form of Exchange Agent Agreement between The Bank of New York and PRIMEDIA to be used in connection with the exchange offer.
- ------------------------ * Filed herein ** To be filed by amendment (1) Incorporated by reference to Exhibit 2.1 filed with PRIMEDIA Inc.'s Registration Statement on Form S-4 (Registration No. 333-51432). (2) Incorporated by reference to Exhibit 4.4 to K-III Communication Corporation's Annual Report on Form 10-K for year ended December 31, 1994 (Registration No. 1-11106). (3) Incorporated by reference to Exhibit 4.1 to K-III Communication Corporation's Registration Statement on Form S-4 (Registration No. 333-03691). (4) Incorporated by reference to Exhibit 4.2 to K-III Communication Corporation's Registration Statement on Form S-4 (Registration No. 333-03691). (5) Incorporated by reference to Exhibit 4.1 to K-III Communication Corporation's Registration Statement on Form S-4 (Registration No. 333-38451). II-7 (6) Incorporated by reference to Exhibit 4.2 filed with PRIMEDIA Inc.'s Registration Statement on Form S-4 (Registration No. 333-51891). (7) Incorporated by reference to Exhibit 4.1 filed with PRIMEDIA Inc.'s Registration Statement on Form S-4 (Registration No. 333-51891). ITEM 22. UNDERTAKINGS The undersigned registrants hereby undertake: (1) To file, during any period in which offers or sales of the registered securities are being made, a post-effective amendment to this registration statement; (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in he information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low and high and of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) To include any material information with respect to the plan distribution not previously disclosed in the registration statement or any material change in such information in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (5) To respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. (6) To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. II-8 Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer of controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-9 SIGNATURES Pursuant to the requirements of the Securities Act, the registrants have duly caused this Form S-4 Registration Statement to be signed on their behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on August 17, 2001. PRIMEDIA INC. By: /s/ BEVERLY C. CHELL ----------------------------------------- (Beverly C. Chell) VICE CHAIRMAN AND SECRETARY
Adams/Intertec International, Inc. Adams/Laux Company, Inc. Bacon's Information, Inc. Bowhunter Magazine, Inc. Canoe & Kayak, Inc. Channel One Communications Corporation Climbing, Inc. Communication Concepts, Inc. Cover Concepts Marketing Services, LLC Cowles History Group, Inc. CSK Publishing Company, Inc. ENO Productions, Inc. Films for the Humanities & Sciences, Inc. Game & Fish Publications, Inc. Go Lo Entertainment, Inc. Haas Publishing Companies, Inc. Hacienda Productions, Inc. HPC Brazil, Inc. Horse & Rider, Inc. IntelliChoice, Inc. PRIMEDIA Business Magazines & Media Inc. Kagan Media Appraisals, Inc. Kagan Seminars, Inc. Kagan World Media, Inc. Kitplanes Acquisition Company Low Rider Publishing Group, Inc. McMullen Argus Publishing, Inc. MediaCentral LLC Miramar Communications Inc. Paul Kagan Associates, Inc. PRIMEDIA Companies Inc. PRIMEDIA Enterprises, Inc. PRIMEDIA Finance Shared Services Inc. PRIMEDIA Holdings III Inc. PRIMEDIA Information Inc. PRIMEDIA Magazines Inc. PRIMEDIA Magazine Finance Inc. PRIMEDIA Special Interest Publications Inc. PRIMEDIA Workplace Learning LP PRIMEDIA Enthusiast Publications, Inc. Simba Information, Inc. Symbol of Excellence Publishers, Inc. The Virtual Flyshop, Inc. By: /s/ BEVERLY C. CHELL ----------------------------------------- (Beverly C. Chell) SECRETARY
II-10 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears below constitutes and appoints Beverly C. Chell and Charles G. McCurdy, and each of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or either of them, or their or his or her substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Form S-4 Registration Statement has been signed below by the following persons in the capacities indicated on August 17, 2001.
NAME TITLE DATE ---- ----- ---- /s/ THOMAS S. ROGERS ------------------------------------------- Chief Executive Officer and August 17, 2001 (Thomas S. Rogers) Director /s/ LAWRENCE R. RUTKOWSKI ------------------------------------------- Chief Financial Officer August 17, 2001 (Lawrence R. Rutkowski) /s/ ROBERT J. SFORZO ------------------------------------------- Controller August 17, 2001 (Robert J. Sforzo) /s/ CHARLES G. MCCURDY ------------------------------------------- Director August 17, 2001 (Charles G. McCurdy) /s/ BEVERLY C. CHELL ------------------------------------------- Director August 17, 2001 (Beverly C. Chell) /s/ MEYER FELDBERG ------------------------------------------- Director August 17, 2001 (Meyer Feldberg) /s/ HENRY R. KRAVIS ------------------------------------------- Director August 17, 2001 (Henry R. Kravis) /s/ GEORGE R. ROBERTS ------------------------------------------- Director August 17, 2001 (George R. Roberts) /s/ MICHAEL T. TOKARZ ------------------------------------------- Director August 17, 2001 (Michael T. Tokarz)
II-11
NAME TITLE DATE ---- ----- ---- /s/ PERRY GOLKIN ------------------------------------------- Director August 17, 2001 (Perry Golkin) /s/ H. JOHN GREENIAUS ------------------------------------------- Director August 17, 2001 (H. John Greeniaus) /s/ SCOTT P. KURNIT ------------------------------------------- Director August 17, 2001 (Scott P. Kurnit) /s/ DAVID BELL ------------------------------------------- Director August 17, 2001 (David Bell)
II-12 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION - --------------------- ----------- 2.1 Agreement and Plan of Merger among PRIMEDIA Inc., Abracadabra Acquisition Corporation and About. com, Inc. dated as of October 29, 2000. (1) **2.2 Agreement regarding acquisition of EMAP, Inc. 4.1 10 1/4 % Senior Note Indenture (including form of note and form of guarantee). (2) 4.2 8 1/2% Senior Note Indenture (including form of note and form of guarantee). (3) 4.3 Form of Class D Subordinated Debenture Indenture (including form of debenture). (4) 4.4 Form of Class F Subordinated Debenture Indenture (including form of debenture). (5) 4.5 Form of Class H Subordinated Debenture Indenture (including form of debenture). (6) 4.6 7 5/8% Senior Note Indenture (including form of note and form of guarantee). (7) *4.7 Indenture, dated as of May 8, 2001, by and among PRIMEDIA Inc., certain of its subsidiaries and The Bank of New York. *4.8 Form of 8 7/8% Senior Note due 2011 (included in Exhibit 4.7). *4.9 Registration Rights Agreement, dated as of May 8, 2011 by and among PRIMEDIA Inc., certain of its subsidiaries and Salomon Smith Barney Inc., on behalf of the other underwriters. *5.1 Opinion of Simpson Thacher & Bartlett as to the legality of the securities being registered. *10.1 Credit Agreement dated as of June 20, 2001 among PRIMEDIA Inc., various lending institutions, Bank of America N.A., as syndication agent, The Bank of New York and The Bank of Nova Scotia, as co-documentation agents and The Chase Manhattan Bank, as administrative agent. *10.2 Amended and Restated About.com, Inc. 1999 Employee Stock Purchase Plan. *12.1 Statement re Computation of Ratios. *21.1 Subsidiaries of PRIMEDIA. *23.1 Consent of Simpson Thacher & Bartlett (contained in Exhibit 5.1). *23.2 Consent of Deloitte & Touche LLP. *23.3 Consent of Ernst & Young LLP. *24.1 Power of Attorney (contained on signature page). *25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York as Trustee. *99.1 Form of Letter of Transmittal. *99.2 Form of Notice of Guaranteed Delivery. *99.3 Form of Exchange Agent Agreement between The Bank of New York and PRIMEDIA to be used in connection with the exchange offer.
- ------------------------ * Filed herein ** To be filed by amendment (1) Incorporated by reference to Exhibit 2.1 filed with PRIMEDIA Inc.'s Registration Statement on Form S-4 (Registration No. 333-51432). (2) Incorporated by reference to Exhibit 4.4 to K-III Communication Corporation's Annual Report on Form 10-K for year ended December 31, 1994 (Registration No. 1-11106). (3) Incorporated by reference to Exhibit 4.1 to K-III Communication Corporation's Registration Statement on Form S-4 (Registration No. 333-03691). (4) Incorporated by reference to Exhibit 4.2 to K-III Communication Corporation's Registration Statement on Form S-4 (Registration No. 333-03691). (5) Incorporated by reference to Exhibit 4.1 to K-III Communication Corporation's Registration Statement on Form S-4 (Registration No. 333-38451). (6) Incorporated by reference to Exhibit 4.2 filed with PRIMEDIA Inc.'s Registration Statement on Form S-4 (Registration No. 333-51891). (7) Incorporated by reference to Exhibit 4.1 filed with PRIMEDIA Inc.'s Registration Statement on Form S-4 (Registration No. 333-51891). EX-4.7 3 a2052089zex-4_7.txt EXHIBIT 4.7 Exhibit 4.7 ================================================================================ PRIMEDIA Inc. and the Guarantors listed herein 8 7/8% Senior Notes due 2011 Series A and Series B ------------- INDENTURE Dated as of May 8, 2001 ------------- THE BANK OF NEW YORK Trustee ================================================================================ TABLE OF CONTENTS
PAGE ---- ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE.............................................1 Section 1.01. Definitions.............................................................1 Section 1.02. Other Definitions......................................................20 Section 1.03. Incorporation by Reference of Trust Indenture Act......................20 Section 1.04. Rules of Construction..................................................20 ARTICLE 2 THE SECURITIES........................................................................21 Section 2.01. Additional Securities; Form and Dating.................................21 Section 2.02. Execution and Authentication...........................................22 Section 2.03. Registrar and Paying Agent.............................................23 Section 2.04. Paying Agent to Hold Money in Trust....................................23 Section 2.05. Holder Lists...........................................................23 Section 2.06. Transfer and Exchange..................................................24 Section 2.07. Replacement Securities.................................................36 Section 2.08. Outstanding Securities.................................................36 Section 2.09. Treasury securities....................................................37 Section 2.10. Temporary Securities...................................................37 Section 2.11. Cancellation...........................................................37 Section 2.12. Defaulted Interest.....................................................37 Section 2.13. CUSIP Numbers..........................................................38 ARTICLE 3 OPTIONAL REDEMPTION AND OPTIONAL REDEMPTION UPON CHANGE OF CONTROL....................38 Section 3.01. Notices to Trustee.....................................................38 Section 3.02. Selection of Securities to Be Redeemed.................................38 Section 3.03. Notices to Holders.....................................................39 Section 3.04. Effect of Notice of Redemption.........................................39 Section 3.05. Deposit of Redemption Price or Purchase Price..........................40 Section 3.06. Securities Redeemed in Part............................................40 Section 3.07. Optional Redemption....................................................40 Section 3.08. Optional Redemption Upon Change of Control.............................41 Section 3.09. Sinking Fund...........................................................41 ARTICLE 4 COVENANTS.............................................................................42 Section 4.01. Payment of Securities..................................................42 Section 4.02. Maintenance of Office or Agency........................................42 Section 4.03. SEC Reports; Financial Statements......................................42 Section 4.04. Compliance Certificate.................................................43 Section 4.05. Compliance with Laws, Taxes............................................44
Section 4.06. Stay, Extension and Usury Laws.........................................44 Section 4.07. Limitations on Restricted Payments.....................................44 Section 4.08. Dividends and Payment Restrictions Affecting Restricted Subsidiaries...48 Section 4.09. Incurrence of Indebtedness.............................................49 Section 4.10. Change of Control......................................................51 Section 4.11. Limitations on Asset Sales.............................................53 Section 4.12. Transactions with Affiliates...........................................54 Section 4.13. Limitations on Liens...................................................55 Section 4.14. Investments in Unrestricted Subsidiaries...............................55 Section 4.15. Payments for Consent...................................................57 Section 4.16. Corporate Existence....................................................57 Section 4.17. Rule 144A Information Requirement......................................58 ARTICLE 5 SUCCESSORS............................................................................58 Section 5.01. Merger, Consolidation, or Sale of Assets...............................58 Section 5.02. Successor Corporation Substituted......................................58 ARTICLE 6 DEFAULTS AND REMEDIES.................................................................59 Section 6.01. Events of Default......................................................59 Section 6.02. Acceleration...........................................................61 Section 6.03. Other Remedies.........................................................61 Section 6.04. Waiver of Past Defaults................................................61 Section 6.05. Control by Majority....................................................62 Section 6.06. Limitations on Suits...................................................62 Section 6.07. Rights of Holders to Receive Payment...................................62 Section 6.08. Collection Suit by Trustee.............................................63 Section 6.09. Trustee May File Proofs of Claim.......................................63 Section 6.10. Priorities.............................................................63 Section 6.11. Undertaking for Costs..................................................64 ARTICLE 7 TRUSTEE...............................................................................64 Section 7.01. Duties of Trustee......................................................64 Section 7.02. Rights of Trustee......................................................65 Section 7.03. Individual Rights of Trustee...........................................66 Section 7.04. Trustee's Disclaimer...................................................66 Section 7.05. Notice of Defaults.....................................................66 Section 7.06. Reports by Trustee to Holders..........................................66 Section 7.07. Compensation and Indemnity.............................................66 Section 7.08. Replacement of Trustee.................................................67 Section 7.09. Successor Trustee by Merger, etc.......................................68 Section 7.10. Eligibility; Disqualification..........................................68 Section 7.11. Preferential Collection of Claims Against Company......................69
ii ARTICLE 8 LEGAL AND COVENANT DEFEASANCE.........................................................69 Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance...............69 Section 8.02. Legal Defeasance and Discharge.........................................69 Section 8.03. Covenant Defeasance....................................................69 Section 8.04. Conditions to Legal or Covenant Defeasance.............................70 Section 8.05. Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions...............................................71 Section 8.06. Repayment to Company...................................................71 Section 8.07. Reinstatement..........................................................72 ARTICLE 9 AMENDMENTS............................................................................72 Section 9.01. Without Consent of Holders.............................................72 Section 9.02. With Consent of Holders................................................73 Section 9.03. Compliance with Trust Indenture Act....................................74 Section 9.04. Revocation and Effect of Consents......................................74 Section 9.05. Notation on or Exchange of Securities..................................75 Section 9.06. Trustee to Sign Amendments, etc........................................75 ARTICLE 10 GUARANTEE............................................................................75 Section 10.01. Subsidiary Guarantee..................................................75 Section 10.02. Execution and Delivery of Guarantee...................................76 Section 10.03. Guarantors May Consolidate, etc., on Certain Terms....................77 Section 10.04. Releases Following Sale of Assets.....................................77 Section 10.05. "Trustee" to Include Paying Agent.....................................78 Section 10.06. Existing and Additional Subsidiary Guarantees.........................78 ARTICLE 11 MISCELLANEOUS........................................................................78 Section 11.01. Trust Indenture Act Controls..........................................78 Section 11.02. Notices...............................................................79 Section 11.03. Communication by Holders with Other Holders...........................80 Section 11.04. Certificate and Opinion as to Conditions Precedent....................80 Section 11.05. Statements Required in Certificate or Opinion.........................80 Section 11.06. Rules by Trustee and Agents...........................................81 Section 11.07. Legal Holidays........................................................81 Section 11.08. No Recourse Against Others............................................81 Section 11.09. Governing Law.........................................................81 Section 11.10. No Adverse Interpretation of Other Agreements.........................81 Section 11.11. Successors............................................................81 Section 11.12. Severability..........................................................81 Section 11.13. Counterpart Originals.................................................82 Section 11.14. Trustee as Paying Agent and Registrar.................................82 Section 11.15. Table of Contents, Headings, etc......................................82 Section 11.16. Bank of New York Not Acting in Individual Capacity....................82
iii Section 11.17. Additional Rights of Holders of Transfer Restricted Securities........82
iv SIGNATURES .....................................................................................67, 68, 69
EXHIBIT A-1 FORM OF SECURITY EXHIBIT A-2 FORM OF REGULATION S GLOBAL NOTE EXHIBIT A-3 FORM OF GUARANTEE EXHIBIT B FROM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF SECURITIES EXHIBIT C FORM OF CERTIFICATE OF EXCHANGE EXHIBIT D FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR v CROSS-REFERENCE TABLE*
Trust Indenture Act Section Indenture Section - ----------------- ----------------- 310(a)(1)..................................................... 7.10 (a)(2)..................................................... 7.10 (a)(3)..................................................... N.A. (a)(4)..................................................... N.A. (a)(5)..................................................... 7.10 (b)........................................................ 7.10 (c)........................................................ N.A. 311(a)........................................................ 7.11 (b)........................................................ 7.11 (c)........................................................ N.A. 312(a)........................................................ 2.05 (b)........................................................ 11.03 (c)........................................................ 11.03 313(a)........................................................ 7.06 (b)(1)..................................................... 11.03 (b)(2)..................................................... 7.06, 7.07 (c)........................................................ 7.06, 11.02 (d)........................................................ 7.06 314(a)........................................................ 4.03, 11.02 (b)........................................................ N.A. (c)(1)..................................................... 11.04 (c)(2)..................................................... 11.04 (c)(3)..................................................... N.A. (d)........................................................ N.A. (e)........................................................ 11.05 (f)........................................................ N.A. 315(a)........................................................ 7.01 (b)........................................................ 7.05, 11.02 (c)........................................................ 7.01 (d)........................................................ 7.01 (e)........................................................ 6.11 316(a) (last sentence)........................................ 2.09 (a)(1)(A).................................................. 6.05 (a)(1)(B).................................................. 6.04 (a)(2)..................................................... N.A. (b)........................................................ 6.07 (c)........................................................ 2.12 317(a)(1)..................................................... 6.08 (a)(2)..................................................... 6.09 (b)........................................................ 2.04 318(a)........................................................ 11.01 (b)........................................................ N.A. (c)........................................................ 11.01 N.A. means not applicable - ---------------- *This Cross-Reference Table is not part of the Indenture
vi INDENTURE, dated as of May 8, 2001, among PRIMEDIA Inc., a Delaware corporation (the "COMPANY"), the corporations listed on Schedule I hereto (each a "GUARANTOR" and collectively, the "GUARANTORS") and The Bank of New York, a New York banking corporation, as Trustee. Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders (as defined below) of the 8 7/8% Senior Notes due 2011 (the "SERIES A NOTES") and the 8 7/8% Senior Notes due 2011 to be issued in exchange for the Series A Notes (the "Series B Notes" and, together with the Series A Notes, the "NOTES" or the "SECURITIES") issued by the Company: ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.01. DEFINITIONS "144A GLOBAL NOTE" means a Global Note in the form of Exhibit A-1 hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Securities sold in reliance on Rule 144A. "ADJUSTED CONSOLIDATED NET INCOME" means, with respect to any Person for any period, (i) the Consolidated Net Income of such Person for such period, plus (ii) in the case of the Company and its Restricted Subsidiaries, all cash received during such period by the Company or any Restricted Subsidiary from its Unrestricted Subsidiaries from the payment of dividends or distributions (including tax sharing payments and loans or advances which are junior in right of payment to the Securities and have a longer Average Life than the Securities), but only to the extent such cash payments are not otherwise included in "Adjusted Consolidated Net Income." Each item of Adjusted Consolidated Net Income will be determined in conformity with GAAP, except that, for purposes of the application of Accounting Principles Board Opinions Nos. 16 and 17, such Person may select any amortization practice allowable by GAAP up to 40 years, notwithstanding the use of a different amortization in such Person's consolidated financial statements. Any designation of a Subsidiary of the Company as a Restricted Subsidiary or Unrestricted Subsidiary at or prior to the time of the calculation of Adjusted Consolidated Net Income of a Subsidiary will be treated as if it had occurred at the beginning of the applicable period. "AFFILIATE" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. A Person shall be deemed to "control" (including the correlative meanings, the terms "controlling," "controlled by," and "under common control with") another Person if the controlling Person possesses, directly or indirectly, the power to direct or cause the direction of the management or policies, of the controlled person, whether through ownership of voting securities, by agreement or otherwise. "AGENT" means any Registrar or Paying Agent. "APPLICABLE PREMIUM" with respect to any Security being redeemed pursuant to Section 3.08 shall equal the greater of (i) 1.0% of the then outstanding principal amount of such Security and (ii) the excess of (A) the present value of the required interest and principal payments due on such Security, computed using a discount rate equal to the Treasury Rate plus the Applicable Spread, over (B) the then outstanding principal amount of such Security. "APPLICABLE PROCEDURES" means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange. "APPLICABLE SPREAD" means one half of one percent. "ASSET SALE" means, with respect to any Person, the sale, lease, conveyance, disposition or other transfer by the referent Person of any of its assets (including by way of a sale-and-leaseback and including the sale or other transfer of any of the Capital Stock of any Subsidiary of the referent Person); PROVIDED, that notwithstanding the foregoing, the term "Asset Sale" shall not include the sale, lease, conveyance, disposition or other transfer of (i) with respect to an Unrestricted Subsidiary, (A) any assets not constituting all or substantially all of the assets of any Net Cash Flow Unrestricted Subsidiary and (B) any Capital Stock or any assets of any Restricted Payment Unrestricted Subsidiary, (ii) all or substantially all of the assets of the Company, as permitted pursuant to Section 5.01 hereof, (iii) any assets between the Company, any Restricted Subsidiary or any Unrestricted Subsidiary, (iv) (A) cash and cash equivalents, (B) inventory in the ordinary course of business and (C) any other tangible or intangible asset, in each case in the ordinary course of business of the Company or its Restricted Subsidiaries, (v) the sale or discount, in each case without recourse, of accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof or (vi) Receivables and Other Assets pursuant to a Qualified Securitization Transaction. "AVERAGE LIFE" means, as of the date of determination, with respect to any debt security, the quotient obtained by dividing (i) the sum of the products of the numbers of years from the date of determination to the dates of each successive scheduled principal payment (assuming the exercise by the obligor of such debt security of all unconditional (other than as to the giving of notice) extension options of each such scheduled payment date) of such debt security multiplied by the amount of such principal payment by (ii) the sum of all such principal payments. "BANK CREDIT FACILITIES" means (1) the Credit Agreement, dated as of March 11, 1999, among the Company, the lending institutions listed therein, The Bank of New York and Bankers Trust Company, as Co-Syndication Agents, The Bank of Nova Scotia, as Documentation Agent, and The Chase Manhattan Bank, as Administrative Agent and (2) the Credit Agreement, dated as of May 24, 1996, among the Company, the lending institutions listed therein, The Bank of New York and Bankers Trust Company, as Co-Syndication Agents, The Bank of Nova Scotia, as Documentation Agent, and The Chase Manhattan Bank, as Administrative Agent. 2 "BANKRUPTCY LAW" means Title 11, U.S. Code or any similar federal or state law for the relief of debtors. "BOARD OF DIRECTORS" means the Board of Directors of the Company or any authorized committee of the Board of Directors of the Company. "BUSINESS DAY" means any day other than a Saturday, a Sunday or a day on which banking institutions in The City of New York or at a place of payment are authorized or obligated by law, regulation or executive order to remain closed. "CAPITAL LEASE OBLIGATION" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease which would at such time be so required to be capitalized on the balance sheet in accordance with GAAP. "CAPITAL STOCK" means any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock. "CHANGE OF CONTROL" means such time as (i) a "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act), other than KKR and its Affiliates, becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of more than (A) 35 percent (35%) of the total voting power of the then outstanding voting stock of the Company and (B) the total voting power of the then outstanding voting stock of the Company beneficially owned by KKR and its Affiliates or (ii) during any period of two consecutive calendar years, individuals who at the beginning of such period constituted the Company's Board of Directors (together with any new directors whose election by the Company's Board of Directors or whose nomination for election by the Company's shareholders was approved by a vote of at least two-thirds of the Directors then still in office who either were Directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the directors then in office. "CLASS D DEBENTURE INDENTURE" means the indenture governing the Class D Subordinated Debentures. "CLASS D SUBORDINATED DEBENTURES" means the 10% Class D Subordinated Exchange Debentures due 2008 of the Company issuable in exchange for the Series D Preferred Stock. "CLASS F DEBENTURE INDENTURE" means the indenture governing the Class F Subordinated Debentures. "CLASS F SUBORDINATED DEBENTURES" means the 9.20% Class F Subordinated Exchange Debentures due 2009 of the Company issuable in exchange for the Series F Preferred Stock. "CLASS H DEBENTURE INDENTURE" means the indenture governing the Class H Subordinated Debentures. 3 "CLASS H SUBORDINATED DEBENTURES" means the 8 5/8% Class H Subordinated Exchange Debentures due 2010 of the Company issuable in exchange for the Series H Preferred Stock. "CLEARSTREAM" means Clearstream Banking S.A. "COMMON STOCK" means the common stock, par value $0.01 per share, of the Company. "COMPANY" means (i) PRIMEDIA Inc., a Delaware corporation, and (ii) any successor of PRIMEDIA Inc. pursuant to Article 5 hereof. "CONSOLIDATED CASH FLOW" means, with respect to any Person for any period, the Adjusted Consolidated Net Income of such Person for such period PLUS (a) (i) with respect to any Restricted Subsidiary other than a Partially Owned Restricted Subsidiary, provision for taxes based on income or profits to the extent such provision for taxes was included in computing Adjusted Consolidated Net Income and (ii) with respect to any Partially Owned Restricted Subsidiary, the Pro Rata Portion of any provision for taxes based on income or profits to the extent such provision for taxes was included in computing Adjusted Consolidated Net Income, PLUS (b) (i) with respect to any Restricted Subsidiary other than a Partially Owned Restricted Subsidiary, consolidated Interest Expense, whether paid or accrued, to the extent such expense was deducted in computing Adjusted Consolidated Net Income (including amortization of original issue discount and non-cash interest payments), and (ii) with respect to any Partially Owned Restricted Subsidiary, the Pro Rata Portion of consolidated Interest Expense, whether paid or accrued, to the extent such expense was deducted in computing Adjusted Consolidated Net Income (including amortization of original issue discount and non-cash interest payments), PLUS (c) (i) with respect to any Restricted Subsidiary other than a Partially Owned Restricted Subsidiary, depreciation, amortization and other non-cash charges to the extent such depreciation, amortization and other non-cash charges were deducted in computing Adjusted Consolidated Net Income (including amortization of goodwill and other intangibles) and (ii) with respect to any Partially Owned Restricted Subsidiary, the Pro Rata Portion of depreciation, amortization and other non-cash charges to the extent such depreciation, amortization and other non-cash charges were deducted in computing Adjusted Consolidated Net Income (including amortization of goodwill and other intangibles); PROVIDED, with respect to the calculation of a Person's Debt to Consolidated Cash Flow Ratio, that if, during such period, (a) such Person or any of its Subsidiaries shall have made any Asset Sales (other than, in the case of the Company and its Restricted Subsidiaries, sales of the Capital Stock of or any assets of Unrestricted Subsidiaries which constitute Asset Sales), Consolidated Cash Flow of such Person for such period shall be reduced by an amount equal to the Consolidated Cash Flow (if positive), to the extent such Consolidated Cash Flow was included in computing Consolidated Cash Flow, directly attributable to the assets or Capital Stock which are the subject of such Asset Sales for such period or increased by an amount equal to the Consolidated Cash Flow (if negative), to the extent such Consolidated Cash Flow was included in computing Consolidated Cash Flow, directly attributable thereto for such period and (b) such Person or any of its Subsidiaries (other than, in the case of the Company and its Restricted Subsidiaries, Unrestricted Subsidiaries) has made any acquisition of assets or Capital Stock (occurring by merger or otherwise), including without limitation, any acquisition of assets or Capital Stock occurring in connection with a transaction causing a calculation to be made hereunder, Consolidated Cash Flow of such person 4 shall be calculated (notwithstanding clause (i) of the definition of Consolidated Net Income) as if such acquisition of assets or Capital Stock (including the incurrence of any Indebtedness in connection with any such acquisition and the application of the proceeds thereof) took place on the first day of such period. Consolidated Cash Flow of such Person shall be determined for any period without regard to changes in Working Capital of such Person and its Subsidiaries during such period. "CONSOLIDATED FIXED CHARGES" means, with respect to any Person for any period, the (a) consolidated Interest Expense, whether paid or accrued, to the extent such expense was deducted in computing Adjusted Consolidated Net Income (including amortization of original issue discount and non-cash interest payments) and (b) the amount of all cash dividend payments on all series of preferred stock other than cash dividends on preferred stock of Unrestricted Subsidiaries and cash dividends paid to such Person or its Subsidiaries; PROVIDED that with respect to Partially Owned Restricted Subsidiaries, only the Pro Rata Portion of any amounts covered by clauses (a) and (b) above shall be included in calculating Consolidated Fixed Charges; PROVIDED FURTHER that if, during such period, (i) such Person or any of its Subsidiaries shall have made any Asset Sales (other than, in the case of the Company and its Restricted Subsidiaries, sales of the Capital Stock of or any assets of Unrestricted Subsidiaries which constitute asset sales), Consolidated Fixed Charges of such Person for such period shall be reduced by an amount equal to the Consolidated Fixed Charges directly attributable to the assets which are the subject of such Asset Sales for such period and (ii) such Person or any of its Subsidiaries (other than, in the case of the Company and its Restricted Subsidiaries, Unrestricted Subsidiaries) has made any acquisition of assets or Capital Stock (occurring by merger or otherwise), including, without limitation, any acquisition of assets or Capital Stock occurring in connection with the transaction causing a calculation to be made hereunder, Consolidated Fixed Charges of such Person shall be calculated as if such acquisition of assets or Capital Stock (including the incurrence of any Indebtedness in connection with any such acquisition and the application of the proceeds thereof) took place on the first day of such period. "CONSOLIDATED NET CASH FLOW" means, with respect to any Person for any period, the aggregate Consolidated Cash Flow of such Person for such period, MINUS (a) capital expenditures of such Person and its Subsidiaries (and in the case of the Company and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of Partially Owned Restricted Subsidiaries, including only the Pro Rata Portion thereof), MINUS (b) the aggregate amount of all cash dividends paid by such Person and its Subsidiaries (and in the case of the Company and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of Partially Owned Restricted Subsidiaries, including only the Pro Rata Portion thereof) to holders of its Capital Stock other than to such Person or its Subsidiaries, MINUS (c) the aggregate amount of all taxes based on income or profits paid by such Person and its Subsidiaries (and in the case of the Company and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of Partially Owned Restricted Subsidiaries, including only the Pro Rata Portion thereof) other than to such Person or its Subsidiaries, MINUS (d) cash Interest Expense of such Person and its Subsidiaries (and in the case of the Company and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of Partially Owned Restricted Subsidiaries, including only the Pro Rata Portion thereof), MINUS (e) repayments of principal of Indebtedness by such Person and its Subsidiaries (and in the case of the Company and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of Partially Owned Restricted Subsidiaries, including only the Pro Rata Portion thereof), MINUS (f) any increases in Working Capital of such 5 Person and its Subsidiaries (and in the case of the Company and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of Partially Owned Restricted Subsidiaries, including only the Pro Rata Portion thereof), and PLUS (g) any decreases in Working Capital of such Person and its Subsidiaries (and in the case of the Company and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of Partially Owned Restricted Subsidiaries, including only the Pro Rata Portion thereof), in each case, for such period and determined in accordance with GAAP; PROVIDED that in calculating the amount referred to in clause (f) or (g) above, as the case may be, for any period during which the Company or any of its Restricted Subsidiaries has consummated an Asset Sale (other than, the case of the Company and its Restricted Subsidiaries, sales of Capital Stock of, cash or any assets of Unrestricted Subsidiaries which constitute Asset Sales), the portion of the change in Working Capital for such period attributable to the entity or business sold or purchased shall be based (x) in the case of such an Asset Sale, on the change in Working Capital attributable to the entity or business sold from the first day of such period to the date of the consummation of such sale and (y) in the case of an acquisition, on the change in Working Capital attributable to the entity or business acquired from the date of consummation of such acquisition to the last day of such period. "CONSOLIDATED NET INCOME" means, with respect to any Person for any period, the aggregate net income (or loss) of such Person and its Subsidiaries (and in the case of the Company and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, with respect to any Partially Owned Restricted Subsidiary, including only the Pro Rata Portion of the net income (or loss) of such Partially Owned Restricted Subsidiary as of any date of determination of Consolidated Net Income for the Company and its Restricted Subsidiaries) for such period, on a consolidated basis, determined in accordance with GAAP, PROVIDED that (i) the net income (or loss) of any Person which is not a Subsidiary or is accounted for by the equity method of accounting shall be included only to the extent of the amount of cash dividends or distributions (including tax sharing payments and loans or advances which are junior in right of payment to the Securities and have a longer Average Life than the Securities) paid to the referent Person or a Subsidiary of the referent Person, (ii) except to the extent includable pursuant to the foregoing clause (i), the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of such Person or is merged into or consolidated with such Person or any of its Subsidiaries or that Person's assets are acquired by such Person or any of its Subsidiaries shall be excluded, (iii) any gains or losses attributable to Asset Sales net of related tax costs or tax benefits, as the case may be, shall be excluded and (iv) the net income of any Unrestricted Subsidiary (and, solely for purposes of Section 4.07 hereof, the net income of any Partially Owned Restricted Subsidiary) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Unrestricted Subsidiary (or, solely for the purposes of Section 4.07 hereof, any Partially Owned Restricted Subsidiary) of that net income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary or its stockholders that, in each such case, has not been legally waived or otherwise satisfied. In addition, "Consolidated Net Income" will not include, without limitation: (A) any non-capitalized transaction costs and expenses incurred in connection with financings, investments or acquisitions, including, but not limited to, financing and refinancing fees; 6 (B) any extraordinary or nonrecurring charges relating to any premium or penalty paid, write-off of deferred financing costs or other financial recapitalization charges in connection with the redemption or retirement of any Indebtedness prior to its stated maturity; and (C) any non-recurring charges arising out of the restructuring or consolidation of the operations of any persons or business either alone or together with the Company or any Restricted Subsidiary, incurred within 18 months following the acquisition of those persons or businesses by the Company or any Restricted Subsidiary. "CONSOLIDATED NET WORTH" means, for purposes of this Indenture, at any date of determination, the sum of the Capital Stock and additional paid-in capital plus retained earnings (or minus accumulated deficit) of the referent Person and its Subsidiaries on a consolidated basis, less amounts attributable to Redeemable Stock, each item to be determined in conformity with GAAP (excluding the effects of foreign currency exchange adjustments under Financial Accounting Standards Board Statement of Financial Accounting Standards No. 52), except that all effects of the application of Accounting Principles Board Opinions Nos. 16 and 17 and related interpretations shall be disregarded. "CORPORATE TRUST OFFICE" means the principal office of the Trustee at which at any particular time its corporate trust business shall be administered, which office at the date of execution of this Indenture is located at 101 Barclay Street, New York, New York 10286, Attention: Corporate Trust and Agency Group. "CREDIT FACILITIES" means, with respect to the Company or any of its Restricted Subsidiaries, one or more debt facilities (including, without limitation, the Bank Credit Facilities) or commercial paper facilities with banks or other institutional lenders providing for revolving credit loans, term loans or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time. "CURRENCY AGREEMENT" means the obligations of any Person pursuant to any foreign exchange contract, currency swap agreement or other similar agreement or arrangement designed to protect such Person or any of its subsidiaries against fluctuations in currency values. "CUSTODIAN" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. "DEBT TO CONSOLIDATED CASH FLOW RATIO" means the ratio of all Indebtedness of the Company and its Restricted Subsidiaries to Consolidated Cash Flow. "DEFAULT" means any event, act or condition that is, or after notice or the passage of time or both would be, an Event of Default. "DEFINITIVE NOTE" means a certificated Security registered in the name of the Holder thereof and issued in accordance with Section 2.06 hereof, in the form of Exhibit A hereto except that such Security shall not bear the Global Note Legend and shall not have the "Schedule of Exchanges of Interests in the Global Note" attached thereto. 7 "DEPOSITARY" means, with respect to the Securities issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Securities, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision of this Indenture. "EQUITY INTERESTS" means Capital Stock, warrants, options or other rights to acquire Capital Stock (but excluding any debt security which is convertible into, or exchangeable for, Capital Stock). "EQUITY OFFERING" means any public or private offering of Equity Interests (other than Redeemable Stock) of the Company. "EUROCLEAR" means Morgan Guaranty Trust Company of New York, Brussels office, as operator of the Euroclear system. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. "EXCHANGE OFFER" means the offer which may be made by the Company pursuant to the Registration Rights Agreement to exchange Series A Notes for the Series B Notes. "EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set forth in the Registration Rights Agreement. "EXISTING INDEBTEDNESS" means Indebtedness of the Company and its Subsidiaries (other than the Bank Credit Facilities and the Outstanding Notes) in existence on the date of this Indenture, until such amounts are repaid. "FIXED CHARGE COVERAGE RATIO" means the ratio of Consolidated Cash Flow to Consolidated Fixed Charges. "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession, which are applicable to the circumstances as of the date of this Indenture. "GLOBAL NOTES" means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes, in the form of Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv), 2.06(d)(ii) or 2.06(f) hereof. "GLOBAL NOTE LEGEND" means the legend set forth in Section 2.06(g)(ii), which is required to be placed on all Global Notes issued under this Indenture. "GUARANTEE" means, individually and collectively, the guarantees given by the Guarantors pursuant to Article 10 hereof, including a notation in the Securities substantially in the form attached hereto as Exhibit A-3. "GUARANTEE DATE" means the date upon which a Guarantor executes a Guarantee. 8 "GUARANTOR" means each domestic Restricted Subsidiary of the Company, other than any Securitization Subsidiary, which is wholly owned, directly or indirectly, by the Company. "HOLDER" means a Person in whose name a Security is registered. "IAI GLOBAL NOTE" means the Global Note in the form of Exhibit A-1 hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Securities sold to Institutional Accredited Investors. "INDEBTEDNESS" of any Person means any indebtedness, contingent or otherwise, in respect of borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof), or evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement obligations with respect thereto) or representing the balance deferred and unpaid of the purchase price of any property (including pursuant to financing leases), if and to the extent any of the foregoing indebtedness would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP (except that any such balance that constitutes a trade payable and/or an accrued liability arising in the ordinary course of business shall not be considered Indebtedness), and shall also include, to the extent not otherwise included, any Capital Lease Obligations, the maximum fixed repurchase price of any Redeemable Stock, indebtedness secured by a Lien to which the property or assets owned or held by such Person is subject, whether or not the obligations secured thereby shall have been assumed, guarantees of items that would be included within this definition to the extent of such guarantees (exclusive of whether such items would appear upon such balance sheet), and net liabilities in respect of Currency Agreements and Interest Rate Agreements. For purposes of the preceding sentence, the maximum fixed repurchase price of any Redeemable Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Redeemable Stock as if such Redeemable Stock were repurchased on any date on which Indebtedness shall be required to be determined pursuant to this Indenture, PROVIDED that if such Redeemable Stock is not then permitted to be repurchased, the repurchase price shall be the book value of such Redeemable Stock. The amount of Indebtedness of any Person at any date shall be without duplication (i) the outstanding balance at such date of all unconditional obligations as described above and the maximum liability of any such contingent obligations at such date and (ii) in the case of Indebtedness of others secured by a Lien to which the property or assets owned or held by such Person is subject, the lesser of the fair market value at such date of any asset subject to a Lien securing the Indebtedness of others and the amount of the Indebtedness secured. For the purpose of determining the aggregate Indebtedness of the Company and its Restricted Subsidiaries, such Indebtedness shall exclude (a) the Indebtedness of any Unrestricted Subsidiary of the Company or any Unrestricted Subsidiary of a Restricted Subsidiary and (b) with respect to any Partially Owned Restricted Subsidiary, the Pro Rata Portion of any Indebtedness of any Partially Owned Restricted Subsidiary of the Company or any Partially Owned Restricted Subsidiary of a Restricted Subsidiary pursuant to which the lender thereunder does not have recourse to any of the assets of the Company or any of its Restricted Subsidiaries. "INDENTURE" means this Indenture as amended from time to time. 9 "INDIRECT PARTICIPANT" means a Person who holds a beneficial interest in a Global Note through a Participant. "INITIAL PURCHASER" means Salomon Smith Barney Inc., Banc of America Securities LLC, J.P. Morgan Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, BNY Capital Markets, Inc., Scotia Capital (USA) Inc., Fleet Securities, Inc. and Mizuho International plc. "INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, who are not also QIBs. "INTEREST EXPENSE" means, with respect to any Person, for any period, the aggregate amount of interest in respect of Indebtedness (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financing and the net cost (benefit) associated with Interest Rate Agreements, and excluding amortization of deferred finance fees and interest recorded as accretion in the carrying value of liabilities (other than Indebtedness) recorded at a discounted value) and all but the principal component of rentals in respect of Capital Lease Obligations, paid, accrued or scheduled to be paid or accrued by such Person during such period. "INTEREST PAYMENT DATE" has the meaning assigned to such term in the Securities. "INTEREST RATE AGREEMENTS" means the obligations of any Person pursuant to any interest rate swap agreement, interest rate collar agreement or other similar agreement or arrangement designed to protect such Person or any of its subsidiaries against fluctuations in interest rates. "INVESTMENT" means any direct or indirect advance, loan (other than advances to customers in the ordinary course of business, which are recorded as accounts receivable on the balance sheet of any Person or its Subsidiaries) or other extension of credit or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition of Capital Stock, bonds, notes, debentures or other securities issued by any other Person. For the purposes of Sections 4.07 and 4.14 hereof, (i) "Investment" shall include and be valued at the fair market value of the net assets of any Restricted Subsidiary at the time that such Restricted Subsidiary is designated an Unrestricted Subsidiary and shall exclude the fair market value of the net assets of any Unrestricted Subsidiary at the time that such Unrestricted Subsidiary is designated a Restricted Subsidiary and (ii) any property transferred to or from an Unrestricted Subsidiary shall be valued at fair market value at the time of such transfer, in each case as determined by the Board of Directors of the Company in good faith. "KKR" means Kohlberg Kravis Roberts & Co., L.P. "LETTER OF TRANSMITTAL" means the letter of transmittal to be prepared by the Company and sent to all Holders of the Securities for use by such Holders in connection with the Exchange Offer. 10 "LIEN" means any mortgage, lien, pledge, charge, security interest or encumbrance of any kind, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement or lease in the nature thereof). "LIQUIDATED DAMAGES" means, with respect to any Securities, all unpaid liquidated damages owing by the Company pursuant to the Registration Rights Agreement for such Securities. "NET CASH FLOW UNRESTRICTED SUBSIDIARY" means an Unrestricted Subsidiary which is not a Restricted Payment Unrestricted Subsidiary. "NET PROCEEDS" means, with respect to any Asset Sale, the aggregate cash proceeds (including any cash received by way of deferred payment pursuant to a note receivable issued in connection with such Asset Sale, other than the portion of such deferred payment constituting interest, and including any amounts received as disbursement or withdrawals from any escrow or similar account established in connection with any such Asset Sale, but, in either such case, only as and when so received) received by the Company or any of its Subsidiaries in respect of such Asset Sale, net of (i) the cash expenses of such sale (including, without limitation, the payment of principal, premium, if any, and interest on Indebtedness required to be paid as a result of such Asset Sale (other than the Outstanding Notes and the Securities and amounts repaid pursuant to the Credit Facilities) and legal, accounting and investment banking fees and sales commissions), (ii) taxes paid or payable as a result thereof, (iii) any portion of cash proceeds which the Company determines in good faith should be reserved for post-closing adjustments, it being understood and agreed that on the day that all such post-closing adjustments have been determined, the amount (if any) by which the reserved amount in respect of such Asset Sale exceeds the actual post-closing adjustments payable by the Company or any of its Subsidiaries shall constitute Net Proceeds on such date and (iv) any relocation expenses and pension, severance and shutdown costs incurred as a result thereof. "NON-COMPETE NOTES" means the promissory notes issued by the Company pursuant to the Non-Competition Agreement, dated as of June 17, 1991, among PRIMEDIA Holdings, Inc., News America Holdings Incorporated and the other parties thereto in an aggregate principal amount not to exceed $50.0 million, as such notes may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof. "NON-RECOURSE INDEBTEDNESS" means Indebtedness (i) as to which neither the Company nor any Restricted Subsidiary (other than a Securitization Subsidiary) (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable (as a guarantor or otherwise) or (c) constitutes the lender, (ii) as to which no default (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) any holder of any other Indebtedness of the Company or any Restricted Subsidiary (other than a Securitization Subsidiary) to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity and (iii) as to which the lenders have been notified in writing they will not have recourse to the shares or assets of the Company or any Restricted Subsidiary (other than a Securitization Subsidiary). 11 "NON-U.S. PERSON" means a Person who is not a U.S. Person. "OBLIGATIONS" means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness. "OFFICERS" means the President, the Treasurer, any Assistant Treasurer, Controller, Secretary or any Vice President of the Company or any Guarantor, as applicable. "OFFICERS' CERTIFICATE" means a certificate signed by two Officers, one of whom must be the Company's chief executive officer, chief financial officer or controller financial accounting. "OPINION OF COUNSEL" means an opinion from legal counsel that meets the requirements of Section 11.05 hereof. The counsel may be an employee of or counsel to the Company, any Subsidiary of the Company or the Trustee. "OUTSTANDING NOTES" means the 10 1/4% Senior Notes due 2004, the 8 1/2% Senior Notes due 2006 and the 7 5/8% Senior Notes due 2008 of the Company, as each may be amended, supplemented or otherwise modified from time to time. "OUTSTANDING NOTE INDENTURES" means the Indenture, dated as of May 31, 1994, among the Company, the guarantors listed therein and Bankers Trust Company, as trustee, relating to the 10 1/4% Senior Notes due 2004, the Indenture, dated as of January 24, 1996, among the Company, the guarantors listed therein and The Bank of New York, as trustee, relating to the 8 1/2% Senior Notes due 2006 and the Indenture, dated as of February 17, 1998, among the Company, the guarantors listed therein and The Bank of New York, as trustee, relating to the 7 5/8% Senior Notes due 2008, as each may be amended, supplemented or otherwise modified from time to time. "PARTIALLY OWNED RESTRICTED SUBSIDIARY" means any Restricted Subsidiary other than a wholly owned Restricted Subsidiary. "PARTICIPANT" means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to The Depository Trust Company, shall include Euroclear and Clearstream). "PARTICIPATING BROKER-DEALER" has the meaning set forth in the Registration Rights Agreement. "PERMITTED LIENS" means (i) Liens for taxes, assessments, governmental charges or claims which are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted and for which a reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made; (ii) statutory Liens of landlords and carriers', warehousemen's, mechanics', suppliers', materialmen's, repairmen's, or other like Liens arising in the ordinary course of business and with respect to amounts not yet delinquent or being contested in good faith by appropriate proceedings, if a reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor; (iii) Liens incurred or deposits made in the ordinary course of business in connection with 12 workers' compensation, unemployment insurance and other types of social security; (iv) Liens incurred or deposits made to secure the performance of tenders, bids, leases, statutory obligations, surety and appeal bonds, government contracts, performance and return-of-money bonds and other obligations of a like nature incurred in the ordinary course of business (exclusive of obligations for the payment of borrowed money); (v) easements, rights-of-way, restrictions, minor defects or irregularities in title and other similar charges or encumbrances not interfering in any material respect with the business of the Company or any of its Subsidiaries incurred in the ordinary course of business; (vi) Liens (including extensions and renewals thereof) upon real or tangible personal property acquired after the date of this Indenture, PROVIDED that (a) any such Lien is created solely for the purpose of securing Indebtedness representing, or incurred to finance, refinance or refund, the cost (including the cost of construction) of the item of property subject thereto, (b) the principal amount of the Indebtedness secured by such Lien does not exceed 100% of such cost, (c) such Lien does not extend to or cover any other property other than such item of property and any improvements on such item and (d) the incurrence of such Indebtedness is permitted by Section 4.09 hereof; (vii) Liens securing reimbursement obligations with respect to letters of credit which encumber documents and other property relating to such letters of credit and the products and proceeds thereof; (viii) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods; (ix) judgment and attachment Liens not giving rise to an Event of Default; (x) leases or subleases granted to others not interfering in any material respect with the business of the Company or any of its Subsidiaries; (xi) Liens encumbering customary initial deposits and margin deposits, and other Liens incurred in the ordinary course of business and which are within the general parameters customary in the industry, in each case securing Indebtedness under Interest Rate Agreements and Currency Agreements; (xii) Liens encumbering deposits made to secure obligations arising from statutory, regulatory, contractual or warranty requirements of the Company or its Subsidiaries; (xiii) Liens arising out of consignment or similar arrangements for the sale of goods entered into by the Company or any of its Subsidiaries in the ordinary course of business of the Company and its Subsidiaries; (xiv) any interest or title of a lessor in the property subject to any Capital Lease Obligation or operating lease; (xv) Liens arising from filing Uniform Commercial Code financing statements regarding leases; (xvi) Liens permitted by the Credit Facilities as in effect on the date of this Indenture; (xvii) Liens securing Indebtedness described in clause (xii) of the second paragraph of Section 4.09 hereof; (xviii) Liens between the Company and any Restricted Subsidiary or between Restricted Subsidiaries; (xix) Liens securing letters of credit in an amount not to exceed $75 million in the aggregate at any one time; (xx) Liens in an amount not to exceed $50 million in the aggregate at any one time; (xxi) Liens incurred by Partially Owned Restricted Subsidiaries which do not exceed 10% of Total Assets in the aggregate at any one time; and (xxii) Liens on assets of a Securitization Subsidiary arising in connection with a Qualified Securitization Transaction. "PERSON" means any individual, corporation, partnership, joint venture, incorporated or unincorporated association, joint-stock company, trust, unincorporated organization or government or other agency or political subdivision thereof or other entity of any kind. "PRIVATE PLACEMENT LEGEND" means the legend set forth in Section 2.06(g)(i) to be placed on all Securities issued under this Indenture except where otherwise permitted by the provisions of this Indenture. 13 "PRO RATA PORTION" means, with respect to any Partially Owned Restricted Subsidiary, the percentage of such Partially Owned Restricted Subsidiary's outstanding Equity Interests beneficially owned by the Company and its Restricted Subsidiaries. "QIB" means a "qualified institutional buyer" as defined in Rule 144A. "QUALIFIED SECURITIZATION TRANSACTION" means any transaction or series of transactions that may be entered into by the Company or any Restricted Subsidiary pursuant to which the Company or any Restricted Subsidiary may sell, convey or otherwise transfer to (a) a Securitization Subsidiary (in the case of a transfer by the Company or of any Restricted Subsidiary) and (b) any other person (in the case of a transfer by a Securitization Subsidiary), or may grant a security interest, in Receivables and Other Assets. "RECEIVABLES AND OTHER ASSETS" means, with respect to any Person, all of the following property and interests in property of such Person, whether now existing or existing in the future or hereafter acquired or arising: (1) accounts; (2) accounts receivable or other similar rights to future payments in respect of assets sold or to be sold, rights granted or to be granted or services rendered or to be rendered, including, without limitation, all rights to payment created by or arising from sales of goods, lease of goods or the rendition of services no matter how evidenced, whether or not earned by performance; (3) all unpaid seller's or lessor's rights, including, without limitation, recession, replevin, reclamation and stoppage in transit, relating to any of the foregoing or arising therefrom; (4) all rights to any goods or merchandise represented by any of the foregoing, including, without limitation, returned or repossessed goods; (5) all reserves and credit balances with respect to any such accounts receivable or account debtors; (6) all letters of credit, security or guarantees of any of the foregoing; (7) all insurance policies or reports relating to any of the foregoing; (8) all collection or deposit accounts relating to any of the foregoing; (9) all proceeds of any of the foregoing; and (10) all books and records relating to any of the foregoing. "REDEEMABLE STOCK" means any Equity Interest which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable before the stated maturity of the Securities), or upon the happening of any event, matures or is mandatorily 14 redeemable, in whole or in part, prior to the stated maturity of the Securities, or is, by its terms or upon the happening of any event, redeemable at the option of the holder thereof, in whole or in part, at any time prior to the stated maturity of the Securities except for Equity Interests of the Company issued to present and former members of management of the Company and its Subsidiaries pursuant to subscription and option agreements in effect on the date hereof or under any stock option plan of About.com, Inc. existing on the date hereof and common stock and options of the Company issued to future members of management of the Company and its Subsidiaries pursuant to subscription agreements executed subsequent to the date hereof containing provisions for the repurchase of such common stock and options upon death, disability or termination of employment of such persons which are substantially identical to those contained in the subscription agreements in effect on the date hereof; PROVIDED that for purposes of Section 4.07 hereof and that for purposes of the definition of Indebtedness, Redeemable Stock does not include the Series D Preferred Stock, the Series F Preferred Stock or the Series H Preferred Stock. "REGISTRATION RIGHTS AGREEMENT" means (a) the registration rights agreement, dated May 8, 2001, among the Company, the Guarantors and the Initial Purchasers and (b) with respect to each issuance of Additional Securities issued in a transaction exempt from the registration requirements of the Securities Act, the registration rights agreement, if any, among the Company and the persons purchasing such Additional Securities under the related purchase agreement. "REGULATION S" means Regulation S promulgated under the Securities Act. "REGULATION S GLOBAL NOTE" means a Regulation S Temporary Global Note or Regulation S Permanent Global Note, as appropriate. "REGULATION S PERMANENT GLOBAL NOTE" means a permanent Global Note in the form of Exhibit A-1 hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Regulation S Temporary Global Note upon expiration of the Restricted Period. "REGULATION S TEMPORARY GLOBAL NOTE" means a temporary Global Note in the form of Exhibit A-2 hereto bearing the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Securities initially sold in reliance on Rule 903 of Regulation S. "RESPONSIBLE OFFICER" means, when used with respect to the Trustee, any officer within the Corporate Trust and Agency Group (or any successor group thereto) of the Trustee, including any Vice President, Assistant Vice President or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and, with respect to a particular matter, any other officer to whom such matter is referred because of such officer's knowledge and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture. 15 "RESTRICTED DEFINITIVE NOTE" means a Definitive Note bearing the Private Placement Legend. "RESTRICTED GLOBAL NOTE" means a Global Note bearing the Private Placement Legend. "RESTRICTED PAYMENT UNRESTRICTED SUBSIDIARY" means an Unrestricted Subsidiary which was capitalized exclusively with a permitted Restricted Payment or the proceeds from the issuance of an Equity Interest by the Company or with the proceeds of the sale of stock or substantially all of the assets of any other Unrestricted Subsidiary which was capitalized with such funds to the extent that a liquidating dividend is paid to the Company or any Restricted Subsidiary from the proceeds of such sale. "RESTRICTED PERIOD" means the 40-day restricted period as defined in Regulation S. "RESTRICTED SUBSIDIARY" means, for the purposes of this Indenture, a Subsidiary of the Company which at the time of determination is not an Unrestricted Subsidiary. "RULE 144" means Rule 144 promulgated under the Securities Act. "RULE 144A" means Rule 144A promulgated under the Securities Act. "RULE 903" means Rule 903 promulgated under the Securities Act. "RULE 904" means Rule 904 promulgated the Securities Act. "SEC" means the Securities and Exchange Commission. "SECURITIES" means the Securities described above issued under this Indenture. "SECURITIES ACT" means the Securities Act of 1933, as amended. "SECURITIZATION SUBSIDIARY" means any Person to which the Company or any Restricted Subsidiary transfers Receivables and Other Assets and that engages in no activities other than in connection with financing of Receivables and Other Assets and that is designated by the Board of Directors as a Securitization Subsidiary and (A) no portion of the Indebtedness or any other Obligations (contingent or otherwise) of which (i) is guaranteed by the Company or any Restricted Subsidiary (excluding guarantees of Obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings); (ii) is recourse to or obligates the Company or any Restricted Subsidiary (other than such Securitization Subsidiary) in any way other than pursuant to Standard Securitization Undertakings; 16 (iii) subjects any property or asset of the Company or any Restricted Subsidiary (other than such Securitization Subsidiary), directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings; (B) with which neither the Company nor any Restricted Subsidiary (other than such Securitization Subsidiary) has any material contract, agreement, arrangement or understanding other than on terms no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Company, other than fees payable in the ordinary course of business in connection with servicing Receivables and Other Assets of such entity, and (C) to which neither the Company nor any Restricted Subsidiary (other than such Securitization Subsidiary) has any obligation to maintain or preserve such entity's financial condition or cause such entity to achieve certain levels of operating results. Any designation of a Securitization Subsidiary shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors of the Company giving effect to the designation and an Officers' Certificate certifying that the designation complied with the preceding conditions and was permitted by this Indenture. "SERIES D PREFERRED STOCK" means the Company's $10.00 Series D Exchangeable Preferred Stock Redeemable 2008, par value $.01 per share. "SERIES F PREFERRED STOCK" means the Company's $9.20 Series F Exchangeable Preferred Stock Redeemable 2009, issuable in exchange for the Series E Preferred Stock and containing terms identical to the Series E Preferred Stock. "SERIES H PREFERRED STOCK" means the Company's $8.625 Series H Exchangeable Preferred Stock Redeemable 2010 issuable in exchange for the Series G Preferred Stock and containing terms identical to the Series G Preferred Stock. "SHELF REGISTRATION STATEMENT" means the Shelf Registration Statement as defined in the Registration Rights Agreement. "SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date of the Indenture. "STANDARD SECURITIZATION UNDERTAKINGS" means representations, warranties, covenants and indemnities entered into by the Company or any Restricted Subsidiary that are reasonably customary in a Qualified Securitization Transaction. "SUBORDINATED DEBENTURES" means the Company's 10% Class D Subordinated Exchange Debentures due 2008, the 9.20% Class F Subordinated Exchange Debentures due 2009 and the 8 5/8% Class H Subordinated Exchange Debentures due 2010. 17 "SUBSIDIARY" of any Person means any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person or a combination thereof. "TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C. Sections 77aaa-77bbbb). "TOTAL ASSETS" means the total consolidated assets of the Company and its Restricted Subsidiaries. "TRANSFER RESTRICTED SECURITIES" means each Security, until the earliest to occur of (a) the date on which such Security is exchanged in the Exchange Offer and entitled to be resold to the public by the Holder thereof without complying with the prospectus delivery requirements of the Securities Act, (b) the date on which such Security has been disposed of in accordance with a Shelf Registration Statement, (c) the date on which such Security is disposed of by any broker or dealer registered under the Exchange Act pursuant to the "Plan of Distribution" contemplated by the Exchange Offer Registration Statement (including delivery of the Prospectus contained therein) or (d) the date on which such Security is distributable to the public pursuant to Rule 144 under the Securities Act. "TRANSFERS" means (i) any payment of interest on Indebtedness, dividends or repayments of loans or advances and (ii) any other transfers of assets, in each case from an Unrestricted Subsidiary to the Company or any of its Restricted Subsidiaries. "TREASURY RATE" means, for the purposes of this Indenture, the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled by and published in the most recent Federal Reserve Statistical Release H.15 (519) which has become publicly available at least two Business Days prior to the date fixed for prepayment (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the then remaining Average Life of the Securities; PROVIDED that if the Average Life of the Securities is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the Average Life of the Securities is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used. "TRUSTEE" means the party named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder. "UNRESTRICTED DEFINITIVE NOTE" means one or more Definitive Notes that do not bear and are not required to bear the Private Placement Legend. "UNRESTRICTED GLOBAL NOTE" means a permanent Global Note in the form of Exhibit A attached hereto that bears the Global Note Legend and that has the "Schedule of 18 Exchanges of Interests in the Global Note" attached thereto, and that is deposited with or on behalf of and registered in the name of the Depositary, representing a series of Securities that do not bear the Private Placement Legend. "UNRESTRICTED SUBSIDIARY" means, for the purposes of this Indenture, (i) each of the following Subsidiaries of the Company, unless and until such Subsidiary ceases to be a Subsidiary o the Company or is designated as a Restricted Subsidiary pursuant to the terms hereof: PRIMEDIANet Inc.; PRIMEDIA Ventures, Inc.; PRIMEDIA Teenclick Corp.; PRIMEDIA Digital Video Holdings LLC; About.com, Inc.; HPC Interactive, LLC; Media Central Acquisition, LLC; Kagan World Media Limited; Kagan Asia Media, Ltd.; In New York LLC; and PRIMEDIA International, Inc., (ii) any other Subsidiary of the Company which at the time of determination is an Unrestricted Subsidiary (as designated by the Board of Directors, as provided below) and (iii) any subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary of the Company (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary owns any Capital Stock of, or owns, or holds any Lien on, any property of, any other Subsidiary of the Company which is not a Subsidiary of the Subsidiary to be so designated; PROVIDED that (a) the Company certifies that such designation complies with Section 4.07 and 4.14 hereof, and (b) the Subsidiary to be so designated has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness pursuant to which the lender has recourse to any of the assets of the Company or any of its Restricted Subsidiaries. The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED that immediately after giving effect to such designation, the Company could incur at least $1.00 of additional Indebtedness pursuant to the first paragraph of Section 4.09 hereof (without giving effect to clauses (i) through (xvi) of the second paragraph thereof), on a PRO FORMA basis taking into account such designation. "U.S. GOVERNMENT OBLIGATIONS" means direct noncallable obligations of or guaranteed by the United States of America. "U.S. PERSON" means a U.S. person as defined in Rule 902(k) under the Securities Act. "WORKING CAPITAL" means, with respect to any Person for any period, the current assets of such Person and its Subsidiaries (and in the case of the Company and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of Partially Owned Restricted Subsidiaries, including only the Pro Rata Portion thereof) on a consolidated basis, after excluding therefrom cash and cash equivalents and deferred income taxes, less the current liabilities of such person and its Subsidiaries (and in the case of the Company and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of Partially Owned Restricted Subsidiaries, including only the Pro Rata Portion thereof) on a consolidated basis, after excluding therefrom, in each case to the extent otherwise included therein, all short-term Indebtedness for borrowed money, the current portion of any long-term Indebtedness, liabilities arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts, which will not be, and will not be deemed to be, inadvertent) drawn against insufficient funds in the ordinary course of business, PROVIDED that such liabilities are extinguished within three business days of this incurrence, and deferred income taxes of such Person and its Subsidiaries (and in the case of the 19 Company and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of Partially Owned Restricted Subsidiaries, including only the Pro Rata Portion thereof). SECTION 1.02. OTHER DEFINITIONS
Defined in Term Section ---- --------- "Additional Securities"..............................................2.01 "Affiliate Transaction"..............................................4.12 "Change of Control Offer"............................................4.10 "Change of Control Payment"..........................................4.10 "Change of Control Payment Date".....................................4.10(2) "Event of Default"...................................................6.01 "Legal Holiday".....................................................11.07 "Paying Agent".......................................................2.03 "Registrar"..........................................................2.03 "Refinancing Indebtedness"...........................................4.09 "Restricted Payments"................................................4.07 "Retired Capital Stock"..............................................4.07 "Refunding Capital Stock"............................................4.07 "Successor"..........................................................5.01(i)
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "INDENTURE SECURITIES" means the Securities and the Guarantees. "INDENTURE SECURITY HOLDER" means a Holder; "INDENTURE TO BE QUALIFIED" means this Indenture; "INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee; and "OBLIGOR" on the Securities means the Company, any other obligor upon the Securities or any successor obligor upon the Securities or any Guarantor. All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them. SECTION 1.04. RULES OF CONSTRUCTION Unless the context otherwise requires: 20 (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (3) "or" is not exclusive; (4) words in the singular include the plural, and in the plural include the singular; and (5) provisions apply to successive events and transactions. ARTICLE 2 THE SECURITIES SECTION 2.01. ADDITIONAL SECURITIES; FORM AND DATING (a) ISSUANCE OF ADDITIONAL SECURITIES. The Company may, subject to Section 4.09 hereof, issue additional Securities (the "Additional Securities") under this Indenture which will have identical terms as the Securities issued on the date hereof other than with respect to their date of issuance, issue price and first payment of interest. The Securities issued on the date hereof and any Additional Securities subsequently issued shall be treated as a single class for all purposes under this Indenture. (b) GENERAL. The Securities and the Trustee's certificate of authentication shall be substantially in the form of Exhibit A hereto. The Securities may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Security shall be dated the date of its authentication. The Securities shall be in denominations of $1,000 and integral multiples thereof. The terms and provisions contained in the Securities shall constitute, and are hereby expressly made, a part of this Indenture and the Company, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Security conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling. (c) GLOBAL NOTES. Securities issued in global form shall be substantially in the form of Exhibit A attached hereto (including the Global Note Legend thereon and the "Schedule of Exchanges of Interests in the Global Note" attached thereto). Securities issued in definitive form shall be substantially in the form of Exhibit A attached hereto (but without the Global Note Legend thereon and without the "Schedule of Exchanges of Interests in the Global Note" attached thereto). Each Global Note shall represent such of the outstanding Securities as shall be specified therein and each shall provide that it shall represent the aggregate principal amount of outstanding Securities from time to time endorsed thereon and that the aggregate principal amount of outstanding Securities represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of 21 outstanding Securities represented thereby shall be made by the Trustee or the Security.Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof. (d) TEMPORARY GLOBAL NOTES. Securities offered and sold in reliance on Regulation S shall be issued initially in the form of the Regulation S Temporary Global Note, which shall be deposited on behalf of the purchasers of the Securities represented thereby with the Trustee, as custodian for the Depositary, and registered in the name of the Depositary or the nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or Clearstream, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The Restricted Period shall be terminated upon the receipt by the Trustee of (i) a written certificate from the Depositary, together with copies of certificates from Euroclear and Clearstream certifying that they have received certification of non-United States beneficial ownership of 100% of the aggregate principal amount of the Regulation S Temporary Global Note (except to the extent of any beneficial owners thereof who acquired an interest therein during the Restricted Period pursuant to another exemption from registration under the Securities Act and who will take delivery of a beneficial ownership interest in a 144A Global Note or an IAI Global Note bearing a Private Placement Legend, all as contemplated by Section 2.06(a)(ii) hereof), and (ii) an Officers' Certificate from the Company. Following the termination of the Restricted Period, beneficial interests in the Regulation S Temporary Global Note shall be exchanged for beneficial interests in Regulation S Permanent Global Notes pursuant to the Applicable Procedures. Simultaneously with the authentication of Regulation S Permanent Global Notes, the Trustee shall cancel the Regulation S Temporary Global Note. The aggregate principal amount of the Regulation S Temporary Global Note and the Regulation S Permanent Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee, as the case may be, in connection with transfers of interest as hereinafter provided. (e) EUROCLEAR AND CLEARSTREAM PROCEDURES APPLICABLE. The provisions of the "Operating Procedures of the Euroclear System" and "Terms and Conditions Governing Use of Euroclear" and the "General Terms and Conditions of Clearstream" and "Customer Handbook" of Clearstream shall be applicable to transfers of beneficial interests in the Regulation S Global Notes that are held by Participants through Euroclear or Clearstream. SECTION 2.02. EXECUTION AND AUTHENTICATION One Officer shall sign the Securities for the Company by manual or facsimile signature. The Company's seal may be reproduced on the Securities and may be in facsimile form. If an Officer whose signature is on a Security no longer holds that office at the time a Note is authenticated, the Security shall nevertheless be valid. A Security shall not be valid until authenticated by the manual signature of the Trustee. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture. 22 The Trustee shall, upon a written order of the Company signed by two Officers (an "Authentication Order"), authenticate Securities for original issue. The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities. An authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Company. SECTION 2.03. REGISTRAR AND PAYING AGENT The Company shall maintain an office or agency where Securities may be presented for registration of transfer or for exchange ("REGISTRAR") and an office or agency where Securities may be presented for payment ("PAYING AGENT"). The Registrar shall keep a register of the Securities and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term "Registrar" includes any co-registrar and the term "Paying Agent" includes any additional paying agent. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may act as Paying Agent or Registrar. The Company initially appoints The Depository Trust Company ("DTC") to act as Depositary with respect to the Global Notes. The Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Note Custodian with respect to the Global Notes. SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium or Liquidated Damages, if any, or interest on the Securities, and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money. If the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee shall serve as Paying Agent for the Securities. SECTION 2.05. HOLDER LISTS The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar, the Company shall furnish to the 23 Trustee at least seven Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Securities and the Company shall otherwise comply with TIA Section 312(a). SECTION 2.06. TRANSFER AND EXCHANGE (a) TRANSFER AND EXCHANGE OF GLOBAL NOTES. A Global Note may not be transferred as a whole except by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. All Global Notes will be exchanged by the Company for Definitive Notes if (i) the Company delivers to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Company within 90 days after the date of such notice from the Depositary or (ii) the Company in its sole discretion determines that the Global Notes (in whole but not in part) should be exchanged for Definitive Notes and delivers a written notice to such effect to the Trustee. Upon the occurrence of either of the preceding events in (i) or (ii) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.11 hereof. Every Security authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to Section 2.07 or 2.11 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note. A Global Note may not be exchanged for another Security other than as provided in this Section 2.06(a), however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof. (b) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE GLOBAL NOTES. The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs as applicable: (i) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL NOTE. Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; PROVIDED, that prior to the expiration of the Restricted Period transfers of beneficial interests in the Regulation S Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Beneficial interests in any Unrestricted Global Note may be transferred only to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(i). 24 (ii) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL INTERESTS IN GLOBAL NOTES. In connection with all transfers and exchanges of beneficial interests (other than a transfer of a beneficial interest in a Global Note to a Person who takes delivery thereof in the form of a beneficial interest in the same Global Note), the transferor of such beneficial interest must deliver to the Registrar either (A) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above; PROVIDED, that in no event shall Definitive Notes be issued upon the transfer or exchange of beneficial interests in the Regulation S Global Note prior to (x) the expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903 under the Securities Act. Upon an Exchange Offer by the Company in accordance with Section 2.06(f) hereof, the requirements of this Section 2.06(b)(ii) shall be deemed to have been satisfied upon receipt by the Registrar of the instructions contained in the Letter of Transmittal delivered by the Holder of such beneficial interests in the Restricted Global Notes. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture, the Securities and otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h) hereof. (iii) TRANSFER OF BENEFICIAL INTERESTS TO ANOTHER RESTRICTED GLOBAL NOTE. A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(ii) above and the Registrar receives the following: (A) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; (B) if the transferee will take delivery in the form of a beneficial interest in the Regulation S Temporary Global Note or the Regulation S Permanent Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and (C) if the transferee will take delivery in the form of a beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications and certificates and Opinion of Counsel required by item (3) thereof, if applicable, and the transferee must deliver a certificate in the form of Exhibit D hereto. 25 (iv) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL NOTE FOR BENEFICIAL INTERESTS IN THE UNRESTRICTED GLOBAL NOTE. A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(ii) above and: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, is not (1) a broker-dealer, (2) a Person participating in the distribution of the Securities or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (B) any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) any such transfer is effected by a Participating Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; (2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and (3) in each such case set forth in this subparagraph (D), an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are not required in order to maintain compliance with the Securities Act. If any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an authentication order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of beneficial interests transferred pursuant to subparagraph (B) or (D) above. 26 Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note. (c) TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS FOR DEFINITIVE NOTES. (i) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO RESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon receipt by the Registrar of the following documentation: (A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof; (B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof; (C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof; (D) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof; (E) if such beneficial interest is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable, and a certificate in the form of Exhibit D hereto; (F) if such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or (G) if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Company shall execute and the Trustee shall authenticate and make available for delivery to the Person 27 designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall make available for delivery such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein. (ii) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO UNRESTRICTED DEFINITIVE NOTES. A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only if: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of such beneficial interest, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) such transfer is effected by a Participating Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Definitive Note that does not bear the Private Placement Legend, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or (2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a Definitive Note that does not bear the Private Placement Legend, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and (3) in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the 28 restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. (iii) BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTES TO UNRESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Company shall execute and the Trustee shall authenticate and make available for delivery to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iii) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall make available for delivery such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this section 2.06(c)(iii) shall not bear the Private Placement Legend. A beneficial interest in an Unrestricted Global Note cannot be exchanged for a Definitive Note bearing the Private Placement Legend or transferred to a Person who takes delivery thereof in the form of a Definitive Note bearing the Private Placement Legend. (d) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR BENEFICIAL INTERESTS. (i) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES. If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation: (A) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof; (B) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof; (C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof; (D) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in 29 accordance with Rule 144 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof; (E) if such Restricted Definitive Note is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; (F) if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof; or (G) if such Restricted Definitive Note is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, and a certificate in the form of Exhibit D hereto, the Trustee shall cancel the Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the appropriate Restricted Global Note, in the case of clause (B) above, the 144A Global Note, in the case of clause (C) above, the Regulation S Global Note and in the case of clause (G) above, the IAI Global Note. (ii) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTES. A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (B) any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) any such transfer is effected by a Participating Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; and 30 (2) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; in each such case set forth in this subparagraph (D), an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act, that the restrictions on transfer contained herein and in the Private Placement Legend are not required in order to maintain compliance with the Securities Act, and such Definitive Notes are being exchanged or transferred in compliance with any applicable blue sky securities laws of any State of the United States. Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note. (iii) UNRESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTES. A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes. If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an authentication order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of beneficial interests transferred pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above. (e) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR DEFINITIVE NOTES. Upon request by a Holder of Definitive Notes and such Holder's compliance with the provisions of this Section 2.06(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by his attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, pursuant to the provisions of this Section 2.06(e). (i) RESTRICTED DEFINITIVE NOTES TO RESTRICTED DEFINITIVE NOTES. Restricted Definitive Notes may be transferred to and registered in the name of Persons who take delivery thereof if the Registrar receives the following: (A) if the transfer will be made pursuant to Rule 144A under the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; 31 (B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; (C) if the transfer will be made pursuant to an exemption from the registration requirements of the Securities Act to an Institutional Accredited Investor, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications and certificates and Opinion of Counsel required by item (3) thereof, if applicable, and the transferee must deliver a certificate in the form of Exhibit D hereto; and (D) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver (x) a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable. (ii) RESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE NOTES. Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (B) any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) any such transfer is effected by a Participating Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; (2) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and (3) in each such case set forth in this subparagraph (D), an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act, that the 32 restrictions on transfer contained herein and in the Private Placement Legend are not required in order to maintain compliance with the Securities Act, and such Restricted Definitive Note is being exchanged or transferred in compliance with any applicable blue sky securities laws of any State of the United States. (iii) A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request for such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof. Unrestricted Definitive Notes cannot be exchanged for or transferred to Persons who take delivery thereof in the form of a Restricted Definitive Note. (f) EXCHANGE OFFER. Upon the occurrence of the Exchange Offer in accordance with the Registration Rights Agreement, the Company shall issue and, upon receipt of an authentication order in accordance with Section 2.02, the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of the beneficial interests in the Restricted Global Notes tendered for acceptance by persons that are not (x) broker-dealers, (y) Persons participating in the distribution of the Exchange Notes or (z) Persons who are affiliates (as defined in Rule 144) of the Company and accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an aggregate principal amount equal to the principal amount of the Restricted Definitive Notes accepted for exchange in the Exchange Offer. Concurrent with the issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Company shall execute and the Trustee shall authenticate and make available for delivery to the Persons designated by the Holders of Definitive Notes so accepted Definitive Notes in the appropriate principal amount. (g) LEGENDS. The following legends shall appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture. (i) PRIVATE PLACEMENT LEGEND. (A) Except as permitted by subparagraph (b) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form: "THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A OR REGULATION S THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE 33 COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR") THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF SECURITIES LESS THAN $100,000, AN OPINION OF COUNSEL THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE." (B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraphs (b)(iv), (c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend. (ii) GLOBAL NOTE LEGEND. Each Global Note shall bear a legend in substantially the following form: "THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE Trustee MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY." 34 (h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or cancelled in whole and not in part, each such Global Note shall be returned to or retained and cancelled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Securities represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note, by the Trustee or by the Depositary at the direction of the Trustee, to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note, by the Trustee or by the Depositary at the direction of the Trustee, to reflect such increase. (i) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES. (i) To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon the Company's order or at the Registrar's request. (ii) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 4.08, and 9.05 hereof). (iii) The Registrar shall not be required to register the transfer of or exchange any Security selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. (iv) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange. (v) The Company shall not be required (A) to issue, to register the transfer of or to exchange Securities during a period beginning at the opening of business 15 days before the day of mailing of a notice of redemption under Section 3.02 hereof and ending at the close of business on the day of selection, (B) to register the transfer of or to exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part or (C) to register the transfer of or to exchange a Security between a record date and the next succeeding Interest Payment Date. 35 (vi) Prior to due presentment for the registration of a transfer of any Security, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of and interest on such Securities and for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary. (vii) The Trustee shall authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02 hereof. (viii) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a transfer or exchange may be submitted by facsimile. SECTION 2.07. REPLACEMENT SECURITIES. If any mutilated Security is surrendered to the Trustee or the Company and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Security, the Company shall issue and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Security if the Trustee's requirements are met. If required by the Trustee or the Company, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Security is replaced. The Company may charge for its expenses in replacing a Security. Every replacement Security is an additional obligation of the Company and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Securities duly issued hereunder. SECTION 2.08. OUTSTANDING SECURITIES. The Securities outstanding at any time are all the Securities authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section as not outstanding. Except as set forth in Section 2.09 hereof, a Security does not cease to be outstanding because the Company or an Affiliate of the Company holds the Security; however, Securities held by the Company or a Subsidiary of the Company shall not be deemed to be outstanding for purposes of Section 3.07(b) hereof. If a Security is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide purchaser. If the principal amount of any Security is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue. If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Securities payable 36 on that date, then on and after that date such Securities shall be deemed to be no longer outstanding and shall cease to accrue interest. SECTION 2.09. TREASURY SECURITIES. In determining whether the Holders of the required principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Company, or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities that a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded. SECTION 2.10. TEMPORARY SECURITIES. Until certificates representing Securities are ready for delivery, the Company may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of certificated Securities but may have variations that the Company considers appropriate for temporary Securities and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Securities in exchange for temporary Securities. Holders of temporary Securities shall be entitled to all of the benefits of this Indenture. SECTION 2.11. CANCELLATION. The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Securities surrendered for registration of transfer, exchange, payment, replacement or cancellation. The Company may not issue new Securities to replace Securities that it has paid or that have been delivered to the Trustee for cancellation. SECTION 2.12. DEFAULTED INTEREST. If the Company defaults in a payment of interest on the Securities, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Securities and in Section 4.01 hereof. The Company shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Security and the date of the proposed payment. The Company shall fix or cause to be fixed each such special record date and payment date, PROVIDED that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) shall mail or cause to be mailed to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid. 37 SECTION 2.13. CUSIP NUMBERS The Company in issuing the Securities s may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; PROVIDED that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee of any change in the "CUSIP" numbers. ARTICLE 3 OPTIONAL REDEMPTION AND OPTIONAL REDEMPTION UPON CHANGE OF CONTROL SECTION 3.01. NOTICES TO TRUSTEE (a) If the Company elects to redeem Securities pursuant to the optional redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least 45 days but not more than 60 days before a redemption date, an Officers' Certificate setting forth that such redemption shall occur pursuant to Section 3.07 hereof and setting forth the redemption date, the principal amount of Securities to be redeemed and the redemption price. (b) If the Company elects to redeem Securities pursuant to the provisions of Section 3.08 hereof, it shall furnish to the Trustee, at least 45 days but not more than 60 days before the redemption date, an Officers' Certificate setting forth that a Change of Control has occurred and the date of such Change of Control and that such redemption shall occur pursuant to Section 3.08 hereof, and further setting forth the principal amount of Securities to be redeemed, the redemption price of such Securities and the intended redemption date. SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED If less than all of the Securities are to be redeemed at any time, selection of the Securities for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Securities are listed, or, if the Securities are not listed on a national securities exchange, on a PRO RATA basis, by lot or by such method as the Trustee shall deem fair and appropriate; PROVIDED that no Security in denominations of $1,000 or less shall be redeemed in part. The Trustee may select for redemption any portion (equal to $1,000 or any integral multiple thereof) of the principal of Securities that have denominations larger than $1,000. Except as provided in the preceding sentence, provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Security selected for partial redemption, the principal amount thereof to be redeemed. The particular Securities to be redeemed shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the 38 redemption date by the Trustee from the outstanding Securities not previously called for redemption. SECTION 3.03. NOTICES TO HOLDERS (a) If the Company elects to redeem Securities pursuant to either of Section 3.07 or 3.08 hereof, notice of redemption shall be mailed by first class mail at least 30 days but not more than 60 days before the redemption date to each Holder of Securities to be redeemed at its registered address. The notice shall identify the Securities to be redeemed (including CUSIP number) and shall state: (1) the redemption date; (2) the redemption price; (3) if any Security is being redeemed in part, the portion of the principal amount of such Security to be redeemed and that, after the redemption date, upon surrender of such Security, a new Security or Securities in principal amount equal to the unredeemed portion will be issued; (4) the name and address of the Paying Agent; (5) that Securities called for redemption must be surrendered to the Paying Agent at the address specified in such notice to collect the redemption price; (6) that interest on Securities or portions of them called for redemption ceases to accrue on and after the redemption date; (7) the paragraph of the Securities pursuant to which the Securities are being redeemed; and (8) the aggregate principal amount of Securities that are being redeemed. (b) At the Company's timely request, the Trustee shall give the notice required in Section 3.03(a) hereof above in the Company's name and at its expense and setting forth the information to be stated in such notice as provided in Section 3.03(a) hereof. SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION Once notice of redemption is mailed (after the Trustee has received the notice provided for in Section 3.01 hereof), Securities called for redemption become due and payable on the redemption date at the redemption price and shall cease to bear interest from and after the redemption date (unless the Company shall fail to make payment of the redemption price or accrued interest on the redemption date). Upon surrender to the Paying Agent, such Securities shall be paid at the redemption price, plus premium and Liquidated Damages, if any, plus accrued interest, if any, to the redemption date, but interest installments whose maturity is on the 39 redemption date and Liquidated Damages which become payable on the redemption date will be payable to the Holder of record at the close of business on the relevant record dates referred to in the Securities. SECTION 3.05. DEPOSIT OF REDEMPTION PRICE OR PURCHASE PRICE Prior to 10:00 a.m. on the redemption date, the Company shall deposit with the Trustee or with the Paying Agent money (in same-day funds) sufficient to pay the redemption price of, premium and Liquidated Damages, if any, and accrued interest on, all Securities to be redeemed on that date other than Securities or portions thereof called for redemption on that date which previously have been delivered by the Company to the Trustee for cancellation. The Trustee or the Paying Agent shall return to the Company any such money not required for that purpose. If the Company complies with the preceding paragraph, interest on the Securities or portions thereof to be redeemed, whether or not such Securities are presented for payment, will cease to accrue on the applicable redemption date. If any Security called for redemption shall not be so paid upon surrender for redemption because of the failure of the Company to comply with the preceding paragraph, then interest will be paid on the unpaid principal from the redemption date until such principal is paid and on any interest not paid on such unpaid principal, in each case, at the rate provided in the Securities and in Section 4.01 hereof. SECTION 3.06. SECURITIES REDEEMED IN PART Upon surrender of a Security that is redeemed in part, the Company shall issue and the Trustee, upon the written order of the Company, shall authenticate for the Holder at the expense of the Company a new Security equal in principal amount to the unredeemed portion of the Security surrendered. SECTION 3.07. OPTIONAL REDEMPTION At any time prior to May 15, 2004, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of Securities (which includes Additional Securities, if any) issued hereunder at a redemption price of 108.875% of the principal amount of such Securities, plus accrued and unpaid interest to the redemption date, with the net cash proceeds of one or more Equity Offerings; PROVIDED that: (1) at least 65% of the aggregate principal amount of Securities (which includes Additional Securities, if any) issued remains outstanding immediately after the occurrence of each of those redemptions (excluding Securities held by the Company and its Subsidiaries); and (2) any redemption must occur within 60 days of the date of closing of such Equity Offering. Except as provided in the preceding paragraph and other than in connection with a Change of Control pursuant to Section 3.08 herein, the Company may not redeem the Securities prior to May 15, 2006. On or after May 15, 2006, the Company may, at its option, redeem the Securities, in whole or in part, at the redemption prices (expressed as percentages of the principal 40 amount) set forth in the immediately succeeding paragraph, plus accrued and unpaid interest thereon to the applicable redemption date. The redemption price as a percentage of the principal amount shall be as follows, if the Securities are redeemed during the twelve-month period beginning May 15 of the years indicated below:
YEAR PERCENTAGE 2006..................................................104.438% 2007..................................................102.958% 2008..................................................101.479% 2009 and thereafter...................................100.000%
If the optional redemption date is on or after an interest record date and on or before the related interest payment date, the accrued and unpaid interest, if any, will be paid to the Person in whose name the Security is registered at the close of business on that record date, and no additional interest will be payable to holders whose Securities will be subject to redemption by the Company. Notwithstanding the foregoing, upon the occurrence at any time of a Change in Control, the Securities will be redeemable, at the option of the Company, in whole or in part, pursuant to the provisions of Section 3.08 hereof. Any redemption pursuant to this Section 3.07 shall be made, to the extent applicable, pursuant to the provisions of Sections 3.01 through 3.06 hereof. SECTION 3.08. OPTIONAL REDEMPTION UPON CHANGE OF CONTROL In addition to any redemption pursuant to Section 3.07 hereof, the Company may, at its option, redeem the Securities, in whole or in part, at any time within 160 days after a Change of Control upon not less than 30 nor more than 60 days' prior notice to each Holder of Securities to be redeemed, at a redemption price equal to the sum of (i) the then outstanding principal amount of the Securities being redeemed plus (ii) accrued and unpaid interest, if any, to the redemption date plus (iii) the Applicable Premium. Any redemption pursuant to this Section 3.08 shall be made, to the extent applicable, pursuant to the provisions of Sections 3.01 through 3.06 hereof. SECTION 3.09. SINKING FUND The Securities will not be entitled to any sinking fund payments. 41 ARTICLE 4 COVENANTS SECTION 4.01. PAYMENT OF SECURITIES The Company shall pay the principal of and interest on the Securities on the dates and in the manner provided in the Securities, and shall pay Liquidated Damages, if any, on the dates and in the manner provided in the Registration Rights Agreement. Principal and interest shall be considered paid on the date due if the Paying Agent, other than the Company or a Subsidiary of the Company, holds on that date money deposited by the Company in available funds and designated for and sufficient to pay all principal and interest then due. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, at the same rate per annum on the Securities to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace period) at the same rate to the extent lawful. SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY The Company shall maintain, in the Borough of Manhattan, The City of New York, an office or agency (which may be an office of the Trustee or the Registrar) where Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. The Company may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; PROVIDED, HOWEVER, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, The City of New York for such purposes. The Company shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. The Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.03 hereof. SECTION 4.03. SEC REPORTS; FINANCIAL STATEMENTS (a) The Company and the Guarantors shall file with the Trustee, within 15 days after it files the same with the SEC, copies of the annual reports and the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) that the Company and/or the Guarantors are required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. If the Company is not subject to the requirements of such Section 13 or 15(d), the Company shall file with the Trustee, 42 within 15 days after it would have been required to file the same with the SEC, financial statements, including any notes thereto (and with respect to annual reports, an auditors' report by a firm of established national reputation), and a "Management's Discussion and Analysis of Financial Condition and Results of Operations," both comparable to that which the Company would have been required to include in such annual reports, information, documents or other reports if the Company had been subject to the requirements of such Section 13 or 15(d). Any Guarantor not required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act shall not be required to file such reports with the SEC or Trustee. The Company and the Guarantors shall also comply with the other provisions of TIA Section314(a). (b) If the Company is required to furnish annual or quarterly reports to its stockholders pursuant to the Exchange Act, the Company shall cause any annual report furnished to its stockholders generally and any quarterly or other financial reports furnished by it to its stockholders generally to be filed with the Trustee and mailed to the Holders at their addresses appearing in the register of Securities maintained by the Registrar. If the Company is not required to furnish annual or quarterly reports to its stockholders pursuant to the Exchange Act, so long as at least 5% of the original principal amount of the Securities remain outstanding, the Company shall cause its financial statements referred to in Section 4.03(a) hereof, including any notes thereto (and with respect to annual reports, an auditors' report by a firm of established national reputation), and a "Management's Discussion and Analysis of Financial Condition and Results of Operations" to be so mailed to the Holders within 90 days after the end of each of the Company's fiscal years and within 60 days after the end of each of the Company's first three fiscal quarters. The Company will cause to be disclosed in a statement accompanying any annual report or comparable information as of the date of the most recent financial statements in each such report or comparable information the amount available for payments pursuant to Section 4.07 hereof. As of the date hereof, the Company's fiscal year ends on December 31. Any Guarantor not required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act shall not be required to file such reports with the SEC or Trustee. Delivery of such reports, information and documents to the Trustee is for information purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). SECTION 4.04. COMPLIANCE CERTIFICATE (a) The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year of the Company, an Officers' Certificate stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he may have knowledge and what action the Company is taking or proposes to take with respect thereto) and that to the best of his knowledge no event has occurred 43 and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Securities are prohibited or, if such event has occurred, a description of the event and what action the Company is taking or proposes to take with respect thereto. (b) So long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, the year-end financial statements delivered pursuant to Section 4.03 hereof shall be accompanied by a written statement of the Company's independent public accountants (who shall be a firm of established national reputation) that in making the examination necessary for certification of such financial statements nothing has come to their attention that would lead them to believe that the Company has violated any provisions of Articles 4 or 5 of this Indenture or, if any such violation has occurred, specifying the nature and period of existence thereof, it being understood that such accountants shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation. (c) The Company shall, so long as any of the Securities are outstanding, (i) deliver to the Trustee, forthwith (and in any event within five Business Days) upon any Officer becoming aware of any Default or Event of Default under this Indenture, an Officers' Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto and (ii) promptly notify the Trustee of any Change of Control. SECTION 4.05. COMPLIANCE WITH LAWS, TAXES The Company shall, and shall cause each of its Subsidiaries to, comply with all statutes, laws, ordinances, or government rules and regulations to which it is subject, noncompliance with which would materially adversely affect the business, earnings, properties, assets or condition, financial or otherwise, of the Company and its Subsidiaries taken as a whole. The Company shall, and shall cause each of its Subsidiaries to, pay prior to delinquency all taxes, assessments, and governmental levies except as contested in good faith and by appropriate proceedings. SECTION 4.06. STAY, EXTENSION AND USURY LAWS The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the Company's obligation to pay the Securities; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law insofar as such law applies to the Securities, and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. SECTION 4.07. LIMITATIONS ON RESTRICTED PAYMENTS The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, (i) declare or pay any dividend or make any distribution on account of the Company's or any of its Restricted Subsidiaries' Capital Stock or other Equity Interests (other 44 than (A) dividends or distributions payable in Equity Interests (other than Redeemable Stock) of the Company or such Restricted Subsidiary, (B) dividends or distributions payable to the Company or any of its Restricted Subsidiaries or (C) dividends or distributions by a Partially Owned Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by that Partially Owned Restricted Subsidiary, the Company or a Restricted Subsidiary receives at least its pro rata share of that dividend or distribution in accordance with its Equity Interests in that class or series of securities), (ii) (A) voluntarily purchase, redeem or otherwise acquire or retire for value any preferred stock of the Company or any of its Restricted Subsidiaries, which by its terms, is exchangeable for any Indebtedness ("Exchangeable Preferred Stock") that is pari passu with or subordinated in right of payment to the Securities or (B) purchase, redeem or otherwise acquire or retire for value any Equity Interests (other than Exchangeable Preferred Stock) of the Company or any of its Restricted Subsidiaries (other than any such Equity Interests purchased from the Company or any of its Restricted Subsidiaries), (iii) voluntarily purchase, repay, redeem, defease (including, but not limited to, covenant or legal defeasance) or otherwise acquire or retire for value any Indebtedness that is subordinated in right of payment to the Securities (other than in connection with the refunding or refinancing of such Indebtedness), except a payment of interest or principal at the stated maturity of such Indebtedness or in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of such payment, and other than Indebtedness between and among the Company and its Restricted Subsidiaries or (iv) make Investments in Restricted Payment Unrestricted Subsidiaries (the foregoing actions set forth in clauses (i) through (iv) being referred to as "Restricted Payments"), if, at the time of such Restricted Payment: (a) a Default or Event of Default shall have occurred and be continuing or shall occur as a consequence thereof; or (b) the Company could not incur at least $1.00 of additional Indebtedness pursuant to the first paragraph of Section 4.09 hereof (without giving effect to clauses (i) through (xvi) of the second paragraph thereof), which calculation shall be made on a PRO FORMA basis deducting from Adjusted Consolidated Net Income the amount of any Investment the Company has made in an Unrestricted Subsidiary during the relevant period and any Investment the Company intends to make in an Unrestricted Subsidiary, to the extent that such Investment is made with amounts included in Adjusted Consolidated Net Income as a result of Transfers described in clause (c)(x) of this Section 4.07 or clause (c)(y) of Section 4.14 hereof; or (c) such Restricted Payment, together with the aggregate of all other Restricted Payments made after May 13, 1992, exceeds the sum of the following: (w) 50% of the amount of the Adjusted Consolidated Net Income (other than amounts included in the next succeeding clause (c)(x)) of the Company for the period (taken as one accounting period) from the beginning of the first quarter commencing immediately after May 13, 1992 through the end of the Company's fiscal quarter ending immediately prior to the time of such Restricted Payment (or, if Adjusted Consolidated Net Income for such period is a deficit, 100% of such deficit); PLUS (x) 100% of the amount of all Transfers from a Restricted Payment Unrestricted Subsidiary up to the aggregate amount of the Investment (after taking into account all prior Transfers from such Restricted Payment Unrestricted Subsidiary) in such Restricted Payment Unrestricted Subsidiary 45 (valued in each case as provided in the definition of "Investment"); PLUS (y) in the event of a designation of a Restricted Payment Unrestricted Subsidiary as a Restricted Subsidiary, 100% of an amount equal to the greater of (A) the fair market value of such Subsidiary as determined by the Board of Directors of the Company in good faith (or, if such fair market value may exceed $25.0 million, as determined in writing by an independent investment banking firm of nationally recognized standing) at the time of the redesignation of such Restricted Payment Unrestricted Subsidiary as a Restricted Subsidiary and (B) the Consolidated Net Cash Flow generated by such Subsidiary for the period (taken as one accounting period) from the beginning of its first fiscal quarter commencing immediately after the date of its designation as a Restricted Payment Unrestricted Subsidiary through such Subsidiary's fiscal quarter ending immediately prior to its designation as a Restricted Subsidiary (or if such Consolidated Net Cash Flow for such period is a deficit, 100% of such deficit); PLUS (z) 100% of the aggregate net cash proceeds received by the Company from (i) the issuance or sale of Equity Interests of the Company (other than such Equity Interests issued or sold to a Restricted Subsidiary of the Company and other than Redeemable Stock) or (ii) the sale of the stock of an Unrestricted Subsidiary or the sale of all or substantially all of the assets of an Unrestricted Subsidiary to the extent that a liquidating dividend is paid to the Company or any Restricted Subsidiary from the proceeds of such sale; PROVIDED, HOWEVER, that for purposes of making Investments in Unrestricted Subsidiaries, if the amount determined in accordance with clauses (w) or (y) above is a deficit, such deficit shall be excluded from the computation of this clause (c); and PROVIDED, FURTHER, that all such amounts applied pursuant to this clause (c) shall not be available for application under clause (c) of Section 4.14 hereof. The foregoing provisions shall not prohibit (i) the payment of any dividend within 60 days after the date of declaration thereof, if at said date of declaration such payment would have complied with the provisions of this Indenture; (ii) (A) the retirement of any shares of the Company's Capital Stock (the "Retired Capital Stock") either (1) in exchange for or (2) out of the net proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary) of other shares of the Company's Capital Stock (the "Refunding Capital Stock") other than any Redeemable Stock, and (B) if immediately prior to such retirement of such Retired Capital Stock the declaration and payment of dividends thereon was permitted under either clause (iii) or (vii) of this paragraph, the declaration and payment of dividends on the Refunding Capital Stock in an aggregate amount per year no greater than the aggregate amount of dividends per year that was declarable and payable on such Retired Capital Stock immediately prior to such retirement; (iii) the declaration and payment of dividends to the holders of the Series D Preferred Stock, Series F Preferred Stock and the Series H Preferred Stock; (iv) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company issued to present and former members of management of the Company and its Subsidiaries pursuant to subscription and option agreements in effect on the date hereof or under any stock option plan of About.com, Inc. existing on the date hereof and Equity Interests of the Company issued to future members of management pursuant to subscription agreements executed subsequent to the date hereof, containing provisions for the repurchase of such Equity Interests upon death, disability or termination of employment of such persons which are substantially identical to those contained in the subscription agreements in effect on the date hereof; (v) the declaration and payment of dividends on the Company's Common Stock of up to $25.0 million per annum plus 6% per 46 annum of the net proceeds received at any time by the Company from (a) the issue or sale of Common Stock or (b)(1) the issuance of securities convertible into Common Stock (other than any such convertible securities issued to (A) members of the Company's management or its Board of Directors and (B) any Subsidiary of the Company) and (2) the conversion of such convertible securities into Common Stock, in both cases at the time of such conversion into Common Stock; (vi) the repurchase, redemption or other acquisition or retirement for value of Indebtedness of the Company or any Guarantor which is subordinated in right of payment to the Securities either (A) in exchange for or (B) with the proceeds of the issuance of, Equity Interests (other than Redeemable Stock) of the Company; (vii) the declaration and payment of dividends to holders of any class or series of the Company's preferred stock issued after the date hereof (including, without limitation, the declaration and payment of dividends on Refunding Capital Stock in excess of the dividends declarable and payable thereon pursuant to clause (ii) of this paragraph), PROVIDED that at the time of such issuance the Company's Fixed Charge Coverage Ratio, after giving effect to such issuance, would be greater than 1.25 to 1; (viii) the redemption, repurchase or other acquisition or retirement for value of any Indebtedness of the Company or any Guarantor which is subordinated in right of payment to the Securities (A) with the proceeds of, or in exchange for, Indebtedness incurred pursuant to clause (vii) of the second paragraph of Section 4.09 hereof or (B) if, after giving effect to such redemption, repurchase or retirement, the Company could incur at least $1.00 of Indebtedness under the first paragraph of Section 4.09 hereof (without giving effect to clauses (i) through (xvi) of the second paragraph thereof); (ix) the retirement of the Series D Preferred Stock, Series F Preferred Stock and Series H Preferred Stock in exchange for the issuance of the Class D Subordinated Debentures, Class F Subordinated Debentures and Class H Subordinated Debentures, respectively, pursuant to the respective certificates of designations relating thereto, (x) the purchase of Class D Subordinated Debentures, Class F Subordinated Debentures and Class H Subordinated Debentures in accordance with the Change of Control covenants in the Class D Debenture Indenture, the Class F Debenture Indenture and the Class H Debenture Indenture, respectively; (xi) Investments in Unrestricted Subsidiaries having an aggregate fair market value, when taken together with all other Investments made pursuant to this clause (xi) that are at that time outstanding, not to exceed $50.0 million at the time of such Investment (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value); (xii) the repurchase, retirement or other acquisition for value of Equity Interests of the Company which are not held by KKR or any of its Affiliates; PROVIDED, that (A) the aggregate Restricted Payments made under this clause (xii) in any calendar year shall not exceed $75 million and (B) immediately after giving effect to each Restricted Payment made pursuant to this clause (xii) on a pro forma basis, the Company could incur at least $1.00 of additional Indebtedness pursuant to the first paragraph of Section 4.09 hereof (without giving effect to clauses (i) through (xvi) of the second paragraph of Section 4.09), (xiii) other Restricted Payments in an aggregate amount not to exceed $50.0 million and (xiv) any Investment made in a Securitization Subsidiary in connection with a Qualified Securitization Transaction, which Investment consists of the transfer of Receivables and Other Assets; PROVIDED that in determining the aggregate amount expended for Restricted Payments in accordance with paragraph (c) above, (1) no amounts expended under clauses (ii)(A)(1), (vi)(A), (viii), (ix) and (xiv) of this paragraph will be included, (2) 100% of the amounts expended under clauses (ii)(A)(2), (iv), (v), (vi)(B), (vii), (x), (xi), (xii) and (xiii) of this paragraph will be included, (3) 50% of the amounts expended under clause (iii) of this paragraph will be included, (4) amounts expended under clause (ii)(B) of this paragraph will be included to the extent previously included for the Retired Capital Stock and (5) 100% of the amounts expended under clause (i) to the extent not included 47 under subclauses (1) through (4) of this proviso will be included. For the purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of permitted Restricted Payments described in clauses (i) through (xiv) above or is entitled to be incurred pursuant to the first paragraph of this Section 4.07 (including clauses (a), (b) and (c) thereof), the Company shall, in its sole discretion, classify such Restricted Payment in any manner that complies with the covenants described above and such Restricted Payment will be treated as having been made pursuant to only one of such clauses or pursuant to the first paragraph of this Section 4.07. Not later than the date of making any Restricted Payment, the Company shall deliver to the Trustee an Officer's Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed, which calculations may be based on the Company's latest available internal financial statements. SECTION 4.08. DIVIDENDS AND PAYMENT RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any Restricted Subsidiary to (i) pay dividends or make any other distributions on its Capital Stock, or any other interest or participation in, or measured by, its profits, owned by the Company or any of its Restricted Subsidiaries, or pay any Indebtedness owed to the Company or any of its Restricted Subsidiaries, (ii) make loans or advances to the Company or any of its Restricted Subsidiaries or (iii) transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries, except for such encumbrances or restrictions existing under or by reason of: (A) the terms (as in effect on the date hereof) of the Existing Indebtedness, (B) the terms (as in effect on the date hereof) of the Bank Credit Facilities and the Outstanding Notes and Outstanding Note Indentures, (C) the terms of Indebtedness of the Company incurred in accordance with Section 4.09 hereof; PROVIDED that such terms of any such Indebtedness constitute no greater encumbrance or restriction on the ability of any Restricted Subsidiary to pay dividends or make distributions, make loans or advances or transfer properties or assets than is permitted by this Section 4.08, (D) the terms of this Indenture and the Securities, (E) applicable law, (F) customary non-assignment provisions entered into in the ordinary course of business and consistent with past practices, (G) the terms of purchase money obligations for property acquired in the ordinary course of business, but only to the extent that such purchase money obligations restrict or prohibit the transfer of the property so acquired, (H) the terms of the Class D Subordinated Debentures, the Class D Debenture Indenture, the Class F Subordinated Debentures, the Class F Debenture Indenture, the Class H Subordinated Debentures and the Class H Debenture Indenture, (I) any encumbrance or restriction with respect to a Subsidiary of the Company that is not a Subsidiary of the Company on the date of this Indenture, which encumbrance or restriction is in existence at the time such Person becomes a Subsidiary of the Company or is created on the date it becomes a Subsidiary of the Company, (J) any encumbrance or restriction with respect to a Subsidiary of the Company imposed pursuant to an agreement which has been entered into for the sale or disposition of all or substantially all the Capital Stock or assets of such Subsidiary, (K) customary provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business, (L) customary provisions contained in leases and other agreements entered into in the ordinary 48 course of business, (M) the terms of any Indebtedness for borrowed money of any Partially Owned Restricted Subsidiary, (N) in the case of clause (iii) of the first sentence of this Section 4.08, any encumbrance or restriction contained in mortgages, pledges or other security agreements permitted under the Indenture securing Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that encumbrance or restriction restricts the transfer of the property subject to those mortgages, pledges or other security agreements, (O) any contractual requirements incurred with respect to Qualified Securitization Transactions relating exclusively to a Securitization Subsidiary that, in the good faith determination of the Board of Directors of the Company, are customary in Qualified Securitization Transactions or (P) any encumbrance or restriction existing under any agreement which refinances or replaces the agreements described in clauses (A), (B), (D), (H), (K), (L) and (M), PROVIDED that the terms and conditions of any such encumbrances or restrictions contained in any such agreements constitute no greater encumbrance or restriction on the ability of any Restricted Subsidiary to pay dividends or make distributions, make loans or advances or transfer properties or assets than those under or pursuant to the agreement evidencing the Indebtedness or obligations refinanced. Nothing contained in this Section 4.08 shall prevent the Company or a Restricted Subsidiary from entering into any agreement permitting or providing for the incurrence of Liens otherwise permitted by Section 4.13 hereof. SECTION 4.09. INCURRENCE OF INDEBTEDNESS The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness unless the Company's Debt to Consolidated Cash Flow Ratio for its four full fiscal quarters ending immediately prior to the date such additional Indebtedness is created, incurred, issued, assumed or guaranteed would have been no greater than 6.0 to 1, and such Indebtedness is not senior in right of payment to the Securities; PROVIDED that such calculation shall give effect to (A) the incurrence of any Indebtedness (after giving effect to the application of the proceeds thereof) in connection with the simultaneous acquisition of any person, business, property or assets and (B) the Consolidated Cash Flow generated by such acquired person, business, property or assets, giving effect in each case to such incurrence of Indebtedness, application of proceeds and Consolidated Cash Flow as if such acquisition had occurred at the beginning of such four quarter period. For purposes of the foregoing provision, cash flow generated by any acquired person, business, property or asset shall be determined on the same basis as the definition of Consolidated Cash Flow and shall be based on the actual earnings before interest, taxes, depreciation and amortization of such acquired person, business, property or asset during the immediately preceding four full fiscal quarters PLUS (y)(i) the savings in cost of goods sold that would have resulted during that period from the effect of using the Company's actual costs for comparable goods and services during that period and (ii) other savings in cost of goods sold or eliminations of selling, general and administrative expenses as determined by the Company in good faith in its consideration of such acquisitions and consistent with the Company's experiences in acquisitions of similar businesses MINUS (z) the incremental expenses that would be included in cost of goods sold and selling, general and administrative expenses that would have been incurred by the Company in the operation of such acquired person, business, property or assets during such period. The foregoing limitations shall not apply to the incurrence of (i) Indebtedness pursuant to the Credit Facilities (provided that the principal amount of such Indebtedness shall 49 not exceed $1.3 billion, less the amount of all repayments made in respect of term loans and of all permanent commitment reductions with respect to revolving loans (except to the extent, and only to the extent, that any required repayments of principal in connection with such commitment reduction are not made) made under the Credit Facilities (excluding such repayments and commitment reductions which occur substantially contemporaneously with a refinancing or a refunding thereof)), PLUS any amounts then available under clause (vi) of this paragraph; (ii) Existing Indebtedness; (iii) Indebtedness represented by the Outstanding Notes and the Securities (but not any Additional Securities); (iv) Indebtedness represented by the Class D Subordinated Debentures issued in exchange for all the outstanding Series D Preferred Stock, the Class F Subordinated Debentures issued in exchange for all the outstanding Series F Preferred Stock and the Class H Subordinated Debentures issued in exchange for all the outstanding Series H Preferred Stock; (v) Capital Lease Obligations in an aggregate principal amount which, when aggregated with the principal amount of all other Capital Lease Obligations then outstanding and incurred pursuant to this clause (v) and including all Refinancing Indebtedness (as defined below) incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (v), does not exceed 5% of Total Assets; (vi) Indebtedness in an aggregate principal amount equal to the greater of (A) $225.0 million in the aggregate at any one time outstanding for the Company and its Restricted Subsidiaries or (B) Indebtedness created, incurred, issued, assumed or guaranteed (x) by the Company at any one time outstanding not in excess of 7% of the Consolidated Net Worth of the Company at the time of such creation, incurrence, issuance, assumption or guarantee or (y) by any Restricted Subsidiary of the Company at any one time outstanding not in excess of 7% of the Consolidated Net Worth of such Restricted Subsidiary at the time of such creation, incurrence, issuance, assumption or guarantee; (vii) Indebtedness created, incurred, issued, assumed or guaranteed in exchange for or the proceeds of which are used to extend, refinance, renew, replace, substitute or refund Indebtedness referred to in clauses (i) through (vi) above, including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness"); PROVIDED, that (A) the principal amount of such Refinancing Indebtedness shall not exceed the principal amount of Indebtedness (including unused commitments and additional Indebtedness incurred to pay premiums and fees in connection therewith) so extended, refinanced, renewed, replaced, substituted or refunded PLUS any amounts then available under clause (vi) of this paragraph, (B) in the case of Refinancing Indebtedness for Indebtedness permitted under clauses (ii) and (iv) of this paragraph, the Refinancing Indebtedness permitted under clauses (ii) and (iv) of this paragraph shall have an Average Life equal to or greater than the Average Life of the Indebtedness being extended, refinanced, renewed, replaced, substituted or refunded and (C) the Refinancing Indebtedness for Indebtedness permitted under clauses (ii) and (iv) of this paragraph shall rank, in right of payment, no more senior than such Indebtedness being extended, refinanced, renewed, replaced, substituted or refunded and the Refinancing Indebtedness for Indebtedness permitted under clauses (i), (iii), (v) and (vi) of this paragraph shall rank, in right of payment, PARI PASSU with or junior to the Securities; (viii) intercompany Indebtedness incurred in connection with Investments in Unrestricted Subsidiaries; PROVIDED that such Investments are permitted by Section 4.07 or Section 4.14 hereof; (ix) Indebtedness under Currency Agreements and Interest Rate Agreements, PROVIDED that in the case of Currency Agreements which relate to other Indebtedness, such Currency Agreements do not increase the Indebtedness of the Company outstanding other than as a result of fluctuations in foreign currency exchange rates; (x) Indebtedness arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or from guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any 50 Restricted Subsidiary of the Company pursuant to such agreements, incurred or assumed by the acquired Subsidiary in connection with the acquisition or disposition of any business, assets or Restricted Subsidiary of the Company, other than guarantees or similar credit support by the Company of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition; PROVIDED that the maximum aggregate liability in respect of all such Indebtedness in the nature of such guarantees shall at no time exceed the gross proceeds actually received from the sale of such business, assets or Restricted Subsidiary; (xi) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts, which will not be, and will not be deemed to be, inadvertent) drawn against insufficient funds in the ordinary course of business, PROVIDED that such Indebtedness is extinguished within three Business Days of its incurrence; (xii) Indebtedness of an entity at the time it is acquired as a Restricted Subsidiary, PROVIDED that such Indebtedness was not incurred or assumed by such entity in connection with or in anticipation of such acquisition; (xiii) Indebtedness between the Company and any Restricted Subsidiary; PROVIDED that any subsequent transfer of any Capital Stock which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of such Indebtedness (other than to the Company or another Restricted Subsidiary) shall be deemed in each case to constitute the incurrence of such Indebtedness by the obligor thereon; (xiv) Non-Compete Notes, not to exceed $50.0 million in aggregate principal amount less the amount of all principal repayments made in respect thereof; (xv) the Company's Obligations arising from the repurchase, redemption or other acquisitions of Capital Stock from management investors to the extent permitted by Section 4.07 hereof and (xvi) Indebtedness incurred by a Securitization Subsidiary in connection with a Qualified Securitization Transaction that is Non-Recourse Indebtedness with respect to the Company and its Restricted Subsidiaries (except for Standard Securitization Undertakings); PROVIDED that in the event such Securitization Subsidiary ceases to qualify as a Securitization Subsidiary or such Indebtedness ceases to constitute such Non-Recourse Indebtedness, such Indebtedness will be deemed, in each case, to be incurred at such time. For the purposes of determining the aggregate Indebtedness of any referent Person, Indebtedness shall not include guarantees by any other Person of such Indebtedness. For the purposes of determining compliance with this Section 4.09, (A) in the event that an item of Indebtedness meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xvi) of this Section 4.09 or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Company shall, in its sole discretion, classify such item of Indebtedness in any manner that complies with the covenants described above; PROVIDED that any Indebtedness classified as incurred pursuant to clause (vi) above may later be reclassified as having been incurred pursuant to the first paragraph of this covenant to the extent such reclassified Indebtedness could be incurred pursuant to the first paragraph at the time of such reclassification; and (B) such item of Indebtedness will be treated as having been incurred pursuant to only one of such clauses or pursuant to the first paragraph of this Section 4.09 except as otherwise set forth in clause (A). Accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.09. SECTION 4.10. CHANGE OF CONTROL Upon the occurrence of a Change of Control, each Holder shall have the right to require the Company to repurchase all or any part of such Holder's Securities pursuant to the 51 offer described below (the "Change of Control Offer") at a purchase price equal to 101% of the aggregate principal amount of such Securities plus accrued and unpaid interest, if any, to the date of purchase (the "Change of Control Payment"). Within 40 days following any Change of Control, the Company shall mail a notice to each Holder stating: (1) that the Change of Control Offer is being made pursuant to this Section 4.10 and that all Securities tendered will be accepted for payment; (2) the purchase price and the purchase date, which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed (the "Change of Control Payment Date"); (3) that any Security not tendered will continue to accrue interest; (4) that, unless the Company defaults in the payment of the Change of Control Payment, all Securities accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Payment Date; (5) that Holders electing to have any Securities purchased pursuant to a Change of Control Offer will be required to surrender the Securities, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Security completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Business Day preceding the Change of Control Payment Date; (6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the third Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Securities delivered for purchase, and a statement that such Holder is withdrawing his election to have such Securities purchased; and (7) that Holders whose Securities are being purchased only in part will be issued new Securities equal in principal amount to the unpurchased portion of the Securities surrendered; PROVIDED that each Holder shall tender Securities, and each Security purchased and each such new Security issued by the Company shall be in a principal amount of $1,000 or integral multiples thereof. If the Change of Control Payment Date is on the related interest payment date, any accrued interest will be paid to the person in whose name a Security is registered at the close of business on such record date, and no additional interest will be payable to Holders who tender Securities pursuant to the Change of Control Offer. On the Change of Control Payment Date, the Company shall, to the extent lawful, (1) accept for payment Securities or portions thereof tendered pursuant to the Change of Control Offer, (2) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Securities or portions thereof so tendered and (3) deliver or cause to be delivered to the Trustee, the Securities so accepted together with an Officers' Certificate stating the Securities or portions thereof were tendered to the Company. The Paying Agent shall promptly mail to each Holder of Securities so accepted, payment in an amount equal to the purchase price for such 52 Securities, and the Trustee shall promptly authenticate and mail to such Holder a new Security equal in principal amount to any unpurchased portion of the Securities surrendered; PROVIDED that each such new Security shall be in a principal amount of $1,000 or integral multiples thereof. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. The Company shall not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements included in this Section 4.10 applicable to a Change of Control Offer made by the Company and purchases all Securities validly tendered and not withdrawn under that Change of Control Offer. SECTION 4.11. LIMITATIONS ON ASSET SALES (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, consummate an Asset Sale (including the sale of any of the stock of any Subsidiary) unless at least 100% of the Net Proceeds from such Asset Sale (or, in the case of a Partially Owned Restricted Subsidiary, the Company's Pro Rata Portion thereof, after repayment by such Partially Owned Restricted Subsidiary of its Indebtedness) are applied first to repay Obligations or reduce commitments under the Credit Facilities in accordance with the terms thereof, second to offer to redeem at par the Outstanding Notes and third to offer to redeem at par the Securities. The foregoing application of Net Proceeds from Asset Sales is not required in the case of (i) sales or dispositions generating cash proceeds of less than, with respect to the Company and its Restricted Subsidiaries, $2.5 million and (ii) sales and dispositions as to which the Company delivers a reinvestment notice and the proceeds are so reinvested in one or more communications, publishing, information, education or media assets or businesses within 12 months of the date the relevant Asset Sale is consummated. Notwithstanding the foregoing provisions of this Section 4.11, neither the Company nor its Restricted Subsidiaries shall be required to apply the Net Proceeds from any Asset Sale (i) to the extent that the aggregate Net Proceeds from such Asset Sale, together with the Net Proceeds, if any, of any other Asset Sale which have not been previously applied, are less than $25.0 million or (ii) to the extent that, and for so long as, such Net Proceeds cannot be so applied as a result of an encumbrance or restriction permitted pursuant to Section 4.13 hereof. (b) At least 15 days prior to the Company's mailing of a notice of a Net Proceeds Offer, the Company shall notify the Trustee of the Company's obligation to make such Net Proceeds Offer. Notice of a Net Proceeds Offer shall be mailed by the Company not less than 30 Business Days nor more than 40 days before the Net Proceeds Payment Date to the Holders of the Securities at their last registered addresses with a copy to the Trustee and the Paying Agent. The Net Proceeds Offer shall remain open from the time of mailing until the close of business on the Business Day prior to the Net Proceeds Payment Date. The notice shall contain all instructions and materials necessary to enable such Holders to tender Securities pursuant to the Net Proceeds Offer. The notice, which shall govern the terms of the Net Proceeds Offer, shall state: (1) that the Net Proceeds Offer is being made pursuant to this Section 4.11 and that the Securities will be accepted for payment on a PRO RATA basis (rounded down to the nearest $1,000), if necessary; 53 (2) the Purchase Price and the Net Proceeds Payment Date; (3) that any Security not tendered or accepted for payment will continue to accrue interest; (4) that any Security accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Net Proceeds Payment Date; (5) that each Holder of a Security electing to have such Security purchased pursuant to a Net Proceeds Offer will be required to surrender the Security, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Security completed, to the Trustee at the address specified in the notice prior to the close of business on the Business Day prior to the Net Proceeds Payment Date; (6) that Holders will be entitled to withdraw their election if the Trustee receives, not later than the close of business on the fifth Business Day next preceding the Net Proceeds Payment Date, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Securities the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Securities purchased; and (7) that Holders whose Securities are purchased only in part will be issued new Securities equal in principal amount to the unpurchased portion of the Securities surrendered. The Trustee shall notify the Company at the opening of business on the Net Proceeds Payment Date as to the principal amount of each of the Securities or portions thereof which have been surrendered to the Trustee in connection with the Net Proceeds Offer. On the Net Proceeds Payment Date, the Company shall (i) accept for payment on a PRO RATA basis (if necessary) Securities or portions thereof tendered pursuant to the Net Proceeds Offer, (ii) deposit with the Paying Agent money sufficient to pay the purchase price of all Securities or portions thereof so accepted and (iii) deliver or cause to be delivered to the Trustee all Securities so accepted together with an Officers' Certificate stating the Securities or portions thereof accepted for payment by the Company and any other information that the Trustee may reasonably request in order to make the payments required to be made on the Net Proceeds Payment Date. The Paying Agent shall promptly mail to Holders of Securities so accepted, payment in an amount equal to the Purchase Price, and the Trustee shall promptly authenticate and mail to such Holders a new Security equal in principal amount to any unpurchased portion of the Security surrendered. Any Securities not so accepted shall be promptly mailed by the Trustee to the Holder thereof. The Company will publicly announce the results of the Net Proceeds Offer on or as soon as practicable after the Net Proceeds Payment Date. For purposes of this Section 4.11, the Trustee shall act as the Paying Agent. SECTION 4.12. TRANSACTIONS WITH AFFILIATES Neither the Company nor any of its Restricted Subsidiaries shall make any loan, advance, guarantee or capital contribution to, or for the benefit of, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or for the benefit of, or purchase or lease 54 any property or assets from, or enter into or amend any contract, agreement or understanding (each an "Affiliate Transaction") with, or for the benefit of, (i) any Person (or any Affiliate of such Person) holding 10% or more of any class of Capital Stock of the Company or any of its Restricted Subsidiaries or (ii) any Affiliate of the Company or any of its Restricted Subsidiaries, in each case involving aggregate payments or consideration in excess of $5.0 million, unless (a) such Affiliate Transaction is on terms that are not materially less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person and (b) the Company delivers to the Trustee with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $10.0 million, a resolution adopted by the majority of the Board of Directors approving such Affiliate Transaction and set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with clause (a) of this Section 4.12. The foregoing restriction shall not apply to (i) the payment of an annual fee to KKR for the rendering of management consulting and financial services to the Company and its Restricted Subsidiaries in an aggregate amount which is reasonable in relation thereto, (ii) the payment of transaction fees to KKR in amounts which are in accordance with past practices for the rendering of financial advice and services in connection with acquisitions, dispositions and financings by the Company and its Subsidiaries, (iii) loans to officers, directors and employees of the Company and its Subsidiaries for business or personal purposes and other loans and advances to such officers, directors and employees for travel, entertainment, moving and other relocation expenses made in the ordinary course of business of the Company and its Subsidiaries, (iv) any Restricted Payments not prohibited by Section 4.07 hereof or any Investment not prohibited by Section 4.14 hereof, (v) transactions between or among any of the Company and its Restricted Subsidiaries, (vi) allocation of corporate overhead to Unrestricted Subsidiaries on a basis not materially less favorable to the Company than such allocations to Restricted Subsidiaries, (vii) the payment of reasonable and customary fees paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of the Company or any Restricted Subsidiary or (viii) sales or other transfers or dispositions of Receivables and Other Assets transferred to a Securitization Subsidiary in a Qualified Securitization Transaction. SECTION 4.13. LIMITATIONS ON LIENS The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien (other than Permitted Liens) on any of its assets or any income or profits therefrom or assign or convey any right to receive income therefrom unless the Securities are equally and ratably secured with the Indebtedness secured by such Lien for so long as such Indebtedness is so secured. Upon the release and discharge of the initial Lien, any Lien created in favor of the Securities as a result of the initial Lien shall be automatically released. SECTION 4.14. INVESTMENTS IN UNRESTRICTED SUBSIDIARIES The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, make any Investment in any Unrestricted Subsidiary, if at the time of such Investment: 55 (a) a Default or Event of Default shall have occurred and be continuing or shall occur as a consequence thereof; or (b) immediately before such Investment, the Company would not be permitted to incur at least $1.00 of Indebtedness pursuant to the first paragraph of Section 4.09 hereof (without giving effect to clauses (i) through (xvi) of the second paragraph thereof), which calculation shall be made on a PRO FORMA basis deducting from Adjusted Consolidated Net Income the amount of any Investment the Company has made in an Unrestricted Subsidiary during the relevant period and any Investment the Company intends to make in an Unrestricted Subsidiary, to the extent that such Investment is made with amounts included in Adjusted Consolidated Net Income as a result of Transfers described in clause (c)(x) of Section 4.07 hereof or clause (c)(y) of this Section 4.14; or (c) such Investment, together with the aggregate of all other Investments in Unrestricted Subsidiaries made after May 13, 1992, exceeds (w) the aggregate Consolidated Net Cash Flow of the Company for the period (taken as one accounting period) from the beginning of the first quarter immediately after May 13, 1992 to the end of the Company's most recently ended fiscal quarter at the time of such Investment; PLUS (x) 100% of the aggregate net cash proceeds received by the Company from (i) the issue or sale of Equity Interests of the Company (other than such Equity Interests issued or sold to a Restricted Subsidiary of the Company and other than Redeemable Stock) or (ii) the sale of the stock of an Unrestricted Subsidiary or the sale of all or substantially all of the assets of an Unrestricted Subsidiary to the extent that a liquidating dividend is paid to the Company or any Restricted Subsidiary from the proceeds of such sale; PLUS (y) 100% of the amount of all Transfers from a Net Cash Flow Unrestricted Subsidiary up to the aggregate Investment (after taking into account all prior Transfers from such Net Cash Flow Unrestricted Subsidiary) in such Net Cash Flow Unrestricted Subsidiary resulting from such payments or transfers of assets (valued in each case as provided in the definition of "Investment"); PLUS (z) in the event of a designation of a Net Cash Flow Unrestricted Subsidiary as a Restricted Subsidiary, 100% of an amount equal to the greater of (A) the fair market value of such Subsidiary as determined by the Board of Directors in good faith (or, if such fair market value may exceed $25.0 million, as determined in writing by an independent investment banking firm of nationally recognized standing) at the time of the redesignation of such Net Cash Flow Unrestricted Subsidiary as a Restricted Subsidiary and (B) the Consolidated Net Cash Flow generated by such Subsidiary for the period (taken as one accounting period) from the beginning of its first fiscal quarter commencing immediately after the date of its designation as Net Cash Flow an Unrestricted Subsidiary through such Subsidiary's fiscal quarter ending immediately prior to its designation as a Restricted Subsidiary (or if such Consolidated Net Cash Flow for such period is a deficit, 100% of such deficit); PROVIDED, that all such amounts applied pursuant to this clause (c) shall not be available for application under clause (c) of Section 4.07 hereof. The foregoing limitations shall not apply to (i) an Investment to the extent that it is to capitalize a Restricted Payment Unrestricted Subsidiary permitted pursuant to Section 4.07 hereof; (ii) an Investment to the extent that it is funded by the issuance of Equity Interests of the Company to the extent net proceeds are not used to fund an optional redemption of Securities, 56 (iii) any Investment made in a Securitization Subsidiary in connection with a Qualified Securitization Transaction, which Investment consists of the transfer of Receivables and Other Assets and (iv) Investments in Unrestricted Subsidiaries having an aggregate fair market value, when taken together with all other Investments made pursuant to this clause (iv) that are at that time outstanding, not to exceed $50.0 million at the time of such Investment (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value). For the purposes of determining compliance with this Section 4.14, in the event that the making of an Investment in an Unrestricted Subsidiary meets the criteria of more than one of the categories of permitted Investments in Unrestricted Subsidiaries described in clauses (i) through (iv) above or is entitled to be incurred pursuant to the first paragraph of this Section 4.14 (including clauses (a), (b) and (c) thereof), the Company shall, in its sole discretion, classify such Investment in an Unrestricted Subsidiary in any manner that complies with this Section 4.14 and Investment in an Unrestricted Subsidiary will be treated as having been made pursuant to only one of such clauses or pursuant to the first paragraph of this Section 4.14. Each Net Cash Flow Unrestricted Subsidiary of the Company shall at all times remain (1) wholly owned, directly or indirectly, by the Company or a wholly owned Restricted Subsidiary of the Company or (2) a Subsidiary of the Company so long as there is no encumbrance or restriction on the ability of that Subsidiary to pay dividends or make any other distributions on its Capital Stock, or pay any Indebtedness or other obligations to, the Company or any Restricted Subsidiary. Not later than the date of making any Investment described above, the Company shall deliver to the Trustee an Officer's Certificate stating that such Investment is permitted (including, without limitation, whether such Investment is capitalizing a Net Cash Flow Unrestricted Subsidiary or a Restricted Payment Unrestricted Subsidiary) and setting forth the basis upon which the calculations required by this Section 4.14 were computed, which calculations may be based on the Company's latest available internal financial statements. SECTION 4.15. PAYMENTS FOR CONSENT Neither the Company nor any of its Subsidiaries shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder of any Securities for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Securities unless such consideration is offered to be paid or agreed to be paid to all Holders of the Securities which so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement. SECTION 4.16. CORPORATE EXISTENCE. Subject to Article 5 hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and the corporate, partnership or other existence of each Restricted Subsidiary in accordance with the respective organizational documents of each Restricted Subsidiary and the rights (charter and statutory), licenses and franchises of the Company and its Restricted Subsidiaries; PROVIDED that the Company shall not be required to preserve any such right, license or franchise, or the corporate, 57 partnership or other existence of any Restricted Subsidiary, if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Restricted Subsidiaries taken as a whole and that the loss thereof is not adverse in any material respect to the Holders. SECTION 4.17. RULE 144A INFORMATION REQUIREMENT. The Company will furnish to the Holders or beneficial holders of the Securities and prospective purchasers of the Securities designated by the holders of Transfer Restricted Securities, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act until such time as the Company consummates the Exchange Offer or has registered the Securities for resale under the Securities Act. ARTICLE 5 SUCCESSORS SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS The Company may not consolidate with, merge with or into, or transfer all or substantially all of its assets (as an entirety or substantially as an entirety in one transaction or a series of related transactions), to any Person (except a wholly owned Restricted Subsidiary, PROVIDED that in connection with any merger of the Company with a Restricted Subsidiary of the Company, no consideration (other than common stock in the surviving corporation or the Company) shall be issued or distributed to the shareholders of the Company) or permit any person to merge with or into it unless: (i) the Company shall be the continuing Person, or the Person (if other than the Company) formed by such consolidation or into which the Company is merged or to which the properties and assets of the Company are transferred (collectively, the "Successor") shall be a corporation organized and existing under the laws of the United States or any State thereof or the District of Columbia and shall expressly assume, by a supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all of the obligations of the Company under the Securities and this Indenture; (ii) immediately after giving effect to such transaction on a pro forma basis, (a) no Default and no Event of Default under this Indenture shall have occurred and be continuing and (b) the Company could incur at least $1.00 of additional Indebtedness pursuant to the first paragraph of Section 4.09 hereof (without giving effect to clauses (i) through (xvi) of the second paragraph thereof) or the Debt to Consolidated Cash Flow Ratio equals or is less than the Debt to Consolidated Cash Flow Ratio immediately prior to such transaction. SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED Upon any consolidation or merger, or any sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company or any assignment of its obligations under this Indenture or the Securities in accordance with Section 5.01 hereof, the Successor formed by such consolidation or into or with which the Company is merged or to 58 which such sale, lease, conveyance or other disposition or assignment is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such Successor has been named as the Company herein and the predecessor Company, in the case of a sale, lease, conveyance or other disposition or assignment, shall be released from all obligations under this Indenture and the Securities. ARTICLE 6 DEFAULTS AND REMEDIES SECTION 6.01. EVENTS OF DEFAULT Each of the following constitutes an "EVENT OF DEFAULT": (1) the Company fails to make any payment of interest on any Security when the same shall become due and payable and the Default continues for a period of 30 days; (2) the Company fails to make any payment of the principal or premium of any Security when the same shall become due and payable at maturity, or upon acceleration, redemption or otherwise; (3) the Company fails to comply with any of its other agreements or covenants in, or provisions of, the Securities or this Indenture and such failure continues for the period and after the notice specified below; (4) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries) whether such Indebtedness or guarantee is now existing or thereafter created in the future, if either (A) such default is the failure to pay the final scheduled principal installment in an amount of at least $10.0 million in respect of any such Indebtedness on the stated maturity date thereof (after giving effect to any extension of such maturity date by the holder of such Indebtedness and after the expiration of any grace period in respect of such final scheduled principal installment contained in the instrument under which such Indebtedness is outstanding) or (B) as a result of such default the maturity of such Indebtedness has been accelerated prior to its express maturity and the principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness the maturity of which has been accelerated, aggregates $20.0 million or more; PROVIDED that an Event of Default shall not be deemed to occur with respect to any accelerated Indebtedness which is repaid or prepaid within 20 days after such declaration; (5) a final judgment that exceeds $15 million individually, or final judgments that exceed $25 million in the aggregate, for the payment of money are entered by a court or courts of competent jurisdiction against the Company, or any of its Significant Subsidiaries and such judgment or judgments shall not be discharged, satisfied, stayed, annulled or rescinded within 60 days of being entered; 59 (6) the Company or any of its Significant Subsidiaries pursuant to or within the meaning of any Bankruptcy Law: (a) commences a voluntary case, (b) consents to the entry of an order for relief against it in an involuntary case, (c) consents to the appointment of a Custodian of it or for all or substantially all of its property, or (d) makes a general assignment for the benefit of its creditors; or (7) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (a) is for relief against the Company, or any of its Significant Subsidiaries as debtor in an involuntary case, (b) appoints a Custodian of the Company, or any of its Significant Subsidiaries or a Custodian for all or substantially all of the property of the Company, or any of its Significant Subsidiaries, or (c) orders the liquidation of the Company, or any of its Significant Subsidiaries, and the order or decree remains unstayed and in effect for 60 days; and (8) except as permitted by this Indenture and the Securities, the Guarantees shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect with respect to any Guarantor or any Guarantor shall deny or disaffirm its obligations under its Guarantee. The Company is required, pursuant to Section 4.04(a) hereof, to deliver to the Trustee annually a statement regarding compliance with this Indenture, and the Company is required, pursuant to Section 4.04(c) hereof, upon becoming aware of any Default or Event of Default to deliver a statement to the Trustee specifying such Default or Event of Default. The Trustee shall not be deemed to know of a Default unless a Responsible Officer has actual knowledge of such Default or receives written notice of such Default with specific reference to such Default. In the case of any Event of Default pursuant to the provisions of this Section 6.01 occurring by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding payment of the premium, if any, which the Company would have had to pay if the Company then had elected to redeem the Securities pursuant to Section 3.07 hereof, an equivalent premium shall also become and be immediately due and payable to the extent permitted by law, anything in this Indenture or in the Securities contained to the contrary notwithstanding. 60 A Default under clause (3) is not an Event of Default until the Trustee notifies the Company, or the Holders of at least 30% in principal amount of the then outstanding Securities notify the Company and the Trustee, in writing, of the Default and the Company does not cure the Default within 30 days after receipt of the notice. The notice must specify the Default, demand that it be remedied and state that the notice is a "Notice of Default." SECTION 6.02. ACCELERATION If an Event of Default (other than an Event of Default with respect to the Company specified in clauses (6) or (7) of Section 6.01 hereof) occurs and is continuing, the Trustee by written notice to the Company, or the Holders of at least 30% in principal amount of the then outstanding Securities by written notice to the Company and the Trustee, may and the Trustee at the request of such Holders shall, declare all unpaid principal of, premium and Liquidated Damages, if any, and accrued interest on the Securities to be due and payable immediately. Upon such declaration of acceleration such principal of, premium and Liquidated Damages, if any, and accrued interest, due and payable on the Securities, as determined in the next succeeding paragraph, shall be due and payable immediately. If an Event of Default with respect to the Company specified in clause (6) or (7) of Section 6.01 hereof occurs, all unpaid principal of, premium and Liquidated Damages, if any, and accrued interest on the Securities then outstanding shall IPSO FACTO become and be immediately due and payable without any declaration, notice or other act on the part of the Trustee or any Holder. The Holders of at least a majority in aggregate principal amount of the then outstanding Securities by written notice to the Trustee may rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, premium and Liquidated Damages, if any, or interest on the Securities that has become due solely as a result of such acceleration) have been cured or waived. In the event that the maturity of the Securities is accelerated pursuant to this Section 6.02, 100% of the principal amount thereof and premium or Liquidated Damages, if any, plus accrued interest to the date of payment shall become due and payable. SECTION 6.03. OTHER REMEDIES If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium and Liquidated Damages, if any, or interest then due on the Securities or to enforce the performance of any provision of the Securities or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law. SECTION 6.04. WAIVER OF PAST DEFAULTS The Holders of at least a majority in principal amount of the then outstanding Securities by notice to the Trustee may waive an existing Default or Event of Default and its consequences (including waivers obtained in connection with a tender offer or exchange offer for 61 Securities), except a continuing Default or Event of Default in the payment of the principal of, premium or Liquidated Damages, if any, or interest on any Security (including, without limitation, pursuant to any mandatory or optional redemption obligation hereunder). Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. SECTION 6.05. CONTROL BY MAJORITY The Holders of a majority in principal amount of the then outstanding Securities may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture, that the Trustee determines may be unduly prejudicial to the rights of other Holders, or that may involve the Trustee in personal liability. SECTION 6.06. LIMITATIONS ON SUITS A Holder may not pursue a remedy with respect to this Indenture, the Securities or any Guarantee unless: (1) the Holder gives to the Trustee written notice of a continuing Event of Default; (2) the Holders of at least 25% in principal amount of the then outstanding Securities make a written request to the Trustee to pursue the remedy; (3) such Holder or Holders offer to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense (including, without limitation, fees and expenses of counsel); (4) the Trustee does not comply with the request within 30 days after receipt of the request and the offer of indemnity; and (5) during such 30-day period the Holders of a majority in principal amount of the then outstanding Securities do not give the Trustee a direction which is inconsistent with the request. A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder. SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT Notwithstanding any other provision of this Indenture, the right of any Holder of a Security to receive payment of principal of, premium and Liquidated Damages, if any, and interest on the Security, on or after the respective due dates expressed in the Security, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of the Holder. 62 SECTION 6.08. COLLECTION SUIT BY TRUSTEE If an Event of Default specified in Section 6.01(1) or (2) or (3) (with respect to the Company's obligations under Section 4.10 or 4.11 hereof) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company or any Guarantor for the amount of principal, premium, if any, and interest remaining unpaid on the Securities, determined in accordance with Section 6.02 hereof and interest on overdue principal, premium and Liquidated Damages, if any, and, to the extent lawful, interest, and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relative to the Company, its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties which the Holders of the Securities may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. SECTION 6.10. PRIORITIES If the Trustee collects any money pursuant to this Article 6, it shall pay out the money in the following order: FIRST: to the Trustee for amounts due under Section 7.07 hereof; SECOND: to Holders for amounts due and unpaid on the Securities for principal, premium and Liquidated Damages, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal, premium, if any, and interest, respectively; and THIRD: to the Company. 63 The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Article 6. SECTION 6.11. UNDERTAKING FOR COSTS In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Securities. ARTICLE 7 TRUSTEE SECTION 7.01. DUTIES OF TRUSTEE (1) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in such exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. (2) Except during the continuance of an Event of Default: (a) the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (b) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee pursuant to and conforming to the requirements of this Indenture. (3) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (a) this paragraph does not limit the effect of paragraph (2) of this Section 7.01; (b) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or other officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (c) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Sections 6.02 or 6.05 hereof. 64 (4) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (1), (2), (3) and (5) of this Section 7.01. (5) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee is not obligated to perform any duty or exercise any right or power under this Indenture at the request of the Holders of the Securities unless it receives an offer from such Holders of security and indemnity satisfactory to it against any loss, liability or expense (including, without limitation, fees of counsel). (6) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. SECTION 7.02. RIGHTS OF TRUSTEE (1) The Trustee may conclusively rely on any document (whether in its original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document. (2) Before the Trustee acts or refrains from acting, it may require receipt of an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder and in reliance thereon. (3) The Trustee may act through agents, attorneys, custodians and nominees and shall not be responsible for the misconduct or negligence of any such agent, attorney, custodian or nominee appointed with due care. (4) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers conferred upon it by this Indenture. (5) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company or any Guarantor shall be sufficient if signed by an Officer of the Company or such Guarantor. (6) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities in this Indenture. (7) The rights, privileges, protections, immunities and benefits given to the 65 Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder. SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or any of its Affiliates with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. However, the Trustee is subject to Sections 7.10 and 7.11 hereof. SECTION 7.04. TRUSTEE'S DISCLAIMER The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities, it shall not be accountable for the Company's use of the proceeds from the Securities or any money paid to the Company or upon the Company's direction under any provision hereof, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee and it shall not be responsible for any statement or recital herein or any statement in the Securities other than its certificate of authentication. SECTION 7.05. NOTICE OF DEFAULTS If a Default or Event of Default occurs and is continuing and if it is actually known to a Responsible Officer of the Trustee, the Trustee shall mail to each Holder a notice of the Default or Event of Default within 90 days after it occurs or, if later, within ten days after such Default or Event of Default becomes so known to the Trustee unless such Default or Event of Default has been cured. Except in the case of a Default or Event of Default in payment of principal of, premium and Liquidated Damages, if any, or interest on any Security or that resulted from a failure to comply with Section 4.10 hereof, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers determines in good faith that withholding the notice is in the interests of the Holders. SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS Within 60 days after each May 15 beginning with May 15, 2001, the Trustee shall mail to Holders a brief report dated as of such reporting date that complies with TIA Section 313(a) (but if no event described in TIA Section 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA Section 313(b). The Trustee also shall transmit by mail all reports as required by TIA Section 313(c). A copy of each report at the time of its mailing to Holders shall be filed with the SEC and each stock exchange on which the Securities are listed in accordance with TIA Section 313(d). The Company shall notify the Trustee when the Securities are listed on any stock exchange or delisted therefrom. SECTION 7.07. COMPENSATION AND INDEMNITY The Company shall pay to the Trustee from time to time such compensation for its acceptance of this Indenture and services hereunder as the parties shall agree from time to 66 time in writing. The Trustee's compensation shall not be limited by any law relating to compensation of a trustee of an express trust. The Company shall reimburse the Trustee promptly upon request for all disbursements, advances and expenses incurred by it. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee's agents and counsel. The Company shall fully indemnify and hold harmless the Trustee and its directors, officers, employees and agents against any loss, liability, claim, damage or expense (including without limitation fees and expenses of counsel) incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture including, without limitation, costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of its powers and duties hereunder, except as set forth in the next paragraph. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. The Company need not reimburse any expense or indemnify against any loss or liability determined by a court of competent jurisdiction to have been caused or incurred as a result of the Trustee's own negligence or willful misconduct. To secure the Company's payment obligations in this Section 7.07, the Trustee shall have a Lien prior to the Securities on all money or property held or collected by the Trustee, except that held in trust to pay principal of, premium and Liquidated Damages, if any, and interest on particular Securities. Such Lien shall survive the satisfaction and discharge of the Indenture. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(6) or (7) hereof occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law. The Trustee shall comply with the provisions of TIA Section 313(b)(2) to the extent applicable. SECTION 7.08. REPLACEMENT OF TRUSTEE The Trustee may resign and be discharged from the trust hereby created by so notifying the Company. The Holders of a majority in principal amount of the then outstanding Securities may remove the Trustee by so notifying the Trustee and the Company. The Company may remove the Trustee if: (1) the Trustee fails to comply with Section 7.10 hereof; (2) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; (3) a Custodian or public officer takes charge of the Trustee or its property; or 67 (4) the Trustee becomes incapable of acting. The foregoing notwithstanding, a resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section 7.08, and thereafter the Trustee shall have no liability for any acts or omissions of any successor Trustee. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of at least 10% in principal amount of the then outstanding Securities may petition at the expense of the Company any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee fails to comply with Section 7.10 hereof, any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to the Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company's obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee. SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC. Subject to Section 7.10 hereof, if the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation or national banking association, the successor entity without any further act shall be the successor Trustee. In case any Securities have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation of such authenticating trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor trustee had itself authenticated such Securities. SECTION 7.10. ELIGIBILITY; DISQUALIFICATION There shall at all times be a Trustee hereunder which shall be a corporation organized and doing business under the laws of the United States of America, any state thereof or the District of Columbia authorized under such laws to exercise corporate trust powers, shall be subject to supervision or examination by Federal or state (or the District of Columbia) authority and shall have a combined capital and surplus of at least $50 million as set forth in its most recent published annual report of condition. This Indenture shall always have a Trustee who satisfies the requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section 310(b). 68 SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY The Trustee is subject to TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein. ARTICLE 8 LEGAL AND COVENANT DEFEASANCE SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE The Company may, at the option of its Board of Directors evidenced by a resolution set forth in an Officers' Certificate, at any time, elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding Securities upon compliance with the conditions set forth below in this Article 8. SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE Upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Company shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from its obligations with respect to all outstanding Securities on the date the conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Securities, which shall thereafter be deemed to be "outstanding" only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in (a) and (b) below, and to have satisfied all its other obligations under such Securities and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of outstanding Securities to receive solely from the trust fund described in Section 8.04 hereof, and as more fully set forth in such Section, payments in respect of the principal of, premium on, if any, and interest on such Securities when such payments are due, (b) the Company's obligations with respect to such Securities under Article 2 and Section 4.02 hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Company's obligations in connection therewith and (d) this Article 8. Subject to compliance with this Article 8, the Company may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof. SECTION 8.03. COVENANT DEFEASANCE Upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Company shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from its obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15 and 4.16 hereof with respect to the outstanding Securities on and after the date the conditions set forth in Section 8.04 are satisfied (hereinafter, "Covenant Defeasance"), and the Securities shall thereafter be deemed not "outstanding" for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "outstanding" 69 for all other purposes hereunder (it being understood that such Securities shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Securities, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Securities shall be unaffected thereby. In addition, upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(3) through 6.01(5) and 6.01(8) hereof shall not constitute Events of Default. SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE The following shall be the conditions to the application of either Section 8.02 or 8.03 hereof to the outstanding Securities: In order to exercise either Legal Defeasance or Covenant Defeasance: (a) the Company irrevocably deposits, or causes to be deposited, in trust with the Trustee or the Paying Agent, or, at the option of the Trustee, with a trustee satisfactory to the Trustee and the Company under the terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee, money or U.S. Government Obligations in an amount sufficient (without reinvestment thereof) to pay principal and interest on the Securities to maturity or redemption, as the case may be, as such amounts become due, and to pay all other sums payable by it hereunder; PROVIDED that (i) the trustee of the irrevocable trust shall have been irrevocably instructed to pay such money or the proceeds of such U.S. Government Obligations to the Trustee and (ii) the Trustee shall have been irrevocably instructed to apply such money or the proceeds of such U.S. Government Obligations to the payment of said principal, premium and Liquidated Damages, if any, and interest with respect to the Securities; (b) in the case of an election under Section 8.02 hereof, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States acceptable to the Trustee or an Internal Revenue Service ruling to the effect that the Holders of the outstanding Securities will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amount, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; (c) in the case of an election under Section 8.03 hereof, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States acceptable to the Trustee confirming that the Holders of the outstanding Securities will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amount, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; 70 (d) no Default or Event of Default shall have occurred and be continuing (A) on the date of such deposit or (B) insofar as Sections 6.01(6) or 6.01(7) hereof is concerned, at any time in the period ending on the 91st day after the date of deposit; and (e) the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with. SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS Subject to Section 8.06 hereof, all money and non-callable U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Securities of all sums due and to become due thereon in respect of principal, premium on, if any, and interest, but such money need not be segregated from other funds except to the extent required by law. The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable U.S. Government Obligations deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Securities. Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the written request of the Company any money or non-callable U.S. Government Obligations held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance. SECTION 8.06. REPAYMENT TO COMPANY Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium on, if any, or interest on any Security and remaining unclaimed for two years after such principal, and premium, if any, or interest has become due and payable shall be paid to the Company on its written request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as a secured creditor, look only to the Company for payment thereof, and all liability of the Trustee or such paying agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified 71 therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company. SECTION 8.07. REINSTATEMENT If the Trustee or paying agent is unable to apply any United States dollars or non-callable Government Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company's obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or paying agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Company makes any payment of principal of, premium on, if any, or interest on any Security following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money held by the Trustee or paying agent. ARTICLE 9 AMENDMENTS SECTION 9.01. WITHOUT CONSENT OF HOLDERS The Company and the Trustee may amend this Indenture, the Securities or the Guarantee or waive any provision hereof or thereof without the consent of any Holder: (1) to cure any ambiguity, defect or inconsistency; (2) to provide for uncertificated Securities in addition to or in place of certificated Securities; (3) to comply with Section 5.01 hereof; (4) to make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the rights hereunder of any Holder; or (5) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA. Upon the request of the Company, accompanied by a resolution of the Board of Directors authorizing the execution of any such supplemental indenture, and upon receipt by the Trustee of the documents described in Section 9.06 hereof, the Trustee shall join with the Company in the execution of any supplemental indenture authorized or permitted by the terms of this Indenture and make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into any supplemental indenture that, in its reasonable discretion, affects its own rights, duties or immunities under this Indenture or otherwise. After an amendment or waiver under this Section 9.01 becomes effective, the Company shall mail to the Holders of each Security affected thereby a notice briefly describing 72 the amendment or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture. SECTION 9.02. WITH CONSENT OF HOLDERS Except as provided below in this Section 9.02, this Indenture, the Securities or the Guarantee may be amended or supplemented, with the written consent of the Holders of at least a majority in principal amount of the then outstanding Securities (including consents obtained in connection with a tender offer or exchange offer for Securities). Upon the request of the Company, accompanied by a resolution of the Board of Directors authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of the Holders as aforesaid, and upon receipt by the Trustee of the documents described in Section 9.06 hereof, the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture. It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof. The Holders of at least a majority in principal amount of the Securities then outstanding may waive compliance in a particular instance by the Company with any provision of this Indenture or the Securities (including waivers obtained in connection with a tender offer for Securities) or any existing default. However, without the consent of each Holder affected, an amendment or waiver under this Section may not (with respect to any Securities held by a non-consenting Holder): (1) reduce the principal amount of Securities whose Holders must consent to an amendment, supplement or waiver; (2) reduce the principal of or change the fixed maturity of any Security or alter the provisions with respect to the redemption or purchase price in connection with repurchases under Sections 3.07, 3.08, 4.10 or 4.11 hereof; (3) reduce the rate of or change the time for payment of interest on any Security; (4) waive a Default or Event of Default in the payment of principal of or premium and Liquidated Damages, if any, or interest on the Securities (except a rescission of acceleration of the Securities by the Holders of at least a majority in aggregate principal amount of the Securities as provided in Section 6.02 hereof); 73 (5) make any Securities payable in money other than that stated in the Securities; (6) make any change in Section 6.04 or 6.07 hereof; (7) waive a redemption payment with respect to any Security; or (8) make any change in the foregoing. The right of any Holder to participate in any consent required or sought pursuant to any provision of this Indenture (and the obligation of the Company to obtain any such consent otherwise required from such Holder) may be subject to the requirement that such Holder shall have been the Holder of record of any Securities with respect to which such consent is required or sought as of a date identified by the Trustee in a notice furnished to Holders in accordance with the terms of this Indenture. SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT Every amendment to this Indenture or the Securities shall comply in form and substance with the TIA as then in effect. SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS Until an amendment (which includes any supplement) or waiver becomes effective, a consent to it by a Holder of a Security is a continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security. However, any such Holder or subsequent Holder may revoke the consent as to his or her Security or portion of a Security if the Trustee receives written notice of revocation before the date the amendment or waiver becomes effective. An amendment or waiver becomes effective in accordance with its terms and thereafter binds every Holder. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment or waiver. If the Company elects to fix a record date for such purpose, the record date shall be fixed at (i) the later of 30 days prior to the first solicitation of such consent or the date of the most recent list of Holders furnished to the Trustee prior to such solicitation pursuant to Section 2.05 hereof, or (ii) such other date as the Company shall designate. If a record date is fixed, then notwithstanding the provisions of the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to consent to such amendment or waiver or to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No consent shall be valid or effective for more than 90 days after such record date unless consents from Holders of the principal amount of Securities required hereunder for such amendment or waiver to be effective shall have also been given and not revoked within such 90-day period. After an amendment or waiver becomes effective it shall bind every Holder, unless it is of the type described in any of clauses (1) through (8) of Section 9.02 hereof. In such case, the amendment or waiver shall bind each Holder of a Security who has consented to it and 74 every subsequent Holder of a Security that evidences the same debt as the consenting Holder's Security. SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES If an amendment, supplement or waiver changes the terms of a Security, the Trustee may require the Holder of the Security to deliver it to the Trustee. The Trustee may place an appropriate notation about the changed terms and return it to the Holder and the Trustee may place an appropriate notation on any Security thereafter authenticated. Alternatively, if the Company or Trustee so determines, the Company in exchange for all Securities shall issue and the Trustee shall authenticate new Securities that reflect the changed terms. SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC. The Trustee shall sign any amendment or supplemental indenture authorized pursuant to this Article 9 if the amendment does not, in the Trustee's reasonable discretion, adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may, but need not, sign it. In signing or refusing to sign such amendment or supplemental indenture, the Trustee shall be entitled to receive and, subject to Section 7.01 hereof, shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel as conclusive evidence that such amendment or supplemental indenture is authorized or permitted by this Indenture, that it is not inconsistent herewith, and that it will be valid and binding upon the Company in accordance with its terms. ARTICLE 10 GUARANTEE SECTION 10.01. SUBSIDIARY GUARANTEE Each of the Guarantors hereby, jointly and severally, fully and unconditionally guarantees to each Holder of a Security authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Securities or the obligations of the Company hereunder or thereunder, that: (a) the principal of, and premium and Liquidated Damages, if any, and interest on the Securities will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of, premium and Liquidated Damages, if any, and interest on the Securities, if any, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Securities or any of such other obligations, the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise; PROVIDED, HOWEVER, that the maximum liability of a Guarantor pursuant to this Guarantee shall in no event exceed the Maximum Guaranteed Amount (as defined below). Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors will be jointly and severally obligated to pay the same immediately. The Guarantors hereby agree that their obligations hereunder shall be absolute and unconditional, irrespective of the validity, regularity or enforceability of the Securities or this Indenture, the absence of any action to enforce the same, any waiver or consent 75 by any Holder of the Securities with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor other than the defense that payment has been made or that the other relevant obligations have been paid or performed. Each Guarantor hereby waives diligence, presentment, demand of payment, claim of fraud, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenant that this Guarantee will not be discharged except by complete performance of the obligations contained in the Securities and this Indenture. If any Holder or the Trustee is required by any court or otherwise to return to the Company or Guarantors, or any Custodian, trustee, liquidator or other similar official acting in relation to either the Company or Guarantors, any amount paid by either to the Trustee or such Holder, this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Guarantee. The Guarantors shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Guarantee. The "Maximum Guaranteed Amount" means, with respect to any Guarantor, the amount which allows the Guarantee to be enforceable to the fullest extent permitted by law, limited only to the extent necessary for the Guarantee to not constitute a fraudulent conveyance. Each Guarantor shall be subrogated to all rights of each Holder of any Securities against the Company in respect of any amounts paid to the Holders by such Guarantor pursuant to the provisions of this Guarantee; PROVIDED that the Guarantors shall not be entitled to enforce, or to receive, any payments arising out of or based upon, such right of subrogation until the principal of, premium and Liquidated Damages, if any, and interest on all the Securities shall have been paid in full and nothing remains owed to the Trustee pursuant to this Indenture. The Guarantee set forth in this Section 10.01 shall not be valid or become obligatory for any purpose with respect to a Security until the certificate of authentication on such Security shall have been signed by or on behalf of the Trustee. No Unrestricted Subsidiary shall become a guarantor of any Indebtedness of the Company or any Restricted Subsidiaries unless such Unrestricted Subsidiary becomes a guarantor of the Securities. SECTION 10.02. EXECUTION AND DELIVERY OF GUARANTEE To evidence its Guarantee set forth in Section 10.01 hereof, each Guarantor hereby agrees that a notation of such Guarantee substantially in the form of Exhibit A-1 shall be 76 endorsed by an officer of such Guarantor on each Security authenticated and delivered by the Trustee and that this Indenture shall be executed on behalf of such Guarantor by its President or one of its Vice Chairmen or Vice Presidents. Each Guarantor hereby agrees that its Guarantee set forth in Section 10.01 shall remain in full force and effect notwithstanding any failure to endorse on each Security a notation of such Guarantee. If an officer or Officer whose signature is on this Indenture of on the Guarantee no longer holds that office at the time the Trustee authenticates the Security on which a Guarantee is endorsed, the Guarantee shall be valid, binding and enforceable nevertheless. The delivery of any Security by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantee set forth in this Indenture on behalf of the Guarantors. SECTION 10.03. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS (a) Except as set forth in Articles 4 and 5 hereof, nothing contained in this Indenture or in any of the Securities shall prevent any consolidation or merger of a Guarantor with or into the Company or another Guarantor or shall prevent any sale or conveyance of the property of a Guarantor as an entirety or substantially as an entirety, to the Company or another Guarantor. Upon any such consolidation, merger, sale or conveyance, the Guarantee given by such Guarantor shall no longer have any force or effect. (b) Except as set forth in Articles 4 and 5 hereof, nothing contained in this Indenture or in any of the Securities shall prevent any consolidation or merger of a Guarantor with or into a corporation or corporations other than the Company or another Guarantor (whether or not affiliated with the Guarantor), or successive consolidations or mergers in which a Guarantor or its successor or successors shall be a party or parties, or shall prevent any sale or conveyance of the property of a Guarantor as an entirety or substantially as an entirety, to a corporation other than the Company or another Guarantor (whether or not affiliated with the Guarantor) authorized to acquire and operate the same; PROVIDED that each such Guarantor is sold or disposed of for fair market value, evidenced by a resolution of the Board of Directors set forth in an Officer's Certificate delivered to the Trustee; and PROVIDED, FURTHER, that the foregoing proviso shall not apply to the sale or disposition of a Guarantor in a foreclosure proceeding to the extent that such proviso would be inconsistent with the Uniform Commercial Code. Upon any such consolidation, merger, sale or conveyance, the Guarantee given by such Guarantor shall no longer have any force or effect. SECTION 10.04. RELEASES FOLLOWING SALE OF ASSETS Concurrently with any sale of assets (including, if applicable, all of the capital stock of any Guarantor), any Liens in favor of the Trustee in the assets sold thereby shall be released; PROVIDED that any such assets are sold or disposed of for fair market value, evidenced by a resolution of the Board of Directors set forth in an Officer's Certificate delivered to the Trustee and, PROVIDED, FURTHER, that, the foregoing proviso shall not apply to the sale or disposition of a Guarantor in a foreclosure proceeding to the extent that such proviso would be inconsistent with the Uniform Commercial Code. If the assets sold in such sale or other 77 disposition include all or substantially all of the assets of any Guarantor or all of the capital stock of any Guarantor, then such Guarantor (in the event of a sale or other disposition of all of the capital stock of such Guarantor) or the corporation acquiring the property and such Guarantor (in the event of a sale or other disposition of all or substantially all of the assets of a Guarantor) shall automatically be released and relieved of its obligations under this Article 10, PROVIDED that any such sale or disposition of all or substantially all of the assets of a Guarantor is sold or disposed of for fair market value, evidenced by a resolution of the Board of Directors set forth in an Officer's Certificate delivered to the Trustee and, PROVIDED, FURTHER, that the foregoing proviso shall not apply to the sale or disposition of a Guarantor in a foreclosure proceeding to the extent that such proviso would be inconsistent with the Uniform Commercial Code. Upon delivery by the Company to the Trustee of an Officers' Certificate and an Opinion of Counsel to the effect that such sale or other disposition was made by the Company in accordance with the provisions of this Indenture, the Trustee shall execute any documents reasonably required in order to evidence the release of any Guarantor from its obligations under its Guarantee. Any Guarantor not released from its obligations under its Guarantee shall remain liable for the full amount of principal of and interest on the Securities and for the other obligations of any Guarantor under the Indenture as provided in this Article 10. SECTION 10.05. "TRUSTEE" TO INCLUDE PAYING AGENT In case at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term "Trustee" as used in this Article 10 shall in such case (unless the context shall otherwise require) be construed as extending to and including such Paying Agent within its meaning as fully and for all intents and purposes as if such Paying Agent were named in this Article 10 in place of the Trustee. SECTION 10.06. EXISTING AND ADDITIONAL SUBSIDIARY GUARANTEES The Company shall (a) cause each Subsidiary which, after the date of this Indenture (if not then a Guarantor), becomes a Restricted Subsidiary to execute a Guarantee of the Obligations of the Company hereunder in the form set forth in this Article 10 hereof and Exhibit A-1 hereto, PROVIDED that no Subsidiary organized outside of the United States of America, Unrestricted Subsidiary, Partially Owned Restricted Subsidiary or Securitization Subsidiary shall be required to be a Guarantor, and (b) deliver to the Trustee an Opinion of Counsel, in form reasonably satisfactory to the Trustee, that such Subsidiary Guarantee is a valid, binding and enforceable obligation of such Restricted Subsidiary, subject to customary exceptions for bankruptcy, fraudulent conveyance and equitable principles and the implied covenant of good faith and fair dealing. ARTICLE 11 MISCELLANEOUS SECTION 11.01. TRUST INDENTURE ACT CONTROLS If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA Section 318(c), the imposed duties shall control. 78 SECTION 11.02. NOTICES Any notice or communication by the Company, the Guarantors or the Trustee to the other is duly given if in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), telex, telecopier or overnight air courier guaranteeing next day delivery, to the other's address: If to the Company or the Guarantors: PRIMEDIA INC. 745 Fifth Avenue New York, New York 10151 Attention: General Counsel Telecopier No.: (212) 745-0199 With a copy to: Simpson Thacher & Bartlett 425 Lexington Avenue New York, New York 10017 Attention: Gary I. Horowitz, Esq. Telecopier No.: (212) 455-2502 If to the Trustee: The Bank of New York 101 Barclay Street -- 21W New York, New York 10286 Attention: Corporate Trust Administration Telecopier No.: (212) 815-5915/5917 The Company, the Guarantors or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. All notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. Any notice or communication to a Holder shall be mailed by first-class mail, certified or registered, return receipt requested, to the Holder's address shown on the register kept by the Registrar. Any notice or communication shall also be mailed to any Person described in TIA Section 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. 79 If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time. SECTION 11.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to their rights under this Indenture or the Securities. The Company, the Guarantors, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c). SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT Upon any request or application by the Company and/or any Guarantors to the Trustee to take any action under this Indenture, the Company and/or such Guarantor as the case may be shall furnish to the Trustee: (1) an Officers' Certificate (which shall include the statements set forth in Section 11.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been complied with; and (2) an Opinion of Counsel (which shall include the statements set forth in Section 11.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been complied with. SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e) and shall include: (1) a statement that the Person making such certificate or opinion has read and understands such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of such Person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with; PROVIDED that with respect to matters of fact Opinions of Counsel may rely on an Officers' Certificate or certificates of public officials. 80 SECTION 11.06. RULES BY TRUSTEE AND AGENTS The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions. SECTION 11.07. LEGAL HOLIDAYS A "Legal Holiday" is a Saturday, a Sunday or a day on which banking institutions in The City of New York or at a place of payment are authorized or obligated by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. SECTION 11.08. NO RECOURSE AGAINST OTHERS No director, officer, employee, incorporator or shareholder of the Company, as such, shall have any liability for any obligations of the Company under the Securities, this Indenture or the Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Securities by accepting the Securities waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Securities. SECTION 11.09. GOVERNING LAW This Indenture, the Securities and the Guarantee shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of law. SECTION 11.10. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. SECTION 11.11. SUCCESSORS All agreements of the Company in this Indenture and the Securities shall bind its successor. All agreements of the Trustee in this Indenture shall bind its successor. SECTION 11.12. SEVERABILITY In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 81 SECTION 11.13. COUNTERPART ORIGINALS The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. SECTION 11.14. TRUSTEE AS PAYING AGENT AND REGISTRAR The Company initially appoints the Trustee as Paying Agent and Registrar. The provisions regarding the indemnification of the Trustee set forth in Section 7.07 shall also apply to the Trustee in its capacity as Paying Agent and Registrar hereunder. SECTION 11.15. TABLE OF CONTENTS, HEADINGS, ETC. The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof. SECTION 11.16. BANK OF NEW YORK NOT ACTING IN INDIVIDUAL CAPACITY Notwithstanding anything to the contrary contained herein, this Indenture has been accepted by The Bank of New York not in its individual capacity but solely as Trustee and in no event shall The Bank of New York have any liability for the representations, warranties, covenants, agreements or other obligations of the Company herein or in any of the certificates, notices or agreements delivered by the Company pursuant hereto, as to all of which recourse shall be had solely to the assets of the Company, and under no circumstances shall The Bank of New York be personally liable for the payment of any indebtedness or expenses of the Company. SECTION 11.17. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES In addition to the rights provided to Holders of Securities under the Indenture, Holders of Transfer Restricted Securities shall have all the rights set forth in the Registration Rights Agreement. [Signatures on Following Pages] 82 SIGNATURES PRIMEDIA INC. Dated as of May 8, 2001 By: /s/ Beverly Chell -------------------------------------- Name: Beverly Chell Title: Vice Chairman & General Counsel Adams/Intertec International, Inc. Adams/Laux Company, Inc. Bacon's Information, Inc. Canoe & Kayak, Inc. Channel One Communications Corp. Climbing, Inc. Cover Concepts Marketing Services, LLC CSK Publishing Company Incorporated ENO Productions, Inc. Films for the Humanities & Sciences, Inc. Game & Fish Publications, Inc. Haas Publishing Companies, Inc. Hacienda Productions, Inc. HPC Brazil, Inc. Intertec Publishing Corporation Kitplanes Acquisition Company Paul Kagan Associates, Inc. PRIMEDIA Enterprises, Inc. PRIMEDIA Finance Shared Services Inc. PRIMEDIA Holdings III Inc. PRIMEDIA Information Inc. PRIMEDIA Magazines Inc. PRIMEDIA Magazine Finance Inc. PRIMEDIA Special Interest Publications Inc. PRIMEDIA Workplace Learning, LP Bowhunter Magazine, Inc. PRIMEDIA Enthusiast Publications, Inc. Princeton/American Communications Company, Inc. Communication Concepts, Inc. Cowles History Group, Inc. Symbol of Excellence Publishers, Inc. The Virtual Flyshop, Inc. GO LO Entertainment, Inc. Horse & Rider, Inc. IntelliChoice, Inc. Kagan Media Appraisals, Inc. Kagan Seminars, Inc. Low Rider Publishing Group, Inc. McMullen Argus Publishing, Inc. Miramar Communications Inc. Dated as of May 8, 2001 By: /s/ Beverly Chell -------------------------------------- Name: Beverly Chell Title: Vice Chairman & General Counsel THE BANK OF NEW YORK, as Trustee Dated as of May 8, 2001 By: /s/ [ILLEGIBLE] -------------------------------------- Vice President EXHIBIT A-1 [__]% SENIOR NOTES DUE 2011 No. _________________ CUSIP _________________ $_____________________ PRIMEDIA INC., a Delaware corporation (herein called the "COMPANY"), for value received hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of _______________________________ on [_____________] [__], 2011. INTEREST PAYMENT DATES: [_____________] and [_________________] RECORD DATES: [_____________] and [_______________________] Reference is hereby made to the further provisions of this Senior Note due 2011 set forth on the reverse side hereof and such further provisions shall for all purposes have the same effect as if set forth on the front side hereof. IN WITNESS WHEREOF, the Company has caused this certificate to be signed manually or by facsimile. DATED: [_____________] [__], 2011 CERTIFICATE OF AUTHENTICATION: This is one of the Global Notes referred to in the within mentioned Indenture. THE BANK OF NEW YORK, PRIMEDIA INC. as Trustee By:___________________________ By:________________________________ Authorized Signatory Name: Title: [___]% SENIOR NOTES DUE 2011 THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE ISSUANCE HEREOF (OR A PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT THE TIME DURING THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (4) TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a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a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (k)(2)(i) OF RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT. Capitalized terms used herein have the meaning assigned to them in the Indenture unless otherwise indicated. 1. INTEREST; LIQUIDATED DAMAGES. The Company promises to pay interest on the principal amount of this Security at [__]% per annum from the date of issuance until maturity and shall pay the Liquidated Damages payable pursuant to the Registration Rights Agreement. The Company will pay interest and Liquidated Damages, if any, semi-annually on [_____________] and [____________]of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an "Interest Payment Date"). Interest on the Securities will accrue from the most recent date on which interest has been paid or, if no interest has been paid, from the date of issuance; PROVIDED that if there is no existing Default in the payment of interest, and if this Security is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; PROVIDED, FURTHER, that the first Interest Payment Date shall be [_____________] [__], 2001. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the same rate per annum on the Securities to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 2. METHOD OF PAYMENT. The Company will pay interest on the Securities (except defaulted interest) and premium and Liquidated Damages, if any, to the Persons who are registered Holders of Securities at the close of business on the [____________] and [_________] next preceding the Interest Payment Date, even if such Securities are cancelled after such record A-1-3 date and on or before such Interest Payment Date. The Securities will be payable as to principal, premium, interest and Liquidated Damages at the office or agency of the Company maintained for such purpose within or without the City and State of New York, or, at the option of the Company, payment of interest, premium and Liquidated Damages may be made by check mailed to the Holders of the Securities at their addresses set forth in the register of Holders of Securities. 3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent, Registrar or co-registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity. 4. INDENTURE. The Company issued the Securities under an Indenture, dated as of [_____________] [__], 2001 (the "Indenture"), among the Company, the Guarantors and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the TIA (15 U.S. Code Sections 77aaa-77bbbb). The Securities are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. The Securities are senior obligations of the Company initially limited to $[____] million in aggregate principal amount, plus premiums and Liquidated Damages, if any, plus amounts, if any, sufficient to pay interest on outstanding Securities as set forth in Paragraph 2 hereof. Additional Securities may be issued from time to time subject to Section 4.09 of the Indenture. The Securities and any Additional Securities subsequently issued would be treated as a single class for all purposes under the Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase. 5. OPTIONAL REDEMPTION. At any time prior to [____________] [__], 2004, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of Securities (which includes Additional Securities, if any) issued hereunder at a redemption price of [__]% of the principal amount of such Securities, plus accrued and unpaid interest to the redemption date, with the net cash proceeds of one or more Equity Offerings; PROVIDED that: (1) at least 65% of the aggregate principal amount of Securities (which includes Additional Securities, if any) issued remains outstanding immediately after the occurrence of each of those redemptions (excluding Securities held by the Company and its Subsidiaries); and (2) any redemption must occur within 60 days of the date of closing of such Equity Offering. Except as provided in the preceding paragraph and other than in connection with a Change of Control pursuant to Section 3.08 of the Indenture, the Company may not redeem the Securities prior to [______________] [__], 2006. On or after [_____________] [__], 2006, the Company may, at its option, redeem the Securities, in whole or in part, at the redemption prices (expressed as percentages of the principal amount) set forth in the immediately succeeding paragraph, plus accrued and unpaid interest thereon to the applicable redemption date. A-1-4 The redemption price as a percentage of the principal amount shall be as follows, if the Securities are redeemed during the twelve-month period beginning [_________] [__] of the years indicated below:
YEAR PERCENTAGE ---- ---------- 2006..................................................[_____]% 2007..................................................[_____]% 2008..................................................[_____]% 2009 and thereafter...................................100.000%
If the optional redemption date is on or after an interest record date and on or before the related interest payment date, the accrued and unpaid interest, if any, will be paid to the Person in whose name the Security is registered at the close of business on that record date, and no additional interest will be payable to holders whose Securities will be subject to redemption by the Company. Notwithstanding the foregoing, upon the occurrence at any time of a Change in Control, the Securities will be redeemable, at the option of the Company, in whole or in part, pursuant to the provisions of Section 3.08 of the Indenture. Any redemption pursuant to this Section 3.07 shall be made, to the extent applicable, pursuant to the provisions of Sections 3.01 through 3.06 of the Indenture. 6. MANDATORY OFFERS TO REPURCHASE; ASSET SALES. (a) Upon the occurrence of a Change of Control, each Holder shall have the right to require the Company to repurchase all or any part of such Holder's Securities pursuant to the offer described below (the "Change of Control Offer") at a purchase price equal to 101% of the aggregate principal amount of such Securities plus accrued and unpaid interest, if any, to the date of purchase (the "Change of Control Payment"). On the Change of Control Payment Date, the Company shall, to the extent lawful, (1) accept for payment Securities or portions thereof tendered pursuant to the Change of Control Offer, (2) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Securities or portions thereof so tendered and (3) deliver or cause to be delivered to the Trustee, the Securities so accepted together with an Officers' Certificate stating the Securities or portions thereof were tendered to the Company. The Paying Agent shall promptly mail to each Holder of Securities so accepted, payment in an amount equal to the purchase price for such Securities, and the Trustee shall promptly authenticate and mail to such Holder a new Security equal in principal amount to any unpurchased portion of the Securities surrendered; PROVIDED that each such new Security shall be in a principal amount of $1,000 or integral multiples thereof. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. A Holder of Securities may tender all or any portion of his Securities at his discretion by completing the form entitled "OPTION OF HOLDER TO ELECT PURCHASE" appearing on this Security. A-1-5 (b) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, consummate an Asset Sale (including the sale of any of the stock of any Subsidiary) unless at least 100% of the Net Proceeds from such Asset Sale (or, in the case of a Partially Owned Restricted Subsidiary, the Company's Pro Rata Portion thereof, after repayment by such Partially Owned Restricted Subsidiary of its Indebtedness) are applied first to repay Obligations or reduce commitments under the Credit Facilities in accordance with the terms thereof, second to offer to redeem at par the Outstanding Notes and third to offer to redeem at par the Securities. The foregoing application of Net Proceeds from Asset Sales is not required in the case of (i) sales or dispositions generating cash proceeds of less than, with respect to the Company and its Restricted Subsidiaries, $2.5 million and (ii) sales and dispositions as to which the Company delivers a reinvestment notice and the proceeds are so reinvested in one or more communications, publishing, information, education or media assets or businesses within 12 months of the date the relevant Asset Sale is consummated. Notwithstanding the foregoing provisions of this paragraph (b), neither the Company nor its Restricted Subsidiaries shall be required to apply the Net Proceeds from any Asset Sale (i) to the extent that the aggregate Net Proceeds from such Asset Sale, together with the Net Proceeds, if any, of any other Asset Sale which have not been previously applied, are less than $25.0 million or (ii) to the extent that, and for so long as, such Net Proceeds cannot be so applied as a result of an encumbrance or restriction permitted pursuant to Section 4.13 of the Indenture. 7. NOTICE OF REDEMPTION. Notice of any redemption pursuant to Section 3.07 or 3.08 of the Indenture will be mailed by first class mail at least 30 days but not more than 60 days before the redemption date to each Holder whose Securities are to be redeemed at its registered address. Securities in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Securities held by a Holder are to be redeemed. On and after the redemption date interest ceases to accrue on Securities or portions thereof called for redemption. 8. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Securities may be registered and Securities may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Security or portion of a Security selected for redemption, except the unredeemed portion of any Security being redeemed in part. Also, it need not exchange or register the transfer of any Securities for a period of 15 days before the mailing of a Notice of Redemption and ending on the date of such mailing or during the period between a record date and the corresponding Interest Payment Date. 9. PERSONS DEEMED OWNERS. The registered Holder of a Security may be treated as its owner for all purposes. 10. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the Indenture, the Securities or the Guarantee may be amended or supplemented and any existing Default under, or compliance with any provision of, the Indenture may be waived with the consent of the Holders A-1-6 of at least a majority in principal amount of the Securities then outstanding (including consents obtained in connection with a tender offer or exchange offer for Securities). Without the consent of any Holder, the Company and the Trustee may amend or supplement the Indenture or the Securities to cure any ambiguity, defect or inconsistency; to provide for uncertificated Securities in addition to or in place of certificated Securities; to comply with Section 5.01 of the Indenture; to make any change that would provide any additional rights or benefits to the Holders of the Securities or that does not adversely affect the legal rights under the Indenture of any such Holder; or to comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA. Without the consent of each Holder affected, an amendment or waiver may not (with respect to any Securities held by a non-consenting Holder of Securities) (i) reduce the principal amount of Securities whose Holders must consent to an amendment, supplement or waiver, (ii) reduce the principal of or change the fixed maturity of any Security or alter the provisions with respect to the redemption or purchase price in connection with repurchases under Sections 3.07, 3.08, 4.10 or 4.11 of the Indenture, (iii) reduce the rate of or change the time for payment of interest on any Security, (iv) waive a Default or Event of Default in the payment of principal of or premium or Liquidated Damages, if any, or interest on the Securities (except a rescission of acceleration of the Securities by the Holders of at least a majority in aggregate principal amount of the Securities as provided in Section 6.02 of the Indenture), (v) make any Securities payable in money other than that stated in the Securities, (vi) make any change in Section 6.04 or 6.07 of the Indenture, (vii) waive a redemption payment with respect to any Security or (viii) make any change in the foregoing. The right of any Holder to participate in any consent required or sought pursuant to any provision of the Indenture or this Security (and the obligation of the Company to obtain any such consent otherwise required from such Holder) may be subject to the requirement that such Holder shall have been the Holder of record of any Securities with respect to which such consent is required or sought as of a date identified by the Trustee in a notice furnished to Holders in accordance with the terms of the Indenture. 11. DEFAULTS AND REMEDIES. Events of Default include: default in payment of interest or Liquidated Damages on the Securities for 30 days; default in payment of the principal or premium of any Security at maturity, or upon acceleration, redemption or otherwise; failure by the Company for 30 days after written notice to it from the Trustee, or after written notice to it and the Trustee from Holders of at least 30% in principal amount of the then outstanding Securities, to comply with any of its other agreements in the Indenture or the Securities; certain defaults under other Indebtedness; certain final judgments that remain undischarged for 60 days after being entered; certain events of bankruptcy or insolvency; and, except as permitted by the Indenture and the Securities, the Guarantees are held in any judicial proceeding to be unenforceable or invalid or otherwise cease for any reason to be in full force and effect with respect to any Guarantor or any Guarantor denies or disaffirms its obligations under its Guarantee. If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 30% in principal amount of the then outstanding Securities may declare all the Securities to be immediately due and payable for an amount equal to 100% of the principal amount of the Securities plus premium and Liquidated Damages, if any, and accrued interest to the date of payment, except that in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Securities become due and payable immediately without further A-1-7 action or notice. Holders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing Default or Event of Default (except a Default or an Event of Default in payment of principal, premium or Liquidated Damages, if any, or interest or that resulted from a failure to comply with Section 4.10 of the Indenture) if and so long as a committee of its Responsible Officers determines in good faith that withholding notice is in their interests. The Company must furnish an annual compliance certificate to the Trustee. 12. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not Trustee. 13. NO RECOURSE AGAINST OTHERS. No director, officer, employee, incorporator or shareholder of the Company, as such, shall have any liability for any obligations of the Company under the Securities, this Indenture or the Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Securities by accepting the Securities waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Securities. 14. AUTHENTICATION. This Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 15. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 16. GUARANTORS. Payment of principal, premium and Liquidated Damages, if any, and interest (including interest on overdue principal of, premium, if any, and interest, if lawful) is unconditionally guaranteed by each of the Guarantors. The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to: PRIMEDIA INC. 745 Fifth Avenue New York, New York 10151 Attention: Treasurer A-1-8 ASSIGNMENT FORM To assign this Security, fill in the form below: (I) or (we) assign and transfer this Security to - -------------------------------------------------------------------------------- (Insert assignee's soc. sec. or tax I.D. no.) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Print or type assignee's name, address and zip code) and irrevocably appoint -------------------------------------------------------- to transfer this Security on the books of the Company. The agent may substitute another to act for him. - -------------------------------------------------------------------------------- Date: -------------------------------------- Your Signature: -------------------------- (Sign exactly as your name appears on the Security) Signature Guarantee.* - ---------------------------------------- *Signature must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion Program in accordance with the Securities Exchange Act of 1934, as amended. A-1-9 OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Security purchased by the Company pursuant to Section or 4.10 or 4.11 of the Indenture, check the appropriate box: / / Section 4.10 / / Section 4.11 If you want to elect to have only part of the Security purchased by the Company pursuant to Section 4.10 or 4.11 of the Indenture, state the amount you elect to have purchased: $___________ Date: Your Signature: ----------------------------- -------------------------- (Sign exactly as your name appears on the Security) Signature Guarantee.* - ------------------------------- *Signature must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion Program in accordance with the Securities Exchange Act of 1934, as amended. A-1-10 SCHEDULE OF EXCHANGES FOR GLOBAL NOTES
AMOUNT OF PRINCIPAL AMOUNT OF THIS AMOUNT OF DECREASE IN INCREASE IN GLOBAL NOTE SIGNATURE OF DATE OF PRINCIPAL AMOUNT OF PRINCIPAL AMOUNT OF FOLLOWING SUCH DECREASE AUTHORIZED EXCHANGE THIS GLOBAL NOTE THIS GLOBAL NOTE (OR INCREASE) SIGNATORY - -------- --------------------- ------------------- ------------------------ ------------
A-1-11 EXHIBIT A-2 [__]% SENIOR NOTES DUE 2011 No. _________________ CUSIP _________________ $---------------------- PRIMEDIA INC., a Delaware corporation (herein called the "COMPANY"), for value received hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of _______________________________ on [_____________] [__], 2011. INTEREST PAYMENT DATES: [_____________] and [_________________] RECORD DATES: [_____________] and [_______________________] Reference is hereby made to the further provisions of this Senior Note due 2011 set forth on the reverse side hereof and such further provisions shall for all purposes have the same effect as if set forth on the front side hereof. IN WITNESS WHEREOF, the Company has caused this certificate to be signed manually or by facsimile. DATED: [_____________] [__], 2011 CERTIFICATE OF AUTHENTICATION: This is one of the Global Notes referred to in the within mentioned Indenture. THE BANK OF NEW YORK, PRIMEDIA INC. as Trustee By:_______________________________ By:________________________________ Authorized Signatory Name: Title: A-2-1 [_______]% SENIOR NOTES DUE 2011 THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE ISSUANCE HEREOF (OR A PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT THE TIME DURING THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE A-2-2 CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (4) TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a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a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (k)(2)(i) OF RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT. Capitalized terms used herein have the meaning assigned to them in the Indenture unless otherwise indicated. 1. INTEREST; LIQUIDATED DAMAGES. The Company promises to pay interest on the principal amount of this Security at [__]% per annum from the date of issuance until maturity and shall pay the Liquidated Damages payable pursuant to the Registration Rights Agreement. The Company will pay interest and Liquidated Damages, if any, semi-annually on [_____________] and [____________] of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an "Interest Payment Date"). Interest on the Securities will accrue from the most recent date on which interest has been paid or, if no interest has been paid, from the date of issuance; PROVIDED that if there is no existing Default in the payment of interest, and if this Security is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; PROVIDED, FURTHER, that the first Interest Payment Date shall be A-2-3 [_____________] [__], 2001. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the same rate per annum on the Securities to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 2. METHOD OF PAYMENT. The Company will pay interest on the Securities (except defaulted interest) and premium and Liquidated Damages, if any, to the Persons who are registered Holders of Securities at the close of business on the [____________] and [_________] next preceding the Interest Payment Date, even if such Securities are cancelled after such record date and on or before such Interest Payment Date. The Securities will be payable as to principal, premium, interest and Liquidated Damages at the office or agency of the Company maintained for such purpose within or without the City and State of New York, or, at the option of the Company, payment of interest, premium and Liquidated Damages may be made by check mailed to the Holders of the Securities at their addresses set forth in the register of Holders of Securities. 3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent, Registrar or co-registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity. 4. INDENTURE. The Company issued the Securities under an Indenture, dated as of [_____________] [__], 2001 (the "Indenture"), among the Company, the Guarantors and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the TIA (15 U.S. Code Sections 77aaa-77bbbb). The Securities are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. The Securities are senior obligations of the Company initially limited to $[____] million in aggregate principal amount, plus premiums and Liquidated Damages, if any, plus amounts, if any, sufficient to pay interest on outstanding Securities as set forth in Paragraph 2 hereof. Additional Securities may be issued from time to time subject to Section 4.09 of the Indenture. The Securities and any Additional Securities subsequently issued would be treated as a single class for all purposes under the Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase. 5. OPTIONAL REDEMPTION. At any time prior to [____________] [__], 2004, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of Securities (which includes Additional Securities, if any) issued hereunder at a redemption price of [__]% of the principal amount of such Securities, plus accrued and unpaid interest to the redemption date, with the net cash proceeds of one or more Equity Offerings; PROVIDED that: (3) at least 65% of the aggregate principal amount of Securities (which includes Additional Securities, if any) issued remains outstanding immediately after the occurrence of each of those redemptions (excluding Securities held by the Company and its Subsidiaries); and A-2-4 (4) any redemption must occur within 60 days of the date of closing of such Equity Offering. Except as provided in the preceding paragraph and other than in connection with a Change of Control pursuant to Section 3.08 of the Indenture, the Company may not redeem the Securities prior to [______________] [__], 2006. On or after [_____________] [__], 2006, the Company may, at its option, redeem the Securities, in whole or in part, at the redemption prices (expressed as percentages of the principal amount) set forth in the immediately succeeding paragraph, plus accrued and unpaid interest thereon to the applicable redemption date. The redemption price as a percentage of the principal amount shall be as follows, if the Securities are redeemed during the twelve-month period beginning [_________] [__] of the years indicated below:
YEAR PERCENTAGE ---- ---------- 2006..................................................[_____]% 2007..................................................[_____]% 2008..................................................[_____]% 2009 and thereafter...................................100.000%
If the optional redemption date is on or after an interest record date and on or before the related interest payment date, the accrued and unpaid interest, if any, will be paid to the Person in whose name the Security is registered at the close of business on that record date, and no additional interest will be payable to holders whose Securities will be subject to redemption by the Company. Notwithstanding the foregoing, upon the occurrence at any time of a Change in Control, the Securities will be redeemable, at the option of the Company, in whole or in part, pursuant to the provisions of Section 3.08 of the Indenture. Any redemption pursuant to this Section 3.07 shall be made, to the extent applicable, pursuant to the provisions of Sections 3.01 through 3.06 of the Indenture. 6. MANDATORY OFFERS TO REPURCHASE; ASSET SALES. (c) Upon the occurrence of a Change of Control, each Holder shall have the right to require the Company to repurchase all or any part of such Holder's Securities pursuant to the offer described below (the "Change of Control Offer") at a purchase price equal to 101% of the aggregate principal amount of such Securities plus accrued and unpaid interest, if any, to the date of purchase (the "Change of Control Payment"). On the Change of Control Payment Date, the Company shall, to the extent lawful, (1) accept for payment Securities or portions thereof tendered pursuant to the Change of Control Offer, (2) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Securities or portions thereof so tendered and (3) deliver or cause to be delivered to the Trustee, the Securities so accepted together with an Officers' Certificate stating the Securities or portions thereof were tendered to the Company. The Paying Agent shall promptly mail to each Holder of Securities so accepted, payment in an amount equal to the purchase price for such Securities, and the Trustee shall promptly A-2-5 authenticate and mail to such Holder a new Security equal in principal amount to any unpurchased portion of the Securities surrendered; PROVIDED that each such new Security shall be in a principal amount of $1,000 or integral multiples thereof. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. A Holder of Securities may tender all or any portion of his Securities at his discretion by completing the form entitled "OPTION OF HOLDER TO ELECT PURCHASE" appearing on this Security. (d) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, consummate an Asset Sale (including the sale of any of the stock of any Subsidiary) unless at least 100% of the Net Proceeds from such Asset Sale (or, in the case of a Partially Owned Restricted Subsidiary, the Company's Pro Rata Portion thereof, after repayment by such Partially Owned Restricted Subsidiary of its Indebtedness) are applied first to repay Obligations or reduce commitments under the Credit Facilities in accordance with the terms thereof, second to offer to redeem at par the Outstanding Notes and third to offer to redeem at par the Securities. The foregoing application of Net Proceeds from Asset Sales is not required in the case of (i) sales or dispositions generating cash proceeds of less than, with respect to the Company and its Restricted Subsidiaries, $2.5 million and (ii) sales and dispositions as to which the Company delivers a reinvestment notice and the proceeds are so reinvested in one or more communications, publishing, information, education or media assets or businesses within 12 months of the date the relevant Asset Sale is consummated. Notwithstanding the foregoing provisions of this paragraph (6), neither the Company nor its Restricted Subsidiaries shall be required to apply the Net Proceeds from any Asset Sale (i) to the extent that the aggregate Net Proceeds from such Asset Sale, together with the Net Proceeds, if any, of any other Asset Sale which have not been previously applied, are less than $25.0 million or (ii) to the extent that, and for so long as, such Net Proceeds cannot be so applied as a result of an encumbrance or restriction permitted pursuant to Section 4.13 of the Indenture. 7. NOTICE OF REDEMPTION. Notice of any redemption pursuant to Section 3.07 or 3.08 of the Indenture will be mailed by first class mail at least 30 days but not more than 60 days before the redemption date to each Holder whose Securities are to be redeemed at its registered address. Securities in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Securities held by a Holder are to be redeemed. On and after the redemption date interest ceases to accrue on Securities or portions thereof called for redemption. 8. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Securities may be registered and Securities may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Security or portion of a Security selected for redemption, except the unredeemed portion of any Security being redeemed in part. Also, it need not exchange or A-2-6 register the transfer of any Securities for a period of 15 days before the mailing of a Notice of Redemption and ending on the date of such mailing or during the period between a record date and the corresponding Interest Payment Date. 9. PERSONS DEEMED OWNERS. The registered Holder of a Security may be treated as its owner for all purposes. 10. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the Indenture, the Securities or the Guarantee may be amended or supplemented and any existing Default under, or compliance with any provision of, the Indenture may be waived with the consent of the Holders of at least a majority in principal amount of the Securities then outstanding (including consents obtained in connection with a tender offer or exchange offer for Securities). Without the consent of any Holder, the Company and the Trustee may amend or supplement the Indenture or the Securities to cure any ambiguity, defect or inconsistency; to provide for uncertificated Securities in addition to or in place of certificated Securities; to comply with Section 5.01 of the Indenture; to make any change that would provide any additional rights or benefits to the Holders of the Securities or that does not adversely affect the legal rights under the Indenture of any such Holder; or to comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA. Without the consent of each Holder affected, an amendment or waiver may not (with respect to any Securities held by a non-consenting Holder of Securities) (i) reduce the principal amount of Securities whose Holders must consent to an amendment, supplement or waiver, (ii) reduce the principal of or change the fixed maturity of any Security or alter the provisions with respect to the redemption or purchase price in connection with repurchases under Sections 3.07, 3.08, 4.10 or 4.11 of the Indenture, (iii) reduce the rate of or change the time for payment of interest on any Security, (iv) waive a Default or Event of Default in the payment of principal of or premium or Liquidated Damages, if any, or interest on the Securities (except a rescission of acceleration of the Securities by the Holders of at least a majority in aggregate principal amount of the Securities as provided in Section 6.02 of the Indenture), (v) make any Securities payable in money other than that stated in the Securities, (vi) make any change in Section 6.04 or 6.07 of the Indenture, (vii) waive a redemption payment with respect to any Security or (viii) make any change in the foregoing. The right of any Holder to participate in any consent required or sought pursuant to any provision of the Indenture or this Security (and the obligation of the Company to obtain any such consent otherwise required from such Holder) may be subject to the requirement that such Holder shall have been the Holder of record of any Securities with respect to which such consent is required or sought as of a date identified by the Trustee in a notice furnished to Holders in accordance with the terms of the Indenture. 11. DEFAULTS AND REMEDIES. Events of Default include: default in payment of interest or Liquidated Damages on the Securities for 30 days; default in payment of the principal or premium of any Security at maturity, or upon acceleration, redemption or otherwise; failure by the Company for 30 days after written notice to it from the Trustee, or after written notice to it and the Trustee from Holders of at least 30% in principal amount of the then outstanding Securities, to comply with any of its other agreements in the Indenture or the Securities; certain defaults under other Indebtedness; certain final judgments that remain undischarged for 60 days A-2-7 after being entered; certain events of bankruptcy or insolvency; and, except as permitted by the Indenture and the Securities, the Guarantees are held in any judicial proceeding to be unenforceable or invalid or otherwise cease for any reason to be in full force and effect with respect to any Guarantor or any Guarantor denies or disaffirms its obligations under its Guarantee. If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 30% in principal amount of the then outstanding Securities may declare all the Securities to be immediately due and payable for an amount equal to 100% of the principal amount of the Securities plus premium and Liquidated Damages, if any, and accrued interest to the date of payment, except that in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Securities become due and payable immediately without further action or notice. Holders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing Default or Event of Default (except a Default or an Event of Default in payment of principal, premium or Liquidated Damages, if any, or interest or that resulted from a failure to comply with Section 4.10 of the Indenture) if and so long as a committee of its Responsible Officers determines in good faith that withholding notice is in their interests. The Company must furnish an annual compliance certificate to the Trustee. 12. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not Trustee. 13. NO RECOURSE AGAINST OTHERS. No director, officer, employee, incorporator or shareholder of the Company, as such, shall have any liability for any obligations of the Company under the Securities, this Indenture or the Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Securities by accepting the Securities waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Securities. 14. AUTHENTICATION. This Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 15. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 16. GUARANTORS. Payment of principal, premium and Liquidated Damages, if any, and interest (including interest on overdue principal of, premium, if any, and interest, if lawful) is unconditionally guaranteed by each of the Guarantors. The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to: A-2-8 PRIMEDIA INC. 745 Fifth Avenue New York, New York 10151 Attention: Treasurer A-2-9 ASSIGNMENT FORM To assign this Security, fill in the form below: (I) or (we) assign and transfer this Security to - -------------------------------------------------------------------------------- (Insert assignee's soc. sec. or tax I.D. no.) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Print or type assignee's name, address and zip code) and irrevocably appoint -------------------------------------------------------- to transfer this Security on the books of the Company. The agent may substitute another to act for him. - -------------------------------------------------------------------------------- Date: ---------------------------- Your Signature: ----------------------------- (Sign exactly as your name appears on the face of this Security) Signature Guarantee.* - ---------------------------------------- *Signature must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion Program in accordance with the Securities Exchange Act of 1934, as amended. A-2-10 OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Security purchased by the Company pursuant to Section or 4.10 or 4.11 of the Indenture, check the appropriate box: / / Section 4.10 / / Section 4.11 If you want to elect to have only part of the Security purchased by the Company pursuant to Section 4.10 or 4.11 of the Indenture, state the amount you elect to have purchased: $ ----------- Date: Your Signature: ----------------------------- -------------------------- (Sign exactly as your name appears on the Security) Signature Guarantee.* - ------------------------------- *Signature must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion Program in accordance with the Securities Exchange Act of 1934, as amended. A-2-11 SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE The following exchanges of a part of this Regulation S Temporary Global Note for an interest in another Global Note, or of other Restricted Global Notes for an interest in this Regulation S Temporary Global Note, have been made:
Principal Amount Amount of of this Global Note Signature of decrease in Amount of increase following such authorized officer Principal Amount in Principal Amount decrease (or of Trustee or Date of Exchange of this Global Note of this Global Note increase) Note Custodian ---------------- ------------------- ------------------- -------- --------------
A-2-12 EXHIBIT A-3 [FORM OF NOTATION ON NOTE RELATING TO GUARANTEE] GUARANTEE Each of the corporations listed below (hereinafter referred to as the "Guarantors", which term includes any successor or additional Guarantor under the Indenture (the "Indenture") referred to in the Security upon which this notation is endorsed) (i) has jointly and severally, unconditionally guaranteed that (a) the principal of, and premium, if any, and interest on the Securities will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of, premium, if any, and interest on the Securities, if any, if lawful, and all other obligations of the Company to the Holders or the Trustee will be promptly paid in full or performed, all in accordance with the terms hereof and as set forth in the Indenture; and (b) in case of any extension of time of payment or renewal of any Securities or any of such other obligations, the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration, or otherwise; PROVIDED, HOWEVER, that the maximum liability of a Guarantor pursuant to this Guarantee shall in no event exceed the Maximum Guaranteed Amount (as defined below). Capitalized terms used herein have the meanings assigned to them in the Indenture unless otherwise indicated. The "Maximum Guaranteed Amount" means, with respect to any Guarantor, the amount which allows this Guarantee to be enforceable to the fullest extent permitted by law, limited only to the extent necessary for this Guarantee to not constitute a fraudulent conveyance. No stockholder, officer, director, employer or incorporator, past, present or future, of the Guarantors, as such, shall have any personal liability under this Guarantee by reason of his or its status as such stockholder, officer, director, employer or incorporator. This Guarantee shall be binding upon each Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges herein conferred upon that party shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions hereof. This Guarantee shall not be valid or obligatory for any purpose with respect to a Security until the certificate of authentication on the Security upon which this Guarantee is noted shall have been executed by or on behalf of the Trustee under the Indenture by the manual signature of one of its authorized signatories. [LIST OF GUARANTORS TO COME] Name: Title: Schedule I [LIST OF GUARANTORS TO COME]. A-3-2 EXHIBIT B FORM OF CERTIFICATE OF TRANSFER PRIMEDIA Inc. 745 Fifth Avenue New York, New York 10151 The Bank of New York 101 Barclay Street New York, New York 10286 Re: [ ] % SENIOR NOTES DUE 2011 Reference is hereby made to the Indenture, dated as of [___________] [_____], 2011 (the "INDENTURE"), between PRIMEDIA Inc., as issuer (the "COMPANY"), and The Bank of New York, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. ______________, (the "TRANSFEROR") owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $___________ in such Note[s] or interests (the "TRANSFER"), to __________ (the "TRANSFEREE"), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that: [CHECK ALL THAT APPLY] 1. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believed and believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a "qualified institutional buyer" within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the 144A Global Note and/or the Definitive Note and in the Indenture and the Securities Act. 2. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act and, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Private Placement Legend printed on the Regulation S Global Note, the Temporary Regulation S Global Note and/or the Definitive Note and in the Indenture and the Securities Act. 3. / / CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN A DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one): (a) / / such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act; or (b) / / such Transfer is being effected to the Company or a subsidiary thereof; or (c) / / such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act; or (d) / / such Transfer is being effected to an Institutional Accredited Investor and pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor hereby further certifies that the Transfer complies with the transfer restrictions applicable to Restricted Definitive Notes and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit D to the Indenture and (2) if such Transfer is in respect of a principal amount of Notes at the time of transfer of less than $100,000, an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that such Transfer is in compliance with the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend B-2 printed on Definitive Notes and in the Indenture and the Securities Act. 4. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE. (a) / / CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture. (b) / / CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture. (c) / / CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture. B-3 This certificate and the statements contained herein are made for your benefit and the benefit of the Company. _________________________________ [Insert Name of Transferor] By:___________________________________ Name: Title: Dated: ________, ___ B-4 ANNEX A TO CERTIFICATE OF TRANSFER 1. The Transferor owns and proposes to transfer the following: [CHECK ONE OF (a) OR (b)] (b) / / a beneficial interest in the: (i) / / 144A Global Note (CUSIP ____), or (ii) / / Regulation S Global Note (CUSIP ____), or (iii) / / IAI Global Note (CUSIP_____), or (c) / / a Restricted Definitive Note. 2. After the Transfer the Transferee will hold: [CHECK ONE] (a) / / a beneficial interest in the: (i) / / 144A Global Note (CUSIP ____), or (ii) / / Regulation S Global Note (CUSIP ____), or (iii) / / Unrestricted Global Note (CUSIP ____); or (b) / / a Restricted Definitive Note; or (c) / / an Unrestricted Definitive Note, in accordance with the terms of the Indenture. EXHIBIT C FORM OF CERTIFICATE OF EXCHANGE PRIMEDIA Inc. 745 Fifth Avenue New York, New York 10151 The Bank of New York 101 Barclay Street New York, New York 10286 Re: [ ] % SENIOR NOTES 2011 (CUSIP __________) Reference is hereby made to the Indenture, dated as of [___________] [____], 2011 (the "INDENTURE"), between PRIMEDIA Inc., as issuer (the "COMPANY"), and The Bank of New York, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. _____________, (the "OWNER") owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $____________ in such Note[s] or interests (the "EXCHANGE"). In connection with the Exchange, the Owner hereby certifies that: 1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE (a) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the "SECURITIES ACT"), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. (b) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. (c) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. (d) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. 2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES (a) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner's own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act. (b) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange of the Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE] / / 144A Global Note, / / Regulation S Global Note or / / IAI Global Note with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer and (ii) such Exchange has been effected in compliance C-2 with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act. C-3 This certificate and the statements contained herein are made for your benefit and the benefit of the Company. _______________________________ [Insert Name of Owner] By: ___________________________ Name: Title: Dated: ________, __ C-4 EXHIBIT D FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR PRIMEDIA Inc. 745 Fifth Avenue New York, New York 10151 The Bank of New York 101 Barclay Street New York, New York 10286 Re: [ ] % SENIOR NOTES DUE 2011 Reference is hereby made to the Indenture, dated as of [___________] [____], 2011 (the "INDENTURE"), between PRIMEDIA Inc., as issuer (the "COMPANY"), and The Bank of New York, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. In connection with our proposed purchase of $____________ aggregate principal amount of: (a) / / a beneficial interest in a Global Note, or (b) / / a Definitive Note, we confirm that: 1. We understand that any subsequent transfer of the Notes or any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except in compliance with, such restrictions and conditions and the United States Securities Act of 1933, as amended (the "SECURITIES ACT"). 2. We understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes and any interest therein may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the Notes or any interest therein, we will do so only (A) to the Company or any subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to a "qualified institutional buyer" (as defined therein), (C) to an institutional "accredited investor" (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and to the Company a signed letter substantially in the form of this letter and, if such transfer is in respect of a principal amount of Notes, at the time of transfer of less than $100,000, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such transfer is in compliance with the Securities Act, (D) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the provisions of Rule 144 under the D-1 Securities Act or (F) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any person purchasing the Definitive Note or beneficial interest in a Global Note from us in a transaction meeting the requirements of clauses (A) through (E) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated herein. 3. We understand that, on any proposed resale of the Notes or beneficial interest therein, we will be required to furnish to you and the Company such certifications, legal opinions and other information as you and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased by us will bear a legend to the foregoing effect. 4. We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or its investment. 5. We are acquiring the Notes or beneficial interest therein purchased by us for our own account or for one or more accounts (each of which is an institutional "accredited investor") as to each of which we exercise sole investment discretion and we are acquiring the Notes for investment purposes and not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act or other applicable securities law. You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. _______________________________________ [Insert Name of Accredited Investor] By: ___________________________________ Name: Title: Dated: ________, ___ D-2 EX-4.9 4 a2052089zex-4_9.txt EXHIBIT 4.9 EXHIBIT 4.9 REGISTRATION RIGHTS AGREEMENT Dated as of May 8, 2001 by and among PRIMEDIA INC. The Guarantors listed herein and SALOMON SMITH BARNEY INC. J.P. MORGAN SECURITIES INC. BANC OF AMERICA SECURITIES LLC This Registration Rights Agreement (this "AGREEMENT") is made and entered into as of May 8, 2001, by and between PRIMEDIA Inc., a Delaware corporation (the "COMPANY"), each of the Guarantors (as defined in the Purchase Agreement referred to below) and Salomon Smith Barney Inc., J.P. Morgan Securities Inc. and Banc of America Securities LLC, on their own behalf and as representatives of the other Initial Purchasers (as defined in the Purchase Agreement referred to below) (collectively, the "INITIAL PURCHASERS") who have agreed to purchase $350,000,000 principal amount of the Company's 87/8% Senior Notes due 2011 (the "SERIES A NOTES") pursuant to the Purchase Agreement (as defined below). This Agreement is made pursuant to the Purchase Agreement, dated May 3, 2001 (the "PURCHASE AGREEMENT"), by and between the Company and the Initial Purchasers. In order to induce the Initial Purchasers to purchase the Series A Notes, the Company has agreed to provide the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the obligations of the Initial Purchasers set forth in Section 4 of the Purchase Agreement. The parties hereby agree as follows: SECTION 1. DEFINITIONS. As used in this Agreement, the following capitalized terms shall have the following meanings: ACT: The Securities Act of 1933, as amended. ADVICE: As defined in Section 6(b) hereof. AFFILIATE: As defined in Rule 144 of the Act. APPLICABLE EFFECTIVENESS PERCENT: As defined in Section 5 hereof. BROKER-DEALER: Any broker or dealer registered under the Exchange Act. BUSINESS DAY: Each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in The Borough of Manhattan, The City of New York, New York are authorized or obligated by law or executive order to close. CLOSING DATE: The date on which the Series A Notes are first sold by the Initial Purchasers pursuant to the Offer. COMMISSION: The Securities and Exchange Commission. CONSUMMATE: A Registered Exchange Offer shall be deemed "Consummated" for purposes of this Agreement upon the occurrence of (i) the filing and effectiveness under the Act of a Registration Statement relating to the Series B Notes to be issued in the Registered Exchange Offer, (ii) the maintenance of such Registration Statement continuously effective for a period of not less than the minimum period required under applicable federal and state securities laws (provided that in no event shall such Registered Exchange Offer remain open and the Registration Statement relating thereto remain continuously effective, in each case, for less than 20 Business Days) and (iii) the delivery by the Company to the registrar under the Indenture of Series B Notes in the same aggregate principal amount of Series A Notes that were tendered by Holders thereof pursuant to the Registered Exchange Offer. CONSUMMATION DEADLINE: As defined in Section 3(b) hereof. EFFECTIVENESS DEADLINE: As defined in Section 3(a) hereof with respect to an Exchange Offer Registration Statement and as defined in Section 4(a) hereof with respect to a Shelf Registration Statement. EXCHANGE ACT: The Securities Exchange Act of 1934, as amended. EXCHANGE OFFER CONSUMMATION DATE: The date on which the Registered Exchange Offer is Consummated. EXCHANGE OFFER EFFECTIVE DATE: The date on which the Registration Statement relating to the Registered Exchange Offer becomes effective. EXCHANGE OFFER REGISTRATION STATEMENT: A registration statement of the Company on an appropriate form under the Act with respect to the Series B Notes and the Registered Exchange Offer. FILING DEADLINE: As defined in Section 3(a) hereof with respect to an Exchange Offer Registration Statement and as defined in Section 4(a) hereof with respect to a Shelf Registration Statement. HOLDER: As defined in Section 2(b) hereof. INDEMNIFIED PARTY: As defined in Section 8 hereof. INDENTURE: The Indenture between the Company and the Trustee pursuant to which the Senior Notes have been or are to be issued. INTEREST PAYMENT DATE: As defined in the Indenture. LIQUIDATED DAMAGES: As defined in Section 5 hereof. NASD: National Association of Securities Dealers, Inc. OFFER: The transactions in which the Initial Purchasers propose to sell the Series A Notes to certain "qualified institutional buyers" (as such term is defined in Rule 144A under the Act) and in "off shore transactions" (as such term is defined in Regulation S under the Act) pursuant to the Offering Memorandum. OFFERING MEMORANDUM: The offering memorandum, dated May 3, 2001 and all amendments and supplements thereto, relating to the Senior Notes. PAYMENT DATE: Each Interest Payment Date. PERSON: An individual, partnership, joint venture, corporation, trust, estate or unincorporated organization, or a government or agency or political subdivision thereof. 2 PROSPECTUS: The prospectus included in a Registration Statement, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material, if any, incorporated by reference into such Prospectus. RECORD HOLDER: With respect to any Interest Payment Date, each person who is a Holder of Senior Notes on the record date for such Interest Payment Date. REGISTRATION DEFAULT: As defined in Section 5 hereof. REGISTERED EXCHANGE OFFER: The registration by the Company under the Act of the Series B Notes pursuant to a Registration Statement pursuant to which the Company offers to each Holder of outstanding Transfer Restricted Securities the opportunity to exchange any outstanding Transfer Restricted Securities held by such Holder for Series B Notes, in a principal amount equal to the aggregate principal amount of the Transfer Restricted Securities tendered in such exchange offer by such Holder. REGISTRATION STATEMENT: Any registration statement of the Company relating to (a) an offering of Series B Notes pursuant to a Registered Exchange Offer or (b) the registration for resale of Transfer Restricted Securities pursuant to a Shelf Registration Statement, which is filed pursuant to the provisions of this Agreement, in each case including the Prospectus included therein, all amendments and supplements thereto (including post- effective amendments) and all exhibits and material incorporated by reference therein. SENIOR NOTES: The Series A Notes and the Series B Notes. SERIES A NOTES: As defined in the caption hereof. SERIES B NOTES: The Company's 87/8% Senior Notes due 2011 to be issued pursuant to the Senior Note Indenture in the Registered Exchange Offer. SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof. TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as in effect on the date of the Indenture. TRANSFER RESTRICTED SECURITIES: Each Senior Note, until the earliest to occur of (a) the date on which such Senior Note is exchanged in the Registered Exchange Offer and entitled to be resold to the public by the Holder thereof (other than a Broker-Dealer), (b) the date on which such Senior Note has been disposed of in accordance with a Shelf Registration Statement, (c) the date on which such Senior Note is distributed to the public pursuant to Rule 144 under the Act, or (d) the date on which such Note is disposed of by a Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the Exchange Offer Registration Statement (including the delivery of the Prospectus contained therein). TRUSTEE: The trustee under the Indenture. UNDERWRITER(S): The underwriter(s) participating in any Underwritten Offering referred to in Section 6(b)(xii) and party to the underwriting agreement referred to in such section. UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A registration in which securities of the Company are sold to an Underwriter for reoffering to the public. 3 SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT (a) TRANSFER RESTRICTED SECURITIES. The securities entitled to the benefits of this Agreement are the Transfer Restricted Securities. (b) HOLDERS OF TRANSFER RESTRICTED SECURITIES. A Person is deemed to be a holder of Transfer Restricted Securities (each, a "HOLDER") whenever such Person is the registered owner of Transfer Restricted Securities. SECTION 3. REGISTERED EXCHANGE OFFER (a) Unless the Registered Exchange Offer shall not be permitted by applicable law or applicable interpretation of the staff of the Commission, the Company shall (i) cause the Exchange Offer Registration Statement to be filed with the Commission on or prior to 120 days after the Closing Date (such 120th day being the "FILING DEADLINE"), (ii) use its reasonable best efforts to cause such Exchange Offer Registration Statement to become effective at the earliest possible time, but in no event later than 200 days after the Closing Date (such day being the "EFFECTIVENESS DEADLINE"), (iii) in connection with the foregoing, (A) file all pre-effective amendments to such Exchange Offer Registration Statement as may be necessary in order to cause it to become effective, (B) file, if applicable, a post-effective amendment to such Exchange Offer Registration Statement pursuant to Rule 430A under the Act and (C) cause all necessary filings, if any, in connection with the registration and qualification of the Series B Notes to be made under the Blue Sky laws of such jurisdictions as are necessary to permit Consummation of the Registered Exchange Offer, and (iv) upon the effectiveness of such Exchange Offer Registration Statement, commence and Consummate the Registered Exchange Offer. The Registered Exchange Offer shall be on the appropriate form permitting (i) registration of the Series B Notes to be offered in exchange for the Series A Notes that are Transfer Restricted Securities and (ii) resales of Series B Notes by Broker-Dealers that tendered Series A Notes into the Registered Exchange Offer that such Broker-Dealer acquired for its own account as a result of market making activities or other trading activities (other than Series A Notes acquired directly from the Company or any of its Affiliates) as contemplated by Section 3(c) below. (b) The Company shall use its reasonable best efforts to cause the Exchange Offer Registration Statement to be effective continuously, and shall keep the Registered Exchange Offer open for a period of not less than the minimum period required under applicable federal and state securities laws to Consummate the Registered Exchange Offer; PROVIDED, HOWEVER, that in no event shall such period be less than 20 Business Days. The Company shall cause the Exchange Offer to comply with all applicable federal and state securities laws. No securities other than the Series B Notes shall be included in the Exchange Offer Registration Statement. The Company shall use its reasonable best efforts to cause the Registered Exchange Offer to be Consummated on the earliest practicable date after the Exchange Offer Registration Statement has become effective, but in no event later than 230 days after the Closing Date (such day being the "CONSUMMATION DEADLINE"). (c) The Company shall include a "Plan of Distribution" section in the Prospectus contained in the Exchange Offer Registration Statement and indicate therein that any Broker- Dealer who holds Transfer Restricted Securities that were acquired for the account of such Broker-Dealer as a result of market-making activities or other trading activities (other than Series A Notes acquired directly from the Company or any Affiliate of the Company), may exchange such Transfer Restricted Securities pursuant to the Registered Exchange Offer. Such "Plan of Distribution" section shall also contain all other information with respect to 4 such sales by such Broker-Dealers that the Commission may require in order to permit such sales pursuant thereto, but such "Plan of Distribution" shall not name any such Broker-Dealer or disclose the amount of Transfer Restricted Securities held by any such Broker-Dealer, except to the extent required by the Commission as a result of a change in policy, rules or regulations after the date of this Agreement. Because such Broker-Dealer may be deemed to be an "underwriter" within the meaning of the Act and must, therefore, deliver a prospectus meeting the requirements of the Act in connection with its initial sale of any Series B Notes received by such Broker-Dealer in the Registered Exchange Offer, the Company shall permit the use of the Prospectus contained in the Exchange Offer Registration Statement by such Broker-Dealer to satisfy such prospectus delivery requirement. To the extent necessary to ensure that the prospectus contained in the Exchange Offer Registration Statement is available for sales of Series B Notes by Broker-Dealers, the Company agrees to use its reasonable best efforts to keep the Exchange Offer Registration Statement continuously effective, supplemented, amended and current as required by and subject to the provisions of Section 6(a) and (c) hereof and in conformity with the requirements of this Agreement, the Act and the policies, rules and regulations of the Commission as announced from time to time, for a period the shorter of (a) 180 days from the Consummation of the Registered Exchange Offer and (b) such shorter period as will terminate when all Transfer Restricted Securities covered by such Registration Statement have been sold pursuant thereto; PROVIDED, HOWEVER, that, during such period, the company may suspend the effectiveness of the Exchange Offer Registration Statement for an aggregate period of not more than 15 consecutive days if there is a possible acquisition or business combination or other transaction, business development or event involving the Company that may require disclosure in the Exchange Offer Registration Statement and the Company determines in the exercise of its reasonable judgment that such disclosure is not in the best interests of the Company and its stockholders or obtaining any financial statements relating to an acquisition or business combination required to be included in the exchange Offer Registration Statement would be impracticable. In such a case, the Company shall promptly notify any such Broker-Dealers of the suspension of the Exchange Offer Registration Statement's effectiveness, PROVIDED that such notice shall not require the Company to disclose the possible acquisition or business combination or other transaction, business development or event if the Company determines in good faith that such acquisition or business combination or other transaction, business development or event should remain confidential. Upon the abandonment, consummation or termination of the possible acquisition or business combination or other transaction, business development or event or the availability of the required financial statements with respect to a possible acquisition or business combination, the suspension of the use of the Exchange Offer Registration Statement pursuant to this clause (c) shall cease and the Company shall promptly comply with Section 6(c)(ii) hereof and notify such Broker-Dealers that the use of the Prospectus in contained in the Exchange Offer Registration Statement, as amended or supplemented, as applicable, may resume. The Company shall provide sufficient copies of the latest version of such Prospectus to such Broker-Dealers, promptly upon request, and in no event later than one day after such request, at any time during such period. SECTION 4. SHELF REGISTRATION (a) SHELF REGISTRATION. If (i) the Registered Exchange Offer is not permitted by applicable law or applicable interpretation of the staff of the Commission or (ii) if any Holder of Transfer Restricted Securities shall notify the Company within 20 Business Days following the Consummation Deadline that (A) such Holder was prohibited by law or Commission policy from participating in the Registered Exchange Offer or (B) such Holder may not resell the Series B Notes acquired by it in the Registered Exchange Offer to the 5 public without delivering a prospectus and the Prospectus contained in the Exchange Offer Registration Statement is not available for such resales by such Holder or (C) such Holder is a Broker- Dealer and holds Series A Notes acquired directly from the Company or any of its Affiliates, then the Company shall: (x) cause to be filed, on or prior to 30 days after the earlier of (i) the date on which the Company determines that the Exchange Offer Registration Statement cannot be filed as a result of clause (a)(i) above and (ii) the date on which the Company receives the notice specified in clause (a)(ii) above, (such earlier date, the "FILING DEADLINE"), but in no event earlier than 120 days after the Closing Date, a shelf registration statement pursuant to Rule 415 under the Act (which may be an amendment to the Exchange Offer Registration Statement (the "SHELF REGISTRATION STATEMENT")), relating to all Transfer Restricted Securities, and (y) shall use its reasonable best efforts to cause such Shelf Registration Statement to become effective on or prior to 75 days after the Filing Deadline for the Shelf Registration Statement (such 75th day the "EFFECTIVENESS DEADLINE"). To the extent necessary to ensure that the Shelf Registration Statement is available for sales of Transfer Restricted Securities by the Holders thereof entitled to the benefit of this Section 4(a) and the other securities required to be registered therein pursuant to Section 6(b)(ii) hereof, the Company shall use its reasonable best efforts to keep any Shelf Registration Statement required by this Section 4(a) continuously effective, supplemented, amended and current as required by and subject to the provisions of Sections 6(b) and (c) hereof and in conformity with the requirements of this Agreement, the Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of two years (as extended pursuant to Section 6(c)(i)) following the Closing Date, or such shorter period as will terminate when all Transfer Restricted Securities covered by such Shelf Registration Statement have been sold pursuant thereto; PROVIDED, HOWEVER, that the Company shall in no event be obligated to keep such Shelf Registration Statement effective for a period of more than 180 days from the date the Shelf Registration Statement is declared effective by the Commission if the Shelf Registration Statement is required to be filed solely to permit resales by a Broker-Dealer that holds Series A Notes acquired directly from the Company or one or more of its affiliates or such shorter period that will terminate when all such Series A Notes cease to be Transfer Restricted Securities; PROVIDED FURTHER that, during any consecutive 365-day period, the Company may suspend the effectiveness of the Shelf Registration Statement for an aggregate period of not more than 60 consecutive days if there is a possible acquisition or business combination or other transaction, business development or event involving the Company that may require disclosure in the Shelf Registration Statement and the Company determines in the exercise of its reasonable judgment that such disclosure is not in the best interests of the Company and its stockholders or obtaining any financial statements relating to an acquisition or business combination required to be included in the Shelf Registration Statement would be impracticable. In such a case, the Company shall promptly notify the Holders of the suspension of the Shelf Registration Statement's effectiveness, PROVIDED that such notice shall not require the Company to disclose the possible acquisition or business combination or other transaction, business development or event if the Company determines in good faith that such acquisition or business combination or other transaction, business development or event should remain confidential. Upon the abandonment, consummation or termination of the possible acquisition or business combination or other transaction, business development or event or the availability of the required financial statements with respect to a possible acquisition or business combination, the suspension of the use of the Shelf Registration Statement shall cease and the Company 6 shall promptly comply with Section 6(c)(ii) hereof and notify the Holders that disposition of Transfer Restricted Securities may resume. (b) PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION WITH THE SHELF REGISTRATION STATEMENT. No Holder of Transfer Restricted Securities may include any of its Transfer Restricted Securities in any Shelf Registration Statement pursuant to this Agreement unless and until such Holder furnishes to the Company in writing, within 20 days after receipt of a request therefor, the information specified in Item 507 or 508 of Regulation S-K, as applicable, of the Act for use in connection with the Shelf Registration Statement or Prospectus or preliminary Prospectus included therein. No Holder of Transfer Restricted Securities shall be entitled to Liquidated Damages pursuant to Section 5 hereof unless and until such Holder shall have provided all such information. Each selling Holder agrees to promptly furnish additional information required to be disclosed in order to make the information previously furnished to the Company by such Holder not materially misleading. SECTION 5. LIQUIDATED DAMAGES If (i) any Registration Statement required by this Agreement is not filed with the Commission on or prior to the applicable Filing Deadline, (ii) any such Registration Statement has not been declared effective by the Commission on or prior to the applicable Effectiveness Deadline, (iii) the Registered Exchange Offer has not been Consummated on or prior to the Consummation Deadline or (iv) any Registration Statement required by this Agreement is filed and declared effective but shall thereafter cease to be effective or fail to be usable for its intended purpose without being succeeded within 2 Business Days by a post-effective amendment to such Registration Statement that cures such failure and that is itself declared effective within 2 Business Days of filing such post-effective amendment to such Registration Statement (each such event referred to in clauses (i) through (iv), a "REGISTRATION DEFAULT"), then the Company hereby agrees to pay to each Holder of Transfer Restricted Securities affected thereby liquidated damages (the "LIQUIDATED DAMAGES"). Liquidated Damages shall accrue, with respect to the first 90-day period (or portion thereof) immediately following the occurrence of the first Registration Default, at a rate of 0.25% per annum of the aggregate principal amount of the Transfer Restricted Notes on the date of such Registration Default, payable in cash semiannually in arrears on each Interest Payment Date, commencing on the date of such Registration Default. The rate of the Liquidated Damages shall increase by an additional 0.25% per annum at the beginning of each subsequent 90-day period (or portion thereof) until all Registration Defaults have been cured, up to a maximum rate of Liquidated Damages for all Registration Defaults of 0.50% per annum. Notwithstanding anything to the contrary set forth herein, (1) upon filing of the Exchange Offer Registration Statement (and/or, if applicable, the Shelf Registration Statement), in the case of (i) above, (2) upon the effectiveness of the Exchange Offer Registration Statement (and/or, if applicable, the Shelf Registration Statement), in the case of (ii) above, (3) upon Consummation of the Registered Exchange Offer, in the case of (iii) above, or (4) upon the filing of a post-effective amendment to the Registration Statement or an additional Registration Statement that causes the Exchange Offer Registration Statement (and/or, if applicable, the Shelf Registration Statement) to again be declared effective or made usable in the case of (iv) above, the Liquidated Damages payable with respect to the Transfer Restricted Securities as a result of such clause (i), (ii), (iii) or (iv), as applicable, shall cease. All accrued Liquidated Damages shall be paid to the Holders entitled thereto, in the manner provided for the payment of interest in the Indenture, on each Interest Payment Date, as more fully set forth in the Indenture and the Notes. Notwithstanding the fact that any 7 securities for which Liquidated Damages are due cease to be Transfer Restricted Securities, all obligations of the Company to pay Liquidated Damages with respect to securities shall survive until such time as such obligations with respect to such securities shall have been satisfied in full. SECTION 6. REGISTRATION PROCEDURES (a) EXCHANGE OFFER REGISTRATION STATEMENT. In connection with the Registered Exchange Offer, the Company shall (x) comply with all applicable provisions of Section 6(c) below, (y) use its reasonable best efforts to effect such exchange and to permit the resale of Series B Notes by Broker-Dealers that tendered in the Registered Exchange Offer Series A Notes that such Broker-Dealer acquired for its own account as a result of its market making activities or other trading activities (other than Series A Notes acquired directly from the Company or any of its Affiliates) being sold in accordance with the intended method or methods of distribution thereof, and (z) comply with all of the following provisions: (i) As a condition to its participation in the Registered Exchange Offer, each Holder of Transfer Restricted Securities (including, without limitation, any Holder who is a Broker-Dealer) shall furnish, upon the request of the Company, prior to the Consummation of the Registered Exchange Offer, a written representation to the Company (which may be contained in the letter of transmittal contemplated by the Exchange Offer Registration Statement) to the effect that (A) it is not an Affiliate of the Company, (B) it is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any person to participate in, a distribution of the Series B Notes to be issued in the Registered Exchange Offer and (C) it is acquiring the Series B Notes in its ordinary course of business. As a condition to its participation in the Registered Exchange Offer each Holder using the Registered Exchange Offer to participate in a distribution of the Series B Notes shall acknowledge and agree that, if the resales are of Series B Notes obtained by such Holder in exchange for Series A Notes acquired directly from the Company or an Affiliate thereof, it (1) could not, under Commission policy as in effect on the date of this Agreement, rely on the position of the Commission enunciated in MORGAN STANLEY AND CO., INC. (available June 5, 1991) and EXXON CAPITAL HOLDINGS CORPORATION (available May 13, 1988), as interpreted in the Commission's letter to SHEARMAN & STERLING dated July 2, 1993, and similar no-action letters and (2) must comply with the registration and prospectus delivery requirements of the Act in connection with a secondary resale transaction and that such a secondary resale transaction must be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K. (ii) Prior to effectiveness of the Exchange Offer Registration Statement, if the Commission so requests, the Company shall provide a supplemental letter to the Commission (A) stating that the Company is registering the Registered Exchange Offer in reliance on the position of the Commission enunciated in EXXON CAPITAL HOLDINGS CORPORATION (available May 13, 1988), MORGAN STANLEY AND CO., INC. (available June 5, 1991) as interpreted in the Commission's letter to SHEARMAN & STERLING dated July 2, 1993 and (B) including a representation that the Company has not entered into any arrangement or understanding with any Person to distribute the Series B Notes to be received in the Registered Exchange Offer and that, to the best of the Company's information and belief, each Holder participating in the Registered Exchange Offer is acquiring the Series B Notes in its ordinary course of business and 8 has no arrangement or understanding with any Person to participate in the distribution of the Series B Notes received in the Registered Exchange Offer. (b) SHELF REGISTRATION STATEMENT. In connection with the Shelf Registration Statement, the Company shall comply with all applicable provisions of Section 6(c) below and use its reasonable best efforts to effect such registration to permit the sale of the Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof (as indicated in the information furnished to the Company pursuant to Section 4(b) hereof), and pursuant thereto the Company will prepare and file with the Commission a Registration Statement relating to the registration on any appropriate form under the Act, which form shall be available for the sale of the Transfer Restricted Securities in accordance with the intended method or methods of distribution thereof within the time periods and otherwise in accordance with the provisions hereof. (c) GENERAL PROVISIONS. In connection with any Registration Statement and any related Prospectus required by this Agreement, the Company shall: (i) use its reasonable best efforts to keep such Registration Statement continuously effective and provide all requisite financial statements for the period specified in Section 3 or 4 of this Agreement, as applicable. Upon the occurrence of any event that would cause any such Registration Statement or the Prospectus contained therein (A) to contain an untrue statement of material fact or omit to state any material fact necessary to make the statements therein not misleading or (B) not to be effective and usable for resale of Transfer Restricted Securities during the period required by this Agreement, the Company shall file promptly an appropriate amendment to such Registration Statement curing such defect, and, if Commission review is required, use its reasonable best efforts to cause such amendment to be declared effective as soon as practicable. (ii) prepare and file with the Commission such amendments and post-effective amendments to the applicable Registration Statement as may be necessary to keep such Registration Statement effective for the applicable period set forth in Section 3 or 4 hereof, as the case may be; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Act, and to comply fully with Rules 424, 430A and 462, as applicable, under the Act in a timely manner; and comply with the provisions of the Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus; (iii) advise each Holder promptly and, if requested by such Holder, confirm such advice in writing, (A) when the Prospectus or any prospectus supplement or post-effective amendment has been filed, and, with respect to any applicable Registration Statement or any post-effective amendment thereto, when the same has become effective, (B) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement under the Act or of the suspension by any state securities commission of the qualification of the Transfer Restricted Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the 9 Registration Statement, the Prospectus, any amendment or supplement thereto or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Registration Statement in order to make the statements therein not misleading, or that requires the making of any additions to or changes in the Prospectus in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, or any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Transfer Restricted Securities under state securities or Blue Sky laws, the Company shall use its reasonable best efforts to obtain the withdrawal or lifting of such order at the earliest possible time; (iv) subject to Section 6(c)(i), if any fact or event contemplated by Section 6(c)(iii)(D) above shall exist or have occurred, prepare a supplement or post- effective amendment to the Registration Statement or related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of Transfer Restricted Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (v) promptly prior to the filing of any document that is to be incorporated by reference into the Shelf Registration Statement or the Prospectus (after initial filing of the Shelf Registration Statement), provide copies of such document to the selling Holders and to the managing Underwriter(s), if any, and make the Company's representative(s) available for discussion of such document; (vi) make available, at reasonable times and upon reasonable notice, for inspection by each Holder and any attorney or accountant retained by such Holders, all financial and other records, pertinent corporate documents of the Company and cause the Company's officers, directors and employees to supply all information reasonably requested by any such Holder, attorney or accountant in connection with such Registration Statement or any post-effective amendment thereto subsequent to the filing thereof and prior to its effectiveness; PROVIDED, HOWEVER, that such persons shall first agree in writing with the Company that any information that is reasonably and in good faith designated by the Company in writing as confidential at the time of delivery of such information shall be kept confidential by such Persons, unless (i) disclosure of such information is required by court or administrative order or is necessary to respond to inquiries of regulatory authorities, (ii) disclosure of such information is required by law (including any disclosure requirements pursuant to federal securities laws in connection with the filing of such Registration Statement or the use of any Prospectus), (iii) such information becomes generally available to the public other than as a result of a disclosure or failure to safeguard such information by such person or (iv) such information becomes available to such person from a source other than the Company and its subsidiaries and such source is not known, after due inquiry, by the relevant Holder to be bound by a confidentiality agreement; PROVIDED FURTHER, that the foregoing investigation shall be coordinated on behalf of the Holders by one representative designated by and on behalf of such Holders and any such confidential information shall be available from such representative to such Holders so long as any Holder agrees to be bound by such confidentiality agreement; 10 (vii) if requested by any Holders in connection with such exchange or sale, promptly include in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such Holders may reasonably request to have included therein, including, without limitation, information relating to the "Plan of Distribution" of the Transfer Restricted Securities; and make all required filings of such Prospectus supplement or post- effective amendment as soon as practicable after the Company is notified of the matters to be included in such Prospectus supplement or post-effective amendment; (viii) furnish to each Holder in connection with such exchange or sale, without charge, at least one copy of the Registration Statement, as first filed with the Commission, and of each amendment thereto, including all documents incorporated by reference therein and all exhibits (including exhibits incorporated therein by reference); (ix) deliver to each Holder without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request; the Company hereby consents to the use (in accordance with law) of the Prospectus and any amendment or supplement thereto by each selling Holder in connection with the offering and the sale of the Transfer Restricted Securities covered by the Prospectus or any amendment or supplement thereto; (x) in the case of a Shelf Registration Statement requested by an Initial Purchaser, enter into such agreements (including underwriting agreements) and make such representations and warranties and take all such other actions in connection therewith in order to expedite or facilitate the disposition of the Transfer Restricted Securities pursuant to the Shelf Registration Statement contemplated by this Agreement as may be reasonably requested by the Holders of a majority in aggregate principal amount of Transfer Restricted Securities (excluding Transfer Restricted Securities held by the Company or its Affiliates) in connection with any sale or resale pursuant to any applicable Registration Statement. In such connection, the Company shall: (A) upon request of any selling Holder, furnish (or in the case of paragraphs (2) and (3), use its reasonable best efforts to cause to be furnished) to such selling Holder, the effectiveness of the Shelf Registration Statement, as the case may be: (1) a certificate, dated such date, signed on behalf of the Company by (x) the President, the Vice Chairman or any Vice President and (y) a principal financial or accounting officer of the Company, confirming, as of the date thereof, the matters set forth in Section 4(c) of the Purchase Agreement and such other similar matters as such Holders may reasonably request; (2) an opinion, dated the date of effectiveness of the Shelf Registration Statement, of counsel for the Company covering matters customarily covered in opinions requested in similar sales of securities or underwritten offerings. 11 (3) a customary comfort letter, dated the date of effectiveness of the Shelf Registration Statement, from the Company's independent accountants, in the customary form and covering matters of the type customarily covered in comfort letters to underwriters in connection with similar underwritten offerings; and (B) deliver such other documents and certificates as may be reasonably requested by the selling Holders to evidence compliance with the matters covered in clause (A) above and with any customary conditions contained in the any agreement entered into by the Company pursuant to this clause (xi); PROVIDED, HOWEVER, that, in the event of any underwritten offering pursuant to this clause (x), the selling Holders shall be responsible for all underwriting commissions and discounts in connection therewith; and PROVIDED FURTHER that, notwithstanding the foregoing, in no event shall any Holder be entitled to participate in an underwritten offering pursuant to this clause (x), unless Holders of Senior Notes the principal amount of which equals or exceeds $50 million shall first notify the Company of their intent to retain an underwriter for such purpose. (xi) prior to any public offering of Transfer Restricted Securities, cooperate with the selling Holders and their counsel in connection with the registration and qualification of the Transfer Restricted Securities under the securities or Blue Sky laws of such jurisdictions as the selling Holders may request and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Transfer Restricted Securities covered by the applicable Registration Statement; PROVIDED, HOWEVER, that the Company shall not be required to register or qualify as a foreign corporation where it is not now so qualified or to take any action that would subject it to the service of process in suits or to taxation, other than as to matters and transactions relating to the Registration Statement, in any jurisdiction where it is not now so subject; (xii) in connection with any sale of Transfer Restricted Securities that will result in such securities no longer being Transfer Restricted Securities, cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Securities to be sold and not bearing any restrictive legends; and to register such Transfer Restricted Securities in such denominations and such names as the selling Holders may request at least two (2) Business Days prior to such sale of Transfer Restricted Securities; (xiii) use its reasonable best efforts to cause the disposition of the Transfer Restricted Securities covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof to consummate the disposition of such Transfer Restricted Securities, subject to the proviso contained in clause (xi) above; (xiv) provide a CUSIP number for all Transfer Restricted Securities not later than the effective date of a Registration Statement covering such Transfer Restricted Securities and provide the Trustee under the Indenture with printed certificates for the Transfer Restricted Securities which are in a form eligible for deposit with the Depository Trust Company; 12 (xv) otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders with regard to any applicable Registration Statement, as soon as practicable, a consolidated earnings statement meeting the requirements of Rule 158 (which need not be audited) covering a twelve-month period beginning after the effective date of the Registration Statement (as such term is defined in paragraph (c) of Rule 158 under the Act); and (xvi) cause the Indenture to be qualified under the TIA not later than the effective date of the first Registration Statement required by this Agreement and, in connection therewith, cooperate with the Trustee and the Holders to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the TIA; and execute and use its reasonable best efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner. (d) RESTRICTIONS ON HOLDERS. Each Holder agrees by acquisition of a Transfer Restricted Security that, upon receipt of the notice referred to in Section 6(c)(iii)(C) or any notice from the Company of the existence of any fact of the kind described in Section 6(c)(iii)(D) hereof (in each case, a "SUSPENSION NOTICE"), such Holder will forthwith discontinue disposition of Transfer Restricted Securities pursuant to the applicable Registration Statement until (i) such Holder has received copies of the supplemented or amended Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such Holder is advised in writing by the Company that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus (in each case, the "RECOMMENCEMENT DATE"). Each Holder receiving a Suspension Notice hereby agrees that it will either (i) destroy any Prospectuses, other than permanent file copies, then in such Holder's possession which have been replaced by the Company with more recently dated Prospectuses or (ii) deliver to the Company (at the Company's expense) all copies, other than permanent file copies, then in such Holder's possession of the Prospectus covering such Transfer Restricted Securities that was current at the time of receipt of the Suspension Notice. The time period regarding the effectiveness of such Registration Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended by a number of days equal to the number of days in the period from and including the date of delivery of the Suspension Notice to the date of delivery of the Recommencement Date. SECTION 7. REGISTRATION EXPENSES (a) All expenses incident to the Company's performance of or compliance with this Agreement will be borne by the Company, regardless of whether a Registration Statement becomes effective, including without limitation all: (i) registration and filing fees and expenses (including filings made with the NASD (including, if applicable, the fees and expenses of any "qualified independent underwriter" and its counsel, as may be required by the rules and regulations of the NASD)); (ii) fees and expenses of compliance with federal securities and state Blue Sky or securities laws; (iii) expenses of printing (including printing certificates for the Senior Notes, and Prospectuses), messenger and delivery services and telephone; (iv) reasonable fees and disbursements of counsel for the Company and the Holders of the Transfer Restricted Securities; (v) all application and filing fees in connection with listing the Senior Notes on a national securities exchange or automated quotation system pursuant to the requirements hereof; and (vi) reasonable fees and disbursements of 13 independent certified public accountants of the Company (including the expenses of any special audit and "cold comfort" letters required by or incident to such performance). The Company will, in any event, bear its internal expenses (including, without limitation, all salaries and expense of its officers and employees performing legal or accounting duties), the expenses of any annual audit, rating agency fees and the fees and expenses of any Person, including special experts, retained by the Company. (b) In connection with the Shelf Registration Statement, the Company will reimburse the Holders of Transfer Restricted Securities being tendered or registered for the reasonable fees and disbursements of Cravath, Swaine & Moore, as counsel to such Holders. Notwithstanding the provisions of this Section 7, each Holder shall pay all registration expenses to the extent required by applicable law. SECTION 8. INDEMNIFICATION (a) Each of the Company and the Guarantors jointly and severally agrees to indemnify and hold harmless each Holder of Transfer Restricted Securities covered by any Registration Statement, the directors, officers, employees and agents of such Holder and each person, if any, who controls such Holder within the meaning of either the Act or the Exchange Act, or is under common control with or is controlled by such Holder, from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred by such Holder or such director, officer, employee or agent of such Holder or any such controlling person or person who is under common control with, or is controlled by such Holder, in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (as may be amended or supplemented), or caused by any omission or alleged omission to state therein a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except (i) insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to any Holder of Transfer Restricted Securities furnished to the Company in writing by such Holder expressly for use therein and (ii) that with respect to any untrue statement or omission of a material fact made in the preliminary prospectus contained in any Registration Statement, the indemnity agreement contained in this Section 8 (a) shall not inure to the benefit of any Holder of Transfer Restricted Securities (or any director, officer, or agent of such Holder or any person controlling, under common control with, or controlled by such Holder) from whom the person asserting any such loss, claim, damage or liability purchased the Transfer Restricted Securities concerned in any initial resale of the Transfer Restricted Securities by such Holder (or any director, officer, or agent of such Holder or any person controlling, under common control with, or controlled by such Holder), to the extent that any such loss, claim, damage or liability of such Holder (or such director, officer, employee, agent or controlling or controlled person) occurs under the circumstance where it shall have been determined by a court of competent jurisdiction by final and nonappealable judgment that (A) the untrue statement or omission of a material fact contained in the preliminary prospectus was corrected in the final prospectus contained in the effective Registration Statement, (B) the Company had previously furnished copies of the final prospectus to the Holders and (C) such loss, claim, damage or liability results from the fact that there was not sent or given to such person a copy of the final prospectus at or prior to the written confirmation of the sale of such Transfer Restricted Securities to such person. 14 (b) Each Holder of Transfer Restricted Securities agrees, severally and not jointly, to indemnify and hold harmless each of the Company and the Guarantors, its directors, its officers, its employees, its agents and each person, if any, who controls the Company within the meaning of either the Act or the Exchange Act to the same extent as the foregoing indemnity from the Company and the Guarantors to such Holder, but only with reference to information relating to such Holder furnished to the Company in writing by such Holder expressly for use in the applicable Registration Statement or any amendments or supplements thereto. (c) In case any proceeding (including without limitation any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to either paragraph (a) or (b) above, such person (the "INDEMNIFIED PARTY") shall promptly notify the person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the Indemnifying Party, upon request of the Indemnified Party, shall retain counsel reasonably satisfactory to the Indemnified Party to represent the Indemnified Party and any others the Indemnifying Party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the Indemnifying Party and the Indemnified Party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the Indemnifying Party shall not, in respect of the legal expenses of any Indemnified Party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by Salomon Brothers Inc., in the case of parties indemnified pursuant to paragraph (a) above and by the Company in the case of parties indemnified pursuant to paragraph (b) above. The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Party agrees to indemnify the Indemnified Party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the immediately preceding sentence, if at any time an Indemnified Party shall have requested an Indemnifying Party to reimburse the Indemnified Party for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the Indemnifying Party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 60 days after receipt by such Indemnifying Party of the aforesaid request and (ii) such Indemnifying Party shall not have reimbursed the Indemnified Party in accordance with such request prior to the date of such settlement. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such proceeding. (d) To the extent the indemnification provided for in paragraph (a) or (b) of this Section 8 is unavailable to an Indemnified Party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Party under such paragraph, in lieu of indemnifying such Indemnified Party thereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, 15 damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors, on the one hand, and the Holders of Transfer Restricted Securities on the other hand, from the offering of the Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Guarantors, on the one hand, and of the Holders of Transfer Restricted Securities, on the other hand, in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault of the Company and the Guarantors, on the one hand, and the Holders of Transfer Restricted Securities on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Holders of Transfer Restricted Securities and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. (e) The Company, the Guarantors and the Holders of Transfer Restricted Securities agree that it would not be just or equitable if contribution pursuant to this Section 8 were determined by PRO RATA allocation or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8, no Holder of Transfer Restricted Securities shall be required to contribute any amount in excess of the amount by which the total price at which the Securities resold by it in the initial placement of such Securities were offered to investors exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 8 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Indemnified Party at law or in equity. (f) The indemnity and contribution provisions contained in this Section 8 and the representations and warranties of the Company and the Guarantors contained in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Holder of Transfer Restricted Securities or any person controlling any Holder of Transfer Restricted Securities or by or on behalf of the Company, its officers, directors, employees or agents or any person controlling the Company and (iii) acceptance of and payment for any of the Senior Notes. The remedies provided for in this Section 8 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Party at law or equity. SECTION 9. RULE 144A The Company hereby agrees with each Holder, for so long as any of the Senior Notes, remain outstanding and during any period in which the Company is not subject to Section 13 or 15(d) of the Exchange Act, to make available to any Initial Purchaser or beneficial owner of such Transfer Restricted Securities in connection with any sale thereof 16 and any prospective purchaser of such Transfer Restricted Securities from such Initial Purchaser or beneficial owner, the information required by Rule 144A(d)(4) under the Act. SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS No Holder may participate in any Underwritten Registration hereunder unless such Holder (a) agrees to sell such Holder's Transfer Restricted Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes the related underwriting agreement and all questionnaires, powers of attorney, indemnities, and other documents required under the terms of such underwriting arrangements. SECTION 11. SELECTION OF UNDERWRITERS Subject to Section 6(b)(xii) hereof, the Holders of Transfer Restricted Securities covered by the Shelf Registration Statement who desire to do so may sell such Transfer Restricted Securities in an Underwritten Offering. The Underwriter(s) that will administer said offerings will be selected by the Holders of a majority of the outstanding aggregate principal amount, of the Transfer Restricted Securities included in such Underwritten Offering. SECTION 12. MISCELLANEOUS (a) REMEDIES. The Liquidated Damages contemplated hereby shall be the exclusive remedy available to Holders of Transfer Restricted Securities for any failure by the Company to comply with the registration requirements of this Agreement. (b) NO INCONSISTENT AGREEMENTS. The Company will not on or after the date of this Agreement enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company's securities under any agreements of the Company in effect on the date hereof. (c) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given unless the Company has obtained the written consent of Holders of a majority of the outstanding aggregate principal amount, of Senior Notes that are Transfer Restricted Securities (excluding Transfer Restricted Securities held by the Company or its Affiliates). (d) NOTICES. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail (registered or certified, return receipt requested), telex, telecopier, or air courier guaranteeing overnight delivery: (i) if to a Holder, at the address set forth on the records of the registrar under the Indenture, for the Senior Notes, with a copy to the transfer agent or the registrar; and 17 (ii) if to the Company, to PRIMEDIA Inc., 745 Fifth Avenue, New York, New York, 10151, Attention: Beverly Chell, with a copy to Simpson Thacher & Bartlett at 425 Lexington Avenue, New York, New York, 10017, Attention: Gary I. Horowitz. All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery. (e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including without limitation and without the need for an express assignment hereof, subsequent Holders of Transfer Restricted Securities; PROVIDED, that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign acquired Transfer Restricted Securities from such Holder. (f) COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (g) HEADINGS. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. (i) SEVERABILITY. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. (j) ENTIRE AGREEMENT. This Agreement together with the other Operative Documents (as defined in the Purchase Agreement) is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted by the Company with respect to the Transfer Restricted Securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. 18 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. PRIMEDIA INC. By: /s/ Beverly Chell -------------------------------------------- Name: Beverly Chell Title: Vice Chairman & General Counsel EACH OF THE GUARANTORS LISTED ON SCHEDULE I HERETO By: /s/ Beverly Chell -------------------------------------------- Name: Beverly Chell Title: Vice Chairman & General Counsel SALOMON SMITH BARNEY INC. J.P. MORGAN SECURITIES INC. BANC OF AMERICA SECURITIES LLC By: Salomon Smith Barney Inc. By: ---------------------------------------------- Name: Title: For themselves and the other several Initial Purchasers listed on Schedule I to the Purchase Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. PRIMEDIA INC. By: -------------------------------------------- Name: Title: EACH OF THE GUARANTORS LISTED ON SCHEDULE I HERETO By: -------------------------------------------- Name: Title: SALOMON SMITH BARNEY INC. J.P. MORGAN SECURITIES INC. BANC OF AMERICA SECURITIES LLC By: Salomon Smith Barney Inc. By: /s/ Christopher Clipper ---------------------------------------------- Name: Christopher Clipper Title: Vice President For themselves and the other several Initial Purchasers listed on Schedule I to the Purchase Agreement. SCHEDULE I
Name of Guarantor State of Organization ----------------- --------------------- Adams/Intertec International, Inc. DE Adams/Laux Company, Inc. DE Bacon's Information, Inc. DE Canoe & Kayak, Inc. DE Channel One Communications Corp. DE Climbing, Inc. DE Cover Concepts Marketing Services, LLC DE CSK Publishing Company Incorporated DE ENO Productions, Inc. DE Films for the Humanities & Sciences, Inc. DE Game & Fish Publications, Inc. DE Haas Publishing Companies, Inc. DE Hacienda Productions, Inc. DE HPC Brazil, Inc. DE Intertec Publishing Corporation DE Kitplanes Acquisition Company DE Paul Kagan Associates, Inc. DE PRIMEDIA Enterprises, Inc. DE PRIMEDIA Finance Shared Services Inc. DE PRIMEDIA Holdings III Inc. DE PRIMEDIA Information Inc. DE PRIMEDIA Magazines Inc. DE PRIMEDIA Magazine Finance Inc. DE PRIMEDIA Special Interest Publications Inc. DE PRIMEDIA Workplace Learning, LP DE Bowhunter Magazine, Inc. PA PRIMEDIA Enthusiast Publications, Inc. PA Communication Concepts, Inc. NV Cowles History Group, Inc. VA Symbol of Excellence Publishers, Inc. AL The Virtual Flyshop, Inc. CO GO LO Entertainment, Inc. CA Horse & Rider, Inc. CA IntelliChoice, Inc. CA Kagan Media Appraisal, Inc. CA Kagan Seminars, Inc. CA Low Rider Publishing Group, Inc. CA McMullen Argus Publishing, Inc. CA Miramar Communications Inc CA Princeton/American Communications Company, Inc. NJ
ANNEX A [Form of Qualified Independent Underwriter Opinion] [date] Salomon Smith Barney Inc. Credit Suisse First Boston Corporation Deutsche Banc Alex. Brown Inc. Raymond James & Associates, Inc. As Representatives of the several Underwriters c/o Salomon Smith Barney Inc. 388 Greenwich Street New York, New York 10013 Global Power Equipment Group Inc. 6120 South Yale Suite 1480 Tulsa, Oklahoma 74136 Global Power Equipment Group Inc. Registration Statement No. 333-56832 NASD File No. 2001-0313-001 -------------------------------------------- Ladies and Gentlemen: On March 9, 2001, Global Power Equipment Group Inc. (the "Company"), filed with the Securities and Exchange Commission a registration statement (Reg. No. 333-56832) on Form S-1 (the "Registration Statement") relating to the public offering (the "Offering") of 7,350,000 shares (including an over-allotment option of up to 1,102,500 shares) of common stock, $.O1 par value, of the Company (the "Securities") by the Company. We understand that for the reasons set forth in the Registration Statement under the heading "Underwriting", the price at which the Securities are offered to the public must be no higher than that recommended by a Qualified Independent Underwriter ("QIU") as such term is defined in Rule 2720 of the Conduct Rules of the National Association of Securities Dealers, Inc. We have participated in the preparation of the Registration Statement and the Prospectus contained therein and have exercised the usual standards of "due diligence" with respect thereto. As such QIU, assuming that the Offering is commenced on (date], we recommend that the price 2 of the Securities offered to the public be no higher than $[price] per share, which should in no event be considered or relied upon as an indication of the actual value of the Securities. Very truly yours, SALOMON SMITH BARNEY INC. By: --------------------------------- Name: Title: EX-5.1 5 a2052089zex-5_1.txt EXHIBIT 5.1 EXHIBIT 5.1 [LETTERHEAD OF SIMPSON THACHER & BARTLETT] July , 2001 PRIMEDIA Inc. 745 Fifth Avenue 23rd Floor New York, New York 10151 Ladies and Gentlemen: We have acted as counsel to PRIMEDIA Inc., a Delaware corporation (the "Company"), and to the subsidiaries of the Company named in Schedules I and II hereto (the "Guarantors") in connection with the Registration Statement on Form S-4 (the "Registration Statement") filed by the Company and the Guarantors with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended, relating to the issuance by the Company of $500,000,000 aggregate principal amount of 8 7/8% Senior Notes due 2011 (the "Exchange Securities"), and the issuance by the Guarantors of guarantees (the "Guarantees"), with respect to the Exchange Securities. The Exchange Securities and the Guarantees will be issued under an indenture dated as of May 8, 2001 (the "Indenture"), among the Company, the Guarantors and The Bank of New York, as Trustee (the "Trustee"). The Exchange Securities will be offered by the Company in exchange for $500,000,000 aggregate principal amount of its outstanding 8 7/8% Senior Notes due 2011 (the "Securities"). We have examined the Registration Statement and the Indenture (including the form of the Exchange Securities set forth among the exhibits thereto), which has been filed with the Commission as an exhibit to the Registration Statement. We also have examined the originals, or duplicates or certified or conformed copies, of such records, agreements, instruments and other documents and have made such other and further investigations as we have deemed relevant and necessary in connection with the opinions expressed herein. As to questions of fact material to this opinion, we have relied upon certificates of public officials and of officers and representatives of the Company and the Guarantors. In rendering the opinions set forth below, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as duplicates or certified or conformed copies, and the authenticity of the originals of such latter documents. We also have assumed that the Indenture is the valid and legally binding obligation of the Trustee. We have assumed further that (1) the subsidiaries of the Company named in Schedule II (the "Non-Delaware Guarantors") have duly authorized, executed and delivered each of the Indenture and their Guarantees and (2) the execution, delivery and performance by the Non-Delaware Guarantors of the Indenture and their Guarantees do not and will not violate any applicable laws (excepting the laws of the State of New York and the Federal laws of the United States). Based upon the foregoing, and subject to the qualifications and limitations stated herein, we are of the opinion that: 1. When the Exchange Securities have been duly authorized, executed, authenticated, issued and delivered in accordance with the provisions of the Indenture in exchange for the Securities, the Exchange Securities will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms. 2. When the Exchange Securities have been duly authorized, executed, authenticated, issued and delivered in accordance with the provisions of the Indenture in exchange for the Securities, and when the applicable Guarantees have been duly authorized, executed and delivered by each of the subsidiaries of the Company named in Schedule I (the "Delaware Guarantors"), the Guarantees will constitute valid and legally binding obligations of the Guarantors enforceable against the Guarantors in accordance with their terms. Our opinions set forth above are subject to the effects of (1) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, (2) general equitable principles (whether considered in a proceeding in equity or at law) and (3) an implied covenant of good faith and fair dealing. We are members of the Bar of the State of New York, and we do not express any opinion herein concerning any law other than the Delaware General Corporation Law, the Delaware Limited Liability Company Law and the Delaware Revised Uniform Limited Partnership Act (in each case including the statutory provisions, all applicable provisions of the Delaware Constitution and reported judicial decisions interpreting the foregoing), the law of the State of New York and the Federal law of the United States. We hereby consent to the filing of this opinion letter as Exhibit 5 to the Registration Statement and to the use of our name under the caption "Experts" in the Prospectus included in the Registration Statement. Very truly yours, /s/ Simpson Thacher & Bartlett SIMPSON THACHER & BARTLETT SCHEDULE I: DESIGNATED SUBSIDIARIES Adams/Intertec International, Inc. Adams/Laux Company, Inc. Bacon's Information, Inc. Canoe & Kayak, Inc. Channel One Communications Corporation Climbing, Inc. Cover Concepts Marketing Services, LLC CSK Publishing Company, Inc. ENO Productions, Inc. Films for the Humanities & Sciences, Inc. Game & Fish Publications, Inc. Haas Publishing Companies, Inc. Hacienda Productions, Inc. HPC Brazil, Inc. PRIMEDIA Business Magazines & Media, Inc. Kagan World Media, Inc. Kitplanes Acquisition Company MediaCentral LLC Paul Kagan Associates, Inc. PRIMEDIA Companies Inc. PRIMEDIA Enterprises, Inc. PRIMEDIA Finance Shared Services, Inc. PRIMEDIA Holdings III, Inc. PRIMEDIA Information, Inc. PRIMEDIA Magazines, Inc. PRIMEDIA Magazine Finance, Inc. PRIMEDIA Special Interest Publications, Inc. PRIMEDIA Workplace Learning LP SCHEDULE II: NON-DESIGNATED SUBSIDIARIES Bowhunter Magazine, Inc. PRIMEDIA Enthusiast Publications, Inc. Communication Concepts, Inc. Cowles History Group, Inc. Symbol of Excellence Publishers, Inc. The Virtual Flyshop, Inc. Go Lo Entertainment, Inc. Horse & Rider, Inc. IntelliChoice, Inc. Kagan Media Appraisals, Inc. Kagan Seminars, Inc. Low Rider Publishing Group, Inc. McMullen Argus Publishing, Inc. Miramar Communications, Inc. Simba Information, Inc. EX-10.1 6 a2052089zex-10_1.txt EXHIBIT 10.1 Exhibit 10.1 ================================================================================ CREDIT AGREEMENT among PRIMEDIA INC., VARIOUS LENDING INSTITUTIONS, BANK OF AMERICA, N.A., as SYNDICATION AGENT, THE BANK OF NEW YORK, and THE BANK OF NOVA SCOTIA, as CO-DOCUMENTATION AGENTS, and THE CHASE MANHATTAN BANK, as ADMINISTRATIVE AGENT ------------------------------------------ Dated as of June 20, 2001 ------------------------------------------ ================================================================================ J.P. MORGAN SECURITIES INC. and BANC OF AMERICA SECURITIES as JOINT ADVISORS, JOINT LEAD ARRANGERS and JOINT BOOKRUNNERS TABLE OF CONTENTS
PAGE ---- SECTION 1. Amount and Terms of Credit............................................................................1 1.01 Commitments........................................................................................1 1.02 Minimum Borrowing Amounts, etc.....................................................................3 1.03 Notice of Borrowing................................................................................3 1.04 Disbursement of Funds..............................................................................4 1.05 Register...........................................................................................5 1.06 Conversions........................................................................................5 1.07 Pro Rata Borrowings................................................................................5 1.08 Interest...........................................................................................5 1.09 Interest Periods...................................................................................6 1.10 Increased Costs, Illegality, etc...................................................................7 1.11 Compensation......................................................................................10 1.12 Change of Lending Office..........................................................................10 1.13 Incremental Loan Commitments......................................................................11 SECTION 2. Letters of Credit....................................................................................11 2.01 Letters of Credit.................................................................................11 2.02 Minimum Stated Amount.............................................................................12 2.03 Letter of Credit Requests; Notices of Issuance....................................................12 2.04 Agreement to Repay Letter of Credit Drawings......................................................12 2.05 Letter of Credit Participations...................................................................13 2.06 Increased Costs...................................................................................15 SECTION 3. Fees; Commitments....................................................................................15 3.01 Fees..............................................................................................15 3.02 Voluntary Reduction of Commitments................................................................16 3.03 Mandatory Reduction of Commitments, etc...........................................................17 SECTION 4. Payments.............................................................................................18 4.01 Voluntary Prepayments.............................................................................18 4.02 Mandatory Repayments..............................................................................19 4.03 Method and Place of Payment.......................................................................21 4.04 Net Payments......................................................................................22 SECTION 5. Conditions Precedent.................................................................................23 5.01 Conditions Precedent to the Initial Borrowing Date................................................23 5.02 Conditions Precedent to each Credit Event.........................................................25
(i)
PAGE ---- SECTION 6. Representations, Warranties and Agreements...........................................................26 6.01 Corporate Status..................................................................................26 6.02 Corporate Power and Authority.....................................................................26 6.03 No Violation......................................................................................27 6.04 Litigation........................................................................................27 6.05 Use of Proceeds; Margin Regulations...............................................................27 6.06 Governmental Approvals............................................................................27 6.07 Investment Company Act............................................................................28 6.08 Public Utility Holding Company Act................................................................28 6.09 True and Complete Disclosure......................................................................28 6.10 Financial Statements; Financial Condition.........................................................28 6.11 Tax Returns and Payments..........................................................................29 6.12 Compliance with ERISA.............................................................................29 6.13 Subsidiaries......................................................................................30 6.14 Intellectual Property.............................................................................30 6.15 Compliance with Statutes, etc.....................................................................31 6.16 The Pledge Agreement..............................................................................31 SECTION 7. Affirmative Covenants................................................................................31 7.01 Information Covenants.............................................................................31 7.02 Books, Records and Inspections....................................................................33 7.03 Payment of Taxes..................................................................................33 7.04 Corporate Franchises..............................................................................34 7.05 Compliance with Statutes, etc.....................................................................34 7.06 ERISA.............................................................................................34 7.07 End of Fiscal Years; Fiscal Quarters..............................................................35 7.08 Use of Proceeds...................................................................................35 7.09 Ownership of Subsidiaries.........................................................................35 7.10 Maintenance of Corporate Separateness.............................................................35 SECTION 8. Negative Covenants...................................................................................35 8.01 Changes in Business...............................................................................36 8.02 Consolidation, Merger, Sale or Purchase of Assets, etc............................................36 8.03 Liens.............................................................................................38 8.04 Indebtedness......................................................................................40 8.05 Advances, Investments and Loans...................................................................41 8.06 Contingent Obligations............................................................................43 8.07 Dividends, etc....................................................................................44 8.08 Transactions with Affiliates......................................................................46 8.09 Fixed Charge Coverage Ratio.......................................................................46 8.10 Interest Coverage Ratio...........................................................................46 8.11 Leverage Ratio....................................................................................47 8.12 Issuance of Stock.................................................................................47 8.13 Modifications of Certain Agreements, etc..........................................................48
(ii)
PAGE ---- 8.14 Limitation on the Creation of Subsidiaries; Redesignation of Partially-Owned Restricted Subsidiaries ........................................................................49 SECTION 9. Events of Default....................................................................................50 9.01 Payments..........................................................................................50 9.02 Representations, etc..............................................................................50 9.03 Covenants.........................................................................................50 9.04 Default Under Other Agreements....................................................................50 9.05 Bankruptcy, etc...................................................................................50 9.06 ERISA.............................................................................................51 9.07 Guaranty..........................................................................................51 9.08 Pledge Agreement..................................................................................51 9.09 Judgments.........................................................................................52 9.10 Ownership.........................................................................................52 SECTION 10. Definitions.........................................................................................52 SECTION 11. The Administrative Agent............................................................................80 11.01 Appointment......................................................................................80 11.02 Delegation of Duties.............................................................................80 11.03 Exculpatory Provisions...........................................................................80 11.04 Reliance by Administrative Agent.................................................................81 11.05 Notice of Default................................................................................81 11.06 Non-Reliance on Administrative Agent and Other Banks.............................................82 11.07 Indemnification..................................................................................82 11.08 Administrative Agent in Its Individual Capacity..................................................83 11.09 Holders..........................................................................................83 11.10 Resignation of the Administrative Agent; Successor Agent.........................................83 SECTION 12. Miscellaneous.......................................................................................83 12.01 Payment of Expenses, etc.........................................................................83 12.02 Right of Setoff..................................................................................84 12.03 Notices..........................................................................................84 12.04 Benefit of Agreement.............................................................................85 12.05 No Waiver; Remedies Cumulative...................................................................86 12.06 Payments Pro Rata................................................................................87 12.07 Calculations; Computations.......................................................................87 12.08 Governing Law; Submission to Jurisdiction; Venue.................................................87 12.09 Counterparts.....................................................................................88 12.10 Effectiveness....................................................................................88 12.11 Headings Descriptive.............................................................................89 12.12 Amendment or Waiver..............................................................................89 12.13 Survival.........................................................................................89 12.14 Domicile of Loans................................................................................89
(iii)
PAGE ---- 12.15 Confidentiality..................................................................................90 12.16 Waiver of Jury Trial.............................................................................90
ANNEX I List of Banks ANNEX II Bank Addresses ANNEX III Subsidiaries ANNEX IV Liens ANNEX V Existing Debt/Existing Contingent Obligations ANNEX VI Existing Preferred Stock ANNEX VII Existing Letters of Credit ANNEX VIII Existing Unrestricted Subsidiaries EXHIBIT A -- Form of Notice of Borrowing EXHIBIT B -- Pledge Agreement EXHIBIT C-1 -- Opinion of Simpson, Thacher & Bartlett EXHIBIT C-2 -- Opinion of Beverly C. Chell, Esq. EXHIBIT C-3 -- Opinion of White & Case LLP EXHIBIT D -- Form of Officer's Certificate EXHIBIT E -- Subsidiary Guaranty EXHIBIT F -- Contribution Agreement EXHIBIT G -- Form of Assignment and Assumption Agreement EXHIBIT H -- Form of Subsidiary Assumption Agreement EXHIBIT I -- Form of 4.04(b) Certificate (iv) CREDIT AGREEMENT, dated as of June 20, 2001, among PRIMEDIA INC., a Delaware corporation (the "Borrower"), the lending institutions listed from time to time on Annex I hereto (each a "Bank" and, collectively, the "Banks"), BANK OF AMERICA, N.A. as Syndication Agent (the "Syndication Agent"), THE BANK OF NEW YORK and THE BANK OF NOVA SCOTIA, as Co-Documentation Agents, and THE CHASE MANHATTAN BANK, as Administrative Agent (the "Administrative Agent"). Unless otherwise defined herein, all capitalized terms used herein and defined in Section 10 are used herein as so defined. W I T N E S S E T H: - - - - - - - - - - WHEREAS, subject to and upon the terms and conditions herein set forth, the Banks are willing to make available to the Borrower the credit facilities provided for herein: NOW, THEREFORE, IT IS AGREED: SECTION 1. Amount and Terms of Credit. 1.01 COMMITMENTS. (a) Subject to and upon the terms and conditions set forth herein, each Bank with a Term Loan A Commitment severally agrees to make, on the Initial Borrowing Date, a term loan or term loans (each a "Term Loan A" and, collectively, "Term Loans A") to the Borrower, which Term Loans A (i) shall be made pursuant to a single drawing, (ii) shall, at the option of the Borrower, be Base Rate Loans or Eurodollar Loans, PROVIDED that all Term Loans A made as part of the same Borrowing shall, unless otherwise specifically provided herein, consist of Term Loans A of the same Type, and (iii) shall equal for each Bank, in initial aggregate principal amount, that amount which equals the Term Loan A Commitment of such Bank on the Initial Borrowing Date (before giving effect to the termination thereof on such date pursuant to Section 3.03(b)). Once repaid, Term Loans A incurred hereunder may not be reborrowed. (b) Subject to and upon the terms and conditions set forth herein, each Bank with a Term Loan B Commitment severally agrees to make, on the Initial Borrowing Date, a term loan or term loans (each a "Term Loan B" and, collectively, the "Term Loans B" and, together with the Term Loans A, the "Term Loans") to the Borrower, which Term Loans B (i) shall be made pursuant to a single drawing, (ii) shall, at the option of the Borrower, be Base Rate Loans or Eurodollar Loans, PROVIDED that all Term Loans B made as part of the same Borrowing shall, unless otherwise specifically provided herein, consist of Term Loans B of the same Type, and (iii) shall equal for each Bank, in initial aggregate principal amount, that amount which equals the Term Loan B Commitment of such Bank on the Initial Borrowing Date (before giving effect to the termination thereof on such date pursuant to Section 3.03(b)). Once repaid, Term Loans B incurred hereunder may not be reborrowed. (c) Subject to and upon the terms and conditions herein set forth, each Bank with a Revolving Loan Commitment severally agrees at any time and from time to time on and after the Initial Borrowing Date and prior to the Revolving Loan Maturity Date, to make a revolving loan or revolving loans (each a " Revolving Loan" and, collectively, the " Revolving Loans") to the Borrower, which Revolving Loans (i) shall, at the option of the Borrower, be Base Rate Loans or Eurodollar Loans, PROVIDED that all Revolving Loans made as part of the same Borrowing shall, unless otherwise specifically provided herein, consist of Revolving Loans of the same Type, (ii) may be repaid and reborrowed in accordance with the provisions hereof, (iii) shall not exceed for any Bank at any time outstanding that aggregate principal amount which, when combined with such Bank's Adjusted Percentage, if any, of the sum of (x) the Letter of Credit Outstandings at such time plus (y) the outstanding principal amount of Swingline Loans at such time, equals (1) if such Bank is a Non-Defaulting Bank, the Adjusted Revolving Loan Commitment of such Bank at such time and (2) if such Bank is a Defaulting Bank, the Revolving Loan Commitment of such Bank at such time and (iv) shall not exceed in aggregate principal amount at any time outstanding, when combined with the aggregate principal amount of all Swingline Loans then outstanding and the aggregate amount of all Letter of Credit Outstandings at such time, an amount equal to the Total Revolving Loan Commitment at such time. (d) Subject to and upon the terms and conditions herein set forth, Chase in its individual capacity agrees to make, at any time and from time to time on and after the Initial Borrowing Date and prior to the Swingline Expiry Date, a revolving loan or revolving loans (each a "Swingline Loan" and, collectively, the "Swingline Loans") to the Borrower, which Swingline Loans (i) shall be made and maintained as Base Rate Loans, (ii) may be repaid and reborrowed in accordance with the provisions hereof, (iii) shall not exceed in aggregate principal amount at any time outstanding, when combined with the aggregate principal amount of all Revolving Loans made by Non-Defaulting Banks then outstanding and the Letter of Credit Outstandings at such time, an amount equal to the Adjusted Total Revolving Loan Commitment then in effect (after giving effect to any reductions to the Adjusted Total Revolving Loan Commitment on such date) and (iv) shall not exceed in aggregate principal amount at any time outstanding the Maximum Swingline Amount. Chase will not make a Swingline Loan after it has received written notice from the Required Banks that one or more of the applicable conditions to Credit Events specified in Section 5 are not then satisfied. (e) On any Business Day, Chase may, in its sole discretion, give notice to the Banks that its outstanding Swingline Loans shall be funded with a Borrowing of Revolving Loans (PROVIDED that each such notice shall be deemed to have been automatically given upon the occurrence of an Event of Default under Section 9.05), in which case a Borrowing of Revolving Loans constituting Base Rate Loans (each such Borrowing, a "Mandatory Borrowing") shall be made on the immediately succeeding Business Day by all Banks with a Revolving Loan Commitment PRO RATA based on each Bank's Adjusted Percentage (determined before giving effect to any termination of the Revolving Loan Commitments pursuant to the last paragraph of Section 9), and the proceeds thereof shall be applied directly to repay Chase for such outstanding Swingline Loans. Each such Bank hereby irrevocably agrees to make Base Rate Loans upon one Business Day's notice pursuant to each Mandatory Borrowing in the amount and in the manner specified in the preceding sentence and on the date specified in writing by Chase notwithstanding (i) that the amount of the Mandatory Borrowing may not comply with the Minimum Borrowing Amount otherwise required hereunder, (ii) whether any conditions specified in Section 5 are then satisfied, (iii) whether a Default or an Event of Default has occurred and is continuing, (iv) the date of such Mandatory Borrowing and (v) any reduction in the Total Revolving Loan Commitment or Adjusted Total Revolving Loan Commitment after any such Swingline Loans -2- were made. In the event that any Mandatory Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Code in respect of the Borrower), then each such Bank (other than Chase) hereby agrees that it shall forthwith purchase (as of the date the Mandatory Borrowing would otherwise have occurred, but adjusted for any payments received from the Borrower on or after such date and prior to such purchase) from Chase (without recourse or warranty other than that such Swingline Loans are free and clear of any Liens) such assignment of the outstanding Swingline Loans as shall be necessary to cause such Banks to share in such Swingline Loans ratably based upon their respective Adjusted Percentages (determined before giving effect to any termination of the Revolving Loan Commitments pursuant to the last paragraph of Section 9), PROVIDED that all interest payable on the Swingline Loans shall be for the account of Chase until the date the respective assignment is purchased and, to the extent attributable to the purchased assignment, shall be payable to the Bank purchasing same from and after such date of purchase. Upon any change in the Revolving Loan Commitments or Adjusted Percentages of the Banks pursuant to Section 1.10(c)(ii) or 12.04(b), or upon the occurrence of a Bank Default, it is hereby agreed that, with respect to all outstanding Swingline Loans, there shall be an automatic adjustment to the participations pursuant to this Section 1.01(e) to reflect the new Adjusted Percentages of the assigning and assignee Banks or of all Non-Defaulting Banks, as the case may be. 1.02 MINIMUM BORROWING AMOUNTS, ETC. The aggregate principal amount of each Borrowing shall not be less than the Minimum Borrowing Amount for such Loans. More than one Borrowing may be incurred on any day, PROVIDED that at no time shall there be outstanding more than 25 Borrowings of Eurodollar Loans. 1.03 NOTICE OF BORROWING. (a) Whenever the Borrower desires to incur Loans hereunder (excluding Swingline Loans and Revolving Loans incurred pursuant to a Mandatory Borrowing), it shall give the Administrative Agent at its Notice Office, prior to 1:00 P.M. (New York time), at least three Business Days' prior written notice (or telephonic notice promptly confirmed in writing) of each Borrowing of Eurodollar Loans and at least one Business Day's prior written notice (or telephonic notice promptly confirmed in writing) of each Borrowing of Base Rate Loans to be incurred hereunder. Each such notice (each, together with each notice referred to in Section 1.03(b)(i), a "Notice of Borrowing"), except as otherwise expressly provided in Section 1.10, shall be irrevocable, and, in the case of each written notice and each confirmation of telephonic notice, shall be in the form of Exhibit A, appropriately completed to specify (i) whether the Loans being incurred pursuant to such Borrowing shall consist of Term Loans A, Term Loans B or Revolving Loans, (ii) the aggregate principal amount of such Loans to be made pursuant to such Borrowing, (iii) the date of such Borrowing (which shall be a Business Day) and (iv) whether the respective Borrowing shall consist of Base Rate Loans or Eurodollar Loans and, if Eurodollar Loans, the Interest Period to be initially applicable thereto. The Administrative Agent shall promptly give each Bank which is required to make Loans pursuant to the Borrowing specified in the respective Notice of Borrowing written notice (or telephonic notice promptly confirmed in writing) of each proposed Borrowing, of such Bank's proportionate share thereof, if any, and of the other matters covered by the Notice of Borrowing. -3- (b) (i) Whenever the Borrower desires to incur a Borrowing of Swingline Loans hereunder, it shall give Chase no later than 12:00 Noon (New York time) on the day such Swingline Loan is to be made, written notice (or telephonic notice promptly confirmed in writing) of each Swingline Loan to be incurred hereunder. Each such Notice of Borrowing shall be irrevocable and shall specify in each case (x) the date of such Borrowing (which shall be a Business Day) and (y) the aggregate principal amount of the Swingline Loans to be incurred pursuant to such Borrowing. (ii) Mandatory Borrowings shall be made upon the notice specified in Section 1.01(e), with the Borrower irrevocably agreeing, by its incurrence of any Swingline Loan, to the making of Mandatory Borrowings as set forth in such Section. (c) Without in any way limiting the obligation of the Borrower to confirm in writing any telephonic notice permitted to be given hereunder, the Administrative Agent, Chase (in the case of a Borrowing of Swingline Loans) or the Letter of Credit Issuer (in the case of the issuance of Letters of Credit), as the case may be, may prior to receipt of written confirmation act without liability upon the basis of such telephonic notice, believed by the Administrative Agent, Chase or the Letter of Credit Issuer, as the case may be, in good faith to be from the chairman, a vice chairman, the president, the chief financial officer, the treasurer, an assistant treasurer, the supervisor, cash management or a director of treasury operations of the Borrower. In each such case, the Borrower hereby waives the right to dispute the Administrative Agent's, Chase's or the Letter of Credit Issuer's record of the terms of such telephonic notice. 1.04 DISBURSEMENT OF FUNDS. (a) No later than 1:00 P.M. (New York time) on the date specified in each Notice of Borrowing relating to any Loans (or (x) in the case of Swingline Loans, no later than 2:00 P.M. (New York time) on the date specified pursuant to Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, no later than 12:00 Noon (New York time) on the date specified in Section 1.01(e)), each Bank with a Commitment under the respective Tranche will make available its Pro Rata Share (if any) of each Borrowing of Loans requested to be made on such date in the manner provided below (or, in the case of Swingline Loans, Chase will make available the full amount thereof). All such amounts shall be made available to the Administrative Agent in U.S. Dollars and immediately available funds at the Payment Office and the Administrative Agent promptly will make available to the Borrower by depositing to its account at the Payment Office the aggregate of the amounts so made available in the type of funds received (other than in respect of Mandatory Borrowings). Unless the Administrative Agent shall have been notified by any Bank prior to the date of Borrowing of any Loans referred to in this Section 1.04(a) that such Bank does not intend to make available to the Administrative Agent its portion of the Borrowing or Borrowings to be made on such date, the Administrative Agent may assume that such Bank has made such amount available to the Administrative Agent on such date of Borrowing, and the Administrative Agent, in reliance upon such assumption, may (in its sole discretion and without any obligation to do so) make available to the Borrower a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent by such Bank and the Administrative Agent has made available same to the Borrower, the Administrative Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Administrative Agent's demand therefor, the Administrative Agent shall -4- promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Administrative Agent. The Administrative Agent shall also be entitled to recover from such Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to the Borrower to the date such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to (x) if paid by such Bank, the overnight Federal Funds Effective Rate or (y) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Section 1.08, for the respective Loans. Nothing herein shall be deemed to relieve any Bank from its obligation to fulfill its commitments hereunder or to prejudice any rights which the Borrower may have against any Bank as a result of any failure by such Bank to make Loans hereunder. 1.05 REGISTER. (a) The Administrative Agent shall maintain a register for the recordation of the Commitments of the Banks from time to time and the principal amount of the Term Loans A, Term Loans B, Revolving Loans and Swingline Loans owing to each Bank (the "Register"). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error. The Register shall be available for inspection by the Borrower or any Bank at any reasonable time and from time to time upon reasonable prior notice. (b) The Borrower hereby agrees to provide a Note, promptly upon the request of any Bank, to the extent such Bank has requested such Note in connection with any pledge or assignment by such Bank of any or all of its Loans hereunder to a Federal Reserve Bank. 1.06 CONVERSIONS. The Borrower shall have the option to convert on any Business Day all or a portion at least equal to the applicable Minimum Borrowing Amount of the outstanding principal amount of the Loans (other than Swingline Loans, which at all times shall be maintained as Base Rate Loans) owing by the Borrower into a Borrowing or Borrowings of another Type of Loan; PROVIDED that (i) no such partial conversion of a Borrowing of Eurodollar Loans shall reduce the outstanding principal amount of the Eurodollar Loans made pursuant to such Borrowing to less than the Minimum Borrowing Amount applicable thereto, (ii) Base Rate Loans may not be converted into Eurodollar Loans if a Default or Event of Default is in existence and the Administrative Agent and/or the Required Banks have notified the Borrower that such a conversion will not be permitted as a result thereof and (iii) Borrowings of Eurodollar Loans resulting from this Section 1.06 shall be limited in number as provided in Section 1.02. Each such conversion shall be effected by the Borrower by giving the Administrative Agent at its Notice Office, prior to 1:00 P.M. (New York time), at least three Business Days (or one Business Day in the case of a conversion into Base Rate Loans) prior written notice (or telephonic notice promptly confirmed in writing) (each a "Notice of Conversion") specifying the Loans to be so converted, the Type of Loans to be converted into and, if to be converted into a Borrowing of Eurodollar Loans, the Interest Period to be initially applicable thereto. The Administrative Agent shall give each Bank prompt notice of any such proposed conversion affecting any of its Loans. 1.07 PRO RATA BORROWINGS. All Borrowings of Term Loans A, Term Loans B and Revolving Loans under this Agreement shall be made by the Banks PRO RATA on the basis of their Term Loan A Commitments, Term Loan B Commitments or Revolving Loan Commitments, as the case may be, provided that all Borrowings of Revolving Loans made pursuant to a Mandatory -5- Borrowing shall be incurred from the Banks with Revolving Loan Commitments PRO RATA on the basis of their Adjusted Percentages. It is understood that no Bank shall be responsible for any default by any other Bank of its obligation to make Loans hereunder and that each Bank shall be obligated to make the Loans to be made by it hereunder, regardless of the failure of any other Bank to make its Loans hereunder. 1.08 INTEREST. (a) The unpaid principal amount of each Base Rate Loan shall bear interest from the date of the Borrowing thereof until maturity (whether by acceleration or otherwise) at a rate per annum which shall at all times be the Applicable Margin (or, in the case of Term Loans B, the Applicable Term Loan B Margin) plus the Base Rate in effect from time to time. (b) The unpaid principal amount of each Eurodollar Loan shall bear interest from the date of the Borrowing thereof until maturity (whether by acceleration or otherwise) at a rate per annum which shall at all times be the Applicable Margin (or, in the case of Term Loans B, the Applicable Term Loan B Margin) plus the relevant Eurodollar Rate. (c) Overdue principal and, to the extent permitted by law, overdue interest in respect of each Loan shall bear interest at a rate per annum equal to the Base Rate in effect from time to time plus the sum of (i) 2% and (ii) the Applicable Margin (or, in the case of Term Loans B, the Applicable Term Loan B Margin) for Base Rate Loans; PROVIDED that principal in respect of Eurodollar Loans shall bear interest after the same becomes due (whether by acceleration or otherwise) until the end of the applicable Interest Period for such Eurodollar Loan at a per annum rate equal to 2% in excess of the rate of interest applicable on the due date therefor. (d) Interest shall accrue from and including the date of any Borrowing to, but excluding the date of any repayment thereof and shall be payable (i) in respect of each Base Rate Loan, quarterly in arrears on the last Business Day of each March, June, September and December, (ii) in respect of each Eurodollar Loan, on the last day of each Interest Period applicable thereto and, in the case of an Interest Period in excess of three months, on each date occurring at three month intervals after the first day of such Interest Period and (iii) in respect of each Loan, on any prepayment or conversion (on the amount prepaid or converted), at maturity (whether by acceleration or otherwise) and, after such maturity, on demand. (e) All computations of interest hereunder shall be made in accordance with Section 12.07(b). (f) The Administrative Agent, upon determining the interest rate for any Borrowing of Eurodollar Loans for any Interest Period, shall promptly notify the Borrower and the Banks thereof. 1.09 INTEREST PERIODS. At the time the Borrower gives a Notice of Borrowing or Notice of Conversion in respect of the making of, or conversion into, a Borrowing of Eurodollar Loans (in the case of the initial Interest Period applicable thereto) or prior to 1:00 P.M. (New York time) on the third Business Day prior to the expiration of an Interest Period applicable to a Borrowing of Eurodollar Loans, it shall have the right to elect by giving the Administrative -6- Agent written notice (or telephonic notice promptly confirmed in writing) of the Interest Period applicable to such Borrowing, which Interest Period shall, at the option of the Borrower, be a one, two, three, six or, if available to each of the Banks (as determined by each such Bank in good faith based on prevailing conditions in the interbank Eurodollar market on any date of determination thereof) nine or twelve month period (or if agreed to by each Bank in the respective Tranche, such other period as requested by the Borrower). Notwithstanding anything to the contrary contained above: (i) unless otherwise requested by the Borrower and agreed to by each Bank in the respective Tranche, the initial Interest Period for any Borrowing of Eurodollar Loans shall commence on the date of such Borrowing (including the date of any conversion from a Borrowing of Base Rate Loans) and each Interest Period occurring thereafter in respect of such Borrowing shall commence on the day on which the next preceding Interest Period applicable thereto expires; (ii) if any Interest Period begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period, such Interest Period shall end on the last Business Day of such calendar month; (iii) if any Interest Period would otherwise expire on a day which is not a Business Day, such Interest Period shall expire on the next succeeding Business Day, PROVIDED that if any Interest Period would otherwise expire on a day which is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the next preceding Business Day; (iv) no Interest Period for a Borrowing under any Tranche of Loans shall be elected which would extend beyond the respective Maturity Date for such Tranche; and (v) no Interest Period may be elected at any time when a Default or Event of Default is then in existence and the Administrative Agent and/or the Required Banks have notified the Borrower that such an election will not be permitted as a result thereof. If upon the expiration of any Interest Period, the Borrower has failed to elect a new Interest Period to be applicable to the respective Borrowing of Eurodollar Loans as provided above, or a Default or an Event of Default then exists and the Administrative Agent and/or the Required Banks have given the notice referred to in clause (v) above, the Borrower shall be deemed to have elected to convert such Borrowing into a Borrowing of Base Rate Loans effective as of the expiration date of such current Interest Period. 1.10 INCREASED COSTS, ILLEGALITY, ETC. (a) In the event that (x) in the case of clause (i) below, the Administrative Agent or (y) in the case of clauses (ii) and (iii) below, any Bank, shall have determined (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto): (i) on any date for determining the Eurodollar Rate for any Interest Period that, by reason of any changes arising after the date of this Agreement affecting the interbank -7- Eurodollar market, adequate and fair means do not exist for ascertaining the applicable interest rate on the basis provided for in the definition of Eurodollar Rate; or (ii) at any time, that such Bank shall incur increased costs or reductions in the amounts received or receivable hereunder with respect to any Eurodollar Loans because of (x) any change since the date of this Agreement in any applicable law, governmental rule, regulation, guideline, order or request (whether or not having the force of law), or in the interpretation or administration thereof and including the introduction of any new law or governmental rule, regulation, guideline, order or request such as, for example, but not limited to, (A) a change since the Effective Date in the basis of taxation of payment to any Bank of the principal of or interest on the Loans or any other amounts payable hereunder (except for changes with respect to Taxes and those taxes described in clauses (x) and (y) of the proviso in the second sentence of Section 4.04) or (B) a change since the Effective Date in official reserve requirements, but, in all events, excluding reserves required under Regulation D to the extent included in the computation of the Eurodollar Rate and/or (y) other circumstances affecting such Bank, the interbank Eurodollar market or the position of such Bank in such market; or (iii) at any time since the Effective Date, that the making or continuance of any Eurodollar Loan has become unlawful by compliance by such Bank in good faith with any law, governmental rule, regulation, guideline or order (or would conflict with any such governmental rule, regulation, guideline or order not having the force of law but with which such Bank customarily complies even though the failure to comply therewith would not be unlawful), or has become impracticable as a result of a contingency occurring after the Effective Date which materially and adversely affects the interbank Eurodollar market; then, and in any such event, such Bank (or the Administrative Agent in the case of clause (i) above) shall (x) on such date and (y) within 10 Business Days of the date on which such event no longer exists give notice (by telephone confirmed in writing) to the Borrower and (except in the case of clause (i)) to the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to each of the other Banks). Thereafter (x) in the case of clause (i) above, Eurodollar Loans shall no longer be available until such time as the Administrative Agent notifies the Borrower and the Banks that the circumstances giving rise to such notice by the Administrative Agent no longer exist, and any Notice of Borrowing or Notice of Conversion given by the Borrower with respect to Eurodollar Loans which have not yet been incurred shall be deemed rescinded by the Borrower, (y) in the case of clause (ii) above, the Borrower agrees to pay to such Bank, upon written demand therefor (accompanied by the written notice referred to below), such additional amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Bank in its sole discretion shall determine) as shall be required to compensate such Bank for such increased costs or reductions in amounts received or receivable hereunder (a written notice as to the additional amounts owed to such Bank, showing the basis for the calculation thereof, submitted to the Borrower by such Bank shall, absent manifest error, be final and conclusive and binding upon all parties hereto) and (z) in the case of clause (iii) above, the Borrower shall take one of the actions specified in Section 1.10(b) as promptly as possible and, in any event, within the time period required by law. -8- (b) At any time that any Eurodollar Loan is affected by the circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and in the case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii) the Borrower shall) either (i) if the affected Eurodollar Loan is then being made pursuant to a Borrowing, cancel said Borrowing by giving the Administrative Agent telephonic notice (confirmed promptly in writing) thereof promptly (but in any event no later than the later of (x) the Business Day next preceding the date of such Borrowing and (y) one Business Day after the Borrower was notified by a Bank pursuant to Section 1.10(a)(ii) or (iii)), or (ii) if the affected Eurodollar Loan is then outstanding, upon at least three Business Days' notice to the Administrative Agent, require the affected Bank to convert each such Eurodollar Loan into a Base Rate Loan (which conversion, in the case of the circumstances described in Section 1.10(a)(iii), shall occur no later than the last day of the Interest Period then applicable to such Eurodollar Loan (or such earlier date as shall be required by applicable law)); PROVIDED that if more than one Bank is affected at any time, then all affected Banks must be treated the same pursuant to this Section 1.10(b). (c) (i) If any Bank shall have determined that after the Effective Date, the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by such Bank with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on such Bank's capital or assets as a consequence of its commitments or obligations hereunder to a level below that which such Bank could have achieved but for such adoption, change or compliance (taking into consideration such Bank's policies with respect to capital adequacy), then from time to time, within 15 days after demand by such Bank (with a copy to the Administrative Agent), accompanied by the notice referred to in the last sentence of this clause (i), the Borrower shall pay to such Bank such additional amount or amounts as will compensate such Bank for such reduction. Each Bank, upon determining in good faith that any additional amounts will be payable pursuant to this Section 1.10(c), will give prompt written notice thereof to the Borrower, which notice shall set forth the basis of the calculation of such additional amounts, although the failure to give any such notice shall not release or diminish the Borrower's obligations to pay additional amounts pursuant to this Section 1.10(c). (ii) If (x) any Bank becomes a Defaulting Bank or otherwise defaults in its obligations to make Loans or fund Unpaid Drawings, (y) any Bank has notified the Borrower that one of its Eurodollar Loans is affected by the circumstances described in Section 1.10(a)(ii) or (iii), or (z) any Bank is owed increased costs or other amounts under Section 1.10(c)(i), 2.06 or 4.04 and, in the case of such clause (y) or (z), compensation or other action with respect to such event is not otherwise requested generally by the other Banks, the Borrower shall have the right, if no Default or Event of Default then exists and, in the case of a Bank described in clause (y) or (z) above, such Bank has not changed its applicable lending office with the effect of eliminating such increased cost, to replace such Bank (the "Replaced Bank") with another commercial bank or banks or other financial institutions (collectively, the "Replacement Bank") reasonably acceptable to the Administrative Agent, and, in the case of any Replaced Bank with a Revolving Loan Commitment, the Letter of Credit Issuer, PROVIDED that (i) at the time of any replacement -9- pursuant to this Section 1.10(c)(ii), the Replacement Bank shall enter into one or more assignment agreements pursuant to Section 12.04(b) hereof (and with all fees payable pursuant to said Section 12.04(b) to be paid by the Replacement Bank) pursuant to which the Replacement Bank shall acquire all of the Commitments and outstanding Loans of, and participations in Letters of Credit by, the Replaced Bank and, in connection therewith, shall pay to the Replaced Bank (or the Letter of Credit Issuer in the case of the proviso contained in clause (b) below or Chase in the case of clause (d) below) in respect thereof an amount equal to the sum of (a) an amount equal to the principal of, and all accrued interest on, all outstanding Loans of the Replaced Bank, (b) an amount equal to the sum of such Replaced Bank's Adjusted Percentage (for this purpose, determined as if the adjustment described in clause (y) of the immediately succeeding sentence had been made with respect to such Replaced Bank) of all Unpaid Drawings and all then unpaid interest with respect thereto at such time, PROVIDED that in the event such Replaced Bank did not reimburse the Letter of Credit Issuer pursuant to Section 2.05(c) in respect of any Unpaid Drawing, such amount shall instead be paid to the Letter of Credit Issuer, (c) an amount equal to any unpaid obligation of the Replaced Bank pursuant to Section 1.01(e), which amount shall be paid to Chase, and (d) an amount equal to all accrued, but theretofore unpaid, Fees owing to the Replaced Bank pursuant to Section 3.01 hereof and (ii) all obligations of the Borrower owing to the Replaced Bank (other than those specifically described in clause (i) above in respect of which the assignment purchase price has been, or is concurrently being, paid) shall be paid in full to such Replaced Bank concurrently with such replacement. Upon the execution of the respective assignment documentation pursuant to clause (i) above and the payment of amounts referred to in clauses (i) above and (ii) above, (x) the Replacement Bank shall become a Bank or Banks hereunder, as the case may be, and the Replaced Bank shall cease to constitute a Bank hereunder, except with respect to indemnification provisions (including, without limitation, Sections 1.10, 1.11, 2.06, 4.04, 11.07 and 12.01 of this Agreement) under this Agreement, which shall survive as to such Replaced Bank and (y) the Adjusted Percentages of the Banks shall be automatically adjusted at such time to give effect to such replacement (and to give effect to the replacement of a Defaulting Bank with one or more Non-Defaulting Banks). 1.11 COMPENSATION. The Borrower agrees to compensate each Bank in the appropriate currency, upon its written request (which request shall set forth the basis for requesting such compensation), for all reasonable losses, expenses and liabilities (including, without limitation, any loss, expense or liability incurred by reason of the liquidation or reemployment of deposits or other funds required by such Bank to fund its Eurodollar Loans but excluding loss of anticipated profit with respect to any Loans) which such Bank may sustain: (i) if for any reason (other than a default by such Bank or the Administrative Agent) a Borrowing of Eurodollar Loans does not occur on a date specified therefor in a Notice of Borrowing or Notice of Conversion (whether or not withdrawn by the Borrower or deemed withdrawn pursuant to Section 1.10(a)); (ii) if any repayment, prepayment or conversion of any Eurodollar Loans occurs on a date which is not the last day of an Interest Period applicable thereto; (iii) if any prepayment of any Eurodollar Loans is not made on any date specified in a notice of prepayment given by the Borrower; or (iv) as a consequence of (x) any other default by the Borrower to repay its Loans when required by the terms of this Agreement or (y) an election made pursuant to Section 1.10(b). Calculation of all amounts payable to a Bank under this Section 1.11 shall be made as though that Bank had actually funded its relevant Eurodollar Loan through the purchase of a -10- Eurodollar deposit bearing interest at the Eurodollar Rate in an amount equal to the amount of that Loan, having a maturity comparable to the relevant Interest Period and through the transfer of such Eurodollar deposit from an offshore office of that Bank to a domestic office of that Bank in the United States of America; PROVIDED, HOWEVER, that each Bank may fund each of its Eurodollar Loans in any manner it sees fit and the foregoing assumption shall be utilized only for the calculation of amounts payable under this Section 1.11. 1.12 CHANGE OF LENDING OFFICE. Each Bank agrees that, upon the occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or (iii), Section 1.10(c)(i), 2.06 or 4.04 with respect to such Bank, it will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Bank) to designate another lending office for any Loans or Letters of Credit affected by such event; PROVIDED that such designation is made on such terms that in the sole judgment of such Bank, such Bank and its lending office suffer no economic, legal or regulatory disadvantage, with the object of avoiding the consequences of the event giving rise to the operation of any such Section. Nothing in this Section 1.12 shall affect or postpone any of the obligations of the Borrower or the right of any Bank provided in Sections 1.10, 2.06 or 4.04. 1.13 INCREMENTAL LOAN COMMITMENTS. At any time and from time to time on and after the Effective Date and prior to the Term Loan B Maturity Date, the Borrower may request that one or more Banks or other lending institutions (each such lending institution, an "Incremental Loan Lending Institution"), as the case may be, (i) enter into commitments to make additional term loans as a Term Loan A or a Term Loan B, subject to all the terms and conditions set forth in this Credit Agreement and the other Credit Documents pertaining to Term Loans A or Term Loans B, as the case may be, (ii) enter into commitments to make additional Revolving Loans, subject to all the terms and conditions set forth in this Credit Agreement and all other Credit Documents pertaining to Revolving Loans and Revolving Loan Commitments and/or (iii) enter into commitments to make new term loans or new revolving loans pursuant to one or more new Tranches hereunder (any such commitment to make additional Term Loans A, Term Loans B, Revolving Loans or other loans hereunder, an "Incremental Loan Commitment"); PROVIDED, that (A) any such new Tranche shall have an average life to maturity no shorter than the other Tranches (excluding Swingline Loans) taken as a whole, (B) the final maturity of any such new Tranche shall occur no earlier than six months after the Term Loan B Maturity Date, (C) no Incremental Loan Commitment may be added at a time when a Default or Event of Default exists, (D) the aggregate amount of any single Incremental Loan Commitment shall not be less than $25,000,000, (E) the aggregate amount of all Incremental Loan Commitments shall not exceed $300,000,000 and (F) any such new Tranche that amortizes shall be subject to semi-annual amortization. Each Incremental Loan Commitment (whether constituting an addition to an existing Tranche or a new Tranche) shall be incorporated into this Agreement pursuant to a supplement or amendment hereto or an amendment and restatement hereof executed and delivered by the Borrower, the Administrative Agent and each Incremental Loan Lending Institution whose Commitment is increasing pursuant thereto, and such Persons are hereby authorized to enter into any such supplement, amendment or amendment and restatement (which shall be binding on all parties), to the extent necessary (but only to the extent necessary) to effect such Incremental Loan Commitment. -11- SECTION 2. Letters of Credit. 2.01 LETTERS OF CREDIT. (a) Subject to and upon the terms and conditions herein set forth, the Borrower may request the Letter of Credit Issuer at any time and from time to time on or after the Initial Borrowing Date and prior to the Business Day next preceding the Revolving Loan Maturity Date to issue, for the account of the Borrower and in support of (x) trade obligations of the Borrower and/or its Restricted Subsidiaries and/or (y) on a standby basis, such other obligations (contingent or otherwise) of the Borrower and/or its Restricted Subsidiaries to any other Person, in each case, that arise in the ordinary course of business and are in respect of general corporate purposes (including, without limitation, in connection with Permitted Acquisitions) of the Borrower and/or its Restricted Subsidiaries, and subject to and upon the terms and conditions herein set forth the Letter of Credit Issuer agrees to issue from time to time, irrevocable letters of credit in such form as may be approved by the Letter of Credit Issuer and the Administrative Agent (each such letter of credit, a "Letter of Credit" and collectively, the "Letters of Credit"). (b) Notwithstanding the foregoing, (i) no Letter of Credit shall be issued the Stated Amount of which, when added to the Letter of Credit Outstandings at such time, would exceed either (x) $75,000,000 or (y) when added to the aggregate principal amount of all Revolving Loans made by Non-Defaulting Banks and Swingline Loans then outstanding, the Adjusted Total Revolving Loan Commitment at such time; (ii) each Letter of Credit shall have an expiry date occurring not later than two years after such Letter of Credit's date of issuance, provided that standby Letters of Credit may provide that, absent notice to the contrary from the Letter of Credit Issuer to the beneficiary thereof, the expiry date shall be automatically extended for successive one year periods and (iii) no Letter of Credit shall have an expiry date occurring later than the Business Day next preceding the Revolving Loan Maturity Date. (c) Annex VII attached hereto contains a description of all letters of credit issued or deemed issued and outstanding under the Existing Credit Agreements on the Initial Borrowing Date. Each such letter of credit, including any extension thereof (each, an "Existing Letter of Credit") shall constitute a "Letter of Credit" for all purposes of this Agreement, issued, for purposes of Section 2.05(a), on the Initial Borrowing Date. 2.02 MINIMUM STATED AMOUNT. The initial Stated Amount of each Letter of Credit shall be not less than $5,000 or such lesser amount acceptable to the Letter of Credit Issuer, PROVIDED that no more than 40 Letters of Credit (or such greater number acceptable to the Letter of Credit Issuer) shall be outstanding at any one time. 2.03 LETTER OF CREDIT REQUESTS; NOTICES OF ISSUANCE. (a) Whenever the Borrower desires that a Letter of Credit be issued, it shall give the Administrative Agent and the Letter of Credit Issuer written notice (or telephonic notice confirmed in writing) thereof prior to 12:00 Noon (New York time) at least five Business Days' (or such shorter period as may be acceptable to the Letter of Credit Issuer) prior to the proposed date of issuance (which shall be a Business Day) (each a "Letter of Credit Request"), which Letter of Credit Request shall include an application for such Letter of Credit and any other documents that the Letter of Credit Issuer -12- customarily requires in connection therewith. The Administrative Agent shall promptly notify each Bank of each Letter of Credit Request. (b) The Letter of Credit Issuer shall, on the date of each issuance of a Letter of Credit by it or amendment thereto, give the Administrative Agent, each Bank and the Borrower written notice of the issuance or amendment of such Letter of Credit, accompanied by a copy to the Administrative Agent of the Letter of Credit or Letters of Credit issued by it or of the amendment thereto. 2.04 AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS. (a) The Borrower hereby agrees to reimburse the Letter of Credit Issuer, by making payment to the Administrative Agent in immediately available funds at the Payment Office, for any payment or disbursement made by the Letter of Credit Issuer under any Letter of Credit issued by it (each such amount so paid or disbursed until reimbursed, an "Unpaid Drawing") no later than one Business Day following the date of such payment or disbursement, with interest on the amount so paid or disbursed by the Letter of Credit Issuer, to the extent not reimbursed prior to 1:00 P.M. (New York time) on the date of such payment or disbursement, from and including the date paid or disbursed to but not including the date the Letter of Credit Issuer is reimbursed therefor at a rate per annum which shall be the Applicable Margin for Base Rate Loans that are Revolving Loans plus the Base Rate as in effect from time to time (plus an additional 2% per annum if not reimbursed by the third Business Day after the date of such payment or disbursement), such interest also to be payable on demand. The Letter of Credit Issuer shall provide the Borrower prompt notice of any payment or disbursement made by it under any Letter of Credit issued by it, although the failure of, or delay in, giving any such notice shall not release or diminish the obligations of the Borrower under this Section 2.04(a) or under any other Section of this Agreement. (b) The Borrower's obligation under this Section 2.04 to reimburse the Letter of Credit Issuer with respect to Unpaid Drawings (including, in each case, interest thereon) shall be absolute and unconditional under any and all circumstances, including, without limitation, those set forth in Section 2.05(e)(i) through (v), inclusive, and irrespective of any setoff, counterclaim or defense to payment which the Borrower may have or have had against the Letter of Credit Issuer, the Administrative Agent or any Bank, including, without limitation, any defense based upon the failure of any drawing under a Letter of Credit to conform to the terms of the Letter of Credit or any non-application or misapplication by the beneficiary of the proceeds of such drawing; PROVIDED, HOWEVER, that the Borrower shall not be obligated to reimburse the Letter of Credit Issuer for any wrongful payment made by the Letter of Credit Issuer under a Letter of Credit as a result of acts or omissions constituting willful misconduct or gross negligence on the part of the Letter of Credit Issuer. 2.05 LETTER OF CREDIT PARTICIPATIONS. (a) Immediately upon the issuance by the Letter of Credit Issuer of any Letter of Credit, the Letter of Credit Issuer shall be deemed to have sold and transferred to each other Bank with a Revolving Loan Commitment, and each such Bank (each a "Participant") shall be deemed irrevocably and unconditionally to have purchased and received from such Letter of Credit Issuer, without recourse or warranty, an undivided interest and participation, to the extent of such Bank's Adjusted Percentage, in such Letter of Credit, each substitute letter of credit, each drawing made thereunder and the obligations of the -13- Borrower under this Agreement with respect thereto (although Letter of Credit Fees shall be payable directly to the Administrative Agent for the account of the Banks as provided in Section 3.01(b) and the Participants shall have no right to receive any portion of any Facing Fees) and any security therefor or guaranty pertaining thereto. Upon any change in the Revolving Loan Commitments or Adjusted Percentages of the Banks pursuant to Section 1.10(c)(ii) or 12.04(b) or otherwise, or upon the occurrence of a Bank Default, it is hereby agreed that, with respect to all outstanding Letters of Credit and Unpaid Drawings, there shall be an automatic adjustment to the participations pursuant to this Section 2.05 to reflect the new Adjusted Percentages of the assigning and assignee Banks or of all Non-Defaulting Banks, as the case may be. (b) In determining whether to pay under any Letter of Credit, the Letter of Credit Issuer shall not have any obligation relative to the Participants other than to determine that any documents required to be delivered under such Letter of Credit have been delivered and that they appear to comply on their face with the requirements of such Letter of Credit. Any action taken or omitted to be taken by the Letter of Credit Issuer under or in connection with any Letter of Credit if taken or omitted in the absence of gross negligence or willful misconduct, shall not create for the Letter of Credit Issuer any resulting liability. (c) In the event that the Letter of Credit Issuer makes any payment under any Letter of Credit and the Borrower shall not have reimbursed such amount in full to the Letter of Credit Issuer pursuant to Section 2.04(a), the Letter of Credit Issuer shall promptly notify the Administrative Agent, and the Administrative Agent shall promptly notify each Participant of such failure, and each Participant shall promptly and unconditionally pay to the Administrative Agent for the account of the Letter of Credit Issuer, the amount of such Participant's Adjusted Percentage of such unreimbursed payment in U.S. Dollars and in same day funds; PROVIDED, HOWEVER, that no Participant shall be obligated to pay to the Administrative Agent its Adjusted Percentage of such unreimbursed amount for any wrongful payment made by the Letter of Credit Issuer under a Letter of Credit as a result of acts or omissions constituting willful misconduct or gross negligence on the part of the Letter of Credit Issuer. If the Administrative Agent so notifies any Participant required to fund a payment under a Letter of Credit prior to 11:00 A.M. (New York time) on any Business Day, such Participant shall make available to the Administrative Agent for the account of the Letter of Credit Issuer such Participant's Adjusted Percentage of the amount of such payment on such Business Day in same day funds. If and to the extent such Participant shall not have so made its Adjusted Percentage of the amount of such payment available to the Administrative Agent for the account of the Letter of Credit Issuer, such Participant agrees to pay to the Administrative Agent for the account of the Letter of Credit Issuer, forthwith on demand such amount, together with interest thereon, for each day from such date until the date such amount is paid to the Administrative Agent for the account of the Letter of Credit Issuer at the overnight Federal Funds Effective Rate. The failure of any Participant to make available to the Administrative Agent for the account of the Letter of Credit Issuer its Adjusted Percentage of any payment under any Letter of Credit shall not relieve any other Participant of its obligation hereunder to make available to the Administrative Agent for the account of the Letter of Credit Issuer its Adjusted Percentage of any payment under any Letter of Credit on the date required, as specified above, but no Participant shall be responsible for the failure of any other Participant to make available to the Administrative Agent for the account of the Letter of Credit Issuer such other Participant's Adjusted Percentage of any such payment. -14- (d) Whenever the Letter of Credit Issuer receives a payment of a reimbursement obligation as to which the Administrative Agent has received for the account of the Letter of Credit Issuer any payments from the Participants pursuant to clause (c) above, the Letter of Credit Issuer shall pay to the Administrative Agent and the Administrative Agent shall promptly pay to each Participant which has paid its Adjusted Percentage thereof, in U.S. Dollars and in same day funds, an amount equal to such Participant's Adjusted Percentage of the principal amount thereof and interest thereon accruing after the purchase of the respective participations. (e) The obligations of the Participants to make payments to the Administrative Agent for the account of the Letter of Credit Issuer with respect to Letters of Credit shall be irrevocable and not subject to counterclaim, set-off or other defense or any other qualification or exception whatsoever and shall be made in accordance with the terms and conditions of this Agreement under all circumstances, including, without limitation, any of the following circumstances: (i) any lack of validity or enforceability of this Agreement or any of the other Credit Documents; (ii) the existence of any claim, set-off, defense or other right which the Borrower may have at any time against a beneficiary named in a Letter of Credit, any transferee of any Letter of Credit (or any Person for whom any such transferee may be acting), the Administrative Agent, the Letter of Credit Issuer, any Bank, or other Person, whether in connection with this Agreement, any Letter of Credit, the transactions contemplated herein or any unrelated transactions (including any underlying transaction between the Borrower and the beneficiary named in any such Letter of Credit); (iii) any draft, certificate or other document presented under the Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (iv) the surrender or impairment of any security for the performance or observance of any of the terms of any of the Credit Documents; or (v) the occurrence of any Default or Event of Default. 2.06 INCREASED COSTS. If at any time after the Effective Date, the adoption of any applicable law, rule or regulation, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Letter of Credit Issuer or any Participant with any request or directive (whether or not having the force of law) by any such authority, central bank or comparable agency shall either (i) impose, modify or make applicable any reserve, deposit, capital adequacy or similar requirement against Letters of Credit issued by the Letter of Credit Issuer or such Participant's participation therein, or (ii) impose on the Letter of Credit Issuer or any Participant any other conditions affecting this Agreement, any Letter of Credit or such Participant's participation therein; and the result of any of the foregoing -15- is to increase the cost to the Letter of Credit Issuer or such Participant of issuing, maintaining or participating in any Letter of Credit, or to reduce the amount of any sum received or receivable by the Letter of Credit Issuer or such Participant hereunder, then, upon demand to the Borrower by the Letter of Credit Issuer or such Participant (a copy of which notice shall be sent by the Letter of Credit Issuer or such Participant to the Administrative Agent), accompanied by the certificate described in the last sentence of this Section 2.06, the Borrower shall pay to the Letter of Credit Issuer or such Participant such additional amount or amounts as will compensate the Letter of Credit Issuer or such Participant for such increased cost or reduction. A certificate submitted to the Borrower by the Letter of Credit Issuer or such Participant, as the case may be (a copy of which certificate shall be sent by the Letter of Credit Issuer or such Participant to the Administrative Agent), setting forth the basis for the determination of such additional amount or amounts necessary to compensate the Letter of Credit Issuer or such Participant as aforesaid shall be final and conclusive and binding on the Borrower absent manifest error, although the failure to deliver any such certificate shall not release or diminish the Borrower's obligations to pay additional amounts pursuant to this Section 2.06. SECTION 3. Fees; Commitments. 3.01 FEES. (a) The Borrower agrees to pay to the Administrative Agent for distribution to each Non-Defaulting Bank with a Revolving Loan Commitment a commitment fee (the "Commitment Fee") for the period from the Effective Date to but not including the date the Total Revolving Loan Commitment has been terminated, computed at a per annum rate equal to the Applicable Commitment Fee Percentage on the daily average Aggregate Unutilized Revolving Loan Commitment of such Non-Defaulting Bank. Accrued Commitment Fees shall be due and payable quarterly in arrears on the last Business Day of March, June, September and December of each year and the date upon which the Total Revolving Loan Commitment is terminated. (b) The Borrower shall pay to the Administrative Agent for the account of each Non-Defaulting Bank with a Revolving Loan Commitment PRO RATA on the basis of their respective Adjusted Percentages, a fee in respect of each Letter of Credit (the "Letter of Credit Fee") computed at a rate equal to the Applicable Letter of Credit Fee Percentage on the average daily Stated Amount of such Letter of Credit. Accrued Letter of Credit Fees shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December of each year and on the date upon which the Total Revolving Loan Commitment shall be terminated. (c) The Borrower shall pay to the Administrative Agent for the account of the Letter of Credit Issuer a fee in respect of each Letter of Credit issued by it (the "Facing Fee") computed at the rate of 1/4 of 1% per annum on the average daily Stated Amount of such Letter of Credit. Accrued Facing Fees shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December of each year and on the date upon which the Total Revolving Loan Commitment shall be terminated. (d) The Borrower hereby agrees to pay directly to the Letter of Credit Issuer upon each issuance of, drawing under, and/or amendment of, a Letter of Credit issued by it such -16- amount as shall at the time of such issuance, drawing or amendment be the administrative charge which the Letter of Credit Issuer is customarily charging for issuances of, drawings under or amendments of, letters of credit issued by it. (e) The Borrower shall pay to the Administrative Agent and the Syndication Agent, for their own respective accounts, such other fees as have been agreed to in writing by the Borrower and the Administrative Agent or the Syndication Agent, respectively. (f) All computations of Fees shall be made in accordance with Section 12.07(b). 3.02 VOLUNTARY REDUCTION OF COMMITMENTS. Upon at least three Business Days' prior written notice (or telephonic notice promptly confirmed in writing) to the Administrative Agent at its Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Banks), the Borrower shall have the right, without premium or penalty, to terminate or partially reduce the Total Unutilized Revolving Loan Commitment; PROVIDED that (w) any such termination or partial reduction shall apply to proportionately and permanently reduce the Revolving Loan Commitment of each of the Banks with a Revolving Loan Commitment, (x) any partial reduction pursuant to this Section 3.02 shall be in the amount of at least $2,000,000, (y) the reduction to the Total Unutilized Revolving Loan Commitment shall in no case be in an amount which would cause the Revolving Loan Commitment of any Bank to be reduced (as required by the preceding clause (w)) by an amount which exceeds the remainder of (i) the Aggregate Unutilized Revolving Loan Commitment of such Bank as in effect immediately before giving effect to such reduction minus (ii) such Bank's Adjusted Percentage of the aggregate principal amount of Swingline Loans then outstanding and (z) each reduction to the Total Revolving Loan Commitment pursuant to this Section 3.02 shall reduce the then remaining Scheduled Revolving Loan Commitment Reductions on a PRO RATA basis (based upon the then remaining principal amount of each such Scheduled Revolving Loan Commitment Reduction). 3.03 MANDATORY REDUCTION OF COMMITMENTS, ETC. (a) Subject to Sections 3.02 and 3.03(d), the Total Revolving Loan Commitment (and the Revolving Loan Commitment of each Bank with such a Commitment) shall be permanently reduced on each date set forth below (provided that if any date set forth below is not a Business Day then the permanent reduction shall occur on the first Business Day immediately succeeding such date set forth below) (each a "Scheduled Revolving Loan Commitment Reduction Date"), in the amount set forth below opposite such date (each such reduction, as such reduction may have been reduced pursuant to Sections 3.02 and/or 3.03(d), a "Scheduled Revolving Loan Commitment Reduction"): -17- SCHEDULED REVOLVING LOAN COMMITMENT REDUCTION DATE AMOUNT ----------------------------------- ------ December 31, 2004 $23,750,000 June 30, 2005 $23,750,000 December 31, 2005 $23,750,000 June 30, 2006 $23,750,000 December 31, 2006 $47,500,000 June 30, 2007 $47,500,000 December 31, 2007 $95,000,000 Revolving Loan Maturity Date $190,000,000 (b) In addition to any other mandatory commitment reductions pursuant to this Section 3.03, the Total Term Loan A Commitment (and the Term Loan A Commitment of each Bank with such a Commitment) shall terminate on the Initial Borrowing Date (after giving effect to the making of the Term Loans A on such date). In addition to any other mandatory commitment reductions pursuant to this Section 3.03, the Total Term Loan B Commitment (and the Term Loan B Commitment of each Bank with such a Commitment) shall terminate on the Initial Borrowing Date (after giving effect to the making of the Term Loans B on such date). (c) The Total Revolving Loan Commitment (and the Revolving Loan Commitment of each Bank) shall terminate in its entirety on the earlier of (i) the date which is the earlier of (x) 30 days after any date on which a Specified Change of Control Event occurs and (y) the date on which any Senior Notes or any other Indebtedness of the Borrower or its Restricted Subsidiaries are required to be repurchased, redeemed or prepaid as a result of any such Specified Change of Control Event, and (ii) the Revolving Loan Maturity Date. (d) With respect to any Asset Sale, (i) on the earliest of (x) the date occurring one year after the consummation of such Asset Sale, (y) the date, if any, following the date of consummation of such Asset Sale upon which the Administrative Agent, on behalf of the Required Banks, shall have delivered a written reinvestment termination notice to the Borrower, provided that such notice may only be given while an Event of Default exists, and (z) the date the Borrower or any of its Subsidiaries shall be required to make an offer to purchase Senior Notes or any other Indebtedness of the Borrower or its Restricted Subsidiaries (other than Indebtedness -18- specifically relating to the assets sold in such Asset Sale) with the proceeds received in connection with such Asset Sale, and (ii) on any date after the earliest of the dates referred to in clause (i) above of receipt by the Borrower or any of its Restricted Subsidiaries of additional Net Cash Proceeds from such Asset Sale, in each case, the Total Revolving Loan Commitment shall be reduced and the aggregate principal amount of the Term Loans A and the Term Loans B shall be repaid in an aggregate amount equal to 100% of the then Remaining Net Cash Proceeds from such Asset Sale (with the Term Loan A Facility Percentage of such Remaining Net Cash Proceeds to be applied as a repayment of the aggregate principal amount of Term Loans A and Term Loan B Facility Percentage to be applied as a repayment of the aggregate principal amount of Term Loans B, and with all such Remaining Net Cash Proceeds to be applied as a reduction of the Total Revolving Loan Commitment after all of the Term Loans A and Term Loans B have been paid in full). Each reduction to the Total Revolving Loan Commitment pursuant to this Section 3.03(d) shall reduce each of the remaining Scheduled Revolving Loan Commitment Reductions on a PRO RATA basis (based upon the then remaining amount of each such Scheduled Revolving Loan Commitment Reduction). (e) Each reduction to the Total Term Loan A Commitment, the Total Term Loan B Commitment and the Total Revolving Loan Commitment pursuant to this Section 3.03 shall be applied proportionately to reduce the Term Loan A Commitment, the Term Loan B Commitment or the Revolving Loan Commitment, as the case may be, of each Bank with such a Commitment. SECTION 4. PAYMENTS. -------- 4.01 VOLUNTARY PREPAYMENTS. The Borrower shall have the right to prepay the Loans incurred by it, in whole or in part, without premium or penalty except as otherwise provided in this Agreement, from time to time on the following terms and conditions: (i) the Borrower shall give the Administrative Agent at the Notice Office written notice (or telephonic notice promptly confirmed in writing) of its intent to prepay the Loans, whether such Loans are Term Loans A, Term Loans B, Revolving Loans or Swingline Loans, the amount of such prepayment and (in the case of Eurodollar Loans) the specific Borrowing(s) pursuant to which made, which notice shall be given by the Borrower prior to 12:00 Noon (New York time) (x) at least two Business Days prior to the date of such prepayment in the case of Term Loans A, Term Loans B, Revolving Loans or (y) on the date of such prepayment in the case of Swingline Loans, which notice shall promptly be transmitted by the Administrative Agent to each of the Banks; (ii) (x) each partial prepayment of any Borrowing (other than a Borrowing of Swingline Loans) shall be in an aggregate principal amount of at least $1,000,000 and, if greater, in an integral multiple of $500,000, (y) each partial prepayment of any Borrowing of Swingline Loans shall be in an aggregate principal amount of at least $250,000 and, if greater, in an integral multiple of $50,000, PROVIDED that no partial prepayment of Eurodollar Loans made pursuant to a Borrowing shall reduce the aggregate principal amount of the Loans outstanding pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount applicable thereto; (iii) each prepayment of Term Loans A or Term Loans B pursuant to this Section 4.01 shall reduce the then remaining Scheduled TLA Repayments or Scheduled TLB Repayments, as the case may be, on a PRO RATA basis (based upon the then remaining principal amount of each such Scheduled TLA Repayment or Scheduled TLB Repayment, as the case may be); and (iv) each prepayment in respect of any -19- Loans made pursuant to a Borrowing shall be applied PRO RATA among such Loans; PROVIDED that at the Borrower's election in connection with any prepayment of Revolving Loans pursuant to this Section 4.01, such prepayment shall not be applied to any Revolving Loans of a Defaulting Bank. 4.02 MANDATORY REPAYMENTS. (a) (i) If on any date the sum of (x) the aggregate outstanding principal amount of Revolving Loans made by Non-Defaulting Banks and Swingline Loans (in each case after giving effect to all other repayments thereof on such date), plus (y) the Letter of Credit Outstandings on such date exceeds the Adjusted Total Revolving Loan Commitment as then in effect, the Borrower shall repay on such date the principal of Swingline Loans, and if no Swingline Loans are or remain outstanding, Revolving Loans of Non-Defaulting Banks in an aggregate amount equal to such excess. If, after giving effect to the repayment of all outstanding Swingline Loans and Revolving Loans, the aggregate amount of Letter of Credit Outstandings exceeds the Adjusted Total Revolving Loan Commitment then in effect, the Borrower agrees to pay to the Administrative Agent an amount in cash and/or Cash Equivalents equal to such excess (up to the aggregate amount of Letter of Credit Outstandings) and the Administrative Agent shall hold such payment as security for the obligations of the Borrower hereunder pursuant to a cash collateral agreement to be entered into in form and substance satisfactory to the Administrative Agent (which shall permit certain investments in Cash Equivalents satisfactory to the Administrative Agent, until the proceeds are applied to the secured obligations). (ii) If on any date the aggregate outstanding principal amount of Revolving Loans made by any Defaulting Bank exceeds the Revolving Loan Commitment of such Defaulting Bank, the Borrower shall repay the Revolving Loans of such Defaulting Bank in an amount equal to such excess. (b) In addition to any other mandatory repayments pursuant to this Section 4.02, the Borrower shall repay, on each date set forth below (PROVIDED that if any date set forth below is not a Business Day then the repayment shall occur on the first Business Day immediately succeeding such date set forth below) (each a "Scheduled TLA Repayment Date"), the Term Loans A in an amount equal to the amount set forth below opposite such date (each such repayment, as the same may be reduced as provided in Sections 4.01, and 4.02(e), a "Scheduled TLA Repayment"): SCHEDULED TLA REPAYMENT DATE AMOUNT ---------------------------- ------ December 31, 2004 $12,500,000 June 30, 2005 $12,500,000 December 31, 2005 $12,500,000 June 30, 2006 $12,500,000 December 31, 2006 $12,500,000 June 30, 2007 $12,500,000 December 31, 2007 $12,500,000 Term Loan A $12,500,000 Maturity Date -20- (c) In addition to any other mandatory repayments pursuant to this Section 4.02, the Borrower shall repay, on each date set forth below (PROVIDED that if any date set forth below is not a Business Day then the repayment shall occur on the first Business Day immediately succeeding such date set forth below) (each a "Scheduled TLB Repayment Date"), the Term Loans B in an amount equal to the amount set forth below opposite such date (each such repayment, as the same may be reduced as provided in Sections 4.01, and 4.02(e), a "Scheduled TLB Repayment"): SCHEDULED TLB REPAYMENT DATE AMOUNT ---------------------------- ------ December 31, 2001 $2,125,000 June 30, 2002 $2,125,000 December 31, 2002 $2,125,000 June 30, 2003 $2,125,000 December 31, 2003 $2,125,000 June 30, 2004 $2,125,000 December 31, 2004 $2,125,000 June 30, 2005 $2,125,000 December 31, 2005 $2,125,000 June 30, 2006 $2,125,000 December 31, 2006 $2,125,000 June 30, 2007 $2,125,000 December 31, 2007 $2,125,000 June 30, 2008 $2,125,000 December 31, 2008 $2,125,000 Term Loan B $393,125,000 Maturity Date (d) In the event that a Specified Change of Control Event occurs, the Borrower shall repay all outstanding Term Loans A and Term Loans B in their entirety on the date which is the earlier of (i) 30 days after any date on which such Specified Change of Control Event occurs and (ii) the date on which any Senior Notes or any other Indebtedness of the Borrower or its Restricted Subsidiaries are required to be repurchased, redeemed or prepaid as a result of any such Specified Change of Control Event. (e) The aggregate principal amount of Term Loans A and Term Loans B shall be repaid at the times, and in the amounts, provided in Section 3.03(d). The amount of each principal repayment of Term Loans A or Term Loans B pursuant to this Section 4.02(e) shall be -21- applied to reduce each of the remaining Scheduled TLA Repayments or Scheduled TLB Repayments, as the case may be, on a PRO RATA basis (based upon the then remaining amount of each such Scheduled TLA Repayment or Scheduled TLB Repayment, as the case may be). (f) Notwithstanding anything to the contrary contained in this Agreement, all then outstanding Loans under this Agreement shall be repaid in full on the respective Maturity Date for such Loans. (g) With respect to each repayment of Loans required by this Section 4.02, the Borrower may designate the Types of Loans which are to be repaid and the specific Borrowing(s) pursuant to which made; PROVIDED that (i) Eurodollar Loans may be designated for repayment pursuant to this Section 4.02 only on the last day of an Interest Period applicable thereto unless all Eurodollar Loans under the respective Tranche with Interest Periods ending on such date of required repayment and all Base Rate Loans under the respective Tranche have been paid in full; (ii) each repayment of any Loans made pursuant to a Borrowing shall be applied PRO RATA among such Loans; (iii) notwithstanding the provisions of the preceding clause (ii), no repayment of Revolving Loans pursuant to Section 4.02(a)(i) shall be applied to the Revolving Loans of a Defaulting Bank; and (iv) repayments of Revolving Loans of Defaulting Banks pursuant to Section 4.02(a)(ii) shall be applied PRO RATA among such Revolving Loans. In the absence of a designation by the Borrower as described in the preceding sentence, the Administrative Agent shall, subject to the above, make such designation in its sole discretion with a view, but no obligation, to minimize breakage costs owing under Section 1.11. Notwithstanding the foregoing provisions of this Section 4.02, if at any time the mandatory repayment of Loans pursuant to Section 4.02(a) arising solely as a result of a reduction to the Total Revolving Loan Commitment pursuant to Section 3.03(d) would result, after giving effect to the procedures set forth above in this clause (g), in the Borrower incurring breakage costs under Section 1.11 as a result of Eurodollar Loans being repaid other than on the last day of an Interest Period applicable thereto (the "Affected Eurodollar Loans"), then the Borrower may in its sole discretion initially deposit a portion (up to 100%) of the amounts that otherwise would have been paid in respect of the Affected Eurodollar Loans with the Administrative Agent to be held as security for the obligations of the Borrower hereunder pursuant to a cash collateral agreement to be entered into in form and substance satisfactory to the Administrative Agent, with such cash collateral to be released from such cash collateral account upon the first occurrence (or occurrences) thereafter of the last day of an Interest Period applicable to the relevant Loans that are Eurodollar Loans (or such earlier date or dates as shall be requested by the Borrower), to repay an aggregate principal amount of such Loans equal to the Affected Eurodollar Loans not initially repaid pursuant to this sentence. 4.03 METHOD AND PLACE OF PAYMENT. Except as otherwise specifically provided herein, all payments under this Agreement shall be made to the Administrative Agent for the ratable account of the Banks entitled thereto (based on each Bank's Pro Rata Share, if any), no later than 1:00 P.M. (New York time) on the date when due and shall be made in immediately available funds and in lawful money of the United States of America at the Payment Office. Any payments under this Agreement which are made later than 1:00 P.M. (New York time) shall be deemed to have been made on the next succeeding Business Day; PROVIDED, HOWEVER, that to the extent that the Administrative Agent shall have received any payment under this Agreement after -22- 1:00 P.M. (New York time) on a Business Day, the Administrative Agent shall use its best efforts to distribute such payment as promptly as practicable on such date to the Banks (other than any Bank that has consented in writing to waive its PRO RATA share of such payment) PRO RATA based upon their respective shares, if any, of the Obligations with respect to which such payment was received, and to the extent that any such Bank receives its portion of such payment from the Administrative Agent on such same date by a time satisfactory to such Bank, such payment to such Bank shall be deemed to have been made on such date. Whenever any payment to be made hereunder shall be stated to be due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day and, with respect to payments of principal, interest shall be payable during such extension at the applicable rate in effect immediately prior to such extension. 4.04 NET PAYMENTS. (a) All payments made by the Borrower hereunder will be made without setoff, counterclaim or other defense. Except as provided in Section 4.04(b), the Borrower agrees to pay, prior to the date on which penalties attach thereto, all present and future income, stamp and other taxes, levies, imposts, fines, fees, assessments or costs and charges whatsoever now and hereafter imposed, assessed, levied, withheld or collected on or in respect of any payments of principal, interest or other amounts (all such taxes, levies, costs, imposts, fines, fees, assessments and charges being herein collectively called "Taxes"); provided that Taxes shall not include, except as provided in the succeeding sentence, taxes imposed on or measured by the overall net income or receipts of the Administrative Agent or any Bank pursuant to the laws of the jurisdiction in which the Administrative Agent or such Bank is organized or the jurisdiction in which the principal office or applicable lending office of such Bank is located or any subdivision thereof or therein. The Borrower agrees to also pay such additional amounts equal to increases in taxes payable by, or withheld from, that Bank described in the foregoing proviso which increases arise from the receipt by that Bank of payments so paid to or on behalf of such Bank by the Borrower pursuant to the immediately preceding sentence of this Section 4.04 and from the receipt of any amounts paid to or on behalf of such Bank pursuant to this sentence. Promptly after the date on which payment of any such Tax is due pursuant to applicable law, the Borrower will furnish to that Bank evidence, in form and substance satisfactory to that Bank, that the Borrower has met its obligation under this Section 4.04. The Borrower agrees to indemnify each Bank against, and reimburse each Bank on demand for, any Taxes so levied or imposed and paid by such Bank, as determined by that Bank. (b) Each Bank that is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes agrees to deliver to the Borrower and the Administrative Agent on or prior to the Effective Date, or in the case of a Bank that is an assignee or transferee of an interest under this Agreement pursuant to Section 12.04 (unless the respective Bank was already a Bank hereunder immediately prior to such assignment or transfer), on the date of such assignment or transfer to such Bank the Prescribed Forms certifying to the Bank's entitlement as of such date to a complete exemption from United States withholding tax with respect to payments to be made under this Agreement. In addition, each Bank agrees that from time to time after the Effective Date, when a lapse in time or change in circumstances renders the Prescribed Forms obsolete or inaccurate in any material respect, it will deliver to the Borrower and the Agent new Prescribed Forms and such other forms as may be required in order to confirm or establish the entitlement of such Bank to a continued exemption -23- from or reduction in United States withholding tax with respect to payments under this Agreement, or it shall immediately notify the Borrower and the Agent of its inability to deliver any such Form or Certificate, in which case such Bank shall not be required to deliver any such Prescribed Form pursuant to this Section 4.04(b). Notwithstanding the foregoing, but subject to Section 12.04(b) and the immediately succeeding sentence, (x) the Borrower shall be entitled, to the extent it is required to do so by law, to deduct or withhold and pay to the appropriate taxing authority within the time prescribed by applicable law income or other similar taxes imposed by the United States of America from interest, fees or other amounts payable hereunder for the account of the Administrative Agent or any Bank other than the Administrative Agent or any Bank (i) who is a U.S. Person (as such term is defined in Section 7701(a)(30) of the Code for U.S. Federal income tax purposes or (ii) who has the Prescribed Forms on file with the Borrower for the applicable year to the extent deduction or withholding of such taxes is not required as a result of the filing of such Prescribed Forms, and (y) the Borrower shall not be obligated pursuant to Section 4.04(a) hereof to gross-up payments to be made to the Administrative Agent or a Bank in respect of income or similar taxes imposed by the United States if (I) the Administrative Agent or such Bank has not provided to the Borrower the Prescribed Forms required to be provided to the Borrower pursuant to this Section 4.04(b) or (II) in the case of a payment, other than interest, to a Bank is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code, to the extent that the Prescribed Forms do not establish a complete exemption from withholding of such taxes. Notwithstanding anything to the contrary contained in the preceding sentence or elsewhere in this Section 4.04 and except as set forth in Section 12.04(b), the Borrower agrees to pay any additional amounts and to indemnify the Administrative Agent and each Bank in the manner set forth in Section 4.04(a) (without regard to the identity of the jurisdiction requiring the deduction or withholding) in respect of any Taxes deducted or withheld by it as described in the immediately preceding sentence as a result of any changes that are effective after the Effective Date in any applicable law, treaty, governmental rule, regulation, guideline or order, or in the interpretation thereof, relating to the deducting or withholding of such Taxes. SECTION 5. CONDITIONS PRECEDENT. -------------------- 5.01 CONDITIONS PRECEDENT TO THE INITIAL BORROWING DATE. The obligation of each Bank to make each Loan to the Borrower hereunder on the Initial Borrowing Date, and the obligation of the Letter of Credit Issuer to issue each Letter of Credit hereunder on the Initial Borrowing Date, are subject, on the Initial Borrowing Date, to the satisfaction of the following conditions: (a) EFFECTIVE DATE. The Effective Date shall have occurred. -------------- (b) NO DEFAULT; REPRESENTATIONS AND WARRANTIES. (i) There shall exist no Default or Event of Default and (ii) all representations and warranties contained herein or in the other Credit Documents in effect at such time shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on and as of such date, unless stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date. -24- (c) OPINIONS OF COUNSEL. The Administrative Agent shall have received opinions, addressed to each of the Banks and the Collateral Agent, dated as of the Initial Borrowing Date, (i) from Simpson, Thacher & Bartlett, special counsel to the Credit Parties, which opinion shall cover the matters contained in Exhibit C-1 and such other matters incident to the transactions contemplated herein as the Administrative Agent may reasonably request, (ii) from Beverly C. Chell, Esq., counsel to the Credit Parties, which opinion shall cover the matters contained in Exhibit C-2 and such other matters incident to the transactions contemplated herein as the Administrative Agent may reasonably request, and (iii) from White & Case LLP, special counsel to the Administrative Agent, which opinion shall cover the matters contained in Exhibit C-3. (d) CORPORATE PROCEEDINGS. (i) The Administrative Agent shall have received from the Borrower and each Subsidiary Guarantor, a certificate, dated the Initial Borrowing Date, signed by the chairman, a vice chairman, the president, the chief financial officer or the treasurer of such Person, and attested to by the secretary or any assistant secretary of such Person, in the form of Exhibit D with appropriate insertions and, to the extent required, together with copies of the Certificate of Incorporation, By-Laws and the resolutions of such Person referred to in such certificate, and the foregoing shall be satisfactory to the Administrative Agent. (ii) All corporate and legal proceedings and all instruments and agreements in connection with the transactions contemplated by this Agreement and the other Credit Documents shall be reasonably satisfactory in form and substance to the Administrative Agent, and the Administrative Agent shall have received all information and copies of all certificates, documents and papers, including good standing certificates and any other records of corporate proceedings and governmental approvals, if any, which the Administrative Agent reasonably may have requested in connection therewith, such documents and papers, where appropriate, to be certified by proper corporate or governmental authorities. (e) GUARANTIES. Each Subsidiary Guarantor shall have duly authorized, executed and delivered a guaranty in the form of Exhibit E hereto (as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof, the "Subsidiary Guaranty"), and the Subsidiary Guaranty shall be in full force and effect. (f) NOTICE OF BORROWING; LETTER OF CREDIT REQUEST. The Administrative Agent shall have received a Notice of Borrowing satisfying the requirements of Section 1.03 with respect to all Borrowings of Loans on the Initial Borrowing Date; and the Administrative Agent and the Letter of Credit Issuer shall have received a Letter of Credit Request satisfying the requirements of Section 2.03 with respect to the issuance of any Letter of Credit (other than Existing Letters of Credit) on the Initial Borrowing Date. (g) PAYMENT OF FEES, ETC. All costs, fees and expenses, and all other compensation contemplated by this Agreement, due to the Administrative Agent, the Letter of Credit Issuer or the Banks shall have been paid to the extent due. (h) CONTRIBUTION AGREEMENT. The Subsidiary Guarantors shall have entered into a contribution agreement in the form of Exhibit F hereto (as amended, modified or -25- supplemented from time to time in accordance with the terms hereof and thereof, the "Contribution Agreement"), and the Contribution Agreement shall be in full force and effect. (i) EXISTING INDEBTEDNESS AGREEMENTS. There shall have been delivered to (or made available for review by) the Banks copies, certified (in the case of those delivered) as true and correct by an appropriate officer of the Borrower making such delivery, of all agreements evidencing or relating to the Existing Debt or the Existing Contingent Obligations with respect to Indebtedness for borrowed money (collectively, the "Existing Indebtedness Agreements"). (j) EXISTING CREDIT AGREEMENTS. The commitments under the Existing Credit Agreements shall have been terminated, and all loans thereunder shall have been paid in full and all guaranties with respect thereto shall have been terminated (except as to indemnification provisions, which may survive) and be of no further force or effect. (k) INTERMEDIATE HOLDING REORGANIZATION. True and correct copies of the Intermediate HoldCo Reorganization Documents shall have been delivered to the Administrative Agent, and the Intermediate HoldCo Reorganization shall have been completed in all material respects in accordance with the terms and conditions of the Intermediate HoldCo Reorganization Documents and all applicable laws. (l) PLEDGE AGREEMENT. The Borrower shall have duly authorized, executed and delivered the Pledge Agreement in the form of Exhibit B (as amended, modified or supplemented from time to time, the "Pledge Agreement") and shall have delivered to the Collateral Agent, as Pledgee thereunder, all of the Collateral referred to therein along with executed and undated stock powers in the case of capital stock and evidence that any Financing Statements (Form UCC-1 or the equivalent) necessary or, in the reasonable opinion of the Collateral Agent, desirable, to perfect the security interests purported to be created by the Pledge Agreement have been executed and delivered to the Collateral Agent and the Pledge Agreement shall be in full force and effect. The occurrence of the Initial Borrowing Date and the acceptance of the benefits of each Credit Event on the Initial Borrowing Date shall constitute a representation and warranty by the Borrower to each of the Banks that all of the conditions specified above exist as of the Initial Borrowing Date. All of the certificates, legal opinions and other documents and papers referred to in this Section 5.01, unless otherwise specified, shall be delivered to the Administrative Agent at its Notice Office for the account of each of the Banks and in sufficient counterparts for each of the Banks and shall be reasonably satisfactory in form and substance to the Administrative Agent. 5.02 CONDITIONS PRECEDENT TO EACH CREDIT EVENT. The obligation of each Bank to make each Loan to the Borrower hereunder, and the obligation of the Letter of Credit Issuer to issue each Letter of Credit hereunder, are subject, at the time of each such Credit Event, to the satisfaction of the following conditions: (a) NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time of each Credit Event and also after giving effect thereto (i) there shall exist no Default or Event of Default and -26- (ii) all representations and warranties contained herein or in the other Credit Documents in effect at such time shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on and as of the date of such Credit Event, unless stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date. (b) NOTICE OF BORROWING; LETTER OF CREDIT REQUEST. The Administrative Agent shall have received a Notice of Borrowing satisfying the requirements of Section 1.03 with respect to any Borrowing of Loans; and the Administrative Agent and the Letter of Credit Issuer shall have received a Letter of Credit Request satisfying the requirements of Section 2.03 with respect to the issuance of any Letter of Credit. The acceptance of the benefits of each Credit Event shall constitute a representation and warranty by the Borrower to each of the Banks that all of the conditions specified above exist as of the date of such Credit Event. All of the documents and papers referred to in this Section 5.02, unless otherwise specified, shall be delivered to the Administrative Agent at its Notice Office for the account of each of the Banks and in sufficient counterparts for each of the Banks and shall be reasonably satisfactory in form and substance to the Administrative Agent. SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. In order to induce the Banks to enter into this Agreement and to make the Loans and issue and/or participate in the Letters of Credit provided for herein, the Borrower makes the following representations and warranties to, and agreements with, the Banks, all of which shall survive the execution and delivery of this Agreement, the making of the Loans and the issuance of the Letters of Credit (with the occurrence of each Credit Event on and after the Initial Borrowing Date being deemed to constitute a representation and warranty that the matters specified in this Section 6 are true and correct in all material respects on and as of the Initial Borrowing Date and as of the date of each such Credit Event, unless stated to relate to a specific earlier date): 6.01 CORPORATE STATUS. The Borrower and each of its Restricted Subsidiaries (i) is a duly organized and validly existing corporation under the laws of the jurisdiction of its organization and has the corporate power and authority to own its property and assets and to transact the business in which it is engaged and presently proposes to engage, (ii) is in good standing under the laws of the jurisdiction of its organization and (iii) is duly qualified and is authorized to do business and is in good standing in all jurisdictions where it is required to be so qualified, except, in the cases of clauses (ii) and (iii) above, for such failures to be in good standing and failures to be so qualified which, in the aggregate, would not have a material adverse effect on the condition (financial or otherwise), operations, assets, liabilities or prospects of the Borrower and its Restricted Subsidiaries taken as a whole. 6.02 CORPORATE POWER AND AUTHORITY. The Borrower and each of its Restricted Subsidiaries has the corporate power and authority to execute, deliver and carry out the terms and provisions of the Credit Documents to which it is a party and has taken all necessary corporate action to authorize the execution, delivery and performance of the Credit Documents to which it is a party. The Borrower and each of its Restricted Subsidiaries has duly executed and delivered -27- each Credit Document to which it is a party and each such Credit Document constitutes the legal, valid and binding obligation of such Person enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws generally affecting creditors' rights and by equitable principles (regardless of whether enforcement is sought in equity or at law). 6.03 NO VIOLATION. Neither the execution, delivery or performance by the Borrower or any of its Restricted Subsidiaries of the Credit Documents to which it is a party nor compliance by them with the terms and provisions thereof, nor the consummation of the transactions contemplated therein (i) will contravene in any material respect any applicable provision of any law, statute, rule or regulation, or any order, writ, injunction or decree of any court or governmental instrumentality, (ii) will conflict or be inconsistent with or result in any breach of, any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien (except Liens created pursuant to the Pledge Agreement) upon any of the property or assets of the Borrower or any of its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, credit agreement, loan agreement or other material agreement or instrument to which the Borrower or any of its Subsidiaries is a party or by which any of them or any of their respective property or assets is bound or to which it may be subject or (iii) will violate any provision of the Certificate of Incorporation or By-Laws of the Borrower or any of its Subsidiaries. 6.04 LITIGATION. There are no actions, suits or proceedings pending, or, to the best knowledge of the Borrower, threatened, with respect to the Borrower or any of its Subsidiaries (i) that are likely to have a material adverse effect on the condition (financial or otherwise), operations, assets, liabilities or prospects of the Borrower and its Restricted Subsidiaries taken as a whole or (ii) that could reasonably be expected to have a material adverse effect on the rights or remedies of the Banks, the Letter of Credit Issuer or the Administrative Agent or on the ability of the Borrower or of the Subsidiary Guarantors, taken as a whole, in either case, to perform its or their respective obligations hereunder and under the other Credit Documents to which it is or they are, or will be, a party. 6.05 USE OF PROCEEDS; MARGIN REGULATIONS. (a) The proceeds of all Terms Loans shall be utilized (i) to refinance the loans outstanding on the Initial Borrowing Date under the Existing Credit Agreements, and (ii) to pay certain fees and expenses arising in connection with such refinancing. (b) The proceeds of all Revolving Loans, and Swingline Loans shall be used for the purposes referred to in Section 6.05(a) above and for general corporate and working capital purposes of the Borrower and its Subsidiaries (including, without limitation, to finance Permitted Acquisitions and refinance Senior Notes). (c) Neither the making of any Loan hereunder, nor the use of the proceeds thereof, will violate the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System and no part of the proceeds of any Loan will be used to purchase or carry any Margin Stock or to extend credit for the purpose of purchasing or carrying any Margin Stock, PROVIDED that the Borrower may use the proceeds of Loans to purchase Margin Stock in -28- compliance with Regulations T, U and X, so long as at the time of the making of such Loan, and after giving effect thereto, not more than 25% of the value of the assets subject to the provisions of Section 8 of the Borrower, or of the Borrower and its Restricted Subsidiaries on a consolidated basis, shall constitute Margin Stock. 6.06 GOVERNMENTAL APPROVALS. No order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, any foreign or domestic governmental or public body or authority, or any subdivision thereof, is required to authorize or is required in connection with (i) the execution, delivery and performance of any Credit Document or (ii) the legality, validity, binding effect or enforceability of any Credit Document, except those which have been obtained or made or those the absence of which, individually or in the aggregate, could not reasonably be expected to have a material adverse effect on either (x) the condition (financial or otherwise), operations, assets, liabilities or prospects of the Borrower and its Restricted Subsidiaries taken as a whole or (y) the rights or remedies of the Banks, the Letter of Credit Issuer or the Administrative Agent or on the ability of the Borrower or of the Subsidiary Guarantors, taken as a whole, in either case, to perform its or their respective obligations hereunder and under the other Credit Documents to which it is or they are, or will be, a party. 6.07 INVESTMENT COMPANY ACT. Neither the Borrower nor any of its Restricted Subsidiaries is an "investment company" or a company "controlled" by an "investment company," within the meaning of the Investment Company Act of 1940, as amended. 6.08 PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Borrower nor any of its Restricted Subsidiaries is a "holding company," or a "subsidiary company" of a "holding company," or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company," within the meaning of the Public Utility Holding Company Act of 1935, as amended. 6.09 TRUE AND COMPLETE DISCLOSURE. (a) All factual information (taken as a whole) heretofore or contemporaneously furnished by the Borrower or any of its Subsidiaries in writing to the Administrative Agent and/or any Bank on or before the Effective Date (including, without limitation, (i) the Information Memorandum and (ii) all information contained in the Credit Documents) for purposes of or in connection with this Agreement or any transaction contemplated herein is true and complete in all material respects on the date as of which such information is dated or certified and not incomplete by omitting to state any material fact necessary to make such information (taken as a whole) not misleading at such time in light of the circumstances under which such information was provided, it being understood and agreed that for purposes of this Section 6.09(a), such factual information shall not include projections and pro forma financial information. (b) The projections and pro forma financial information contained in the factual information referred to in paragraph (a) above were based on good faith estimates and assumptions believed by such Persons to be reasonable at the time made, it being recognized by the Banks that such projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results. -29- 6.10 FINANCIAL STATEMENTS; FINANCIAL CONDITION. (a) The consolidated balance sheets of the Borrower and its Subsidiaries as at December 31, 2000 and March 31, 2001 and the related consolidated statements of income and cash flows of the Borrower and its Subsidiaries for the fiscal year or three month period, as the case may be, ended as of said dates, which, in the case of the December 31, 2000 statements, have been examined by Deloitte & Touche, independent certified public accountants, who delivered an unqualified opinion in respect thereof, present fairly the financial position of the Borrower and its Subsidiaries at the dates of said statements and the results for the period covered thereby. All such financial statements have been prepared in accordance with GAAP consistently applied except to the extent provided in the notes to said financial statements (subject, in the case of the March 31, 2001 statements, to normal year and audit adjustments). (b) Since December 31, 2000 and after giving effect to the incurrence of Indebtedness hereunder and the other transactions contemplated hereby, there has been no material adverse change in the condition (financial or otherwise), operations, assets, liabilities or prospects of the Borrower and its Restricted Subsidiaries taken as a whole (other than any change in general economic conditions or any change in conditions affecting the Business generally). 6.11 TAX RETURNS AND PAYMENTS. The Borrower and each of its Restricted Subsidiaries has filed all Federal income tax returns and all other material tax returns, domestic and foreign, required to be filed by it and has paid all Federal taxes and assessments shown to be due on such returns and all other material taxes and assessments, domestic and foreign, in each case payable by it which have become due, other than those not yet delinquent and except for those contested in good faith and adequately disclosed and fully provided for on the financial statements of the Borrower and its Restricted Subsidiaries in accordance with GAAP. The Borrower and each of its Restricted Subsidiaries have at all times paid, or have provided adequate reserves (in the good faith judgment of the management of the Borrower) for the payment of, all federal, state and foreign income taxes applicable for all prior fiscal years and for the current fiscal year to date, except to the extent that the failure to make such payments or provide such reserves would not have a material adverse effect on the condition (financial or otherwise), operations, assets, liabilities or prospects of the Borrower and its Restricted Subsidiaries taken as a whole. There is no action, suit, proceeding, investigation, audit, or claim now pending or, to the knowledge of the Borrower or any of its Restricted Subsidiaries, threatened by any authority regarding any taxes relating to the Borrower or any of its Restricted Subsidiaries, except to the extent that any such action, proceeding, investigation, audit or claim would not have a material adverse effect on the condition (financial or otherwise), operations, assets, liabilities or prospects of the Borrower and its Restricted Subsidiaries taken as a whole. Neither the Borrower nor any of its Restricted Subsidiaries has entered into an agreement or waiver or been requested to enter into an agreement or waiver extending any statute of limitations relating to the payment or collection of taxes of the Borrower or any of its Restricted Subsidiaries, or is aware of any circumstances that would cause the taxable years or other taxable periods of the Borrower or any of its Restricted Subsidiaries not to be subject to the normally applicable statute of limitations, except to the extent that any such agreement, wavier, request or circumstance would not have a material adverse effect on the condition (financial or otherwise), operations, assets, liabilities or prospects of the Borrower and its Restricted Subsidiaries taken as a whole. -30- 6.12 COMPLIANCE WITH ERISA. As of the Initial Borrowing Date, there are no Plans and neither the Borrower nor any of its Restricted Subsidiaries nor any ERISA Affiliate has incurred any unpaid material liability or reasonably expects to incur any material liability with respect to any "employee pension benefit plan" (as defined in Section 3(2) of ERISA) covered by Title IV of ERISA. As of the date of each subsequent Credit Event, (a) each Plan is in substantial compliance with ERISA and the Code; no Reportable Event has occurred with respect to a Plan; no Plan is insolvent or in reorganization; no Plan has an accumulated or waived funding deficiency, has permitted decreases in its funding standard account or has applied for an extension of any amortization period within the meaning of Section 412 of the Code; neither the Borrower nor any of its Restricted Subsidiaries nor any ERISA Affiliate has incurred or reasonably expects to incur any liability to or on account of a Plan pursuant to ERISA or the Code; no proceedings have been instituted by the PBGC to terminate any Plan; no condition exists which presents a material risk to the Borrower, any of its Restricted Subsidiaries or any ERISA Affiliate of incurring a liability to or on account of a Plan pursuant to ERISA or the Code; no lien imposed under the Code or ERISA on the assets of the Borrower, any of its Restricted Subsidiaries or any ERISA Affiliate exists or is likely to arise on account of any Plan; and the Borrower and its Restricted Subsidiaries do not maintain or contribute to any "employee welfare benefit plan" (as defined in Section 3(1) of ERISA), which provides benefits to retired employees (other than as required by Section 601 of ERISA), (b) where, with respect to any of the foregoing representations in this Section 6.12, the liability for or the lien which could arise as a result of, the particular circumstance or event which is the subject of the representation, would be reasonably likely to result in a material adverse effect on the condition (financial or otherwise), operations, assets, liabilities or prospects of the Borrower and its Restricted Subsidiaries taken as a whole. Using actuarial assumptions and computation methods consistent with subpart 1 of subtitle E of Title IV of ERISA, the aggregate liabilities of the Borrower, its Restricted Subsidiaries and ERISA Affiliates to all Plans which are "multiemployer plans" (as defined in Section 4001(a)(3) of ERISA) (each a "Multiemployer Plan") in the event of a complete withdrawal therefrom, as of the close of the most recent fiscal year of each such Plan would not be reasonably likely to be an amount that could result in a material adverse effect on the condition (financial or otherwise), operations, assets, liabilities or prospects of the Borrower and its Restricted Subsidiaries taken as a whole. Notwithstanding anything in this Section 6.12 to the contrary, all representations and warranties made with respect to any Plan which is a Multiemployer Plan shall be made to the best knowledge of the Borrower. 6.13 SUBSIDIARIES. On the Initial Borrowing Date, the corporations listed on Annex III under the name of the Borrower are the only Subsidiaries of the Borrower. Annex III correctly sets forth, as of the Initial Borrowing Date, the percentage ownership (direct and indirect) of the Borrower in each class of capital stock of each of its Subsidiaries and also identifies the direct owner thereof. 6.14 INTELLECTUAL PROPERTY. (a) The Borrower and each of its Restricted Subsidiaries owns, or is licensed or otherwise authorized to sell, distribute, use or exploit, all material copyrights, literary works, texts and other works of authorship fixed in any tangible medium of expression necessary for the present conduct of its business ("Copyrights"), except to the extent that the failure to own or obtain licenses or authorizations with respect to any of the foregoing, individually or in the aggregate, would not have a material adverse effect on the -31- condition (financial or otherwise), operations, assets, liabilities or prospects of the Borrower and its Restricted Subsidiaries taken as a whole. (b) The Borrower and each of its Restricted Subsidiaries owns or is licensed to use all the patents, trademarks, permits, service marks, trade names, technology, know-how and formulas, or rights with respect to the foregoing, necessary for the present conduct of its business, except to the extent that the failure to own or obtain licenses with respect to any of the foregoing, individually or in the aggregate, would not have a material adverse effect on the condition (financial or otherwise), operations, assets, liabilities or prospects of the Borrower and its Restricted Subsidiaries taken as a whole (together with the Copyrights, "Intellectual Property"). (c) All Intellectual Property is protected in all material respects under the laws of the United States relating to such Intellectual Property and has been duly and properly registered or filed with or issued by the appropriate governmental offices and jurisdictions for such registrations, filings or issuances, except to the extent that the failure to make or obtain such registrations, filings or issuances would not have a material adverse effect on the condition (financial or otherwise), operations, assets, liabilities or prospects of the Borrower and its Restricted Subsidiaries taken as a whole. (d) No material claim has been asserted by any Person challenging or questioning the use of any such Intellectual Property or the validity or effectiveness of any such Intellectual Property. The use of such Intellectual Property by the Borrower or its Restricted Subsidiaries does not infringe on the rights of any Person, except for such claims and infringements as do not, individually or in the aggregate, give rise to any liabilities on the part of the Borrower and its Restricted Subsidiaries that are material to the Borrower and its Restricted Subsidiaries taken as a whole. 6.15 COMPLIANCE WITH STATUTES, ETC. The Borrower and each of its Restricted Subsidiaries is in compliance with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies, domestic or foreign, in respect of the conduct of its business and the ownership of its property (including compliance with all applicable Environmental Laws with respect to any Real Property and the requirements of any permits issued under such Environmental Laws with respect to any such Real Property or the operations of the Borrower or any of its Subsidiaries), except such noncompliances as would not, in the aggregate, have a material adverse effect on the condition (financial or otherwise), operations, assets, liabilities or prospects of the Borrower and its Restricted Subsidiaries taken as a whole. 6.16 THE PLEDGE AGREEMENT. The security interests created in favor of the Collateral Agent, as Pledgee, for the benefit of the Secured Creditors, under the Pledge Agreement constitute first priority perfected security interests in the Collateral described in the Pledge Agreement, subject to no security interests of any other Person. No filings or recordings are required in order to perfect (or maintain the perfection or priority of) the security interests created in the Pledge Agreement Collateral under the Pledge Agreement. -32- SECTION 7. AFFIRMATIVE COVENANTS. The Borrower hereby covenants and agrees that on the Effective Date and thereafter for so long as this Agreement is in effect and until the Commitments have terminated, no Letters of Credit or Notes are outstanding and the Loans together with interest, Fees and all other Obligations are paid in full: 7.01 INFORMATION COVENANTS. The Borrower will furnish to each Bank (subject to the final paragraph of this Section 7.01): (a) ANNUAL FINANCIAL STATEMENTS. Within 100 days after the close of each fiscal year of the Borrower, the consolidated balance sheets of each of (A) the Borrower and its Subsidiaries and of (B) the Borrower and its Restricted Subsidiaries, as at the end of such fiscal year and, in each case, the related consolidated statements of income and retained earnings and of cash flows for such fiscal year, setting forth for such fiscal year, in comparative form, the corresponding figures for the preceding fiscal year and, in the case of the figures with respect to the Borrower and its Restricted Subsidiaries the corresponding figures from the budget for such fiscal year delivered pursuant to Section 7.01(c); all of which shall be examined by Deloitte & Touche or such other independent certified public accountants of recognized national standing as shall be acceptable to the Administrative Agent, whose opinion shall not be qualified as to the scope of audit or as to the status of the Borrower and its Subsidiaries or of the Borrower and its Restricted Subsidiaries, as the case may be, as a going concern, together with a certificate of such accounting firm stating that in the course of its regular audit of the business of the Borrower and its Subsidiaries, which audit was conducted in accordance with generally accepted auditing standards, no Default or Event of Default which has occurred and is continuing has come to its attention or, if such a Default or Event of Default has come to its attention a statement as to the nature thereof (provided that in no event shall such accountants be liable as a result of this Agreement by reason of any failure to obtain knowledge of any Default or Event of Default that would not be disclosed in the course of their audit examination). (b) QUARTERLY FINANCIAL STATEMENTS. As soon as available and in any event within 50 days after the close of each of the first three quarterly accounting periods in each fiscal year of the Borrower (beginning with the quarterly accounting period ending June 30, 2001) and, at the sole option of the Borrower, at any time prior to 100 days after the close of the fourth quarterly accounting period in each fiscal year, the consolidated balance sheet of each of (A) the Borrower and its Subsidiaries and of (B) the Borrower and its Restricted Subsidiaries, as at the end of such quarterly period and the related consolidated statements of income and retained earnings and of cash flows for such quarterly period and for the elapsed portion of the fiscal year ended with the last day of such quarterly period; all of which shall be in reasonable detail and certified by the chief financial officer or other Authorized Officer of the Borrower that they fairly present the financial condition of the Borrower and its Subsidiaries or of the Borrower and its Restricted Subsidiaries, as the case may be, as of the dates indicated and the results of their operations and changes in their cash flows for the periods indicated, subject to changes resulting from audit and normal year-end audit adjustments. (c) BUDGETS; ETC. Not more than 90 days after the commencement of each fiscal year of the Borrower, budgets of the Borrower and its Restricted Subsidiaries in reasonable detail for each of the four fiscal quarters of such fiscal year setting forth Consolidated EBITDA -33- and consolidated sales and setting forth, with appropriate discussion, the principal assumptions upon which such budgets are based. (d) OFFICER'S CERTIFICATES. At the time of the delivery of the financial statements provided for in Section 7.01(a) and (b), a certificate of the chief financial officer, treasurer, controller or chief accounting officer of the Borrower (i) to the effect that no Default or Event of Default exists or, if any Default or Event of Default does exist, specifying the nature and extent thereof, which certificate shall set forth the calculations required to establish whether the Borrower and its Subsidiaries were in compliance with the provisions of Sections 8.04(c), 8.05(d), 8.07 and Sections 8.09 through and including 8.11, as at the end of such fiscal quarter or year, as the case may be and (ii) setting forth the calculations demonstrating (A) with respect to each Affected Transaction consummated during the most recently ended fiscal quarter, that the Borrower was in compliance, on a PRO FORMA Basis, with Sections 8.09, 8.10 and 8.11 and (B) with respect to each business sold (or deemed sold) pursuant to Section 8.02(c) hereof, compliance by the Borrower with clause (iii) of such Section 8.02(c). In addition, at the time of the delivery of the financial statements provided for in Section 7.01(a) and (b), a certificate of the chief financial officer, treasurer, controller or chief accounting officer of the Borrower setting forth the amount of, and calculations required to establish the amount of, Excess Cash Flow for the respective fiscal year or quarter. (e) NOTICE OF DEFAULT OR LITIGATION. Promptly, and in any event within three Business Days after any officer of the Borrower obtains knowledge thereof, notice of (x) the occurrence of any event which constitutes a Default or Event of Default, which notice shall specify the nature thereof, the period of existence thereof and what action the Borrower proposes to take with respect thereto and (y) the commencement of, or threat of, or any significant development in, any litigation or governmental proceeding pending against the Borrower or any of its Subsidiaries which is likely to have a material adverse effect on the condition (financial or otherwise), operations, assets, liabilities or prospects of the Borrower and its Restricted Subsidiaries taken as a whole, or the ability of the Borrower or of the Subsidiary Guarantors, taken as a whole, in either case, to perform its or their respective obligations hereunder or under any other Credit Document. (f) AUDITORS' REPORTS. Promptly upon receipt thereof, a copy of each report or "management letter" submitted to the Borrower or any of its Subsidiaries by its independent accountants in connection with any annual, interim or special audit made by them of the books of the Borrower or any of its Subsidiaries. (g) OTHER INFORMATION. Promptly upon transmission thereof, copies of any filings and registrations with, and reports to, the SEC by the Borrower or any of its Subsidiaries and, with reasonable promptness, such other information or documents (financial or otherwise) as the Administrative Agent on its own behalf or on behalf of the Required Banks may reasonably request from time to time. Unless expressly requested by a Bank, the financial statements and other documents that are required to be delivered under this Section 7.01 shall not be required to be -34- physically delivered to any Bank to the extent that such financial statements and other documents are available on the EDGAR database. 7.02 BOOKS, RECORDS AND INSPECTIONS. The Borrower will, and will cause each of its Restricted Subsidiaries to, permit, upon notice to the chief financial officer or other Authorized Officer of the Borrower, officers and designated representatives of the Administrative Agent or the Required Banks to visit and inspect any of the properties or assets of the Borrower and any of its Restricted Subsidiaries in whomsoever's possession, and to examine the books of account of the Borrower and any of its Restricted Subsidiaries and discuss the affairs, finances and accounts of the Borrower and of any of its Restricted Subsidiaries with, and be advised as to the same by, their officers and independent accountants, all at such reasonable times and intervals and to such reasonable extent as the Administrative Agent or the Required Banks may desire. 7.03 PAYMENT OF TAXES. The Borrower will pay and discharge, and will cause each of its Restricted Subsidiaries to pay and discharge, all taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits, or upon any properties belonging to it, prior to the date on which material penalties attach thereto, and all lawful claims for sums that have become due and payable which, if unpaid, might become a Lien not otherwise permitted under Section 8.03(a) or charge upon any properties of the Borrower or any of its Restricted Subsidiaries; PROVIDED that neither the Borrower nor any of its Restricted Subsidiaries shall be required to pay any such tax, assessment, charge, levy or claim which is being contested in good faith and by proper proceedings if it has maintained adequate reserves with respect thereto in accordance with GAAP. 7.04 CORPORATE FRANCHISES. The Borrower will do, and will cause each of its Restricted Subsidiaries to do, or cause to be done, all things necessary to preserve and keep in full force and effect its existence and its rights, franchises, licenses, permits and Intellectual Property rights except to the extent its failures to do so would not, in the aggregate, have a material adverse effect on the condition (financial or otherwise), operations, assets, liabilities or prospects of the Borrower and its Restricted Subsidiaries taken as a whole; PROVIDED, HOWEVER, that any transaction permitted by Section 8.02 will not constitute a breach of this Section 7.04. 7.05 COMPLIANCE WITH STATUTES, ETC. The Borrower will, and will cause each of its Restricted Subsidiaries to, comply with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies, domestic or foreign, in respect of the conduct of its business and the ownership of its property (including applicable statutes, regulations, orders and restrictions relating to environmental standards and controls) other than those the non-compliance with which would not have a material adverse effect on the condition (financial or otherwise), operations, assets, liabilities or prospects of the Borrower and its Restricted Subsidiaries taken as a whole or on the ability of the Borrower or of the Subsidiary Guarantors, taken as a whole, in either case, to perform its or their obligations hereunder or under any other Credit Document. 7.06 ERISA. As soon as possible and, in any event, within 30 days after the Borrower, any of its Restricted Subsidiaries or any ERISA Affiliate knows or could reasonably be expected to know of the occurrence of any of the following and where it could reasonably be -35- expected that a material liability of the Borrower and its Restricted Subsidiaries and ERISA Affiliates, taken as a whole, could result in connection therewith, the Borrower will deliver to each of the Banks a certificate of the chief financial officer or other Authorized Officer of the Borrower setting forth details as to such occurrence and such action, if any, which the Borrower, such Restricted Subsidiary or such ERISA Affiliate is required or proposes to take, together with any notices required or proposed to be given to or filed with or by the Borrower, such Restricted Subsidiary, such ERISA Affiliate, the PBGC, a Plan participant or the Plan administrator with respect thereto: that a Reportable Event has occurred that a contributing sponsor (as defined in Section 4001(a)(13) of ERISA of a Plan subject to Title IV of ERISA in subject to the advance reporting requirements of PBGC of Regulation Section 4043.61 (without regard to subparagraph (b)(1) thereof), and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably expected to occur with respect to such Plan within the following 30 days; that an accumulated funding deficiency has been incurred or an application is reasonably likely to be or has been made to the Secretary of the Treasury for a waiver or modification of the minimum funding standard (including any required installment payments) or an extension of any amortization period under Section 412 of the Code with respect to a Plan; that a Plan has been or is reasonably likely to be terminated, reorganized, partitioned or declared insolvent under Title IV of ERISA; that a Plan has an Unfunded Current Liability giving rise to a lien under ERISA or the Code; that proceedings are reasonably likely to be or have been instituted to terminate a Plan; that a proceeding has been instituted pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan; or that the Borrower, any of its Restricted Subsidiaries or any ERISA Affiliate will or is reasonably likely to incur any liability (including any contingent or secondary liability) to or on account of the termination of or withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or 502(i) or 502(1) of ERISA. At the request of any Bank, the Borrower will deliver to such Bank a complete copy of the annual report (Form 5500) of each Plan required to be filed with the Internal Revenue Service. 7.07 END OF FISCAL YEARS; FISCAL QUARTERS. The Borrower will, for financial reporting purposes, cause (i) each of its, and each of its Subsidiaries', fiscal years to end on December 31 of each year and (ii) each of its, and each of its Subsidiaries', fiscal quarters to end on March 31, June 30, September 30 and December 31 of each year. 7.08 USE OF PROCEEDS. All proceeds of the Loans shall be used as provided in Section 6.05. 7.09 OWNERSHIP OF SUBSIDIARIES. The Borrower will, at all times, maintain, directly or indirectly, ownership of at least a majority of the capital stock of its Restricted Subsidiaries, except to the extent 100% of the capital stock owned by the Borrower or any Restricted Subsidiary of any such Restricted Subsidiary is sold, transferred or disposed of in a transaction permitted by Section 8.02(c) or (j) or any such Restricted Subsidiary is merged, consolidated or liquidated in a transaction permitted by Section 8.02(e). 7.10 MAINTENANCE OF CORPORATE SEPARATENESS. The Borrower will, and will cause each of its Subsidiaries to, satisfy customary corporate formalities, including the holding of -36- regular board of directors' and shareholders' meetings and the maintenance of corporate offices and records. Neither the Borrower nor any Restricted Subsidiary shall make any payment to a creditor of any Unrestricted Subsidiary in respect of any liability of such Unrestricted Subsidiary, and no bank account of an Unrestricted Subsidiary shall be commingled with any bank account of the Borrower or any of its Restricted Subsidiaries. Any financial statements distributed to any creditors of an Unrestricted Subsidiary shall clearly establish the separateness of such Unrestricted Subsidiary from the Borrower and its Restricted Subsidiaries. Finally, neither the Borrower nor any of its Subsidiaries shall take any action, or conduct its affairs in a manner, which is likely to result in the corporate existence of any Unrestricted Subsidiary which is a direct Subsidiary of the Borrower or any Restricted Subsidiary being ignored by any court of competent jurisdiction, or in the assets and liabilities of the Borrower or any Restricted Subsidiary being substantively consolidated with those of any Unrestricted Subsidiary in a bankruptcy, reorganization or other insolvency proceeding. SECTION 8. NEGATIVE COVENANTS. The Borrower hereby covenants and agrees that as of the Effective Date, and thereafter for so long as this Agreement is in effect and until the Commitments have terminated, no Letters of Credit or Notes are outstanding and the Loans, together with interest, Fees and all other Obligations are paid in full: 8.01 CHANGES IN BUSINESS. The Borrower will not, and will not permit any of its Restricted Subsidiaries to, engage in any businesses other than Businesses, PROVIDED that the Borrower and its Restricted Subsidiaries may engage in businesses other than a Business so long as the businesses engaged in by the Borrower and its Restricted Subsidiaries, taken as a whole, consist substantially of Businesses. 8.02 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC. The Borrower will not, and will not permit any of its Restricted Subsidiaries to, wind up, liquidate or dissolve its affairs or enter into any transaction of merger or consolidation, or convey, sell, lease or otherwise dispose of (or agree to do any of the foregoing at any future time) all or any part of its property or assets, or enter into any partnerships, joint ventures or sale-leaseback transactions, or purchase or otherwise acquire (in one or a series of related transactions) any part of the property or assets (other than purchases or other acquisitions of inventory, materials and equipment (and, to the extent consistent with industry practices, other tangible and intangible assets) in the ordinary course of business) of any Person, except that the following shall be permitted: (a) any sale, transfer or other disposition of (x) inventory in the ordinary course of business or (y) any other tangible or intangible asset in the ordinary course of business of the Borrower and/or its Restricted Subsidiaries; (b) the advances, investments and loans permitted pursuant to Section 8.05; (c) the disposition of a business (including, without limitation, to the extent permitted in this Section 8.02(c), sales of the capital stock of a Restricted Subsidiary but excluding sales of the stock of an Unrestricted Subsidiary); PROVIDED that (i) no Default or Event of Default exists at such time or would exist immediately after giving effect thereto; (ii) such sale, transfer or disposition (or deemed sale, transfer or disposition -37- pursuant to any Permitted Restricted Subsidiary Conversion) (x) is for fair market value, as determined in good faith by management of the Borrower (or, in the case of any Permitted Restricted Subsidiary Conversion or Permitted Restricted Asset Sale, to the extent requested by the Administrative Agent or the Required Banks, as determined by a written opinion of value reasonably satisfactory to the Administrative Agent by an Appraisal Firm) and (y) except in the case of a Permitted Restricted Subsidiary Conversion otherwise permitted pursuant to the terms hereof, results in consideration in the form of cash, promissory notes issued by the respective purchaser and/or other assets, PROVIDED that, to the extent any such other assets are received by the Borrower and/or its Restricted Subsidiaries in connection with any such Asset Sale, (I) the market value of such other assets, when added to the aggregate amount of other consideration received in connection with such Asset Sale, shall equal or exceed the market value of the assets so sold (such value to be set forth, to the extent requested by the Administrative Agent or the Required Banks, in a written opinion of value reasonably satisfactory to the Administrative Agent by an Appraisal Firm) and (II) such assets are permitted to be acquired by the Borrower or any of its Restricted Subsidiaries pursuant to Section 8.02(g) at the time of consummation of such Asset Sale (both before and after giving effect to such Asset Sale); (iii) the businesses sold (or deemed sold pursuant to any Permitted Restricted Subsidiary Conversion) by the Borrower and/or its Restricted Subsidiaries pursuant to this Section 8.02(c) in any fiscal year of the Borrower shall not, in the aggregate, have EBITDA in the immediately preceding fiscal year in an amount in excess of 25% of the Consolidated EBITDA of the Borrower and its Restricted Subsidiaries for such preceding fiscal year, determined on a PRO forma basis as if (A) any dispositions (or deemed dispositions pursuant to any Permitted Restricted Subsidiary Conversion) consummated during such preceding fiscal year had been consummated on the first day of such preceding fiscal year and (B) any acquisitions consummated after the beginning of such preceding fiscal year but prior to the date of any proposed Asset Sale pursuant to this Section 8.02(c) had been consummated on the first day of such preceding fiscal year; and (iv) to the extent such sale, transfer or disposition constitutes a sale, transfer or disposition of less than 100% of the capital stock of any Restricted Subsidiary of the Borrower, after giving effect to such sale, transfer or disposition, the Borrower shall own at least a majority of the capital stock of such Restricted Subsidiary; PROVIDED that, notwithstanding the foregoing provisions of this clause (iv), but only to the extent such sale, transfer or disposition is structured as a leveraged recapitalization, the Borrower shall be permitted to structure any sale, transfer or disposition of the capital stock of a Restricted Subsidiary as a leveraged recapitalization in which up to 15% of the capital stock of the Restricted Subsidiary being recapitalized is retained (directly or indirectly) by the Borrower; (d) Asset Sales constituting the disposition of the capital stock owned by the Borrower and its Restricted Subsidiaries or Unrestricted Subsidiaries; (e) any Restricted Subsidiary may be merged or consolidated with or into, or be liquidated into, the Borrower or any other Restricted Subsidiary of the Borrower, or all or any part of its business, properties and assets may be conveyed, leased, sold or otherwise transferred to the Borrower or any other Restricted Subsidiary, PROVIDED that -38- (v) in any such merger or consolidation involving the Borrower, the Borrower shall be the surviving corporation, (w) no Default or Event of Default exists or would exist after giving effect thereto, (x) no Excluded Foreign Restricted Subsidiary or Excluded Domestic Restricted Subsidiary may be the surviving corporation of any such merger or consolidation (other than, in the case of an Excluded Foreign Restricted Subsidiary, a merger or consolidation with another Excluded Foreign Restricted Subsidiary and other than, in the case of an Excluded Domestic Restricted Subsidiary, a merger or consolidation with another Excluded Domestic Restricted Subsidiary), (y) no businesses, properties or assets may be transferred to Excluded Foreign Restricted Subsidiaries (other than by other Excluded Foreign Restricted Subsidiaries) if after giving effect to such transfer the Net Investments in Excluded Foreign Restricted Subsidiaries would exceed $50,000,000 and (z) to the extent any business, properties or assets are transferred to Excluded Domestic Restricted Subsidiaries in connection with any such merger or consolidation the Borrower shall have determined, with respect to such transaction, that the Borrower and its Restricted Subsidiaries would have been in compliance, on a PRO FORMA Basis, with Sections 8.09, 8.10 and 8.11 of this Agreement; (f) the Borrower and/or its Restricted Subsidiaries may lease real or personal property (so long as such lease does not create Capitalized Lease Obligations except as otherwise permitted by Section 8.04); (g) so long as no Default or Event of Default exists or would result therefrom, the Borrower and its Restricted Subsidiaries may acquire assets, the capital stock of, or other ownership interests in, any Person (any such acquisition permitted by this clause (g), a "Permitted Acquisition"); PROVIDED that (A) after giving effect to any such acquisition, the Borrower and its Restricted Subsidiaries shall be in compliance with Section 8.01 hereof; (B) the Borrower shall have determined, with respect to such acquisition, that, on a PRO FORMA Basis, the Borrower and its Restricted Subsidiaries would have been in compliance with Sections 8.09, 8.10 and 8.11 of this Agreement; and (C) to the extent that such acquisition is of the capital stock of or other ownership interest in another Person (such Person, the "Acquired Entity"), (I) such acquisition must be of at least a majority of such capital stock or of such ownership interests, such Person shall be or become a Restricted Subsidiary and all of the applicable provisions of Section 8.14 shall have been complied with in respect of such Restricted Subsidiary and (II) the Board of Directors or other governing body of the Acquired Entity shall not have indicated, either publicly or privately to the Borrower or any of its Restricted Subsidiaries, its opposition to the consummation by the Borrower or such Subsidiary of such acquisition; (h) the Borrower and its Restricted Subsidiaries may sell or discount, in each case without recourse, accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof; (i) Capital Expenditures by the Borrower and/or its Restricted Subsidiaries made in the ordinary course of business; and -39- (j) the Borrower and its Restricted Subsidiaries may sell assets (and may effect Permitted Restricted Subsidiary Conversions) other than in the ordinary course of business, so long as (x) each such asset is sold (or deemed sold pursuant to any Permitted Restricted Subsidiary Conversion) at fair market value, as determined in good faith by management of the Borrower; (y) each such sale (or deemed sale pursuant to any Permitted Restricted Subsidiary Conversion) results in consideration in the form of cash, promissory notes issued by the respective purchaser and/or other assets, PROVIDED that, to the extent any such other assets are received by the Borrower and/or its Restricted Subsidiaries in connection with any such asset sale, (I) the market value of such other assets, when added to the aggregate amount of other consideration received in connection with such asset sale, shall equal or exceed the market value of the assets so sold and (II) such assets are permitted to be acquired by the Borrower or any of its Restricted Subsidiaries pursuant to Section 8.02(g) at the time of consummation of such asset sale (both before and after giving effect to such asset sale); and (z) the aggregate value of all assets so sold (or deemed sold pursuant to any Permitted Restricted Subsidiary Conversion) by the Borrower and its Restricted Subsidiaries in any fiscal year shall not exceed $30,000,000. 8.03 LIENS. The Borrower will not, and will not permit any of its Restricted Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with respect to any property or assets of any kind (real or personal, tangible or intangible) of the Borrower or its Restricted Subsidiaries, whether now owned or hereafter acquired, or sell any such property or assets subject to an understanding or agreement, contingent or otherwise, to repurchase such property or assets (including sales of accounts receivable or notes with recourse to the Borrower or any of its Restricted Subsidiaries) or assign any right to receive income, except: (a) Liens for taxes not yet due or Liens for taxes being contested in good faith and by appropriate proceedings for which adequate reserves have been established in accordance with GAAP; (b) Liens in respect of property or assets of the Borrower or any of its Restricted Subsidiaries imposed by law which were incurred in the ordinary course of business and which have not arisen to secure Indebtedness for borrowed money, such as carriers', warehousemen's and mechanics' Liens, statutory landlord's Liens, and other similar Liens arising in the ordinary course of business, and which either (x) do not in the aggregate materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business of the Borrower or its Restricted Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the property or asset subject to such Lien; (c) Liens in existence on the Effective Date which are listed, and the property subject thereto described, in Annex IV, without giving effect to any extensions or renewal thereof ("Permitted Liens"); -40- (d) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 9.09; (e) Liens incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations incurred in the ordinary course of business (exclusive of obligations in respect of the payment for borrowed money); (f) leases or subleases granted to third Persons not interfering in any material respect with the business of the Borrower or any of its Restricted Subsidiaries; (g) easements, rights-of-way, restrictions, minor defects or irregularities in title and other similar charges or encumbrances not interfering in any material respect with the ordinary conduct of the business of the Borrower or any of its Restricted Subsidiaries; (h) Liens arising from UCC financing statements regarding leases permitted by this Agreement; (i) purchase money Liens securing payables arising from the purchase by the Borrower or any of its Restricted Subsidiaries of any equipment or goods in the normal course of business; (j) any interest or title of a lessor or sublessor under any lease permitted by this Agreement; (k) Liens created pursuant to Capital Leases permitted pursuant to Section 8.04(c); (l) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of custom duties in connection with the importation of goods so long as such Liens attach only to the imported goods; (m) Liens on assets acquired (or owned by a Restricted Subsidiary acquired) after the Effective Date securing Indebtedness permitted under Section 8.04(g), PROVIDED that at the time of such acquisition the value of the assets subject to such Liens does not exceed 10% of the total value of the assets so acquired, or of the assets of the Restricted Subsidiary so acquired, as the case may be; (n) Liens arising out of consignment or similar arrangements for the sale of goods entered into by the Borrower or any of its Restricted Subsidiaries in the ordinary course of business; (o) Liens created under this Agreement and/or the other Credit Documents; and; -41- (p) Liens not otherwise permitted hereunder which secure Indebtedness, Contingent Obligations or other obligations (in each case permitted hereunder) not exceeding (as to the Borrower and its Restricted Subsidiaries) $40,000,000 in the aggregate at any time outstanding. 8.04 INDEBTEDNESS. The Borrower will not, and will not permit any of its Restricted Subsidiaries to, contract, create, incur, assume or suffer to exist any Indebtedness, except: (a) Indebtedness incurred pursuant to this Agreement (including, without limitation, any indebtedness incurred pursuant to a supplement or amendment hereto entered into pursuant to Section 1.13); (b) Indebtedness incurred pursuant to the other Credit Documents; (c) Capitalized Lease Obligations of the Borrower and its Restricted Subsidiaries; PROVIDED that the aggregate Capitalized Lease Obligations under all Capital Leases outstanding at any one time shall not exceed $75,000,000; (d) Existing Indebtedness of the Borrower and its Restricted Subsidiaries outstanding on the Effective Date and listed on Part A of Annex V hereto ("Existing Debt"), without giving effect to any subsequent extension, renewal or refinancing thereof except pursuant to Section 8.04(i); (e) Indebtedness to the extent permitted pursuant to Section 8.05(c); (f) Indebtedness evidenced by the Subordinated Exchange Debentures after the issuance thereof in an aggregate principal amount not to exceed $575,000,000 at any time outstanding; (g) Indebtedness of a Restricted Subsidiary acquired after the Effective Date (or Indebtedness assumed at the time of an acquisition of an asset securing such Indebtedness), PROVIDED that (i) such Indebtedness was not incurred in connection with or in anticipation of such acquisition and (ii) at the time of such acquisition such Indebtedness does not exceed 10% of the total value of the assets of the Restricted Subsidiary so acquired, or of the asset so acquired, as the case may be; (h) additional Indebtedness of the Borrower and its Restricted Subsidiaries not otherwise permitted hereunder; PROVIDED that (A) in no event shall the final maturity of such Indebtedness occur prior to the Term Loan B Maturity Date, (B) in no event shall such Indebtedness have a shorter average life than the Loans hereunder, (C) in no event shall such Indebtedness contain terms and conditions (including, without limitation, with respect to the obligor and guarantors, if any, in respect of such Indebtedness, prepayment and redemption provisions, covenants, defaults, security, remedies and, if applicable, subordination provisions) materially less favorable to the Borrower and its Restricted Subsidiaries or to the Banks than the terms and conditions of (I) in the case of Indebtedness issued to the public or in accordance with Rule 144A or similar rule under -42- the Securities Act of 1933, as amended (the "Securities Act"), the Senior Notes, (II) in the case of other senior Indebtedness, this Agreement and the other Credit Documents, and (III) in the case of other Indebtedness, similar Indebtedness of the Borrower then outstanding or if no similar Indebtedness of the Borrower is then outstanding, the Senior Notes (in each case excluding the impact of market conditions on the interest rate and other economic terms) and (D) the Borrower shall have determined, with respect to the incurrence of such Indebtedness, that the Borrower and its Restricted Subsidiaries would have been in compliance, on PRO FORMA Basis, with Sections 8.09, 8.10 and 8.11 of this Agreement (any Indebtedness issued pursuant to this Section 8.04(h), "Additional Indebtedness"), PROVIDED FURTHER, that, the aggregate principal amount of any such Additional Indebtedness incurred directly by the Subsidiary Guarantors (taken as a whole), when added to the aggregate principal amount of Indebtedness incurred directly by the Subsidiary Guarantors (taken as a whole) pursuant to Section 8.04(j) shall not exceed $300,000,000 at any time outstanding; (i) Indebtedness of the Borrower and its Restricted Subsidiaries constituting Permitted Refinancing Debt; and (j) additional Indebtedness of the Borrower and its Restricted Subsidiaries (including, but not limited to, Non-Facility Letter of Credit Outstandings) not exceeding in an aggregate principal amount at any one time outstanding an amount equal to $250,000,000, PROVIDED that the aggregate principal amount of such Indebtedness incurred directly by the Subsidiary Guarantors (taken as a whole), when added to the aggregate principal amount of Additional Indebtedness incurred directly by the Subsidiary Guarantors (taken as a whole) pursuant to Section 8.04(h), shall not exceed $300,000,000 at any time outstanding. 8.05 ADVANCES, INVESTMENTS AND LOANS. The Borrower will not, and will not permit any of its Restricted Subsidiaries to, lend money or credit or make advances to any Person, or purchase or acquire any stock, obligations or securities of, or any other interest in, or make any capital contribution to, any Person, except (collectively, "Investments"): (a) the Borrower and its Restricted Subsidiaries may invest in cash and Cash Equivalents; (b) the Borrower or any of its Restricted Subsidiaries may acquire and hold receivables owing to it, if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms of the Borrower or such Restricted Subsidiary, as the case may be; (c) the Borrower may make intercompany loans and advances to any Restricted Subsidiary, and any Restricted Subsidiary may make intercompany loans and advances to any other Restricted Subsidiary or the Borrower (collectively, "Intercompany Loans"), PROVIDED that (i) no Intercompany Loan may be made to an Excluded Foreign Restricted Subsidiary at any time if after giving effect to such Intercompany Loan the Net Investments in Excluded Foreign Restricted Subsidiaries would exceed $50,000,000, and -43- (ii) no such Intercompany Loan may be made by the Borrower or a Wholly-Owned Restricted Subsidiary to an Excluded Domestic Restricted Subsidiary; (d) so long as no Default or Event of Default exists or would result therefrom, the Borrower and its Restricted Subsidiaries may make loans and advances of cash to, or cash capital contributions in, any Unrestricted Subsidiary of the Borrower; PROVIDED that (i) the sum of (A) the aggregate amount of capital contributions made in, plus the aggregate principal amount of loans or advances outstanding at any one time made to, Unrestricted Subsidiaries after the Effective Date pursuant to this clause (d) (such amount, the "Unrestricted Subsidiary Investment Amount") plus (B) the Aggregate Conversion Amount at such time, shall not exceed the Unrestricted Subsidiary Investment Limit then in effect, and (ii) the Unrestricted Subsidiary receiving cash proceeds from such loan, advance or contribution shall utilize the entire amount of cash so received to effectuate an acquisition of assets or capital stock of a Person not an affiliate of the Borrower and its Subsidiaries (other than pursuant to a Permitted Restricted Subsidiary Conversion or a Permitted Restricted Asset Sale) or to develop the Business and to finance the working capital needs of such Unrestricted Subsidiary; (e) the Borrower and its Restricted Subsidiaries shall be permitted to (i) make Permitted Acquisitions, (ii) engage in any transaction to the extent permitted by Section 8.02(e) and (iii) acquire and hold promissory notes issued by the purchasers of assets sold in accordance with Section 8.02(c) or 8.02(j); (f) the Borrower and any of its Restricted Subsidiaries may acquire and own investments (including debt obligations) received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business; (g) (i) the Borrower or any Subsidiary Guarantor may acquire capital stock or other equity securities (or warrants, rights or options with respect thereto) issued by any other Restricted Subsidiary and (ii) any Excluded Foreign Restricted Subsidiary may acquire capital stock or other equity securities (or warrants, rights or options with respect thereto) issued by any other Excluded Foreign Restricted Subsidiaries; (h) Interest Rate Protection Agreements permitted by Section 8.06(d) shall be permitted; (i) Investments by the Borrower or Restricted Subsidiaries in (x) Subsidiary Guarantors, PROVIDED that if the Subsidiary Guarantor in which such investment is made is a newly-formed Subsidiary or a Partially-Owned Restricted Subsidiary newly designated as a Subsidiary Guarantor pursuant to Section 8.14(b)(x), all of the applicable provisions of Section 8.14 shall have been satisfied with respect to such Restricted Subsidiary, (y) Excluded Domestic Restricted Subsidiaries, PROVIDED that, the Borrower shall have determined, in connection with any such investment, that the Borrower and its Restricted Subsidiaries would have been in compliance, on a PRO FORMA Basis, with -44- Sections 8.09, 8.10 and 8.11 of this Agreement and (z) in Excluded Foreign Restricted Subsidiaries, PROVIDED that no investment in an Excluded Foreign Restricted Subsidiary may be made at any time if after giving effect to such investment the Net Investments in Excluded Foreign Restricted Subsidiaries would exceed $50,000,000; (j) the Borrower and its Restricted Subsidiaries may make loans and advances to officers, employees and agents (i) in the ordinary course of business constituting travel advances or (ii) otherwise equal in the aggregate for the Borrower and its Restricted Subsidiaries, in the case of all loans and advances pursuant to this clause (ii), to no more than $45,000,000 at any one time outstanding less the principal amount of all Contingent Obligations then outstanding pursuant to Section 8.06(h); (k) the Borrower may acquire obligations of, or make loans or advances to, one or more management investors in connection with such management investors' acquisition of shares of capital stock of the Borrower so long as the proceeds thereof are used to purchase from the Borrower the capital stock of the Borrower; and (l) Investments not otherwise permitted hereunder with an aggregate cost or principal amount, as the case may be, not to exceed $200,000,000 at any time outstanding. 8.06 CONTINGENT OBLIGATIONS. The Borrower will not, and will not permit any of its Restricted Subsidiaries to, contract, create, incur, assume or suffer to exist any Contingent Obligations, except: (a) any Subsidiary Guarantor may become liable as guarantor with respect to any Indebtedness, obligation or liability of the Borrower or any other Subsidiary Guarantor to the extent that such Indebtedness, obligation or liability is otherwise permitted by this Agreement, PROVIDED that a Subsidiary Guarantor (x) may not guaranty any Subordinated Exchange Debentures and (y) may only guaranty Permitted Refinancing Debt if and to the extent either (A) it guaranteed the indebtedness refinanced thereby or (B) such Subsidiary Guarantor would have guaranteed the indebtedness refinanced thereby if it had been a Subsidiary of the Borrower while such indebtedness was outstanding; (b) Contingent Obligations pursuant to the Guaranties; (c) Contingent Obligations in respect of the Letters of Credit; (d) Contingent Obligations under Interest Rate Protection Agreements with respect to the Loans or any other Indebtedness of the Borrower and its Restricted Subsidiaries otherwise permitted by this Agreement; (e) Contingent Obligations pursuant to the Contribution Agreement; -45- (f) Contingent Obligations of the Borrower outstanding on the Effective Date and listed on Part B of Annex V hereto ("Existing Contingent Obligations"), without giving effect to any subsequent extension, renewal or refinancing thereof; (g) (i) the Borrower may become liable as guarantor with respect to any Indebtedness, obligation or liability of any Subsidiary Guarantor and (ii) any Excluded Foreign Restricted Subsidiary may become liable as a guarantor with respect to any Indebtedness, obligation or liability of any other Excluded Foreign Restricted Subsidiary, in each case to the extent that such Indebtedness, obligation or liability is otherwise permitted by this Agreement; (h) the Borrower and its Restricted Subsidiaries may guaranty in the ordinary course of business loans and advances to officers, employees and agents so long as the aggregate principal amount of the loans and advances so guaranteed does not exceed $45,000,000 less the principal amount of all loans and advances outstanding pursuant to Section 8.05(j); and (i) additional Contingent Obligations (including, without limitation, Contingent Obligations consisting of Non-Facility Letters of Credit and reimbursement obligations with respect thereto) not otherwise permitted hereunder not exceeding (for the Borrower and all of its Restricted Subsidiaries) in aggregate principal amount at any time outstanding an amount equal to the lesser of (x) $50,000,000 and (y) when added to the aggregate principal amount of Indebtedness outstanding under Section 8.04(j) at such time, $250,000,000. 8.07 DIVIDENDS, ETC. The Borrower will not, and will not permit any of its Restricted Subsidiaries to, declare or pay any dividends (other than dividends payable solely in capital stock of such Person) or return any capital to, its stockholders or authorize or make any other distribution, payment or delivery of property or cash to its stockholders as such, or redeem, retire, purchase or otherwise acquire, directly or indirectly, for a consideration, any shares of any class of its capital stock now or hereafter outstanding (or any warrants for or options or stock appreciation rights in respect of any of such shares), or set aside any funds for any of the foregoing purposes, and the Borrower will not permit any of its Restricted Subsidiaries to purchase or otherwise acquire for consideration any shares of any class of the capital stock of the Borrower or any other Subsidiary, as the case may be, now or hereafter outstanding (or any options or warrants or stock appreciation rights issued by such Person with respect to its capital stock) (all of the foregoing "Dividends"), except that: (a) the Borrower may pay regularly accruing dividends on each issuance of Preferred Stock through the issuance of additional shares of such Preferred Stock, PROVIDED that the Borrower may pay such regularly accruing dividends on its Preferred Stock in cash so long as no Default or Event of Default exists at such time or would result therefrom; (b) any Subsidiary of the Borrower may pay Dividends to the Borrower or to any Wholly-Owned Restricted Subsidiary of the Borrower; -46- (c) any Partially-Owned Restricted Subsidiary may pay cash Dividends to its stockholders, PROVIDED that the Borrower and its Restricted Subsidiaries must receive at least their proportionate share of any Dividends paid by such Subsidiary; (d) so long as no Default or Event of Default exists at such time or would result therefrom the Borrower may issue its Subordinated Exchange Debentures in exchange for its Series D Preferred Stock in accordance with the terms thereof, (y) the Borrower may issue its Subordinated Exchange Debentures in exchange for its Series F Preferred Stock in accordance with the terms thereof and (z) the Borrower may issue its Subordinated Exchange Debentures in exchange for its Series H Preferred Stock in accordance with the terms thereof, PROVIDED that in each such case, the Borrower shall have determined, with respect to such issuance, that the Borrower and its Restricted Subsidiaries would have been in compliance, on a PRO FORMA Basis, with Sections 8.09, 8.10 and 8.11 of this Agreement; (e) the Borrower may exchange shares of its common stock in replacement for shares of outstanding Preferred Stock; (f) the Borrower may issue Permitted Replacement Preferred Stock so long as either (x) such stock is issued in exchange for or (y) all of the proceeds from such issuance are used to redeem or repurchase, shares of outstanding Preferred Stock; (g) the Borrower may redeem or repurchase shares of its common stock from management investors; PROVIDED that (x) no Default or Event of Default is then in existence or would arise therefrom and (y) the aggregate amount of all cash paid in respect of all such shares and equity interests so redeemed or repurchased does not exceed the sum of (i) $10,000,000 in any fiscal year or $25,000,000 in the aggregate after the Effective Date and (ii) the amount of cash proceeds received by the Borrower in respect of the issuance of common equity to management investors on or after the Effective Date; (h) the Borrower and its Subsidiaries may enter into transactions permitted under Section 8.05(g); (i) the Borrower and its Restricted Subsidiaries may acquire the capital stock of Unrestricted Subsidiaries in accordance with the provisions of this Agreement; (j) so long as no Default or Event of Default exists at such time or would result therefrom, the Borrower may redeem or repurchase shares of its Preferred Stock at a price equal to the liquidation preference thereof plus accrued but unpaid dividends thereon and any applicable premium with respect thereto in exchange for, or with the proceeds of, Additional Preferred Stock and/or Indebtedness incurred under Sections 8.04(h) and/or 8.04(j) (it being understood and agreed that such redemption and/or repurchase need not occur contemporaneously with the issuance of such Additional Preferred Stock or Indebtedness); -47- (k) so long as no Default or Event of Default exists at such time or would result therefrom, the Borrower may declare and pay cash Dividends to the holders of its common stock (including, without limitation, repurchases of shares of its common stock), PROVIDED that (x) the aggregate amount of cash Dividends paid pursuant to this clause (k) during any fiscal year of the Borrower does not exceed $75,000,000 and (y) the Borrower shall have determined, in connection with such Dividend, that the Borrower and its Restricted Subsidiaries would have been in compliance, on a PRO FORMA Basis, with Sections 8.09, 8.10 and 8.11 of this Agreement; and (l) the Borrower may pay additional cash Dividends to the holders of its common stock so long as (x) no Default or Event of Default exists at such time or would result therefrom, (y) the Leverage Ratio at such time is less than 4.00:1.00 and (z) the Borrower shall have determined, in connection with such Dividend, that the Borrower and its Restricted Subsidiaries would have been in compliance, on a PRO FORMA Basis, with Sections 8.09, 8.10 and 8.11 of this Agreement. 8.08 TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will not permit any of its Restricted Subsidiaries to, enter into any transaction or series of transactions, whether or not in the ordinary course of business, with any Affiliate (other than the Borrower or any Restricted Subsidiary) other than on terms and conditions substantially as favorable to the Borrower or such Restricted Subsidiary as would be obtainable by the Borrower or such Restricted Subsidiary at the time in a comparable arm's-length transaction with a Person other than an Affiliate; PROVIDED that (i) the Borrower may pay management and transaction fees to KKR or its affiliates which have been disclosed in writing to the Banks prior to the Effective Date; (ii) the payment of transaction fees to KKR for the rendering of financial advice and services in connection with acquisitions, dispositions and financings by the Borrower and its Restricted Subsidiaries in amounts which are in accordance with past practices shall be permitted; (iii) loans and advances to officers, employees and agents in the ordinary course of business shall be permitted; (iv) customary fees may be paid to non-officer directors of the Borrower and/or its Restricted Subsidiaries; (v) the loans, advances and contributions made (or deemed made) in Unrestricted Subsidiaries in compliance with Section 8.05(d) shall be permitted; and (vi) transactions specifically permitted by the provisions of this Agreement to occur between the Borrower, its Restricted Subsidiaries and their respective Affiliates shall be permitted to the extent so otherwise specifically permitted. 8.09 FIXED CHARGE COVERAGE RATIO. The Borrower will not permit the ratio of (i) Consolidated EBITDA of the Borrower and its Restricted Subsidiaries to (ii) Consolidated Fixed Charges of the Borrower and its Restricted Subsidiaries, for any Test Period to be less than 1.05 to 1.0. 8.10 INTEREST COVERAGE RATIO. The Borrower will not permit the ratio of (i) Consolidated EBITDA of the Borrower and its Restricted Subsidiaries to (ii) Consolidated Interest Expense of the Borrower and its Restricted Subsidiaries for any Test Period ending during a period listed below to be less than the ratio set forth opposite such period below: -48- PERIOD RATIO ------ ----- Effective Date to and including June 30, 1.80 to 1.00 2003 July 1, 2003 to and including 2.00 to 1.00 December 31, 2003 January 1, 2004 to and including 2.25 to 1.00 December 31, 2004 January 1, 2005 and thereafter 2.50 to 1.00 8.11 LEVERAGE RATIO. The Borrower will not permit the ratio (the "Leverage Ratio") of (i) Consolidated Debt of the Borrower and its Restricted Subsidiaries at any date of determination thereof (net of cash and Cash Equivalents held by the Borrower and its Restricted Subsidiaries at such time in excess of $5,000,000) to (ii) Consolidated EBITDA of the Borrower and its Restricted Subsidiaries for the Test Period then last ended, to exceed, at any time during a period set forth below, the ratio set forth opposite such period below: PERIOD RATIO ------ ----- Effective Date to and including June 30, 6.00 to 1.00 2003 July 1, 2003 to and including 5.75 to 1.00 December 31, 2003 January 1, 2004 to and including 5.50 to 1.00 December 31, 2004 January 1, 2005 to and including December 5:00 to 1:00 31, 2005 January 1, 2006 and thereafter 4.50 to 1.00 8.12 ISSUANCE OF STOCK. The Borrower will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, issue, sell, assign, pledge or otherwise encumber or dispose of any shares of its or such Restricted Subsidiary's preferred or preference stock or other redeemable equity securities (or warrants, rights or options to acquire shares of any of the foregoing) except: (a) in the case of shares of capital stock of the Borrower and its Restricted Subsidiaries, to the extent permitted by Section 8.02, 8.03, 8.05, 8.07 or 8.13(b); -49- (b) issuances by Restricted Subsidiaries to the Borrower or to Wholly-Owned Restricted Subsidiaries; and (c) issuances by the Borrower of additional preferred stock not otherwise permitted hereunder; PROVIDED that (A) in no event shall such preferred stock contain any provision requiring mandatory redemption or permitting any put with respect to all or any portion of such stock prior to the Term Loan B Maturity Date, (B) in no event shall such preferred stock contain terms and conditions (including, without limitation, liquidation preferences, voting rights and exchange rights) materially less favorable to the Borrower and its Restricted Subsidiaries or to the Banks than the terms and conditions of the Existing Preferred Stock (excluding the impact of market conditions on the dividend rate and other economic terms) and (C) the Borrower shall have determined, in connection with such issuance, that the Borrower and its Restricted Subsidiaries would have been in compliance, on a PRO FORMA Basis, with Sections 8.09, 8.10 and 8.11 of this Agreement, PROVIDED that, for purposes of the calculation of compliance with Section 8.09, the ratio set forth in Section 8.09 shall be deemed to equal 1.25 to 1.0 (any Preferred Stock issued pursuant to this Section 8.12(c), "Additional Preferred Stock"). 8.13 MODIFICATIONS OF CERTAIN AGREEMENTS, ETC. The Borrower will not, and will not permit any of its Subsidiaries to: (a) after the issuance thereof, amend or modify (or permit the amendment or modification of) any of the terms or provisions of the Senior Notes, the Preferred Stock, the Subordinated Exchange Debentures or any agreement related to any of the foregoing, provided that Permitted Amendments may be made to the Senior Notes, the Preferred Stock, any Subordinated Exchange Debenture, and the documents governing the terms of any of the foregoing; or (b) make (or give any notice in respect thereof) any voluntary or optional payment or prepayment or redemption or acquisition for value of (including, without limitation, by way of depositing with the trustee with respect thereto money or securities before due for the purpose of paying when due) or exchange of any Subordinated Exchange Debentures, or any Permitted Refinancing Debt (to the extent issued to refinance Subordinated Exchange Debentures), PROVIDED that (i) the Subordinated Exchange Debentures and any Permitted Refinancing Debt previously issued to refinance same may be (A) refinanced with (I) Additional Indebtedness (to the extent that such Additional Indebtedness would have qualified as Permitted Refinancing Debt in respect thereof if it had been issued contemporaneously with such refinancing) and/or Permitted Refinancing Debt or (II) the proceeds from a common equity issuance by the Borrower or an issuance by the Borrower of Additional Preferred Stock, in each case, after the Effective Date or (B) exchanged for Additional Preferred Stock or non-redeemable common equity of the Borrower (it being understood and agreed that any refinancing of such Indebtedness need not occur contemporaneously with the issuance of such Additional Indebtedness, Additional Preferred Stock and/or common equity) and (ii) the Borrower's 10-1/4% Senior Notes due 2004 may be prepaid, redeemed or acquired for value, in whole or in part (including, without limitation, by way of depositing with the trustee with respect thereto, money or securities before due for the purpose of paying when due) . In addition, the Borrower will not, and will not permit any of its Restricted Subsidiaries to, agree to modify, supplement, amend, rescind or otherwise alter the terms, conditions or provisions of its Certificate of Incorporation (including, without limitation, by the filing of any certificate of designation) or its By-Laws in any material respect, other than such modifications, supplements or amendments that would not -50- materially adversely affect the interests of the Banks under this Agreement or the other Credit Documents. 8.14 LIMITATION ON THE CREATION OF SUBSIDIARIES; REDESIGNATION OF PARTIALLY-OWNED RESTRICTED SUBSIDIARIES. (a) Notwithstanding anything to the contrary contained in this Agreement, the Borrower shall not, and shall not permit any Subsidiary to, establish, create or acquire after the Effective Date any Subsidiary unless (w) such Subsidiary is an Unrestricted Subsidiary; (x) such Subsidiary is an Excluded Foreign Restricted Subsidiary; (y) such Subsidiary is a Partially-Owned Restricted Subsidiary and at the time of creation or acquisition thereof, the Borrower shall have made a Non-Guarantor Designation with respect to such Partially-Owned Restricted Subsidiary in accordance with the terms hereof or (z) such Subsidiary is a Restricted Subsidiary (other than a Restricted Subsidiary of the type described in clauses (x) or (y) above) and each such new Restricted Subsidiary becomes a party to the Subsidiary Guaranty by executing a Subsidiary Assumption Agreement in the form of Exhibit H hereto. (b) At any time and from time to time, (x) the Borrower may redesignate any Excluded Domestic Restricted Subsidiary as a Subsidiary Guarantor by giving notice thereof to the Administrative Agent and by causing such Subsidiary to become a party to the Subsidiary Guaranty by executing a Subsidiary Assumption Agreement in the form of Exhibit H hereto, and (y) the Borrower may redesignate any Subsidiary Guarantor which is a Partially-Owned Restricted Subsidiary as an Excluded Domestic Restricted Subsidiary by making a Non-Guarantor Designation with respect to such Subsidiary in accordance with the terms hereof. (c) At the time of the creation of any Subsidiary described in clause (z) of Section 8.14(a) and at the time of any redesignation pursuant to clause (x) of Section 8.14(b), each such new Subsidiary Guarantor shall execute and deliver, or cause to be executed and delivered, in each case to the extent not previously executed and delivered, all other relevant documentation of the type described in Section 5 as such new Subsidiary Guarantor would have had to deliver if such new Restricted Subsidiary had been a Restricted Subsidiary and a Subsidiary Guarantor on the Initial Borrowing Date. (d) Notwithstanding anything to the contrary contained in this Section 8.14 or elsewhere in this Agreement, in no event shall any Subsidiary of the Borrower guaranty any Indebtedness of the Borrower or any Wholly-Owned Subsidiary unless such Subsidiary is a party to the Subsidiary Guaranty; PROVIDED that, to the extent not prohibited by Section 8.04 hereof, (x) Excluded Foreign Restricted Subsidiaries may guaranty Indebtedness of other Excluded Foreign Restricted Subsidiaries and (y) Unrestricted Subsidiaries may guaranty Indebtedness of other Unrestricted Subsidiaries. (e) Notwithstanding anything to the contrary contained in this Section 8.14 or elsewhere in this Agreement, the Borrower will not have any direct Subsidiaries other than Intermediate HoldCo, unless all of the capital stock of such Subsidiary owned directly or indirectly by the Borrower shall have been pledged pursuant to a supplement to the Pledge Agreement satisfactory to the Administrative Agent. -51- SECTION 9. EVENTS OF DEFAULT. Upon the occurrence of any of the following specified events (each an "Event of Default"): 9.01 PAYMENTS. (a) The Borrower shall (i) default in the payment when due of any principal of the Loans or (ii) default, and such default shall continue for five or more days, in the payment when due of any Unpaid Drawing, any interest on the Loans or any Fees or any other amounts owing hereunder or under any other Credit Document or (b) any Guarantor shall default in the payment when due of any amount in respect of any payment of the type described in clause (a)(ii) above pursuant to its Guaranty, and such default shall continue for five or more days; or 9.02 REPRESENTATIONS, ETC. Any representation, warranty or statement made by the Borrower or any Subsidiary Guarantor herein or in any other Credit Document or in any statement or certificate delivered pursuant hereto or thereto shall prove to be untrue in any material respect on the date as of which made or deemed made; or 9.03 COVENANTS. The Borrower shall (a) default in the due performance or observance by it of any term, covenant or agreement contained in Section 7.08, or 8, or (b) default in the due performance or observance by it of any term, covenant or agreement (other than those referred to in Section 9.01, 9.02 or clause (a) of this Section 9.03) contained in this Agreement and such default shall continue unremedied for a period of at least 30 days after notice to the defaulting party by the Administrative Agent or the Required Banks; or 9.04 DEFAULT UNDER OTHER AGREEMENTS. (a) The Borrower or any of its Restricted Subsidiaries shall (i) default in any payment with respect to any Indebtedness or Contingent Obligation (other than the Obligations) beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness or Contingent Obligation was created or (ii) default in the observance or performance of any agreement or condition relating to any such Indebtedness or Contingent Obligation or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness or Contingent Obligation (or a trustee or agent on behalf of such holder or holders) to cause any such Indebtedness or Contingent Obligation to become due prior to its stated maturity; or (b) any Indebtedness or Contingent Obligation (other than the Obligations) of the Borrower or any of its Restricted Subsidiaries shall be declared to be due and payable, or shall be required to be prepaid other than by a regularly scheduled required prepayment or as a mandatory prepayment (unless such required prepayment or mandatory prepayment results from a default thereunder or an event of the type that constitutes an Event of Default), prior to the stated maturity thereof, PROVIDED that it shall not constitute an Event of Default pursuant to clause (a) or (b) of this Section 9.04 unless the aggregate amount of all such Indebtedness and Contingent Obligations referred to in clauses (a) and (b) above exceeds $20,000,000 at any one time; or 9.05 BANKRUPTCY, ETC. The Borrower or any of its Material Subsidiaries shall commence a voluntary case concerning itself under Title 11 of the United States Code entitled "Bankruptcy," as now or hereafter in effect, or any successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced against the Borrower or any of its Material Subsidiaries and the petition is not controverted within 10 days, or is not dismissed within 60 days, after -52- commencement of the case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge of, all or substantially all of the property of the Borrower or any of its Material Subsidiaries; or the Borrower or any of its Material Subsidiaries commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to the Borrower or any of its Material Subsidiaries; or there is commenced against the Borrower or any of its Material Subsidiaries any such proceeding which remains undismissed for a period of 60 days; or the Borrower or any of its Material Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or the Borrower or any of its Material Subsidiaries suffers any appointment of any custodian or the like for it or any substantial part of its property to continue undischarged or unstayed for a period of 60 days; or the Borrower or any of its Material Subsidiaries makes a general assignment for the benefit of creditors; or any corporate action is taken by the Borrower or any of its Material Subsidiaries for the purpose of effecting any of the foregoing; or 9.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding standard required for any plan year or part thereof or a waiver of such standard or extension of any amortization period is sought or granted under Section 412 of the Code; any Plan is, shall have been or is likely to be terminated or the subject of termination proceedings under ERISA; any Plan shall have an Unfunded Current Liability; or the Borrower, any Restricted Subsidiary or any ERISA Affiliate has incurred or is likely to incur a liability to or on account of a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code; or the Borrower or any Restricted Subsidiary has incurred or is likely to incur liabilities pursuant to one or more employee welfare benefit plans (as defined in Section 3(1) of ERISA) which provide benefits to retired employees (other than as required by Section 601 of ERISA); and (b) there shall result from any such event or events the imposition of a lien, the granting of a security interest, or a liability or a material risk of incurring a liability, on the part of the Borrower, any of its Restricted Subsidiaries or any ERISA Affiliate, which lien, security interest or liability will have a material adverse effect on the condition (financial or otherwise), operations, assets, liabilities or prospects of the Borrower and its Restricted Subsidiaries taken as a whole; or 9.07 GUARANTY. (a) Any Guaranty or any provision thereof shall cease to be in full force and effect, or any Guarantor thereunder or any Person acting on behalf of such Guarantor shall deny or disaffirm such Guarantor's obligations under such Guaranty or (b) except as otherwise provided in Section 9.01(b), any Guarantor shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to the respective Guaranty, PROVIDED that in the case of Section 13 of the Subsidiary Guaranty, if the default constitutes a failure to perform or comply with any provision, covenant or agreement contained in Section 7 (other than Section 7.08) of this Agreement, such default shall continue unremedied for a period of at least 30 days after notice to the defaulting Guarantor by the Administrative Agent or the Required Banks; or 9.08 PLEDGE AGREEMENT. (a) The Pledge Agreement shall cease to be in full force and effect, or shall cease to give the Collateral Agent for the benefit of the Secured Creditors the -53- Liens, rights, powers and privileges purported to be created thereby, except as a result of the negligent or willful failure of the Collateral Agent to maintain possession of the certificated Collateral, or (b) the Borrower shall default in any material respect in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to the Pledge Agreement; or 9.09 JUDGMENTS. One or more judgments or decrees shall be entered against the Borrower or any of its Subsidiaries involving a liability of $15,000,000 or more in the case of any one such judgment or decree or $25,000,000 or more in the aggregate for all such judgments and decrees for the Borrower and its Subsidiaries (not paid or to the extent not covered by insurance) and any such judgments or decrees shall not have been vacated, discharged or stayed or bonded pending appeal within 60 days from the entry thereof; or 9.10 OWNERSHIP. A Change of Control Event shall have occurred; then, and in any such event, and at any time thereafter, if any Event of Default shall then be continuing, the Administrative Agent shall, upon the written request of the Required Banks, by written notice to the Borrower, take any or all of the following actions, without prejudice to the rights of the Administrative Agent, the Letter of Credit Issuer or any Bank to enforce its claims against the Borrower, except as otherwise specifically provided for in this Agreement (PROVIDED that if an Event of Default specified in Section 9.05 shall occur with respect to the Borrower, the result which would occur upon the giving of written notice by the Administrative Agent as specified in clauses (i) and (ii) below shall occur automatically without the giving of any such notice): (i) declare the Total Commitment (or the unutilized portion thereof) terminated, whereupon the Commitment of each Bank (or the unutilized portion thereof) shall forthwith terminate immediately and any Commitment Fees shall forthwith become due and payable without any other notice of any kind; (ii) declare the principal of and any accrued interest in respect of all Loans and all obligations owing hereunder (including Unpaid Drawings) to be, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; (iii) enforce, as Collateral Agent (or direct the Collateral Agent to enforce), any or all of the Liens and security interests created pursuant to the Pledge Agreement; (iv) terminate any Letter of Credit which may be terminated in accordance with its terms; and (v) direct the Borrower to pay (and the Borrower hereby agrees upon receipt of such notice, or upon the occurrence of any Event of Default specified in Section 9.05, to pay) to the Administrative Agent at the Payment Office such additional amounts of cash, to be held as security for the Borrower's reimbursement obligations in respect of Letters of Credit then outstanding, equal to the aggregate Stated Amount of all Letters of Credit then outstanding. SECTION 10. DEFINITIONS. As used herein, the following terms shall have the meanings herein specified unless the context otherwise requires. Defined terms in this Agreement shall include in the singular number the plural and in the plural the singular: "Acquired Entity" shall have the meaning provided in Section 8.02(g). "Additional Indebtedness" shall have the meaning provided in Section 8.04(h). -54- "Additional Preferred Stock" shall have the meaning provided in Section 8.12(c). "Adjusted Percentage" shall mean (x) at a time when no Bank Default exists, for each Bank such Bank's Revolving Loan Percentage and (y) at a time when a Bank Default exists (i) for each Bank that is a Defaulting Bank, zero and (ii) for each Bank that is a Non-Defaulting Bank, the percentage determined by dividing such Bank's Revolving Loan Commitment at such time by the Adjusted Total Revolving Loan Commitment at such time, it being understood that all references herein to Revolving Loan Commitments and the Adjusted Total Revolving Loan Commitment at a time when the Total Revolving Loan Commitment or Adjusted Total Revolving Loan Commitment, as the case may be, has been terminated shall be references to the Revolving Loan Commitments or Adjusted Total Revolving Loan Commitment, as the case may be, in effect immediately prior to such termination, PROVIDED that (A) no Bank's Adjusted Percentage shall change upon the occurrence of a Bank Default from that in effect immediately prior to such Bank Default if, after giving effect to such Bank Default and any repayment of Revolving Loans and Swingline Loans at such time pursuant to Section 4.02(a) or otherwise, the sum of (i) the aggregate outstanding principal amount of Revolving Loans of all Non-Defaulting Banks plus (ii) the aggregate outstanding principal amount of Swingline Loans plus (iii) the Letter of Credit Outstandings, exceeds the Adjusted Total Revolving Loan Commitment; (B) the changes to the Adjusted Percentage that would have become effective upon the occurrence of a Bank Default but that did not become effective as a result of the preceding clause (A) shall become effective on the first date after the occurrence of the relevant Bank Default on which the sum of (i) the aggregate outstanding principal amount of the Revolving Loans of all Non-Defaulting Banks plus (ii) the aggregate outstanding principal amount of Swingline Loans plus (iii) the Letter of Credit Outstandings is equal to or less than the Adjusted Total Revolving Loan Commitment; and (C) if (i) a Non-Defaulting Bank's Adjusted Percentage is changed pursuant to the preceding clause (B) and (ii) any repayment of such Bank's Revolving Loans, or of Unpaid Drawings with respect to Letters of Credit or of Swingline Loans, that was made during the period commencing after the date of the relevant Bank Default and ending on the date of such change to its Adjusted Percentage must be returned to the Borrower as a preferential or similar payment in any bankruptcy or similar proceeding of the Borrower, then the change to such Non-Defaulting Bank's Adjusted Percentage effected pursuant to said clause (B) shall be reduced to that positive change, if any, as would have been made to its Adjusted Percentage if (x) such repayments had not been made and (y) the maximum change to its Adjusted Percentage would have resulted in the sum of the outstanding principal of Revolving Loans made by such Bank plus such Bank's new Adjusted Percentage of the outstanding principal amount of Swingline Loans and of Letter of Credit Outstandings equaling such Bank's Revolving Loan Commitment at such time. "Adjusted Revolving Loan Commitment" for each Non-Defaulting Bank shall mean at any time the product of such Bank's Adjusted Percentage and the Adjusted Total Revolving Loan Commitment. "Adjusted Total Revolving Loan Commitment" shall mean at any time the Total Revolving Loan Commitment less the aggregate Revolving Loan Commitments of all Defaulting Banks. -55- "Administrative Agent" shall have the meaning provided in the first paragraph of this Agreement and shall include any successor to the Administrative Agent appointed pursuant to Section 11.10. "Affected Eurodollar Loan" shall have the meaning provided in Section 4.02(g). "Affected Period" shall mean, with respect to each Affected Transaction, the period commencing on the date occurring twelve months prior to the last day of the then most recently ended fiscal quarter of the Borrower and ending on the date such Affected Transaction is consummated. "Affected Transaction" shall mean and include each of the following: (i) any transfer of assets to an Excluded Domestic Restricted Subsidiary in connection with a transaction permitted pursuant to Section 8.02(e), (ii) any Permitted Acquisition, (iii) any incurrence of Additional Indebtedness, (iv) any investment in an Excluded Domestic Restricted Subsidiary pursuant to Section 8.05(d), (v) any issuance of Subordinated Exchange Debentures, (vi) the payment of any Dividend as permitted by Section 8.07(k) or (l), (vii) any issuance of Additional Preferred Stock, (viii) any Permitted Restricted Subsidiary Conversion or Non-Guarantor Designation and (ix) any designation of an Unrestricted Subsidiary as a Restricted Subsidiary pursuant to the definition of "Restricted Subsidiaries." "Affiliate" shall mean, with respect to any Person, any other Person directly or indirectly controlling (including but not limited to all directors and officers of such Person), controlled by, or under direct or indirect common control with such Person. A Person shall be deemed to control a corporation if such Person possesses, directly or indirectly, the power (i) to vote 10% or more of the securities having ordinary voting power for the election of directors of such corporation or (ii) to direct or cause the direction of the management and policies of such corporation, whether through the ownership of voting securities, by contract or otherwise. "Aggregate Conversion Amount" shall mean, at any time, the sum of the Conversion Value Amount with respect to each Permitted Restricted Subsidiary Conversion consummated after the Effective Date but on or prior to the date of determination thereof. "Aggregate Unutilized Revolving Loan Commitment" with respect to any Bank at any time shall mean such Bank's Revolving Loan Commitment at such time less the sum of (i) the aggregate outstanding principal amount of all Revolving Loans made by such Bank and (ii) such Bank's Adjusted Percentage of the Letter of Credit Outstandings at such time. "Agreement" shall mean this Credit Agreement, as the same may be from time to time modified, amended and/or supplemented. "Applicable Commitment Fee Percentage" shall mean the percentage set forth below under the heading Applicable Commitment Fee Percentage opposite the ratio of (i) Consolidated Debt as of the last day of the most recent fiscal year or fiscal quarter in respect of which the Banks shall have received Section 7.01 Financials to (ii) Consolidated EBITDA for the Test Period ending on the last day of such fiscal year or fiscal quarter (it being understood that -56- each Applicable Commitment Fee Percentage shall be in effect from the date the respective Section 7.01 Financials are required to be delivered to the Banks until the date the next such Section 7.01 Financials are required to be delivered to the Banks at which time the Applicable Margin shall be reset in accordance with the foregoing provisions of this definition): Applicable Commitment Fee DEBT/EBITDA RATIO PERCENTAGE ----------------- ---------- 5.25:1 or Greater .500% Less than 5.25:1 .375% ; PROVIDED that if (A) if Late Section 7.01 Financials are delivered and such Late Section 7.01 Financials establish that any Applicable Commitment Fee Percentage would have been increased or reduced to an amount set forth in the table above on the Required Delivery Date and (B) the Borrower shall have made any payment of Commitment Fees during the period from the Required Delivery Date to the actual date of delivery of such Late Section 7.01 Financials based upon any such lower or higher Applicable Commitment Fee Percentage, then (x) in the case of actual payments based on any such lower Applicable Commitment Fee Percentage, the Borrower shall pay in the form of a supplemental Commitment Fee payment, an amount which equals the difference between the amount of Commitment Fees which would otherwise have been paid determined as if the Late Section 7.01 Financials were delivered on the Required Delivery Date and the amount of such Commitment Fees so paid, which supplemental Commitment Fee payment shall be due and payable on the date of delivery of the Late Section 7.01 Financials and (y) in the case of actual payments made based on such higher Applicable Commitment Fee Percentage, the Banks shall retain all such amounts so paid. "Applicable Letter of Credit Fee Percentage" shall mean at any time, the Applicable Margin then in effect for Eurodollar Loans that are Revolving Loans less 1/4 of 1%. "Applicable Margin" shall mean, at any time, (a) with respect to Base Rate Loans, the margin set forth below under the heading Applicable Base Rate Margin and (b) with respect to Eurodollar Loans, the margin set forth below under the heading Applicable Eurodollar Margin, in each case, opposite the ratio of (i) Consolidated Debt as of the last day of the most recent fiscal year or fiscal quarter in respect of which the Banks shall have received Section 7.01 Financials to (ii) Consolidated EBITDA for the Test Period ending on the last day of such fiscal year or fiscal quarter (it being understood that each Applicable Margin shall be in effect from the date the respective Section 7.01 Financials are required to be delivered to the Banks until the date the next such Section 7.01 Financials are required to be delivered to the Banks at which time the Applicable Margin shall be reset in accordance with the foregoing provisions of this definition): -57-
APPLICABLE EURODOLLAR APPLICABLE BASE RATE DEBT/EBITDA RATIO MARGIN MARGIN ----------------- --------- ------ 5.75:1 or Greater 2.500% 1.500% Less than 5.75:1 but equal 2.125% 1.125% to or greater than 5.25:1 Less than 5.25:1 but equal to or 1.750% .750% greater than 4.75:1 Less than 4.75:1 but equal to or 1.500% .500% greater than 4.25:1 Less than 4.25:1 but equal to or 1.250% .250% greater than 3.75:1 Less than 3.75:1 1.125% .125%
; PROVIDED that if (A) any Section 7.01 Financials are not delivered when required (the "Late Section 7.01 Financials") and such Late Section 7.01 Financials establish that any Applicable Margin would have been increased or reduced to an amount set forth in the table above on the date that such Late Section 7.01 Financials were required to have been delivered (the "Required Delivery Date") and (B) the Borrower shall have made any interest payment during the period from the Required Delivery Date to the actual date of delivery of such Late Section 7.01 Financials based upon any such lower or higher Applicable Margin, then (x) in the case of actual payments based on any such lower Applicable Margin, the Borrower shall pay in the form of a supplemental interest payment, an amount which equals the difference between the amount of interest which would otherwise have been paid determined as if the Late Section 7.01 Financials were delivered on the Required Delivery Date and the amount of such interest so paid, which supplemental interest payment shall be due and payable on the date of delivery of the Late Section 7.01 Financials and (y) in the case of actual payments made based on such higher Applicable Margin, the Banks shall retain all such amounts so paid. Notwithstanding anything to the contrary contained above, the Applicable Margin for the period from the Effective Date to, but not including, the date that the Borrower's financial statements are delivered pursuant to Section 7.01(a) of this Agreement for the fiscal year ending December 31, 2001 shall be the greater of (i) the Applicable Margin set forth opposite the Borrower's actual Consolidated Debt/EBITDA Ratio for the applicable Test Period and (ii) the Applicable Margin determined as if the Borrower's Consolidated Debt/EBITDA ratio was less than 5.25:1, but equal to or greater than 4.75:1 for the applicable Test Period. "Applicable Term Loan B Margin" shall mean, at any time, (a) with respect to Base Rate Loans, 1.750% and (b) with respect to Eurodollar Loans, 2.750%. "Appraisal Firm" shall mean an independent appraisal firm (which may be an investment banking firm of national recognition) selected by, and at the expense of, the Borrower and reasonably satisfactory to the Administrative Agent. -58- "Approved Bank" shall have the meaning provided in the definition of Cash Equivalents. "Approved Fund" shall mean, with respect to any Bank, any fund or commingled investment vehicle that invests in loans and is managed or advised by the same investment advisor (or an affiliate of such investment advisor) as such Bank or an affiliate of such Bank. "Asset Sale" shall mean any sale, transfer or other disposition by the Borrower or any of its Restricted Subsidiaries to any Person other than the Borrower or any Restricted Subsidiary of any asset (including, without limitation, any capital stock or other securities of another Person, but excluding any sale, transfer or other disposition by the Borrower of its capital stock) of the Borrower or such Restricted Subsidiary, including, without limitation, a Permitted Restricted Asset Sale and any sale, transfer or other disposition deemed made pursuant to a Permitted Restricted Subsidiary Conversion (other than (x) any sale, transfer or disposition of Cash Equivalents; (y) any sale, transfer or disposition permitted by Section 8.02(a), (e) or (h); and (z) for purposes of Sections 3.03(d), any sale, transfer or disposition of assets (other than capital stock or other securities of any Subsidiary) that results in Available Cash Proceeds (including Available Cash Proceeds of any related sale, transfer or disposition) of not in excess of $2,500,000). "Authorized Officer" shall mean any officer of the Borrower designated as such in writing to the Administrative Agent by the Borrower, in each case to the extent reasonably acceptable to the Administrative Agent. "Available Cash Proceeds" shall mean, with respect to any sale, lease, transfer or other disposition of assets, the aggregate cash payments (including any cash received by way of deferred payment pursuant to a note receivable issued in connection with such sale, lease, transfer or other disposition, other than the portion of such deferred payment constituting interest, and including any amounts received as disbursement or withdrawals from any escrow or similar account established in connection with any such sale, lease, transfer or other disposition, but, in either such case, only as and when so received; but excluding any portion of cash payments which the Borrower determines in good faith (x) should be reserved for post-closing adjustments (to the extent the Borrower delivers to the Administrative Agent a certificate signed by its chief financial officer, treasurer, controller or chief accounting officer as to such determination) or (y) must be applied to repurchase Senior Notes pursuant to the Senior Note Documents (to the extent the Borrower delivers to the Administrative Agent a certificate signed by its chief financial officer, treasurer, controller or chief accounting officer as to such determination), it being understood and agreed that on the date that all such post-closing adjustments have been determined and/or the date such repurchases shall be required to be effected, as the case may be, the amount (if any) by which the reserved amount in respect of such sale or disposition exceeds the actual post-closing adjustments payable by the Borrower or any of its Subsidiaries or actual amount expended in connection with such repurchases, as the case may be, shall constitute Available Cash Proceeds on such date) received by the Borrower and/or any of its Subsidiaries from such sale, lease, transfer or other disposition. "Bank" shall have the meaning provided in the first paragraph of this Agreement. -59- "Bank Default" shall mean (i) the refusal (which has not been retracted) of a Bank to make available its portion of any Borrowing or to fund its portion of any unreimbursed payment under Section 2.05(c) or (ii) a Bank having notified the Administrative Agent and/or the Borrower that it does not intend to comply with the obligations under Section 1.01(c), 1.01(d) or 2.05(c), in the case of either (i) or (ii) as a result of the appointment of a receiver or conservator with respect to such Bank at the direction or request of any regulatory agency or authority. "Bankruptcy Code" shall have the meaning provided in Section 9.05. "Base Rate" at any time shall mean the higher of (x) the rate which is 1/2 of 1% in excess of the Federal Funds Effective Rate and (y) the Prime Lending Rate as in effect from time to time. "Base Rate Loan" shall mean each Loan bearing interest at the rates provided in Section 1.08(a). "Borrower" shall have the meaning provided in the first paragraph of this Agreement. "Borrowing" shall mean a borrowing of Loans under a single Tranche from all Banks having Commitments with respect to such Tranche (or from Chase in the case of Swingline Loans) on a given date (or resulting from conversions on a given date), in each case, as required by the provisions of this Agreement, being of a single Type of Loans and having, in the case of Eurodollar Loans, the same Interest Period, provided that Base Rate Loans incurred pursuant to Section 1.10(b) shall be considered part of any related Borrowing of Eurodollar Loans. "Business" shall mean and include the communications, information, education, publishing and/or media businesses. "Business Day" shall mean (i) for all purposes other than as covered by clause (ii) below, any day excluding Saturday, Sunday and any day which shall be in the City of New York a legal holiday or a day on which banking institutions are authorized by law or other governmental actions to close, (ii) with respect to all notices and determinations in connection with, and payments of principal and interest on, Eurodollar Loans, any day which is a Business Day described in clause (i) and which is also a day for trading by and between banks in U.S. dollar deposits in the interbank Eurodollar market. "Capital Expenditures" shall mean, for any period, any expenditures (whether paid in cash or accrued as liabilities and including in all events all amounts expended or capitalized under Capital Leases) by any Person during that period that, in conformity with GAAP, are or are required to be included in the property, plant or equipment reflected in the balance sheet of such Person. "Capital Lease," as applied to any Person, shall mean any lease of any property (whether real, personal or mixed) by that Person as lessee which, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of that Person. -60- "Capitalized Lease Obligations" shall mean all obligations under Capital Leases of the Borrower or any of its Restricted Subsidiaries in each case taken at the amount thereof accounted for as liabilities in accordance with GAAP. "Cash Equivalents" shall mean (i) securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof) having maturities of not more than one year from the date of acquisition, (ii) U.S. dollar denominated time deposits, certificates of deposit and bankers acceptances of (x) any Bank, (y) any commercial bank of recognized standing having capital and surplus in excess of $500,000,000 or (z) any bank whose short-term commercial paper rating from Standard & Poor's Ratings Group ("S&P") is at least A-2 or the equivalent thereof or from Moody's Investors Service, Inc. ("Moody's") is at least P-2 or the equivalent thereof (any such bank or Bank, an "Approved Bank"), in each case with maturities of not more than one year from the date of acquisition, (iii) commercial paper issued by any Approved Bank or by the parent company of any Approved Bank and commercial paper issued by, or guaranteed by, any industrial or financial company with a short-term commercial paper rating of at least A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent thereof by Moody's, or guaranteed by any industrial company with a long term unsecured debt rating of at least A or A2, or the equivalent of each thereof, from S&P or Moody's, as the case may be, and in each case maturing within one year after the date of acquisition, (iv) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either S&P or Moody's and (v) investments in money market funds substantially all the assets of which are comprised of securities of the types described in clauses (i) through (iv) above. "Change of Control Event" shall mean (a) any "Change of Control" or similar term as defined in the indentures governing the terms of the Senior Notes as in effect on the Initial Borrowing Date or in any agreement governing any Indebtedness incurred pursuant to Section 8.04(f), (h), (i) or (j); (b) any Person or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended), other than KKR and/or one or more Affiliates of KKR, becomes the "beneficial owner" (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of a percentage of the voting common stock of the Borrower equal to or greater than the greater of (i) 35% and (ii) the percentage of such voting common stock then held (directly or indirectly) by KKR and its Affiliates; (c) during any period of two consecutive calendar years, directors who at the beginning of such period (together with any new directors whose election by the Borrower's Board of Directors or whose nomination for election by the Borrower's shareholders was approved by vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the directors then in office; (d) the Borrower shall cease to own, directly, 100% of the capital stock of Intermediate HoldCo; or (e) Intermediate HoldCo shall cease to own, directly or indirectly, each Subsidiary of the Borrower other than (x) Intermediate HoldCo, (y) Subsidiaries the capital stock of which is pledged to the Collateral Agent in accordance with -61- Section 8.14(e) and (z) Subsidiaries that cease to be Subsidiaries in accordance with Section 8.02. "Chase" shall mean The Chase Manhattan Bank or any successor thereto by merger. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time and the regulations promulgated and the rulings issued thereunder. Section references to the Code are to the Code, as in effect at the date of this Agreement and any subsequent provisions of the Code amendatory thereof, supplemental thereto or substituted therefor. "Collateral" shall mean all of the Collateral as defined in the Pledge Agreement. "Collateral Agent" shall mean the Administrative Agent acting as collateral agent for the Secured Creditors pursuant to the Pledge Agreement. "Commitment" shall mean, at any time, for any Bank the sum of the Term Loan A Commitment, Term Loan B Commitment and Revolving Loan Commitment of such Bank at such time. "Commitment Fee" shall have the meaning provided in Section 3.01(a). "Consolidated Capital Expenditures" shall mean, for any period, the aggregate of all Capital Expenditures by the Borrower and its Restricted Subsidiaries at such time determined on a consolidated basis. "Consolidated Current Assets" shall mean, at any time, the current assets (other than cash and Cash Equivalents, and deferred income taxes to the extent included in current assets) of the Borrower and its Restricted Subsidiaries at such time determined on a consolidated basis. "Consolidated Current Liabilities" shall mean, at any time, the current liabilities of the Borrower and its Restricted Subsidiaries determined on a consolidated basis, but excluding (i) all short-term Indebtedness for borrowed money, (ii) the current portion of any long-term Indebtedness of the Borrower or its Restricted Subsidiaries, (iii) deferred income taxes, (iv) liabilities arising from cash overdrafts, and (v) liabilities arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, provided that such liabilities are extinguished within three Business Days of their incurrence; in each case to the extent included in current liabilities. "Consolidated Debt" shall mean all Indebtedness of the Borrower and its Restricted Subsidiaries, determined on a consolidated basis, other than Indebtedness owing by the Borrower to any of its Restricted Subsidiaries or by any of the Borrower's Restricted Subsidiaries to the Borrower or any other Restricted Subsidiary of the Borrower, provided that, for purposes of this definition, Indebtedness of any Partially-Owned Restricted Subsidiary shall be included in Consolidated Debt in an aggregate amount equal to the percentage equity -62- ownership of the Borrower in such Partially-Owned Restricted Subsidiary multiplied by the aggregate Indebtedness of such Partially-Owned Restricted Subsidiary. "Consolidated EBITDA" shall mean, for any period, (A) the sum (without duplication) of the amounts for such period of (i) the net income (or loss) of the Borrower and its Restricted Subsidiaries on a consolidated basis for such period taken as a single accounting period, provided that, except as provided in clauses (I) through (III) below, there shall be excluded from Consolidated EBITDA (x) the net income (or loss) of all Unrestricted Subsidiaries and all Partially-Owned Restricted Subsidiaries for such period and (y) all cash or other payments received during such period by the Borrower and its Restricted Subsidiaries from any Unrestricted Subsidiaries from dividends or distributions (including tax sharing payments), in each case to the extent otherwise included, (ii) provisions for taxes based on income, (iii) Consolidated Interest Expense, (iv) amortization or write-off of deferred financing costs, (v) losses on sales of assets (excluding sales in the ordinary course of business) and other extraordinary losses, (vi) non-cash amounts charged as compensation for "phantom stock" arrangements, (vii) all non-cash interest expense not included in the foregoing clause (iii), (viii) depreciation expense, (ix) other non-cash charges, (x) restructuring charges taken by the Borrower and/or its Subsidiaries in accordance with SEC Staff Accounting Bulletin No. 100, entitled "Restructuring and Impairment Charges", (xi) charges resulting from premiums paid in connection with the refinancing of Indebtedness and (xii) amortization expense, in the case of each of clauses (ii) through (xii) above to the extent deducted in determining net income (or loss) pursuant to clause (i) above for such period, less (B) the amount for such period of gains on sales of assets (excluding sales in the ordinary course of business) and other extraordinary gains, in each case, to the extent included in determining net income (or loss) pursuant to clause (A)(i) above for such period, all as determined on a consolidated basis; provided, however, that (I) for purposes of Section 8.11 and the definitions of Applicable Margin and Applicable Commitment Fee Percentage, (1) there shall be included in determining Consolidated EBITDA for any period (x) the EBITDA of any person, business, property or asset (other than an Unrestricted Subsidiary) acquired and not subsequently sold or otherwise disposed of (but not including the EBITDA of any related person, business, property or assets to the extent not so acquired) by the Borrower or one of its Restricted Subsidiaries during such period (each such person, business, property or asset acquired and not subsequently disposed of, an "Acquired Entity or Business"), and the EBITDA of any Unrestricted Subsidiary that is converted into a Restricted Subsidiary during such period (each, a "Converted Restricted Subsidiary"), in each case based on the actual EBITDA of such Acquired Entity or Business or Converted Restricted Subsidiary for the entire period (including the portion thereof occurring prior to such acquisition or conversion) and (y) an increase in respect of each Acquired Entity or Business acquired during such period equal to the cost adjustment amount applicable to the relevant period determined by the Borrower to represent the savings secured by the Borrower in connection with its reduction of salary and other employment expenses and lease and other contractual expenses with respect to such Acquired Entity or Business and (2) there shall be excluded in determining Consolidated EBITDA for any period the EBITDA of any person, business, property or asset (other than an Unrestricted Subsidiary) sold or disposed of by the Borrower or one of its Restricted Subsidiaries during such period (each such person, business, property or asset so sold or disposed of, a "Sold Entity or Business"), and the EBITDA of any Restricted Subsidiary that is converted into an Unrestricted -63- Subsidiary during such period (each, a "Converted Unrestricted Subsidiary"), in each case based on the actual EBITDA of such Sold Entity or Business or Converted Unrestricted Subsidiary for the entire period (including the portion thereof occurring prior to such sale, disposition or conversion), (II) for purposes of this definition, subject to clause (III) below, there shall be included or excluded any of the items described in the above clauses (A) and (B) attributable to a Partially-Owned Restricted Subsidiary (other than a Subsidiary Guarantor), but only to the extent of the equity percentage ownership of the Borrower in such Partially-Owned Restricted Subsidiary and (III) in the event the aggregate portion of Consolidated EBITDA for any period attributable to Partially-Owned Restricted Subsidiaries (other than Subsidiary Guarantors) (the "Limited EBITDA Component") exceeds an amount equal to 15% of the aggregate amount of Consolidated EBITDA of the Borrower and its Restricted Subsidiaries for such period, the Limited EBITDA Component (and accordingly Consolidated EBITDA), in each case, for such period, shall be reduced such that the Limited EBITDA Component for such period equals 15% of the aggregate amount of such Consolidated EBITDA for such period. "Consolidated Fixed Charges" shall mean, for any period, the sum, without duplication, of the amounts for such period of (i) Consolidated Interest Expense, plus consolidated cash Dividend expense payable in respect of all Preferred Stock and common stock of the Borrower, (ii) provisions for taxes based on income other than (x) changes in deferred taxes, (y) taxes on gains resulting from sales of assets (other than sales in the ordinary course of business) and (z) taxes on gains on extraordinary items, (iii) Consolidated Capital Expenditures paid in cash, (iv) scheduled payments on Indebtedness for borrowed money (including the Term Loans A and the Term Loans B, but excluding (i) the Revolving Loans and (ii) the term loans pursuant to the Existing Credit Agreements) (other than, in the case of any payments referred to in this clause (iv), any interest payments to the extent included in Consolidated Interest Expense), and (v) the Net Maximum Exposure Reduction, if positive, for such period; all as determined on a consolidated basis for the Borrower and its Restricted Subsidiaries; provided that for purposes of this definition, fixed charges of the type referred to in clauses (i)-(v) above of any Partially-Owned Restricted Subsidiary shall be included in Consolidated Fixed Charges in an aggregate amount equal to the percentage equity ownership of the Borrower in such Partially-Owned Restricted Subsidiary multiplied by the fixed charges of the type referred to above of such Partially-Owned Restricted Subsidiary for the respective period. "Consolidated Interest Expense" shall mean, for any period, total interest expense (including that attributable to Capital Leases in accordance with GAAP but excluding non-cash interest expenses) of the Borrower and its Restricted Subsidiaries determined on a consolidated basis with respect to all outstanding Indebtedness of the Borrower and its Restricted Subsidiaries, including, without limitation, all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financing and net costs (i.e., costs minus benefits) under Interest Rate Protection Agreements, but excluding, however, amortization of deferred financing costs to the extent included in total interest expense, all as determined on a consolidated basis; provided that for purposes of this definition, interest expense of the type referred to above of any Partially-Owned Restricted Subsidiary shall be included in Consolidated Interest Expense in an aggregate amount equal to the percentage equity ownership of the Borrower in such Partially-Owned Restricted Subsidiary multiplied by the interest expense of the type referred to above of such Partially-Owned Restricted Subsidiary for the respective period. -64- "Contingent Obligations" shall mean as to any Person (i) any obligation of such Person guaranteeing or intended to guarantee any Indebtedness, leases, dividends or other obligations ("primary obligations") of any other Person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent, (a) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (b) to advance or supply funds (x) for the purchase or payment of any such primary obligation or (y) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (d) otherwise to assure or hold harmless the owner of such primary obligation against loss in respect thereof and (ii) any Interest Rate Protection Agreement; provided, however, that the term Contingent Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith. "Contribution Agreement" shall have the meaning provided in Section 5.01(h). "Conversion Value Amount" shall have the meaning provided in the definition of Permitted Restricted Subsidiary Conversion. "Converted Restricted Subsidiary" shall have the meaning provided in the definition of Consolidated EBITDA. "Converted Unrestricted Subsidiary" shall have the meaning provided in the definition of Consolidated EBITDA. "Copyrights" shall have the meaning provided in Section 6.14(a). "Credit Documents" shall mean this Agreement, any Notes to the extent issued, the Guaranties, the Pledge Agreement and the Contribution Agreement. "Credit Event" shall mean the making of a Loan or the issuance of a Letter of Credit. "Credit Party" shall mean the Borrower and each Subsidiary Guarantor. "Default" shall mean any event, act or condition which with notice or lapse of time, or both, would constitute an Event of Default. "Defaulting Bank" shall mean any Bank with respect to which a Bank Default is in effect. -65- "Dividends" shall have the meaning provided in Section 8. "Documentation Agent" shall have the meaning provided in the first paragraph of this Agreement. "Early Maturity Date" shall mean (i) November 1, 2005, to the extent that the Borrower's $300,000,000 8-1/2% Senior Notes due 2006 have not been paid in full or defeased by such time and (ii) January 1, 2008, to the extent that the Borrower's $250,000,000 7-5/8% Senior Notes due 2008 have not been paid in full or defeased by such time. "EBITDA" shall mean, for any Restricted Subsidiary person, business, property or asset, for any period, the portion of Consolidated EBITDA attributable to such Restricted Subsidiary person, business, property or asset. "Effective Date" shall have the meaning provided in Section 12.10. "Environmental Law" shall mean any federal, state, provincial or local statute, law, rule, regulation, ordinance, code, policy or rule of common law now or hereafter in effect and in each case as amended, and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to the environment, health, safety or Hazardous Materials. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and the rulings issued thereunder. Section references to ERISA are to ERISA as in effect at the date of this Agreement and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefor. "ERISA Affiliate" shall mean each person (as defined in Section 3(9) of ERISA) which together with the Borrower or any Subsidiary of the Borrower would be deemed to be a "single employer" within the meaning of Section 414(b), (c), (m) or (o) of the Code. "Eurodollar Loans" shall mean each Loan bearing interest at the rates provided in Section 1.08(b). "Eurodollar Rate" shall mean with respect to each Interest Period for a Eurodollar Loan, (i) the per annum rate of interest determined on the basis of the rate for deposits in dollars for a period equal to such Interest period appearing on Dow Jones Markets Page 3750 as of 11:00 A.M., London time, two Business Days prior to the commencement of such Interest Period, divided (and rounded upward to the next whole multiple of 1/16 of 1%) by (ii) a percentage equal to 100% minus the then stated maximum rate of all reserve requirements (including, without limitation, any marginal, emergency, supplemental, special or other reserves) applicable to any member bank of the Federal Reserve System in respect of Eurocurrency liabilities as defined in Regulation D (or any successor category of liabilities under Regulation D). In the event that the rate refined to in clause (i) above does not appear on Dow Jones Markets Page 3750 (or otherwise on such Dow Jones Markets service), the "Eurodollar Rate" for the purposes of this paragraph shall be determined by reference to such other publicly available service for displaying -66- eurodollar rates as may be agreed upon by the Administrative Agent and the Borrower or, in the absence of such agreement, the "Eurodollar Rate" for the purposes of this paragraph shall instead be the rate per annum notified to the Administrative Agent by Chase as the rate at which Chase is offered Dollar deposits at or about 10:00 A.M., New York time, two Business Days prior to the beginning of such Interest Period, in the interbank eurodollar market where the eurodollar and foreign currency and exchange operations in respect of its Eurodollar Loans are then being conducted for delivery on the first day of such Interest Period for the number of days comprised therein and in an amount comparable to the amount of its Eurodollar Loan to be outstanding during such Interest Period. "Event of Default" shall have the meaning provided in Section 9. "Excess Cash Flow" shall mean, for any period, the remainder of (x) the sum of (i) Consolidated EBITDA for such period and (ii) the decrease, if any, in Working Capital from the first day to the last day of such period, minus (y) the sum of (i) the amount of Consolidated Fixed Charges for such period (but in the case of Consolidated Capital Expenditures included therein, only to the extent such expenditures are not financed by Indebtedness (other than Loans hereunder)) and (ii) the increase, if any, in Working Capital from the first day to the last day of such period, provided that in calculating the amount referred to in clause (x)(ii) or (y)(ii) above, as the case may be, (A) for any period during which the Borrower and/or any of its Restricted Subsidiaries have consummated an Asset Sale pursuant to Section 8.02(c) or a Permitted Acquisition, the portion of the change in Working Capital for such period attributable to the entity or business sold or purchased shall be based (x) in the case of an Asset Sale, on the change in Working Capital attributable to the entity or business sold from the first day of such period to the date of the consummation of such sale and (y) in the case of an acquisition, on the change in Working Capital attributable to the entity or business acquired from the date of consummation of such acquisition to the last day of such period and (B) Working Capital shall only include the assets and liabilities of a Partially-Owned Restricted Subsidiary to the extent of the percentage equity interest of the Borrower in such Partially-Owned Restricted Subsidiary. "Excess Cash Flow Amount" shall mean an amount which initially shall be zero and which shall be (i) increased on the date of delivery of Section 7.01 Financials in respect of the first three fiscal quarters in each year of the Borrower (commencing with the fiscal quarter ended June 30, 2001) by an amount (if positive) equal to 75% of Excess Cash Flow for the fiscal quarter in respect of which such Section 7.01 Financials are delivered, provided that in the event that Excess Cash Flow for the first and/or second fiscal quarter in any fiscal year is negative, then for purposes of this clause (i) the Excess Cash Flow for the third fiscal quarter in such fiscal year shall be deemed to be reduced by the amount of such negative Excess Cash Flow for such first and/or second quarter, and (ii) increased on the date of delivery of Section 7.01 Financials in respect of each fiscal year of the Borrower by an amount (if positive) equal to 75% of the Excess Cash Flow for such fiscal year less an amount (if any) equal to the aggregate amount by which the Excess Cash Flow Amount was increased pursuant to clause (i) above in respect of the first, second and third quarters in such fiscal year. -67- "Excluded Domestic Restricted Subsidiary" shall mean any Partially-Owned Restricted Subsidiary with respect to which the Borrower shall have made a Non-Guarantor Designation in accordance with the provisions hereof. "Excluded Foreign Restricted Subsidiaries" shall mean (i) Intertec Publishing (UK) Limited, a U.K. corporation, (ii) Canadian Red Book, Inc., a Canada corporation, (iii) each Restricted Subsidiary of the Borrower established, created or acquired after the Effective Date which is incorporated in a jurisdiction outside the United States, except to the extent the requirements set forth in clause (z) of Section 8.14(a), and Section 8.14(c), are satisfied with respect to such Subsidiary. "Existing Contingent Obligations" shall have the meaning provided in Section 8.06(f). "Existing Credit Agreements" shall mean and include each of the Existing Revolving Credit Facility and the Existing Revolving Credit and Term Loan Facility. "Existing Debt" shall have the meaning provided in Section 8.04(d). "Existing Indebtedness Agreements" shall have the meaning provided in Section 5.01(i). "Existing Letter of Credit" shall have the meaning provided in Section 2.01(c). "Existing Preferred Stock" shall include preferred stock of the Borrower issued prior to the Effective Date and listed on Annex VI hereto, without giving effect to any extension or replacement thereof, as the same may be modified, supplemented or amended from time to time pursuant to the terms hereof and thereof. "Existing Revolving Credit and Term Loan Facility" shall mean the Amended and Restated Credit Agreement, dated as of May 24, 1996 and amended and restated as of March 11, 1999, among the Borrower, various lending institutions and The Chase Manhattan Bank, as Administrative Agent, as same may have been modified, supplemented or amended from time to time to and including the Effective Date. "Existing Revolving Credit Facility" shall mean the Credit Agreement, dated as of May 24, 1996, among the Borrower, and various lending institutions and The Chase Manhattan Bank, as Administrative Agent, as same may have been modified, supplemented or amended from time to time to and including the Effective Date. "Facing Fee" shall have the meaning provided in Section 3.01(c). "Federal Funds Effective Rate" shall mean, for any period, a fluctuating interest rate equal for each day during such period to the weighted average of the rates on overnight Federal Funds transactions with members of the Federal Reserve System arranged by Federal Funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so -68- published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal Funds brokers of recognized standing selected by the Administrative Agent. "Fees" shall mean (i) all amounts payable pursuant to, or referred to in, Section 3.01 and (ii) all other fees payable to the Administrative Agent or any Bank as may be agreed to from time to time between the Borrower and the Administrative Agent or such Bank, as the case may be. "GAAP" shall mean generally accepted accounting principles in the United States of America as in effect from time to time; it being understood and agreed that determinations in accordance with GAAP for purposes of Section 8, including defined terms as used therein, are subject (to the extent provided therein) to Section 12.07(a). "Guarantor" shall mean each Subsidiary Guarantor. "Guaranty" shall mean each Subsidiary Guaranty. "Hazardous Materials" shall mean (a) any petrochemical or petroleum products, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, transformers or other equipment that contain dielectric fluid containing levels of polychlorinated biphenyls, and radon gas; and (b) any chemicals, materials or substances defined as or included in the definition of "hazardous substances," "hazardous wastes," "hazardous materials," "restricted hazardous materials," "extremely hazardous wastes," "restrictive hazardous wastes," "toxic substances," "toxic pollutants," "contaminants" or "pollutants," or words of similar import, under any applicable Environmental Law. "Incremental Loan Commitment" shall have the meaning provided in Section 1.13. "Incremental Loan Lending Institution" shall have the meaning provided in Section 1.13. "Indebtedness" of any Person shall mean without duplication (i) all indebtedness of such Person for borrowed money, (ii) the deferred purchase price of assets or services payable to the sellers thereof or any of such seller's assignees which in accordance with GAAP would be shown on the liability side of the balance sheet of such Person, (iii) the face amount of all letters of credit issued for the account of such Person and, without duplication, all drafts drawn thereunder, (iv) all Indebtedness of a second Person secured by any Lien on any property owned by such first Person, whether or not such Indebtedness has been assumed, (v) all Capitalized Lease Obligations of such Person and (vi) all obligations of such Person to pay a specified purchase price for goods or services whether or not delivered or accepted, i.e., take-or-pay and similar obligations, provided that Indebtedness shall not include (x) trade payables and accrued expenses, in each case arising in the ordinary course of business and (y) any obligations under Interest Rate Protection Agreements. -69- "Information Memorandum" shall mean the Confidential Information Memorandum dated April 2001 and distributed to the Banks prior to the Effective Date. "Initial Borrowing Date" shall mean the date of the occurrence of the first Credit Event hereunder. "Intellectual Property" shall have the meaning provided in Section 6.14(b). "Intercompany Loan" shall have the meaning provided in Section 8.05(c). "Interest Period" with respect to any Eurodollar Loan, shall mean the interest period applicable thereto, as determined pursuant to Section 1.09. "Interest Rate Protection Agreement" shall mean any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedging agreement or other similar agreement or arrangement. "Intermediate HoldCo" shall mean PRIMEDIA Companies Inc., a Delaware corporation that is directly owned by the Borrower and is a Wholly-Owned Restricted Subsidiary. "Intermediate HoldCo Reorganization" shall mean the transfer directly or indirectly of all of the Capital Stock of all of the Subsidiaries of the Borrower as of the Effective Date to Intermediate HoldCo pursuant to and in accordance with the terms of the Intermediate HoldCo Reorganization Documents. "Intermediate HoldCo Reorganization Documents" shall mean and include all agreements and documents relating to the Intermediate HoldCo Reorganization. "Investments" shall have the meaning provided in Section 8.05. "KKR" shall mean Kohlberg Kravis Roberts & Co., a Delaware limited partnership. "Late Section 7.01 Financials" shall have the meaning provided in the definition of Applicable Margin. "Leasehold" of any Person means all of the right, title and interest of such Person as lessee or licensee in, to and under leases or licenses of land, improvements and/or fixtures. "Letter of Credit" shall have the meaning provided in Section 2.01(a). "Letter of Credit Fee" shall have the meaning provided in Section 3.01(b). "Letter of Credit Issuer" shall mean Chase. "Letter of Credit Outstandings" shall mean, at any time, the sum of, without duplication, (i) the aggregate Stated Amount of all outstanding Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings in respect of all Letters of Credit. -70- "Letter of Credit Request" shall have the meaning provided in Section 2.03(a). "Leverage Ratio" shall have the meaning provided in Section 8.11. "Lien" shall mean any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, any financing or similar statement or notice filed under the UCC or any similar recording or notice statute, and any lease having substantially the same effect as the foregoing). "Loan" shall mean each and every Loan made by any Bank hereunder, including Term Loans A, Term Loans B, Revolving Loans, Incremental Loans and Swingline Loans. "Mandatory Borrowing" shall have the meaning provided in Section 1.01(e). "Margin Stock" shall have the meaning provided in Regulation U. "Material Subsidiary" shall mean, at any time, (a) any Restricted Subsidiary (i) having assets (valued at fair market value) equal to or greater than 3% of the assets (valued at fair market value) of the Borrower and its Restricted Subsidiaries taken as a whole or (ii) having revenues for the then most recently ended fiscal year equal to or greater than 3% of the revenues for such fiscal year of the Borrower and its Restricted Subsidiaries taken as a whole, (b) any group of Restricted Subsidiaries (i) having aggregate assets (valued at fair market value) equal to or greater than 10% of the assets (valued at fair market value) of the Borrower and its Restricted Subsidiaries taken as a whole or (ii) having aggregate revenues for the then most recently ended fiscal year equal to or greater than 10% of the revenues for such fiscal year of the Borrower and its Restricted Subsidiaries taken as a whole and (c) any Unrestricted Subsidiary that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act of 1933, as amended, as such Regulation is in effect on the Effective Date. "Maximum Swingline Amount" shall mean $40,000,000. "Minimum Borrowing Amount" shall mean (i) for Term Loans A, $2,000,000; (ii) for Term Loans B, $2,000,000; (iii) for Revolving Loans, $2,000,000; and (iv) for Swingline Loans, $500,000. "Minimum Retention Amount" shall mean, at any time, (A) with respect to Term Loans A and the Revolving Loan Commitments, $5,000,000 multiplied by a fraction (i) the numerator of which shall be the sum of the outstanding Term Loans A plus the Total Revolving Loan Commitment at such time and (ii) the denominator of which shall be $575,000,000 and (B) with respect to Term Loans B, $1,000,000 multiplied by a fraction (i) the numerator of which shall be the sum of the outstanding Term Loans B at such time and (ii) the denominator of which shall be $425,000,000. "Moody's" shall have the definition provided in the definition of Cash Equivalents. -71- "Multiemployer Plan" shall have the meaning provided in Section 6.12. "Net Cash Proceeds" shall mean, with respect to any Asset Sale, the Available Cash Proceeds resulting therefrom net of (a) cash expenses of sale (including payment of principal, premium and interest of Indebtedness specifically relating to the assets sold in such Asset Sale, relocation expenses and severance and shutdown costs) and (b) taxes paid or payable as a result thereof over and above the taxes which would otherwise have been payable in the absence of such Asset Sale, provided that in the case of an Asset Sale by a Partially-Owned Restricted Subsidiary, "Net Cash Proceeds" shall be the amount as determined above in this definition multiplied by the percentage of the capital stock of such Subsidiary owned, directly or indirectly, by the Borrower. "Net Investments in Excluded Foreign Restricted Subsidiaries" shall mean the remainder of (i) the sum of (x) the aggregate value of all businesses, properties and assets transferred by the Borrower and/or its Restricted Subsidiaries (other than Excluded Foreign Restricted Subsidiaries) to Excluded Foreign Restricted Subsidiaries after the Effective Date, (y) the aggregate outstanding principal amount of all Intercompany Loans made to Excluded Foreign Restricted Subsidiaries by the Borrower and/or its Restricted Subsidiaries (other than Excluded Foreign Restricted Subsidiaries) after the Effective Date and (z) the aggregate amount of all investments by the Borrower and its Restricted Subsidiaries (other than Excluded Foreign Restricted Subsidiaries) in Excluded Foreign Restricted Subsidiaries after the Effective Date, minus (ii) the sum of (x) the aggregate value of all businesses, properties and assets transferred by Excluded Foreign Restricted Subsidiaries to the Borrower and/or its Restricted Subsidiaries (other than Excluded Foreign Restricted Subsidiaries) after the Effective Date and (y) the aggregate amount of all cash dividends and other cash distributions on common stock paid by Excluded Foreign Restricted Subsidiaries to the Borrower and its Restricted Subsidiaries (other than Excluded Foreign Restricted Subsidiaries) after the Effective Date. "Net Maximum Exposure Reduction" shall mean, for any period, the Maximum Exposure during such period less the sum of (i) the Total Revolving Loan Commitment on the last day of such period and (ii) an amount equal to the aggregate amount of reductions to the Total Revolving Loan Commitment during such period pursuant to Section 3.03(d). "Non-Defaulting Bank" shall mean each Bank other than a Defaulting Bank. "Non-Facility Letter of Credit Outstandings" shall mean, at any time, the sum of (i) the aggregate maximum amount available to be drawn (regardless of whether any conditions for drawing could then be met) under all outstanding Non-Facility Letters of Credit and (ii) the aggregate amount of all Non-Facility Unpaid Drawings. "Non-Facility Letters of Credit" shall mean each letter of credit (other than any Letter of Credit issued pursuant to this Agreement) issued for the account of the Borrower or any of its Restricted Subsidiaries, provided that the reimbursement obligations of the Borrower or such Restricted Subsidiary with respect to such letter of credit may be secured only to the extent permitted by Section 8.03(p). -72- "Non-Facility Unpaid Drawings" shall mean all amounts paid or disbursed by the issuers of Non-Facility Letters of Credit which have not been reimbursed. "Non-Guarantor Designation" shall mean and include each of (x) the designation by the Borrower of any newly created or acquired Partially-Owned Restricted Subsidiary and (y) the redesignation of any existing Partially-Owned Restricted Subsidiary which is a Subsidiary Guarantor, in each case, as an Excluded Domestic Restricted Subsidiary by delivery of a written notice to the Administrative Agent of such designation or redesignation, as the case may be; provided that the Borrower may only make a Non-Guarantor Designation hereunder if, at the time of such designation (i) no Default or Event of Default exists or would result therefrom and (ii) the Borrower shall have determined, with respect to such designation, that the Borrower and its Restricted Subsidiaries would have been in compliance, on a Pro Forma Basis, with Sections 8.09, 8.10 and 8.11 of this Agreement. "Note" shall mean and include each promissory note, in the form agreed by the Borrower and the Administrative Agent prior to the Effective Date, to the extent issued pursuant to Section 1.05(b) hereof. "Notice of Borrowing" shall have the meaning provided in Section 1.03(a). "Notice of Conversion" shall have the meaning provided in Section 1.06. "Notice Office" shall mean the office of the Administrative Agent at 270 Park Avenue, New York, New York 10017, or such other office as the Administrative Agent may designate to the Borrower and the Banks from time to time. "Obligations" shall mean all amounts, direct or indirect, contingent or absolute, of every type or description, and at any time existing, owing to the Administrative Agent or any Bank pursuant to the terms of this Agreement or any other Credit Document. "Partially-Owned Restricted Subsidiary" shall mean any Restricted Subsidiary of the Borrower to the extent that the Borrower and its Wholly-Owned Restricted Subsidiaries shall own less than 100% of the capital stock of such Restricted Subsidiary. "Participant" shall have the meaning provided in Section 2.05(a). "Payment Office" shall mean the office of the Administrative Agent at 270 Park Avenue, New York, New York 10017, or such other office as the Administrative Agent may designate to the Borrower and the Banks from time to time. "PBGC" shall mean the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto. "Permitted Acquisition" shall have the meaning provided in Section 8.02(g). "Permitted Amendments" shall mean, to any amendment or supplement to or waiver of the documents governing or evidencing (x) any issue of Indebtedness which does not -73- (i) add, directly or indirectly, any new covenant, event of default, collateral requirement or repayment requirement (including pursuant to any put arrangement), (ii) modify in any manner materially adverse to the issuer or guarantors thereof any existing covenant, event of default, collateral requirement or repayment requirement (including any shortening or any amortization requirements), (iii) increase the interest rate thereon or modify in any manner the time or manner of payment of such interest (including any option or right to pay such interest in kind), (iv) modify any of the subordination provisions or (v) contain any provision which, in the opinion of the Administrative Agent, is materially adverse to the interests of the Banks, (y) any issue of Preferred Stock which does not (i) add, directly or indirectly, any new covenant, default, voting, redemption, exchange or put provision, (ii) modify in any manner adverse to the issuer thereof any existing covenant, default, voting, redemption, exchange or put provision, (iii) increase the dividend rate thereon or modify in any manner the time or manner of payment of such dividends (including any option or right to pay such dividends in kind) or (iv) contain any provision which, in the opinion of the Administrative Agent, is materially adverse to the interests of the Banks or (z) the sole effect of which is to (i) delete covenants or events of default and/or (ii) add to, or increase existing, exceptions to the covenants contained therein, or waive any of the covenants contained therein or any rights of the holders of such Indebtedness or Preferred Stock, as the case may be, set forth therein. "Permitted Liens" shall have the meaning provided in Section 8.03(c). "Permitted Refinancing Debt" shall mean Indebtedness issued in connection with a refinancing of any or all of the Existing Debt, the Subordinated Exchange Debentures, any Additional Indebtedness or any other Permitted Refinancing Debt; provided that (i) such Indebtedness has a longer average life than the Indebtedness being refinanced and (ii) such Indebtedness, and the agreements and other documents entered into by the Borrower and/or any of its Restricted Subsidiaries in connection therewith shall contain terms and conditions (including, without limitation, with respect to the obligor and guarantors, if any, in respect of such Indebtedness, amortization schedules, interest rates, redemption provisions, covenants, defaults, security, remedies and, if the Indebtedness so refinanced is subordinated to any other Indebtedness of the Borrower or its Restricted Subsidiaries, subordination provisions) not materially less favorable to the Borrower and its Restricted Subsidiaries or to the Banks than the terms and conditions of the Indebtedness so refinanced (excluding, for purposes of this clause (ii), the impact of market conditions on the interest rate and other economic terms). "Permitted Replacement Preferred Stock" shall mean preferred stock of the Borrower issued in connection with the replacement and cancellation of any outstanding Preferred Stock; provided that such preferred stock and the agreements, certificates of designation and other documents entered into by the Borrower in connection therewith shall contain terms and conditions (including, without limitation, dividend rates, pay-in-kind features, redemption provisions, put rights, liquidation preferences, voting rights and exchange rights) not materially less favorable to the Borrower or to the Banks than the terms and conditions of the preferred stock being replaced (excluding the impact of market conditions on the dividend rate and other economic terms), as such preferred stock may be amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. -74- "Permitted Restricted Asset Sale" shall mean any sale, transfer or other disposition by the Borrower or any of its Restricted Subsidiaries to any Unrestricted Subsidiary of any asset (including, without limitation, any capital stock or other securities of another Person, but excluding any sale, transfer or other disposition by the Borrower of its capital stock) of the Borrower or such Restricted Subsidiary; provided that the Borrower or such Restricted Subsidiary shall only be permitted to effectuate a Permitted Restricted Asset Sale so long as (i) no Default or Event of Default exists or would result therefrom, (ii) the Borrower shall have delivered to the Administrative Agent the opinion of value of an Appraisal Firm to the extent required by Section 8.02(c) and (iii) the Borrower shall have, or shall have caused such Restricted Subsidiary to have, complied with the other terms and conditions of Section 8.02(c) or (j), as the case may be. "Permitted Restricted Subsidiary Conversion" shall mean the redesignation by the Borrower of a Restricted Subsidiary of the Borrower as an Unrestricted Subsidiary of the Borrower pursuant to a written notice to the Administrative Agent and the Banks; provided that any such redesignation of a Restricted Subsidiary as an Unrestricted Subsidiary shall be deemed to constitute a sale of all of the assets of the respective Restricted Subsidiary for all purposes of this Agreement; provided further, that the Borrower shall only be permitted to effectuate a Permitted Restricted Subsidiary Conversion so long as (i) no Default or Event of Default exists or would result therefrom, (ii) the Borrower shall have delivered to the Administrative Agent the opinion of value of management of the Borrower or, to the extent required by Section 8.02(c), the Appraisal Firm required by such Section (the value set forth in any such opinion, the "Conversion Value Amount"), (iii) the Borrower shall have complied with the other terms and conditions of Section 8.02(c) or (j), as the case may be, (iv) the Aggregate Conversion Amount at such time, when added to the Unrestricted Subsidiary Investment Amount at such time shall not exceed the Unrestricted Subsidiary Investment Limit then in effect, and (v) the Borrower shall have determined, with respect to such conversion, that the Borrower and its Restricted Subsidiaries would have been in compliance, on a Pro Forma Basis, with Sections 8.09, 8.10 and 8.11 of this Agreement. "Person" shall mean any individual, partnership, joint venture, firm, corporation, association, trust or other enterprise or any government or political subdivision or any agency, department or instrumentality thereof. "Plan" shall mean any multiemployer or single-employer plan, as defined in Section 4001 of ERISA, which is maintained or contributed to by (or to which there is an obligation to contribute of) the Borrower, any Restricted Subsidiary or an ERISA Affiliate, and each such plan for the five year period immediately following the latest date on which the Borrower, any Restricted Subsidiary or an ERISA Affiliate maintained, contributed to or had an obligation to contribute to such plan. "Pledge Agreement" shall have the meaning provided in Section 5.01(l). "Preferred Stock" shall mean and include the Existing Preferred Stock and, once issued, any Additional Preferred Stock and any Permitted Replacement Preferred Stock. -75- "Prescribed Forms" shall mean (i) two accurate and complete original signed copies of Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to the benefits of any income tax treaty) (or successor forms), or (ii) if the Bank is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code, (x) a certificate substantially in the form of Exhibit I (any such certificate, a "Section 4.04(b) Certificate") and (y) two accurate and complete original signed copies of Internal Revenue Service Form W-8BEN (with respect to the portfolio interest exemption)(or successor form). "Prime Lending Rate" shall mean the rate which the Administrative Agent announces from time to time as its prime commercial lending rate, the Prime Lending Rate to change when and as such prime commercial lending rate changes. The Prime Lending Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer. The Administrative Agent may make commercial loans or other loans at rates of interest at, above or below the Prime Lending Rate. "Pro Forma Basis" shall mean, with respect to each Affected Transaction in connection with which any calculation of compliance with any financial covenant or financial term is required, the calculation thereof on a pro forma basis, for the Test Period ended on the last day of the most recently ended fiscal quarter, determined as if (x) such Affected Transaction, each other Affected Transaction effected by Borrower during the Affected Period and any reduction of Consolidated Debt during such Affected Period effected with the proceeds received by the Borrower and/or its Restricted Subsidiaries of (A) the issuance of common equity by the Borrower or (B) the sale of the capital stock or other ownership interest of the Borrower in an Unrestricted Subsidiary (to the extent not otherwise included in Consolidated EBITDA), in each case, had occurred on the first day of such Affected Period, and (y) with respect to any Affected Transaction involving the issuance of Indebtedness or Preferred Stock, such Indebtedness and/or Preferred Stock had remained outstanding at all times during such Affected Period. "Pro Rata Share" shall mean, for each Bank, (i) with respect to Term Loans A, the percentage obtained by dividing such Bank's outstanding Term Loans A (if any) by the aggregate of all outstanding Term Loans A, (ii) with respect to Term Loans B, the percentage obtained by dividing such Bank's outstanding Term Loans B (if any) by the aggregate of all outstanding Term Loans B and (iii) with respect to Revolving Loans, the percentage obtained by dividing such Bank's Revolving Loan Commitment (if any) by the Total Revolving Loan Commitment; provided that, if at any time of the determination of a Bank's "Pro Rata Share," any Commitments under a Tranche under this Agreement shall have been terminated, Pro Rata Share shall be calculated with reference to the amount of Loans outstanding under such Tranche rather than such Commitments. "Real Property" of any Person shall mean all of the right, title and interest of such Person in and to land, improvements and fixtures, including Leaseholds. "Register" shall have the meaning provided in Section 1.05(a). -76- "Regulation D" shall mean Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof establishing reserve requirements. "Regulation T" shall mean Regulation T of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof establishing Margin requirements. "Regulation U" shall mean Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof establishing margin requirements. "Regulation X" shall mean Regulation X of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof establishing margin requirements. "Remaining Net Cash Proceeds" shall mean, with respect to any Asset Sale, at any time, an amount equal to the Net Cash Proceeds from such Asset Sale theretofore received by the Borrower and/or its Restricted Subsidiaries minus the portion, if any, of such Net Cash Proceeds theretofore expended by the Borrower or any of its Restricted Subsidiaries in furtherance of the purchase, construction or other acquisition of assets to be employed in, and/or the capital stock of any Person engaged in, the Business. "Replaced Bank" shall have the meaning provided in Section 1.10(c)(ii). "Replacement Bank" shall have the meaning provided in Section 1.10(c)(ii). "Reportable Event" shall mean an event described in Section 4043(c) of ERISA with respect to a Plan other than those events as to which the 30-day notice is waived under subsection .22, .23, .25, .27 or .28 of PBGC Regulation Section 4043. "Required Banks" shall mean Non-Defaulting Banks whose outstanding (a) Term Loans A (or, if prior to the Initial Borrowing Date, Term Loan A Commitments), (b) Term Loans B and (c) outstanding Revolving Loan Commitments (or, if after the Total Revolving Loan Commitment has been terminated, outstanding Revolving Loans and Adjusted Percentages of Swingline Loans and Letter of Credit Outstandings) constitute more than 50% of the sum of (i) all outstanding Term Loans A (or, if prior to the Initial Borrowing Date, Term Loan A Commitments) of Non-Defaulting Banks plus (ii) all outstanding Term Loans B of Non-Defaulting Banks plus (iii) the Adjusted Total Revolving Loan Commitment (or, if after the Total Revolving Loan Commitment has been terminated, the total outstanding Revolving Loans of Non-Defaulting Banks and the aggregate Adjusted Percentages of all Non-Defaulting Banks of the total outstanding Swingline Loans and Letter of Credit Outstandings at such time). "Required Delivery Date" shall have the meaning provided in the definition of Applicable Margin. -77- "Restricted Subsidiaries" shall mean (x) all of the Subsidiaries of the Borrower in existence on the Effective Date (other than those listed on Annex VIII), (y) any Subsidiary owned (directly or indirectly) by the Borrower that is created, established or acquired after the Effective Date and which does not constitute an Unrestricted Subsidiary on the date of the creation, establishment and/or acquisition thereof and (z) any Unrestricted Subsidiary of the Borrower to the extent designated by the Borrower as a Restricted Subsidiary hereunder by written notice to the Administrative Agent; provided that the Borrower shall only be permitted to so designate a new Restricted Subsidiary so long as (i) no Default or Event of Default exists or would result therefrom, (ii) more than 50% of the capital stock of such newly-designated Restricted Subsidiary is owned by the Borrower or one or more Wholly-Owned Restricted Subsidiaries and all of the applicable provisions of Section 8.14 shall have been complied with in respect of such newly-designated Restricted Subsidiary, (iii) the Borrower shall have determined, with respect to such designation, that the Borrower and its Restricted Subsidiaries would have been in compliance, on a Pro Forma Basis, with Sections 8.09, 8.10 and 8.11 of this Agreement and (iv) such Unrestricted Subsidiary is permitted to be designated a Restricted Subsidiary pursuant to the Senior Note Documents; provided further, that, at the time of any Permitted Restricted Subsidiary Conversion or the sale of 100% of the capital stock owned by the Borrower or any Restricted Subsidiary of a Restricted Subsidiary to an Unrestricted Subsidiary pursuant to a Permitted Restricted Asset Sale, the Restricted Subsidiary so converted or sold shall no longer constitute a Restricted Subsidiary hereunder. "Revolving Loan" shall have the meaning provided in Section 1.01(c). "Revolving Loan Commitment" shall mean, with respect to each Bank, the amount set forth opposite such Bank's name in Annex I hereto directly below the column entitled "Revolving Loan Commitment", as same may be reduced from time to time pursuant to Sections 3.02, 3.03 and/or 9. "Revolving Loan Maturity Date" shall mean the earlier of (a) June 30, 2008 and (b) the Early Maturity Date. "Revolving Loan Percentage" shall mean at any time for each Bank the percentage obtained by dividing such Bank's Revolving Loan Commitment (if any) by the Total Revolving Loan Commitment; PROVIDED that at any time when the Total Revolving Loan Commitment shall have been terminated, each Bank's Revolving Loan Percentage shall be the percentage obtained by dividing such Bank's Revolving Loan Commitment (if any) immediately prior to such termination by the Total Revolving Loan Commitment immediately prior to such termination. "S&P" shall have the meaning provided in the definition of Cash Equivalents. "Scheduled Revolving Loan Commitment Reduction" shall have the meaning provided in Section 3.03(a). "Scheduled Revolving Loan Commitment Reduction Date" shall have the meaning provided in Section 3.03(a). -78- "Scheduled TLA Repayment" shall have the meaning provided in Section 4.02(b). "Scheduled TLA Repayment Date" shall have the meaning provided in Section 4.02(b). "Scheduled TLB Repayment" shall have the meaning provided in Section 4.02(c). "Scheduled TLB Repayment Date" shall have the meaning provided in Section 4.02(c). "SEC" shall mean the Securities and Exchange Commission or any successor thereto. "Section 7.01 Financials" shall mean the financial statements delivered, or to be delivered, pursuant to Section 7.01(a) or (b). "Secured Creditors" shall have the meaning assigned that term in the Pledge Agreement. "Securities Act" shall have the meaning provided in Section 8.04(h). "Senior Note Documents" shall mean and include each of the documents and other agreements entered into by the Borrower or any of its Subsidiaries (including, without limitation, the indentures pursuant to which each issuance of the Senior Notes are issued and any guaranty or guaranties relating thereto) relating to the issuance by the Borrower of any Senior Notes, as in effect on the Initial Borrowing Date and as the same may be modified, supplemented or amended from time to time pursuant to the terms hereof and thereof. "Senior Notes" shall mean and include the Borrower's (a) 7-5/8% Senior Secured Notes due 2008, (b) 10-1/4% Senior Notes due 2004, (c) 8-1/2% Senior Notes due 2006, and (d) the 8-7/8% Senior Notes due 2011, in each case, as in effect on the Effective Date and as the same may be modified, supplemented or amended from time to time pursuant to the terms hereof and thereof. "Series D Preferred Stock" shall mean the Borrower's $10.00 Series D Exchangeable Preferred Stock, as in effect on the Initial Borrowing Date and as the same may be modified, supplemented or amended from time to time pursuant to the terms hereof and thereof. "Series F Preferred Stock" shall mean the Borrower's $9.20 Series F Exchangeable Preferred Stock, as in effect on the Initial Borrowing Date and as the same may be modified, supplemented or amended from time to time pursuant to the terms hereof and thereof. "Series H Preferred Stock" shall mean the Borrower's $8.625 Series H Exchangeable Preferred Stock, as in effect on the Initial Borrowing Date and as the same may be modified, supplemented or amended from time to time pursuant to the terms hereof and thereof. -79- "Specified Change of Control Event" shall mean a Change of Control Event of the type described in clause (a) of the definition thereof. "Stated Amount" of each Letter of Credit shall mean the maximum amount available to be drawn thereunder (regardless of whether any conditions for drawing could then be met). "Subordinated Exchange Debentures" shall mean and include the Borrower's (x) 10% Class D Subordinated Exchange Debentures due 2008, (y) 9.20% Class F Subordinated Exchange Debentures due 2009 and (z) 8-5/8% Class H Subordinated Exchange Debentures due 2010, in each case, in the form delivered to the Banks on the Initial Borrowing Date and as the same may be modified, supplemented or amended from time to time pursuant to the terms hereof and thereof. "Subsidiary" of any Person shall mean and include (i) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person directly or indirectly through Subsidiaries and (ii) any partnership, association, joint venture or other entity in which such Person directly or indirectly through Subsidiaries, has more than a 50% equity interest at the time. "Subsidiary Guarantor" shall mean (i) each Restricted Subsidiary in existence on the Initial Borrowing Date (other than Excluded Foreign Restricted Subsidiaries) and (ii) each Restricted Subsidiary of the Borrower formed after the Initial Borrowing Date and each Excluded Domestic Restricted Subsidiary designated as such by the Borrower, in each case, which has executed and delivered a counterpart of the Subsidiary Guaranty to the Administrative Agent on behalf of the Banks, provided that any such Restricted Subsidiary which is a Partially-Owned Restricted Subsidiary shall cease to constitute a Subsidiary Guarantor to the extent the Borrower shall have made a Non-Guarantor Designation with respect to such Subsidiary in accordance with the terms hereof. "Subsidiary Guaranty" shall have the meaning provided in Section 5.01(e). "Swingline Expiry Date" shall mean the date which is five Business Days prior to the Revolving Loan Maturity Date. "Swingline Loan" shall have the meaning provided in Section 1.01(d). "Syndication Agent" shall have the meaning provided in the first paragraph of this Agreement. "Taxes" shall have the meaning provided in Section 4.04. "Term Loan A" shall have the meaning provided in Section 1.01(a). -80- "Term Loan A Commitment" shall mean, with respect to each Bank, the amount set forth opposite such Bank's name in Annex I hereto directly below the column entitled "Term Loan A Commitment," as same may be reduced from time to time pursuant to Sections 3.03 and/or 9. "Term Loan A Facility Percentage" shall mean, at any time, a fraction (expressed as a percentage) the numerator of which is equal to the aggregate principal amount of all Term Loans A outstanding at such time and the denominator of which is equal to the sum of (x) the aggregate principal amount of Term Loans A outstanding at such time, and (y) the aggregate principal amount of Term Loans B then outstanding at such time. "Term Loan B Facility Percentage" shall mean, at any time, a fraction (expressed as a percentage) the numerator of which is equal to the aggregate principal amount of all Term Loans B outstanding at such time and the denominator of which is equal to the sum of (x) the aggregate principal amount of Term Loans A outstanding at such time, and (y) the aggregate principal amount of Term Loans B outstanding at such time. "Term Loan A Maturity Date" shall mean the earlier of (a) June 30, 2008 and (b) the Early Maturity Date. "Term Loan B" shall have the meaning provided in Section 1.01(b). "Term Loan B Commitment" shall mean, with respect to each Bank, the amount set forth opposite such Bank's name in Annex I hereto directly below the column entitled " Term Loan B Commitment," as same may be reduced from time to time pursuant to Sections 3.03 and/or 9. "Term Loan B Maturity Date" shall mean the earlier of (a) June 30, 2009 and (b) the Early Maturity Date. "Test Period" shall mean the four consecutive fiscal quarters of the Borrower then last ended. "Total Commitment" shall mean, at any time, the sum of the Commitments of each of the Banks. "Total Revolving Loan Commitment" shall mean, at any time, the sum of the Revolving Loan Commitments of each of the Banks. "Total Term Loan A Commitment" shall mean, at any time, the sum of the Term Loan A Commitments of each of the Banks. "Total Term Loan B Commitment" shall mean, at any time, the sum of the Term Loan B Commitments of each of the Banks. "Total Unutilized Revolving Loan Commitment" shall mean, at any time, (i) the Total Revolving Loan Commitment at such time less (ii) the sum of the aggregate principal -81- amount of all Revolving Loans and Swingline Loans at such time, plus the Letter of Credit Outstandings at such time. "Tranche" shall mean the respective facility and commitments utilized in making Loans hereunder, with there being four separate Tranches, i.e., the Term Loans A, the Term Loans B, the Revolving Loans and the Swingline Loans. "Type" shall mean any type of Loan determined with respect to the interest option applicable thereto, i.e., a Base Rate Loan or Eurodollar Loan. "UCC" shall mean the Uniform Commercial Code as in effect in the State of New York. "Unfunded Current Liability" of any Plan shall mean the amount, if any, by which the actuarial present value of the accumulated plan benefits under such Plan as of the close of its most recent plan year exceeds the fair market value of the assets allocable thereto, each determined in accordance with Statement of Financial Accounting Standards No. 87, based upon the actuarial assumptions used by the Plan's actuary in the most recent annual valuation of the Plan. "Unpaid Drawing" shall have the meaning provided in Section 2.04(a). "Unrestricted Subsidiary" shall mean (i) each Subsidiary of the Borrower listed on Annex VIII hereto, (ii) any Subsidiary of the Borrower that is formed or acquired after Effective Date, which is funded through loans, advances and/ or capital contributions as permitted by, and in compliance with, Section 8.05(d), provided that at the time of the initial loan, advance or capital contribution by the Borrower or any Restricted Subsidiary to such Subsidiary (x) the Borrower designates such Subsidiary as an Unrestricted Subsidiary in a written notice to the Administrative Agent and (y) such Subsidiary and the Borrower shall have entered into a tax sharing agreement in form and substance reasonably satisfactory to the Administrative Agent, (ii) any Restricted Subsidiary of the Borrower redesignated as an Unrestricted Subsidiary pursuant to a Permitted Restricted Subsidiary Conversion and any Restricted Subsidiary sold to an Unrestricted Subsidiary pursuant to a Permitted Restricted Asset Sale, in each case to the extent consummated in accordance with the terms of the respective definitions thereof and Section 8.02(c) or 8.02(j), as the case may be, and (iii) each Subsidiary of an Unrestricted Subsidiary; provided that, at the time of any designation of the type described in clause (z) of the definition of "Restricted Subsidiary," the Subsidiary so designated shall no longer constitute an Unrestricted Subsidiary hereunder. "Unrestricted Subsidiary Investment Amount" shall have the meaning provided in Section 8.05(d). "Unrestricted Subsidiary Investment Limit" shall mean, at any time, the sum of (i) $350,000,000, (ii) the Excess Cash Flow Amount at such time, (iii) an amount equal to all cash or other payments received by the Borrower and its Restricted Subsidiaries from Unrestricted Subsidiaries from dividends or distributions after the Effective Date (provided that for purposes -82- of this clause (iii), cash and other payments received by a Partially-Owned Restricted Subsidiary shall be added to the Unrestricted Subsidiary Investment Limit only to the extent of the equity percentage ownership of the Borrower in such Partially-Owned Restricted Subsidiary), plus (iv) an amount equal to the aggregate net proceeds received by the Borrower from the issuance of equity securities of the Borrower after the Effective Date, provided that if the net proceeds from any such equity issuance are not utilized to make a loan or advance to, or a cash capital contribution in, an Unrestricted Subsidiary pursuant to Section 8.05(d) within 90 days following the date of such equity issuance, then the net proceeds from such equity issuance shall no longer be added to the Unrestricted Subsidiary Investment Limit. "U.S. Dollars" and "$" shall mean freely transferable lawful money of the United States of America. "Wholly-Owned Restricted Subsidiary" shall mean any Restricted Subsidiary of the Borrower which is not a Partially-Owned Restricted Subsidiary. "Working Capital" shall mean the excess of Consolidated Current Assets over Consolidated Current Liabilities. "Written" or "in writing" shall mean any form of written communication or a communication by means of telex, telecopier device, telegraph or cable. SECTION 11. The Administrative Agent. 11.01 APPOINTMENT. Each Bank hereby irrevocably designates and appoints Chase as Administrative Agent of such Bank (such term to include for purposes of this Section 11, Chase acting as Collateral Agent) and to act as specified herein and in the other Credit Documents, and each such Bank hereby irrevocably authorizes Chase as the Administrative Agent for such Bank, to take such action on its behalf under the provisions of this Agreement and the other Credit Documents and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of this Agreement and the other Credit Documents, together with such other powers as are reasonably incidental thereto. The Administrative Agent agrees to act as such upon the express conditions contained in this Section 11. Notwithstanding any provision to the contrary elsewhere in this Agreement, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein or in the other Credit Documents, or any fiduciary relationship with any Bank, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or otherwise exist against the Administrative Agent. The provisions of this Section 11 are solely for the benefit of the Administrative Agent and the Banks, and neither the Borrower nor any of its Subsidiaries shall have any rights as a third party beneficiary of any of the provisions hereof. In performing its functions and duties under this Agreement, the Administrative Agent shall act solely as agent of the Banks and the Administrative Agent neither assumes and nor shall it be deemed to have assumed any obligation or relationship of agency or trust with or for the Borrower or any of its Subsidiaries. -83- 11.02 DELEGATION OF DUTIES. The Administrative Agent may execute any of its duties under this Agreement or any other Credit Document by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care except to the extent otherwise required by Section 11.03. 11.03 EXCULPATORY PROVISIONS. Neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or the other Credit Documents (except for its or such Person's own gross negligence or willful misconduct) or (ii) responsible in any manner to any of the Banks for any recitals, statements, representations or warranties made by the Borrower, any of its Subsidiaries or any of their respective officers contained in this Agreement or the other Credit Documents or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Credit Document or for any failure of the Borrower or any of its Subsidiaries or any of their respective officers to perform its obligations hereunder or thereunder. The Administrative Agent shall not be under any obligation to any Bank to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or the other Credit Documents, or to inspect the properties, books or records of the Borrower or any of its Subsidiaries. The Administrative Agent shall not be responsible to any Bank for the effectiveness, genuineness, validity, enforceability, collectibility or sufficiency of this Agreement or any other Credit Document or for any representations, warranties, recitals or statements made herein or therein or made in any written or oral statement or in any financial or other statements, instruments, reports, certificates or any other documents in connection herewith or therewith furnished or made by the Administrative Agent to the Banks or by or on behalf of the Borrower to the Administrative Agent, or any Bank or be required to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or agreements contained herein or therein or as to the use of the proceeds of the Loans or of the existence or possible existence of any Default or Event of Default. 11.04 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Borrower), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Credit Document unless it shall first receive such advice or concurrence of the Required Banks as it deems appropriate or it shall first be indemnified to its satisfaction by the Banks against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Credit Documents in accordance -84- with a request of the Required Banks, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Banks. 11.05 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless the Administrative Agent has actually received notice from a Bank or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default." In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give prompt notice thereof to the Banks. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Banks; PROVIDED that, unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Banks. 11.06 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER BANKS. Each Bank expressly acknowledges that neither the Administrative Agent nor any of its respective officers, directors, employees, agents, attorneys-in-fact or affiliates have made any representations or warranties to it and that no act by the Administrative Agent hereinafter taken, including any review of the affairs of the Borrower or any of its Subsidiaries, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Bank. Each Bank represents to the Administrative Agent that it has, independently and without reliance upon the Administrative Agent or any other Bank, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, assets, operations, property, financial and other condition, prospects and creditworthiness of the Borrower and its Subsidiaries and made its own decision to make its Loans hereunder and enter into this Agreement. Each Bank also represents that it will, independently and without reliance upon the Administrative Agent or any other Bank, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement, and to make such investigation as it deems necessary to inform itself as to the business, assets, operations, property, financial and other condition, prospects and creditworthiness of the Borrower and its Subsidiaries. The Administrative Agent shall not have any duty or responsibility to provide any Bank with any credit or other information concerning the business, operations, assets, property, financial and other condition, prospects or creditworthiness of the Borrower or any of its Subsidiaries which may come into the possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates. 11.07 INDEMNIFICATION. The Banks agree to indemnify the Administrative Agent in its capacity as such ratably according to their respective "percentages" (which shall equal, for each Non-Defaulting Bank, that percentage determined by dividing (i) the sum of (x) such Bank's Revolving Loan Commitment and (y) the outstanding principal amount of such Bank's Term Loans A and Term Loans B by (ii) the sum of (x) the Adjusted Total Revolving Loan Commitment and (y) the total aggregate principal amount of Term Loans A and Term Loans B LESS any outstanding Term Loans A and Term Loans B of Defaulting Banks, it being understood and agreed that references herein to Revolving Loan Commitments (as well as to the Adjusted -85- Total Revolving Loan Commitment) at a time when any such Commitment has been terminated shall be references to such terminated Commitment as in effect immediately prior to such termination), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, reasonable expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Obligations) be imposed on, incurred by or asserted against the Administrative Agent in its capacity as such in any way relating to or arising out of this Agreement or any other Credit Document, or any documents contemplated by or referred to herein or the transactions contemplated hereby or any action taken or omitted to be taken by the Administrative Agent under or in connection with any of the foregoing, but only to the extent that any of the foregoing is not paid by the Borrower or any of its Subsidiaries; PROVIDED that no Bank shall be liable to the Administrative Agent for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the gross negligence or willful misconduct of the Administrative Agent. If and to the extent any amount paid to the Administrative Agent is subsequently recovered by the Administrative Agent against the Borrower or any of its Subsidiaries, the Administrative Agent shall promptly pay to each Bank to the extent such Bank paid the Administrative Agent, its "percentage" of the amount so recovered. If any indemnity furnished to the Administrative Agent for any purpose shall, in the opinion of the Administrative Agent be insufficient or become impaired, the Administrative Agent may call for additional indemnity and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished. The agreements in this Section 11.07 shall survive the payment of all Obligations. 11.08 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. The Administrative Agent and its respective affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Borrower and its Subsidiaries as though the Administrative Agent were not the Administrative Agent hereunder. With respect to the Loans made by it and all Obligations owing to it, the Administrative Agent shall have the same rights and powers under this Agreement as any Bank and may exercise the same as though it were not the Administrative Agent, and the terms "Bank" and "Banks" shall include the Administrative Agent in its individual capacity. 11.09 HOLDERS. The Administrative Agent may deem and treat the payee of any Note which has been issued hereunder as the owner thereof for all purposes hereof unless and until a written notice of the assignment, transfer or endorsement thereof, as the case may be, shall have been filed with the Administrative Agent. Any request, authority or consent of any Person or entity who, at the time of making such request or giving such authority or consent, is the holder of any such Note shall be conclusive and binding on any subsequent holder, transferee, assignee or indorsee, as the case may be, of such Note or of any Note or Notes issued in exchange therefor. 11.10 RESIGNATION OF THE ADMINISTRATIVE AGENT; SUCCESSOR AGENT. The Administrative Agent may resign as the Administrative Agent upon 20 days' notice to the Banks. Upon the resignation of the Administrative Agent, the Required Banks shall appoint from among the Banks a successor Administrative Agent for the Banks subject to prior approval by the Borrower (such approval not to be unreasonably withheld), whereupon such successor agent shall -86- succeed to the rights, powers and duties of the Administrative Agent, and the term "Administrative Agent" shall include such successor agent effective upon its appointment, and the resigning Administrative Agent's rights, powers and duties as the Administrative Agent shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement. After the resignation of the Administrative Agent hereunder, the provisions of this Section 11 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement. SECTION 12. MISCELLANEOUS. 12.01 PAYMENT OF EXPENSES, ETC. The Borrower agrees to: (i) whether or not the transactions herein contemplated are consummated, pay all reasonable out-of-pocket costs and expenses of the Administrative Agent (including, without limitation, the reasonable fees and disbursements of White & Case LLP) in connection with the negotiation, preparation, execution and delivery of the Credit Documents and the documents and instruments referred to therein and any amendment, waiver or consent relating thereto and in connection with the Administrative Agent's syndication efforts with respect to this Agreement; (ii) pay all reasonable out-of-pocket costs and expenses of the Administrative Agent, the Letter of Credit Issuer and each of the Banks in connection with the enforcement of the Credit Documents and the documents and instruments referred to therein and, after an Event of Default shall have occurred and be continuing, the protection of the rights of the Administrative Agent, the Letter of Credit Issuer and each of the Banks thereunder (including, without limitation, the reasonable fees and disbursements of counsel (including in-house counsel) for the Administrative Agent, the Letter of Credit Issuer and for each of the Banks); (iii) pay and hold each of the Banks harmless from and against any and all present and future stamp and other similar taxes with respect to the foregoing matters and save each of the Banks harmless from and against any and all liabilities with respect to or resulting from any delay or omission (other than to the extent attributable to such Bank) to pay such taxes; and (iv) indemnify the Administrative Agent, the Letter of Credit Issuer and each Bank, its officers, directors, employees, representatives and agents from and hold each of them harmless against any and all losses, liabilities, claims, damages or expenses incurred by any of them as a result of, or arising out of, or in any way related to, or by reason of, any investigation, litigation or other proceeding (whether or not the Administrative Agent, the Letter of Credit Issuer or any Bank is a party thereto) related to the entering into and/or performance of any Credit Document or the use of the proceeds of any Loans or Letter of Credit hereunder or the consummation of any other transactions contemplated in any Credit Document including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such investigation, litigation or other proceeding (but excluding any such losses, liabilities, claims, damages or expenses to the extent incurred by reason of the gross negligence or willful misconduct of the Person to be indemnified). 12.02 RIGHT OF SETOFF. In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, upon the occurrence of an Event of Default, each Bank (including to the extent such Bank is, or is deemed to be, the holder of a funded participation in any Swingline Loan, and/or Letter of Credit) is hereby authorized at any time or from time to time, without presentment, demand, protest or other notice -87- of any kind to the Borrower or any of its Subsidiaries or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and apply any and all deposits (general or special) and any other Indebtedness at any time held or owing by such Bank (including, without limitation, by branches and agencies of such Bank wherever located) to or for the credit or the account of any Credit Party against and on account of the Obligations and liabilities of such Credit Party to such Bank under this Agreement or under any of the other Credit Documents, including, without limitation, all interests in Obligations of such Credit Party purchased by such Bank pursuant to Section 12.06(b), and all other claims of any nature or description arising out of or connected with this Agreement or any other Credit Document, irrespective of whether or not such Bank shall have made any demand hereunder and although said Obligations, liabilities or claims, or any of them, shall be contingent or unmatured. 12.03 NOTICES. Except as otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including facsimile communication) and mailed, facsimilied or delivered, if to the Borrower, at the address specified opposite its signature below or in the other relevant Credit Documents, as the case may be; if to any Bank, at its address specified for such Bank on Annex II hereto; or, at such other address as shall be designated by any party in a written notice to the other parties hereto. All such notices and communications shall be mailed, facsimilied or cabled or sent by overnight courier, and shall be effective when received. 12.04 BENEFIT OF AGREEMENT. (a) This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto; PROVIDED that the Borrower may not assign or transfer any of its respective rights or obligations hereunder without the prior written consent of the Banks. Each Bank may at any time grant participations in any of its rights hereunder to another financial institution; PROVIDED FURTHER, that, in the case of any such participation, the participant shall not have any rights under this Agreement or any of the other Credit Documents (the participant's rights against such Bank in respect of such participation to be those set forth in the agreement executed by such Bank in favor of the participant relating thereto) and all amounts payable by the Borrower hereunder shall be determined as if such Bank had not sold such participation, except that the participant shall be entitled to receive the additional amounts under Sections 1.10, 1.11, 2.06 and 4.04 of this Agreement to, and only to, the extent that such Bank would be entitled to such benefits if the participation had not been entered into or sold; and PROVIDED FURTHER, that no Bank shall transfer, grant or assign any participation under which the participant shall have rights to approve any amendment to or waiver of this Agreement or any other Credit Document except to the extent such amendment or waiver would (i) extend the final scheduled maturity of any Loan in which such participant is participating (it being understood that any waiver of an installment on, or the application of any prepayment or the method of application of any prepayment to the amortization of the Loans shall not constitute an extension of the final scheduled maturity date), or reduce the rate or extend the time of payment of interest or Fees thereon (except in connection with a waiver of the applicability of any post-default increase in interest rates), or reduce the principal amount thereof, or increase such participant's participating interest in any Commitment over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default or of a mandatory reduction in the Total Commitment shall not constitute a change in the terms of any Commitment and that an increase in any Commitment shall be permitted -88- without the consent of any participant if such participant's participation is not increased as a result thereof), (ii) release the Borrower from the Borrower Guaranty or release all or substantially all of the Subsidiary Guarantors from the Subsidiary Guaranty (in each case except as expressly provided in the Credit Documents) or (iii) in each case consent to the assignment or transfer by the Borrower or any other Subsidiaries of the Borrower of any of its rights and obligations under this Agreement or any other Credit Document except in accordance with the terms hereof and thereof. (b) Notwithstanding the foregoing, (x) any Bank may assign all or a portion of its Loans and/or Commitment and its rights and obligations hereunder to (i) any affiliate of such Bank, (ii) any other Bank and/or its affiliates or (iii) any Approved Fund and (y) with the consent of the Administrative Agent and the Borrower, and, in the case of any assignment of Revolving Loans and/or Revolving Loan Commitments, of the Letter of Credit Issuer (which consent in each case shall not be unreasonably withheld or delayed), any Bank may assign all or a portion of its Loans and/or Commitments and its rights and obligations hereunder to one or more commercial banks, other Persons who invest in commercial loan facilities or other financial institutions. No assignment pursuant to the immediately preceding sentence shall (x) to the extent such transaction represents an assignment pursuant to clause (y) of the preceding sentence (other than an assignment to a Bank), be in an aggregate amount less than the minimum of (I) $5,000,000 (in the case of an assignment of a portion of a Bank's Revolving Loan Commitment or outstanding principal amount of Term Loans A), and (II) $1,000,000 (in the case of an assignment of a portion of a Bank's outstanding Term Loans B) (or such lesser amount as constitutes the assigning Bank's entire Commitment and outstanding Loans or such lesser amount as may be approved by the Administrative Agent and the Borrower) so long as no Default or Event of Default then exists, reduce the Loans and Commitments of the assigning Bank to an aggregate amount less than the Minimum Retention Amount unless the same are reduced to $0. If any Bank so sells or assigns all or a part of its rights hereunder, any reference in this Agreement or the other Credit Documents to such assigning Bank shall thereafter refer to such Bank and to the respective assignee Bank to the extent of their respective interests and the respective assignee Bank shall have, to the extent of such assignment (unless otherwise provided therein), the same rights and benefits as it would if it were such assigning Bank. Each assignment pursuant to this Section 12.04(b) shall be effected by the assigning Bank and the assignee Bank executing an Assignment and Assumption Agreement substantially in the form of Exhibit G (appropriately completed). At the time of any such assignment, (i) Annex I shall be deemed to be amended to reflect the Commitments and outstanding Loans of the respective assignee Bank (which shall result in a direct reduction to the respective Commitments of the assigning Bank) and of the other Banks, (ii) the Administrative Agent as agent for the Borrower shall record such assignment and the resultant effects thereof on the Loans and/or Commitments of the assigning Bank and the assignee Bank in the Register and (iii) the Administrative Agent shall receive from the assigning Bank and/or the assignee Bank at the time of each assignment (other than an assignment pursuant to clause (x) of the first sentence of this Section 12.04(b)) the payment of a nonrefundable assignment fee in an aggregate amount of $3,500 with respect to each such assignment. Each Bank and the Borrower agree to execute such documents (including, without limitation, amendments to this Agreement and the other Credit Documents) as shall be necessary to effect the foregoing. Promptly following any assignment pursuant to this Section -89- 12.04(b), the assigning Bank shall promptly notify the Borrower thereof. Nothing in this Section 12.04(b) shall prevent or prohibit any Bank from pledging its Loans or, if issued, Notes hereunder to a Federal Reserve Bank in support of borrowings made by such Bank from such Federal Reserve Bank or prevent any Bank which is an Approved Fund from, at any time, pledging all or any portion of its Loans to its trustee or representative or other creditor; PROVIDED, HOWEVER, that no such pledge shall release any Bank from its obligations hereunder or substitute such Federal Reserve Bank, trustee or representative or other creditor for such Bank as a party hereto. (c) Notwithstanding any other provisions of this Section 12.04, no transfer or assignment of the interests or obligations of any Bank hereunder or any grant of participations therein shall be permitted if such transfer, assignment or grant would require the Borrower to file a registration statement with the SEC or to qualify the Loans under the "Blue Sky" laws of any State. 12.05 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of the Administrative Agent, the Letter of Credit Issuer or any Bank in exercising any right, power or privilege hereunder or under any other Credit Document and no course of dealing between the Borrower and the Administrative Agent, the Letter of Credit Issuer or any Bank shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under any other Credit Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights and remedies herein expressly provided are cumulative and not exclusive of any rights or remedies which the Administrative Agent, the Letter of Credit Issuer or any Bank would otherwise have. No notice to or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Administrative Agent, the Letter of Credit Issuer or the Banks to any other or further action in any circumstances without notice or demand. 12.06 PAYMENTS PRO RATA. (a) The Administrative Agent agrees that promptly after its receipt of each payment from or on behalf of the Borrower in respect of any Obligations of the Borrower hereunder, it shall, except as otherwise provided in this Agreement, distribute such payment to the Banks (other than any Bank that has consented in writing to waive its PRO RATA share of such payment) PRO RATA based upon their respective shares, if any, of the Obligations with respect to which such payment was received. (b) Each of the Banks agrees that, if it should receive any amount hereunder (whether by voluntary payment, by realization upon security, by the exercise of the right of setoff or banker's lien, by counterclaim or cross action, by the enforcement of any right under the Credit Documents, or otherwise) which is applicable to the payment of the principal of, or interest on, the Loans, Unpaid Drawings or Fees, of a sum which with respect to the related sum or sums received by other Banks is in a greater proportion than the total of such Obligation then owed and due to such Bank bears to the total of such Obligation then owed and due to all of the Banks immediately prior to such receipt, then such Bank receiving such excess payment shall purchase for cash without recourse or warranty from the other Banks an interest in the Obligations of the Borrower to such Banks in such amount as shall result in a proportional -90- participation by all of the Banks in such amount; PROVIDED that if all or any portion of such excess amount is thereafter recovered from such Bank, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest. (c) Notwithstanding anything to the contrary contained herein, the provisions of the preceding Sections 12.06(a) and (b) shall be subject to the express provisions of this Agreement which require, or permit, differing payments to be made to Non-Defaulting Banks as opposed to Defaulting Banks. 12.07 CALCULATIONS; COMPUTATIONS. (a) The financial statements to be furnished to the Banks pursuant hereto shall be made and prepared in accordance with GAAP consistently applied throughout the periods involved (except as set forth in the notes thereto or as otherwise disclosed in writing by the Borrower to the Banks); PROVIDED that except as otherwise specifically provided herein, all computations determining compliance with Section 8, including definitions used therein, shall utilize accounting principles and policies in effect at the time of the preparation of, and in conformity with those used to prepare, the December 31, 2000 historical financial statements delivered to the Banks pursuant to Section 6.10(a). (b) All computations of interest (other than interest on Base Rate Loans) and Fees hereunder shall be made on the actual number of days elapsed over a year of 360 days. All computations of interest on Base Rate Loans hereunder shall be made on the actual number of days elapsed over a year of 365 days. 12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding with respect to this Agreement or any other Credit Document may be brought in the courts of the State of New York or of the United States for the Southern District of New York, and, by execution and delivery of this Agreement, the Borrower hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. The Borrower hereby further irrevocably waives any claim that any such courts lack jurisdiction over the Borrower, and agrees not to plead or claim, in any legal action or proceeding with respect to this Agreement or any other Credit Document brought in any of the aforesaid courts, that any such court lacks jurisdiction over the Borrower. The Borrower irrevocably consents to the service of process in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to the Borrower, at its address for notices pursuant to Section 12.03, such service to become effective 30 days after such mailing. The Borrower hereby irrevocably waives and agrees not to plead or claim in any action or proceeding commenced hereunder or under any other Credit Document that service of process was in any way invalid or ineffective. The Borrower hereby represents and warrants that its chief executive office is located at 745 Fifth Avenue, New York, New York 10151, and the Borrower hereby further agrees that it shall not move its chief executive office unless it shall give the Administrative Agent not less than 30 days' prior written notice of its intention so to do. The Borrower agrees that (x) prior to moving its chief executive office outside New York City and (y) and if for any reason any designee, -91- appointee and agent previously appointed pursuant to this sentence shall cease to be available to act as such, the Borrower shall designate a designee, appointee and agent or replacement designee, appointee and agent, as the case may be, in New York City on the terms and for the purposes of this provision satisfactory to the Administrative Agent. Nothing herein shall affect the right of the Administrative Agent, any Bank or the holder of any Note to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against the Borrower in any other jurisdiction. (b) The Borrower hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Agreement or any other Credit Document brought in the courts referred to in clause (a) above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum. 12.09 COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A complete set of counterparts executed by all the parties hereto shall be lodged with the Borrower and the Administrative Agent. 12.10 EFFECTIVENESS. This Agreement shall become effective on the date (the "Effective Date") on which the Borrower, the Administrative Agent and each Bank shall have signed a copy hereof (whether the same or different copies) and shall have delivered the same to the Administrative Agent at its Notice Office or, in the case of the Banks, shall have given to the Administrative Agent telephonic (confirmed in writing), written or facsimile notice (actually received) at such office that the same has been signed and mailed to it. The Administrative Agent will give the Borrower and each Bank prompt written notice of the occurrence of the Effective Date. 12.11 HEADINGS DESCRIPTIVE. The headings of the several sections and subsections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement. 12.12 AMENDMENT OR WAIVER. (a) Except as provided in Section 12.12(b) below, neither this Agreement nor any other Credit Document nor any terms hereof or thereof may be changed, waived, discharged or terminated unless such change, waiver, discharge or termination is in writing signed by the Borrower and the Required Banks; PROVIDED that no such change, waiver, discharge or termination shall, without the consent of each Bank (other than a Defaulting Bank) affected thereby, (i) extend any Scheduled Revolving Loan Commitment Reduction Date, any Scheduled TLA Repayment Date, any Scheduled TLB Repayment Date or reduce the amount of any Scheduled Revolving Loan Commitment Reduction, any Scheduled TLA Repayment or Scheduled TLB Repayment (or any mandatory repayment arising as a result of any such Scheduled Revolving Loan Commitment Reduction) or extend the final scheduled maturity of any Loan (it being understood that any waiver of the application of any prepayment of or the method of application of any prepayment to the amortization of the Loans shall not constitute any -92- such extension), or reduce the rate or extend the time of payment of interest (other than as a result of waiving the applicability of any post-default increase in interest rates) or Fees thereon, or reduce the principal amount thereof, or increase the Commitments of any Bank over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default or of a mandatory repayment or reduction in the Total Commitment shall not constitute a change in the terms of any Commitment of any Bank), (ii) release all or substantially all of the Subsidiary Guarantors from the Subsidiary Guaranty (in each case except as expressly provided in the Credit Documents), (iii) release all or substantially all of the Collateral, (iv) amend, modify or waive any provision of this Section, or Section 1.10, 1.11, 2.06, 4.04, 9.01, 11.07, 12.01, 12.02, 12.04, 12.06 or 12.07(b), (v) reduce the percentage specified in, or otherwise modify, the definition of, Required Banks, or (vi) consent to the assignment or transfer by any Credit Party of any of its rights and obligations under this Agreement or any other Credit Document except in accordance with the terms hereof or thereof. No provision of Section 2 or 11 may be amended without the consent of the Letter of Credit Issuer or the Administrative Agent. (b) Notwithstanding anything to the contrary contained in Section 12.12(a) above, the Administrative Agent, the Borrower and the respective Incremental Loan Lending Institutions are hereby authorized to enter into a supplement or amendment to or amendment and restatement of this Agreement to give effect to any Incremental Loan Commitment (as if such Incremental Loan Commitment were part of this Agreement as of the Effective Date), in each case as set forth in Section 1.13. 12.13 SURVIVAL. All indemnities set forth herein including, without limitation, in Sections 1.10, 1.11, 2.06, 4.04, 11.07 or 12.01, shall survive the execution and delivery of this Agreement and the making and repayment of the Loans and the satisfaction of all other Obligations. 12.14 DOMICILE OF LOANS. Each Bank may transfer and carry its Loans at, to or for the account of any branch office, subsidiary or affiliate of such Bank, provided, that the Borrower shall not be responsible for costs arising under Sections 1.10, 1.11, 2.06 or 4.04 resulting from any such transfer (other than a transfer pursuant to Section 1.12) to the extent such costs would not otherwise be applicable to such Bank in the absence of such transfer. 12.15 CONFIDENTIALITY. Each of the Banks agrees that it will use its best efforts not to disclose without the prior consent of the Borrower (other than to (i) its employees, auditors, counsel or other professional advisors, to affiliates or to another Bank if the Bank or such Bank's holding or parent company in its sole discretion determines that any such party should have access to such information or (ii) any contractual counterparty in any swap agreement to which a Bank is a party, or any professional advisor to any such contractual counterparty, so long as such parties agree to be bound by the provisions of this Section) any information with respect to the Borrower or any of its Subsidiaries which is furnished pursuant to this Agreement and which is designated by the Borrower to the Banks in writing as confidential, PROVIDED that any Bank may disclose any such information (a) as has become generally available to the public, (b) as may be required or appropriate in any report, statement or testimony submitted to any municipal, state, provincial or Federal regulatory body having or claiming to have jurisdiction over such Bank or to the Federal Reserve Board or the Federal Deposit Insurance Corporation, the National -93- Association of Insurance Commissioners or similar organizations (whether in the United States or elsewhere) or their successors, (c) as may be required or appropriate in response to any summons or subpoena or in connection with any litigation, (d) in order to comply with any law, order, regulation or ruling applicable to such Bank, and (e) to any prospective transferee in connection with any contemplated transfer of any of the Loans and/or Commitments or any interest herein by such Bank, PROVIDED that such prospective transferee agrees to be bound by the provisions of this Section. 12.16 WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. * * * -94- IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written. Address: 745 Fifth Avenue PRIMEDIA INC. New York, NY 10151 Telephone: (212) 745-0101 By: /S/ BEVERLY C. CHELL --------------------------------------- Telecopier: (212) 745-0199 Title: Vice Chairman, General Counsel Attention: Beverly Chell, Esq. and Secretary THE CHASE MANHATTAN BANK, Individually and as Administrative Agent By: /S/ WILLIAM ROTTINO --------------------------------------- Title: Vice President BANK OF AMERICA, N.A., Individually and as Syndication Agent By: /S/ THOMAS KANE --------------------------------------- Title: Principal THE BANK OF NEW YORK Individually and as Co-Documentation Agent By: /S/ STEVEN J. CORRELL --------------------------------------- Title: Assistant Vice President THE BANK OF NOVA SCOTIA Individually and as Co-Documentation Agent By: /S/ VINCENT J. FITZGERALD, JR. --------------------------------------- Title: Authorized Signatory CITIBANK, N.A. By: /S/ ROBERT H. CHEN --------------------------------------- Title: Vice President FLEET NATIONAL BANK By: /S/ SRBUI SEFERIAN --------------------------------------- Title: Assistant Vice President MERRILL LYNCH CAPITAL CORPORATION By: /S/ CHRISTOPHER A. JOHNSON --------------------------------------- Title: Managing Director THE DAI-ICHI KANGYO BANK, LTD ( d.b.a. Mizuho Financial Group) By: /S/ MARVIN-MIREL LAZAR --------------------------------------- Title: Vice President UNION BANK OF CALIFORNIA, N.A. By: /S/ MOLLY L. TONEY --------------------------------------- Title: Assistant Vice President KZH CRESCENT LLC By: /S/ SUSAN LEE --------------------------------------- Title: Authorized Agent KZH CRESCENT-2 LLC By: /S/ SUSAN LEE --------------------------------------- Title: Authorized Agent KZH CRESCENT-3 LLC By: /S/ SUSAN LEE --------------------------------------- Title: Authorized Agent METROPOLITAN LIFE INSURANCE COMPANY By: /S/ JAMES R. DINGLER --------------------------------------- Title: Director RIVIERA FUNDING LLC By: /S/ ANN E. MORRIS --------------------------------------- Title: Assistant Vice President MORGAN STANLEY PRIME INCOME TRUST By: /S/ SHEILA A. FINNERTY --------------------------------------- Title: Senior Vice President VAN KAMPEN PRIME RATE INCOME TRUST --------------------------------------- By: Van Kampen Investment Advisory Corp. By: /S/ BRIAN T. BUSCHER --------------------------------------- Title: Manager Operations & Compliance VAN KAMPEN SENIOR FLOATING RATE FUND --------------------------------------- By: Van Kampen Investment Advisory Corp. By: /S/ BRIAN T. BUSCHER --------------------------------------- Title: Manager Operations & Compliance VAN KAMPEN SENIOR INCOME TRUST By: Van Kampen Investment Advisory Corp. By: /S/ BRIAN T. BUSCHER --------------------------------------- Title: Manager Operations & Compliance KZH CNC LLC By: /S/ SUSAN LEE --------------------------------------- Title: Authorized Agent WINGED FOOT FUNDING TRUST By: /S/ KELLY C. WALKER --------------------------------------- Title: Authorized Agent NATEXIS BANQUES POPULAIRES By: /S/ ELIZABETH A. HARKER --------------------------------------- Title: Assistant Vice President By: /S/ CYNTHIA SACHS --------------------------------------- Title: Vice President, Group Manager KZH LANGDALE LLC By: /S/ SUSAN LEE --------------------------------------- Title: Authorized Agent STANWICH LOAN FUNDING LLC By: /S/ KELLY C. WALKER --------------------------------------- Title: Vice President TORONTO DOMINION (NEW YORK), INC. By: /S/ GWEN ZIRKLE --------------------------------------- Title: Vice President NUVEEN SENIOR INCOME FUND By: Nuveen Senior Loan Asset Management Inc. By: /S/ LISA M. MINCHESKI --------------------------------------- Title: Managing Director NUVEEN FLOATING RATE FUND By: Nuveen Senior Loan Asset Management Inc. By: /S/ LISA M. MINCHESKI --------------------------------------- Title: Managing Director OLYMPIC FUNDING TRUST, SERIES 1999-1 By: /S/ ANNE E. MORRIS --------------------------------------- Title: Authorized Agent SEQUILS-CUMBERLAND I, LTD. By: Deerfield Capital Management LLC, as its Collateral Manager By: /S/ MARK E. WITTNEBEL --------------------------------------- Title: Senior Vice President MUIRFIELD TRADING LLC By: /S/ ANNE E. MORRIS --------------------------------------- Title: Assistant Vice President Annex I Page 2 LIST OF BANKS
TERM LOAN A TERM LOAN B REVOLVING LOAN BANK COMMITMENT COMMITMENT COMMITMENT ---- ---------- ---------- ---------- The Chase Manhattan Bank $17,391,304.36 $308,750,000 $82,608,695.65 Bank of America, N.A. $17,391,304.35 $3,750,000 $82,608,695.65 The Bank of New York $14,565,217.39 $69,184,782.61 The Bank of Nova Scotia $14,565,217.39 $10,000,000 $69,184,782.61 Citibank, N.A. $11,739,130.43 $55,760,869.57 Fleet National Bank $ 8,695,652.17 $41,304,347.83 Merrill Lynch Capital Corporation $ 8,695,652.17 $41,304,347.83 Dai-Ichi Kangyo Bank, Ltd. $ 4,347,826.09 $20,652,173.91 Union Bank of California, N.A. $ 2,608,695.65 $12,391,304.35 KZH Crescent LLC $ 3,500,000 KZH Crescent-2 LLC $ 2,500,000 KZH Crescent-3 LLC $ 2,500,000 Metropolitan Life Insurance Company $25,000,000 Riviera Funding LLC $ 5,000,000 Morgan Stanley Prime Income Trust $ 7,500,000 Van Kampen Prime Rate Income Trust $ 6,000,000 Van Kampen Senior Floating Rate Fund $ 3,000,000 Van Kampen Senior Income Trust $ 6,000,000 KZH CNC LLC $ 5,000,000 Winged Foot Funding Trust $ 5,000,000
Annex I Page 2
TERM LOAN A TERM LOAN B REVOLVING LOAN BANK COMMITMENT COMMITMENT COMMITMENT ---- ---------- ---------- ---------- Natexis Banques Populaires $ 10,000,000 KZH Langdale LLC $ 2,500,000 Stanwich Loan Funding LLC $ 3,000,000 Toronto Dominion (New York), Inc. $ 4,000,000 Nuveen Senior Income Fund $ 5,000,000 Nuveen Floating Rate Fund $ 2,000,000 Olympic Funding Trust, Series 1999-1 $ 2,000,000 Sequils-Cumberland I, Ltd. $ 2,000,000 Muirfield Trading LLC $ 1,000,000 Total $100,000,000 $425,000,000 $475,000,000 ===== ============ ============ ============
ANNEX II BANK ADDRESSES The Chase Manhattan Bank 270 Park Avenue New York, NY 10017 Telephone: (212) 270-2700 Telecopier: (212) 270-4164 Attention: William Rottino e-mail: william.rottino@chase.com Bank of America, N.A. 335 Madison Avenue Entertainment Media Group-5374 New York, NY 10017 Telephone: (212) 503-7980 Telecopier: (212) 503-7173 Attention: Thomas J. Kane e-mail: thomasj.kane@bankofamerica.com The Bank of New York One Wall Street, 16th Floor New York, NY 10286 Telephone: (212) 635-8608 Telecopier: (212) 635-8593 Attention: Steven Correll e-mail: scorrell@bankofny.com The Bank of Nova Scotia One Liberty Plaza New York, NY 10006 Telephone: (212) 225-5042 Telecopier: (212) 225-5090 Attention: Vincent Fitzgerald e-mail: vfitzger@scotiacapital.com Citibank, N.A. 390 Greenwich Street New York, NY 10013 Telephone: (212) 723-6755 Telecopier: (212) 723-8547 Attention: John Judge e-mail: john.judge@ssmb.com Annex II Page 2 Fleet National Bank 100 Federal Street Mail Stop MADE 10009D Boston, MA 02110 Telephone: (617) 434-6757 Telecopier: (617) 346-4345 Attention: Sue Anderson Merrill Lynch Capital Corporation 4 World Trade Center New York, NY 10080 Telephone: (212) 449-8414 Telecopier: (212) 738-1649 Attention: Carol Feeley e-mail: cfeeley@exchange.ml,com Dai-Ichi Kangyo Bank, Ltd 1 World Trade Center, Suite 4911 New York, NY 10048 Telephone: (212) 432-6648 Telecopier: (212) 488-8955 Attention: Ronald Wolinski e-mail: rwolinski@dkb.com Union Bank of California, N.A. 445 South Figueroa Los Angeles, CA 90071 Telephone: (213) 236-7412 Telecopier: (213) 236-5747 Attention: Michael McShane e-mail: jeanpieace.knight@uboc.com KZH Crescent LLC c/o The Chase Manhattan Bank 140 East 45th Street, 11th Floor New York, NY 10017 Telephone: (212) 622-9353 Telecopier: (212) 622-0123 Attention: Virginia Conway e-mail: virginia.r.conway@chase.com with a copy to: Annex II Page 3 Weil, Gotshal & Manges 767 Fifth Avenue New York, NY 10153 Telephone: (212) 310-6857 Telecopier: (212) 310-8007 Attention: Shan McSweeney e-mail: shan.mcsweeney@weil.com KZH Crescent 2 LLC c/o The Chase Manhattan Bank 140 East 45th Street, 11th Floor New York, NY 10017 Telephone: (212) 622-9353 Telecopier: (212) 622-0123 Attention: Virginia Conway e-mail: virginia.r.conway@chase.com with a copy to: Weil, Gotshal & Manges 767 Fifth Avenue New York, NY 10153 Telephone: (212) 310-6857 Telecopier: (212) 310-8007 Attention: Shan McSweeney e-mail: shan.mcsweeney@weil.com KZH Crescent 3 LLC c/o The Chase Manhattan Bank 140 East 45th Street, 11th Floor New York, NY 10017 Telephone: (212) 622-9353 Telecopier: (212) 622-0123 Attention: Virginia Conway e-mail: virginia.r.conway@chase.com with copy to: Annex II Page 4 Weil, Gotshal & Manges 767 Fifth Avenue New York, NY 10153 Telephone: (212) 310-6857 Telecopier: (212) 310-8007 Attention: Shan McSweeney e-mail: shan.mcsweeney@weil.com Metropolitan Life Insurance Co. PO Box 633 334 Madison Avenue Convent Station, NJ 07961 Telephone: (973) 254-3206 Telecopier: (973_254-3032 Attention: James Dingler with a copy to: Metropolitan Life Insurance Co. One Madison Avenue New York, NY 10010-3690 Telephone: (212) 578-2508 Telecopier: (212) 251-1563 Attention: Linda Glass Riviera Funding LLC c/o Indosuez Capital 666 Third Avenue, 9th Floor New York, NY 10017 Telephone: (646) 658-2231 Telecopier: (646) 658-2254 Attention: Melissa Morano e-mail: mmarano@us.ca.indosuez.com with a copy to: Bank of America Securities 100 North Tryon Street NC1 007 06 07 Charlotte, NC 28255 Telephone: (704) 387-1939 Telecopier: (704) 409-0192 Attention: Diana Mushill e-mail: diana.l.mushill@ncmi.com Annex II Page 5 Van Kampen Prime Rate Income Trust c/o Van Kampen American Capital One Parkview Plaza Oakbrook Terrace, IL 60181 Telephone: (630) 684-6283 Telecopier: (630) 684-6740 Attention: Brian Buscher Van Kampen Sr. Floating Rate Fund c/o Van Kampen American Capital One Parkview Plaza Oakbrook Terrace, IL 60181 Telephone: (630) 684-6283 Telecopier: (630) 684-6740 Attention: Brian Buscher Van Kampen Senior Income Trust c/o Van Kampen American Capital One Parkview Plaza Oakbrook Terrace, IL 60181 Telephone: (630) 684-6283 Telecopier: (630) 684-6740 Attention: Brian Buscher KZH CNC LLC c/o The Chase Manhattan Bank 140 East 45th Street, 11th Floor New York, NY 10017 Telephone: (212) 622-9353 Telecopier: (212) 622-0123 Attention: Virginia Conway e-mail: virginia.r.conway@chase.com with a copy to: Weil, Gotshal & Manges 767 Fifth Avenue New York, NY 10153 Telephone: (212) 310-6857 Telecopier: (212) 310-8007 Attention: Shan McSweeney e-mail: shan.mcsweeney@weil.com Annex II Page 6 Winged Foot Funding Trust Banc of America Securities LLC 100 North Tryon Street NC-007-06-07 Charlotte, NC 28255 Telephone: (704) 387-1939 Telecopier: (704) 388-0648 Attention: Annebet Morris e-mail: anne.morris@bankofamerica.com Natexis Banque Populaires 645 Fifth Avenue, 20th Floor New York, NY 10022 Telephone: (212) 872-5029 Telecopier: (212) 872-5045 Attention: Beth Harker e-mail: eharker@natexisny.com KZH Langdale LLC c/o The Chase Manhattan Bank 140 East 45th Street, 11th Floor New York, NY 10017 Telephone: (212) 622-9353 Telecopier: (212) 622-0123 Attention: Virginia Conway e-mail: virginia.r.conway@chase.com with a copy to: Weil, Gotshal & Manges 767 Fifth Avenue New York, NY 10153 Telephone: (212) 310-6857 Telecopier: (212) 310-8007 Attention: Shan McSweeney e-mail: shan.mcsweeney@weil.com Annex II Page 7 Stanwich Loan Funding LLC c/o CIGNA Investments Inc. 900 Cottage Grove Rd, S-307 Hartford, CT 06152 Telephone: (860) 226-9032 Telecopier: (860) 226-9276 with a copy to: Bank of America 100 North Tryon St. Charlotte, North Carolina 28255 Telephone: (704) 388-8943 Telecopier: (704) 388-0648 Attention: Kelly Walker Toronto Dominion (New York), Inc. Union Bank of California, N.A. 445 South Figueroa Los Angeles, CA 90071 Telephone: (213) 236-7412 Telecopier: (213) 236-5747 Attention: Michael McShane e-mail: jeanpieace.knight@uboc.com Nuveen Senior Income Fund c/o John Nuveen & Company, Inc. 820 Jorie Boulevard, Suite 420 Oakbrook, IL 60523 Telephone: (312) 917-7914 Telecopier: (312) 917-8347 Attention: Jeffrey Maillet Nuveen Floating Rate Fund c/o John Nuveen & Company, Inc. 820 Jorie Boulevard, Suite 420 Oakbrook, IL 60523 Telephone: (312) 917-7914 Telecopier: (312) 917-8032 Attention: Jeffrey Maillet Annex II Page 8 Olympic Funding Trust Series 1999-1 Bank of America 100 North Tryon Street NC-007-06-07 Charlotte, NC 28255 Telephone: (704) 387-1939 Telecopier: (704) 388-0648 Attention: Annebet Morris e-mail: anne.morris@bankofamerica.com Sequils-Cumberland I, Ltd. c/o Deerfield Capital Mgt., LLC 8700 West Bryn Mawr, 12th Floor Chicago, IL 60631 Telephone: (773) 380-1687 Telecopier: (773) 380-1629 Attention: Mark Wittenbel e-mail: mwittenbel@deerfieldcapital.com Muirfield Trading LLC c/o Deerfield Asset Mgt., LLC 8700 West Bryn Mawr, 12th Floor Chicago, IL 60631 Telephone: (773) 380-1687 Telecopier: (773) 380-1629 Attention: Mark Wittenbel e-mail: mwittenbel@deerfieldcapital.com with a copy to: Bank of America 100 North Tryon Street NC-007-06-07 Charlotte, NC 28255 Telephone: (704) 387-1939 Telecopier: (704) 388-0648 Attention: Annebet Morris e-mail: anne.morris@bankofamerica.com ANNEX III SUBSIDIARIES
NAME OF SUBSIDIARY JURISDICTION OF DIRECT PARENT % OF PRIMEDIA ORGANIZATION INC. OWNERSHIP - -------------------------------------------------------------------------------------------------------------------------- ABOUT.COM, INC. DE PRIMEDIA INC. 100% ADAMS/INTERTEC INTERNATIONAL, INC. DE INTERTEC PUBLISHING CORPORATION 100% ADAMS/LAUX COMPANY, INC. DE INTERTEC PUBLISHING CORPORATION 100% AGRICLICK LLC DE INDUSTRYCLICK 100% BACON'S INFORMATION, INC. DE PRIMEDIA INC. 100% BOWHUNTER MAGAZINE, INC. PA PRIMEDIA ENTHUSIAST 100% CANADIAN RED BOOK, INC. CANADA INTERTEC PUBLISHING CORPORATION 100% CANOE & KAYAK, INC. DE PRIMEDIA ENTHUSIAST 100% CHANNEL ONE COMMUNICATIONS CORPORATION DE PRIMEDIA INC. 100% CHANNEL ONE INTERACTIVE, INC. DE PRIMEDIANET INC. 100% CLIMBING, INC. DE PRIMEDIA ENTHUSIAST 100% COMMUNICATIONS CONCEPTS, INC. NV MCMULLEN ARGUS 100% CONSUMERCLICK CORP. DE PRIMEDIANET INC. 100% COVER CONCEPTS MARKETING SERVICES, LLC DE CHANNEL ONE COMMUNICATIONS 99% HAAS PUBLISHING COMPANIES, INC. 1% COWLES HISTORY GROUP, INC. VA PRIMEDIA ENTHUSIAST 100% CREATIVE TECHNOLOGIES LLC DE INDUSTRYCLICK 100% CSK PUBLISHING COMPANY, INC. DE MCMULLEN ARGUS 100% DIGIBID LLC DE INDUSTRYCLICK 100% ELECTRICAL CONSTRUCTION LLC DE INDUSTRYCLICK 100% ENO PRODUCTIONS, INC. DE CHANNEL ONE COMMUNICATIONS 100% FILMS FOR THE HUMANITIES & SCIENCES, INC. DE PRIMEDIA INC. 100% GAME & FISH PUBLICATIONS, INC. GA PRIMEDIA SPECIAL INTEREST 100% GO LO ENTERTAINMENT, INC. CA MCMULLEN ARGUS 100% GR8RIDE.COM, INC. DE PRIMEDIANET INC. 100% GUIAS DO BRASIL LTDA. BRAZIL HPC DO BRASIL LTDA 99% HAAS PUBLISHING COMPANIES, INC. 1% HAAS PUBLISHING COMPANIES, INC. DE PRIMEDIA INC. 100% HACIENDA PRODUCTIONS, INC. DE CHANNEL ONE COMMUNICATIONS 100% HORSE & RIDER, INC. CA PRIMEDIA ENTHUSIAST 100% HPC BRAZIL, INC. DE PRIMEDIA INC. 100% HPC DO BRASIL LTDA. BRAZIL HAAS PUBLISHING COMPANIES, INC. 99% HPC BRAZIL, INC. 1% HPC INTERACTIVE, INC. DE PRIMEDIANET INC. 100% HPC INTERACTIVE, LLC DE HAAS PUBLISHING COMPANIES, INC. 100% IN NEW YORK LLC DE PRIMEDIA MAGAZINES 80% INDUSTRYCLICK CORP. DE PRIMEDIANET INC. 100% INTELLICHOICE, INC. CA INTERTEC PUBLISHING CORPORATION 100% INTERTEC PUBLISHING CORPORATION DE PRIMEDIA INC. 100% INTERTEC PUBLISHING (UK) LIMITED UNITED KINGDOM WESTCOTT PRIMEDIA LIMITED 100% KAGAN ASIA MEDIA LTD. UNITED KINGDOM KAGAN WORLD MEDIA LIMITED 100% KAGAN MEDIA APPRAISALS, INC. CA PRIMEDIA INC. 100% KAGAN SEMINARS, INC. CA PRIMEDIA INC. 100% KAGAN WORLD MEDIA, INC. DE PRIMEDIA INC. 100%
ANNEX III Page 2
NAME OF SUBSIDIARY JURISDICTION OF DIRECT PARENT % OF PRIMEDIA ORGANIZATION INC. OWNERSHIP - -------------------------------------------------------------------------------------------------------------------------- KAGAN WORLD MEDIA LIMITED UNITED KINGDOM MEDIA CENTRAL LLC 100% KITPLANES ACQUISITION COMPANY DE PRIMEDIA ENTHUSIAST 100% LOW RIDER PUBLISHING GROUP, INC. CA MCMULLEN ARGUS 100% MARKETINGCLICK LLC DE INDUSTRYCLICK 100% MCMULLEN ARGUS PUBLISHING, INC. CA PRIMEDIA MAGAZINES 100% MEDIA CENTRAL ACQUISITION, LLC DE MEDIA CENTRAL LLC 100% MEDIACENTRAL LLC DE PRIMEDIA INC. 100% MIRAMAR COMMUNICATIONS, INC. CA INTERTEC PUBLISHING CORPORATION 100% PAUL KAGAN ASSOCIATES, INC. (F/K/A PKA ACQUISITION DE PRIMEDIA INC. 100% CORP) PRIMEDIA COMPANIES INC. DE PRIMEDIA INC. 100% PRIMEDIA DIGITAL VIDEO HOLDINGS LLC DE PRIMEDIA INC. 100% PRIMEDIA ENTERPRISES, INC. DE PRIMEDIA INC. 100% PRIMEDIA ENTHUSIAST PUBLICATIONS, INC. PA PRIMEDIA MAGAZINES 100% PRIMEDIA FINANCE SHARED SERVICES, INC. DE PRIMEDIA INC. 100% PRIMEDIA HOLDINGS III, INC. DE PRIMEDIA INC. 100% PRIMEDIA INFORMATION, INC. DE PRIMEDIA INC. 100% PRIMEDIA INTERNATIONAL, INC. DE PRIMEDIA INC. 100% PRIMEDIA MAGAZINE FINANCE, INC. DE PRIMEDIA MAGAZINES 100% PRIMEDIA MAGAZINES, INC. DE PRIMEDIA HOLDINGS III, INC. 100% PRIMEDIA PRODUCTIONS DALLAS LLC DE PRIMEDIA DIGITAL VIDEO HOLDINGS LLC 100% (F/K/A PRIMEDIA DIGITAL VIDEO LLC) PRIMEDIA SPECIAL INTEREST PUBLICATIONS, INC. DE PRIMEDIA MAGAZINES 100% PRIMEDIA TEENCLICK CORPORATION DE PRIMEDIA INC. 100% PRIMEDIA VENTURES, INC. DE PRIMEDIA INC. 100% PRIMEDIANET INC. DE PRIMEDIA INC. 100% PRIMEDIA WORKPLACE LEARNING LLC DE HAAS PUBLISHING COMPANIES, INC. 100% PRIMEDIA WORKPLACE LEARNING LP DE PRIMEDIA WORKPLACE LEARNING LLC 99% HAAS PUBLISHING COMPANIES, INC. 1% SIMBA INFORMATION, INC. CT PRIMEDIA INFORMATION, INC. 100% SYMBOL OF EXCELLENCE PUBLISHERS, INC. AL PRIMEDIA SPECIAL INTEREST 100% TELECOMCLICK LLC DE INDUSTRYCLICK 100% THE VIRTUAL FLYSHOP, INC. CO PRIMEDIA ENTHUSIAST 100% WESTCOTT PRIMEDIA LIMITED UNITED KINGDOM PRIMEDIA INC. 100%
ANNEX IV LIENS None. ANNEX V EXISTING DEBT/EXISTING CONTINGENT OBLIGATIONS PART A. EXISTING DEBT ------------- $100 million 10.25% Senior Notes due 6/1/04 $300 million 8.50% Senior Notes due 2/1/06 $250 million 7.625% Senior Notes due 4/1/08 $500 million 8.875% Senior Notes due 5/15/11 PART B. EXISTING CONTINGENT OBLIGATIONS ------------------------------- None. ANNEX VI EXISTING PREFERRED STOCK $250,000,000 $8.625 Series H Exchangeable Preferred Stock $200,000,000 $10.00 Series D Exchangeable Preferred Stock $125,000,000 $9.20 Series F Exchangeable Preferred Stock ANNEX VII EXISTING LETTERS OF CREDIT (as of May 30, 2001)
NUMBER TYPE VALUE DATE EXP. DATE AMOUNT ------ ---- ---------- --------- ------ P751486 IRREV SBY 07/09/92 07/08/02 730,409.00 P751961 IRREV SBY 10/20/92 10/20/01 250,000.00 P752118 IRREV SBY 12/15/92 12/20/01 280,000.00 P753493 IRREV SBY 02/24/94 02/23/02 104,400.00 P212048 IRREV SBY 03/30/01 03/31/02 825,000.00 P213752 IRREV SBY 05/22/01 05/22/02 5,000,000.00 P258839 IRREV SBY 11/09/95 11/09/01 100,000.00 P349081 IRREV SBY 08/07/96 07/30/01 25,000.00 P359321 IRREV SBY 03/18/98 06/30/02 1,781,310.00 P359336 IRREV SBY 03/18/98 01/20/02 910,717.00 P359348 IRREV SBY 03/18/98 12/31/01 5,550,000.00 P359362 IRREV SBY 03/18/98 12/31/01 5,550,000.00 P379676 IRREV SBY 04/28/97 04/30/02 24,900.00 P359335 IRREV SBY 03/18/98 08/28/02 600,000.00
Annex VIII EXISTING UNRESTRICTED SUBSIDIARIES PRIMEDIANet Inc. PRIMEDIA Ventures, Inc. PRIMEDIA Teenclick Corp. PRIMEDIA Digital Video Holdings LLC About.com, Inc. HPC Interactive, LLC Media Central Acquisition, LLC Kagan World Media Limited Kagan Asia Media, Ltd. In New York LLC PRIMEDIA International, Inc. EX-10.2 7 a2052089zex-10_2.txt EXHIBIT 10.2 Exhibit 10.2 AMENDED AND RESTATED ABOUT.COM, INC. 1999 EMPLOYEE STOCK PURCHASE PLAN --------------------------------- (As of February 20, 2001) I. PURPOSE OF THE PLAN This 1999 Employee Stock Purchase Plan is intended to promote the interests of About.com, Inc., a Delaware corporation, by providing eligible employees with the opportunity to acquire a proprietary interest in the Corporation through participation in a payroll-deduction based employee stock purchase plan designed to qualify under Section 423 of the Code. Capitalized terms herein shall have the meanings assigned to such terms in the attached Appendix. II. ADMINISTRATION OF THE PLAN The Plan Administrator shall have full authority to interpret and construe any provision of the Plan and to adopt such rules and regulations for administering the Plan as it may deem necessary in order to comply with the requirements of Section 423 of the Code. Decisions of the Plan Administrator shall be final and binding on all parties having an interest in the Plan. III. STOCK SUBJECT TO PLAN A. The stock purchasable under the Plan shall be shares of authorized but unissued or reacquired Common Stock, including shares of Common Stock purchased on the open market. The maximum number of shares of Common Stock which may be issued over the term of the Plan shall not exceed One Hundred Twenty-Five Thousand (125,000) shares. If the Primedia Transaction is consummated, then the maximum number of shares of Common Stock which may be issued over the term of the Plan shall not exceed Two Hundred Ninety-Two Thousand Six Hundred Twelve (292,612) shares. B. Should any change be made to the Common Stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without the Corporation's receipt of consideration, appropriate adjustments shall be made to (i) the maximum number and class of securities issuable under the Plan, (ii) the maximum number and class of securities purchasable per Participant on any one Purchase Date and (iii) the number and class of securities and the price per share in effect under each outstanding purchase right in order to prevent the dilution or enlargement of benefits thereunder. IV. OFFERING PERIODS A. Shares of Common Stock shall be offered for purchase under the Plan through a series of successive offering periods until such time as (i) the maximum number of shares of Common Stock available for issuance under the Plan shall have been purchased or (ii) the Plan shall have been sooner terminated. B. Each offering period shall be of such duration (not to exceed twenty-four (24) months) as determined by the Plan Administrator prior to the start date of such offering period. However, except as otherwise provided herein, the initial offering period shall commence at the Effective Time and terminate on the last business day in April 2001. Subsequent offering periods shall commence as designated by the Plan Administrator. C. Each offering period shall be comprised of a series of one or more successive Purchase Intervals. Purchase Intervals shall run from the first business day in May each year to the last business day in October of the same year and from the first business day in November each year to the last business day in April of the following year; provided, however, that the first Purchase Interval in effect under the initial offering period shall commence at the Effective Time and terminate on the last business day in October 1999; and provided, further, that in the event the Primedia Transaction is approved by the stockholders of the Corporation on or prior to February 21, 2001, the offering period and the Purchase Interval in effect at the time of such stockholder approval shall terminate on the close of business three days after such approval, and thereafter, a new offering period (the "Special Offering Period") shall commence on the fourth business day after such approval and, except as provided in the next succeeding sentence, such Special Offering Period shall end on the last business day in October 2002. If the Primedia Transaction is consummated following stockholder approval thereof as contemplated in the preceding sentence, the Special Offering Period and the sole Purchase Interval for such Special Offering Period shall terminate on the last business day in June 2001; if the Primedia Transaction is approved by stockholders as contemplated in the preceding sentence, but is not consummated as contemplated thereby, the first Purchase Interval of the Special Offering Period shall end on the last business day in April 2001 and a new Purchase Interval shall commence on the first business day in May 2001. D. Should the Fair Market Value per share of Common Stock on any Purchase Date within an offering period be less than the Fair Market Value per share of Common Stock on the start date of that offering period, then that offering period shall automatically terminate immediately after the purchase of shares of Common Stock on such Purchase Date, and a new offering period shall commence on the next business day following such Purchase Date. The new offering period shall have a duration of twenty (24) months, unless a shorter duration is established by the Plan Administrator within five (5) business days following the start date of that offering period. E. Notwithstanding anything to the contrary herein, should the total number of shares of Common Stock to be purchased on any particular date exceed the number of shares then available for issuance under the Plan, then the Plan Administrator shall have the right to terminate the offering period during which such purchase occurs and to determine when a new offering period shall commence. V. ELIGIBILITY 2 A. Each individual who is an Eligible Employee on the start date of the initial offering period under the Plan may enter that offering period on such start date or on any subsequent Semi-Annual Entry Date within that offering period, provided he or she remains an Eligible Employee. B. Each individual who is an Eligible Employee on the start date of any subsequent offering period under the Plan may enter that offering period on such start date or on any subsequent Semi-Annual Entry Date within that offering period, provided in each case that he or she has completed at least thirty (30) days of continuous employment with the Corporation or a Corporate Affiliate prior to such date. C. Each individual who first becomes an Eligible Employee after the start date of an offering period may enter that offering period on any subsequent Semi-Annual Entry Date within that offering period on which he or she is an Eligible Employee, provided he or she has completed at least thirty (30) days of continuous employment with the Corporation or a Corporate Affiliate prior to such Semi-Annual Entry Date. D. The date an individual enters an offering period shall be designated his or her Entry Date for purposes of that offering period. E. To participate in the Plan for a particular offering period, the Eligible Employee must complete the enrollment forms prescribed by the Plan Administrator (including a stock purchase agreement and a payroll deduction authorization) and file such forms with the Plan Administrator (or its designate) on or before his or her scheduled Entry Date. VI. PAYROLL DEDUCTIONS A. The payroll deduction authorized by the Participant for purposes of acquiring shares of Common Stock during an offering period may be any multiple of one percent (1%) of the Cash Earnings paid to the Participant during each Purchase Interval within that offering period, up to a maximum of fifteen percent (15%). The deduction rate so authorized shall continue in effect throughout the offering period, except to the extent such rate is changed in accordance with the following guidelines: (i) The Participant may, at any time during the offering period, reduce his or her rate of payroll deduction to become effective as soon as possible after filing the appropriate form with the Plan Administrator. The Participant may not, however, effect more than one (1) such reduction per Purchase Interval. (ii) The Participant may, prior to the commencement of any new Purchase Interval within the offering period, increase the rate of his or her payroll deduction by filing the appropriate form with the Plan Administrator. The new rate (which may not exceed the fifteen percent (15%) maximum) shall become effective on the start date of the first Purchase Interval following the filing of such form. 3 B. Payroll deductions shall begin on the first pay day following the Participant's Entry Date into the offering period and shall (unless sooner terminated by the Participant) continue through the pay day ending with or immediately prior to the last day of that offering period. The amounts so collected shall be credited to the Participant's book account under the Plan, but no interest shall be paid on the balance from time to time outstanding in such account. The amounts collected from the Participant shall not be required to be held in any segregated account or trust fund and may be commingled with the general assets of the Corporation and used for general corporate purposes. C. Payroll deductions shall automatically cease upon the termination of the Participant's purchase right in accordance with the provisions of the Plan. D. The Participant's acquisition of Common Stock under the Plan on any Purchase Date shall neither limit nor require the Participant's acquisition of Common Stock on any subsequent Purchase Date, whether within the same or a different offering period. VII. PURCHASE RIGHTS A. GRANT OF PURCHASE RIGHT. A Participant shall be granted a separate purchase right for each offering period in which he or she participates. The purchase right shall be granted on the Participant's Entry Date into the offering period and shall provide the Participant with the right to purchase shares of Common Stock, in a series of successive installments over the remainder of such offering period, upon the terms set forth below. The Participant shall execute a stock purchase agreement embodying such terms and such other provisions (not inconsistent with the Plan) as the Plan Administrator may deem advisable. Under no circumstances shall purchase rights be granted under the Plan to any Eligible Employee if such individual would, immediately after the grant, own (within the meaning of Code Section 424(d)) or hold outstanding options or other rights to purchase, stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Corporation or any Corporate Affiliate. B. EXERCISE OF THE PURCHASE RIGHT. Each purchase right shall be automatically exercised in installments on each successive Purchase Date within the offering period, and shares of Common Stock shall accordingly be purchased on behalf of each Participant (other than Participants whose payroll deductions have previously been refunded pursuant to the Termination of Purchase Right provisions below) on each such Purchase Date. The purchase shall be effected by applying the Participant's payroll deductions for the Purchase Interval ending on such Purchase Date to the purchase of whole shares of Common Stock at the purchase price in effect for the Participant for that Purchase Date. C. PURCHASE PRICE. The purchase price per share at which Common Stock will be purchased on the Participant's behalf on each Purchase Date within the offering period shall be equal to eighty-five percent (85%) of the LOWER of (i) the Fair Market Value per share of Common Stock on the Participant's Entry Date into that offering period or (ii) the Fair Market Value per share of Common Stock on that Purchase Date. 4 D. NUMBER OF PURCHASABLE SHARES. The number of shares of Common Stock purchasable by a Participant on each Purchase Date during the offering period shall be the number of whole shares obtained by dividing the amount collected from the Participant through payroll deductions during the Purchase Interval ending with that Purchase Date by the purchase price in effect for the Participant for that Purchase Date. However, the maximum number of shares of Common Stock purchasable per Participant on any one Purchase Date shall not exceed Five Hundred (500) shares, subject to periodic adjustments in the event of certain changes in the Corporation's capitalization. If the Primedia Transaction is consummated, then the maximum number of shares of Common Stock purchasable per Participant on any one Purchase Date shall not exceed One Thousand One Hundred Seventy (1,170) shares. E. EXCESS PAYROLL DEDUCTIONS. Any payroll deductions not applied to the purchase of shares of Common Stock on any Purchase Date because they are not sufficient to purchase a whole share of Common Stock shall be held for the purchase of Common Stock on the next Purchase Date. However, any payroll deductions not applied to the purchase of Common Stock by reason of the limitation on the maximum number of shares purchasable on the Purchase Date shall be promptly refunded. F. TERMINATION OF PURCHASE RIGHT. The following provisions shall govern the termination of outstanding purchase rights: (i) A Participant may, at any time prior to the next scheduled Purchase Date in the offering period, terminate his or her outstanding purchase right by filing the appropriate form with the Plan Administrator (or its designate), and no further payroll deductions shall be collected from the Participant with respect to the terminated purchase right. Any payroll deductions collected during the Purchase Interval in which such termination occurs shall, at the Participant's election, be immediately refunded or held for the purchase of shares on the next Purchase Date. If no such election is made at the time such purchase right is terminated, then the payroll deductions collected with respect to the terminated right shall be refunded as soon as possible. (ii) The termination of such purchase right shall be irrevocable, and the Participant may not subsequently rejoin the offering period for which the terminated purchase right was granted. In order to resume participation in any subsequent offering period, such individual must re-enroll in the Plan (by making a timely filing of the prescribed enrollment forms) on or before his or her scheduled Entry Date into that offering period. (iii) Should the Participant cease to remain an Eligible Employee for any reason (including death, disability or change in status) while his or her purchase right remains outstanding, then that purchase right shall immediately terminate, and all of the Participant's payroll deductions for the Purchase Interval in which the purchase right so terminates shall be immediately refunded. However, should the Participant cease to remain in active service by reason of an approved unpaid leave of absence, then the Participant shall have the right, exercisable up until the last business day of the Purchase Interval in which 5 such leave commences, to (a) withdraw all the payroll deductions collected to date on his or her behalf for that Purchase Interval or (b) have such funds held for the purchase of shares on his or her behalf on the next scheduled Purchase Date. In no event, however, shall any further payroll deductions be collected on the Participant's behalf during such leave. Upon the Participant's return to active service (i) within ninety (90) days following the commencement of such leave or, (ii) prior to the expiration of any longer period for which such Participant's right to reemployment with the Corporation is guaranteed by either statute or contract, his or her payroll deductions under the Plan shall automatically resume at the rate in effect at the time the leave began. However, should the Participant's leave of absence exceed ninety (90) days and his or her re-employment rights not be guaranteed by either statute or contract, then the Participant's status as an Eligible Employee will be deemed to terminate on the ninety-first (91st) day of that leave, and such Participant's purchase right for the offering period in which that leave began shall thereupon terminate. An individual who returns to active employment following such a leave shall be treated as a new Employee for purposes of the Plan and must, in order to resume participation in the Plan, re-enroll in the Plan (by making a timely filing of the prescribed enrollment forms) on or before his or her scheduled Entry Date into the offering period. G. CORPORATE TRANSACTION. Each outstanding purchase right shall automatically be exercised, immediately prior to the effective date of any Corporate Transaction other than the Primedia Transaction, by applying the payroll deductions of each Participant for the Purchase Interval in which such Corporate Transaction occurs to the purchase of whole shares of Common Stock at a purchase price per share equal to eighty-five percent (85%) of the LOWER of (i) the Fair Market Value per share of Common Stock on the Participant's Entry Date into the offering period in which such Corporate Transaction occurs or (ii) the Fair Market Value per share of Common Stock immediately prior to the effective date of such Corporate Transaction. However, the applicable limitations on the number of shares of Common Stock purchasable per Participant and in the aggregate shall continue to apply to any such purchase. The Corporation shall use its best efforts to provide at least ten (10)-days prior written notice of the occurrence of any Corporate Transaction, and Participants shall, following the receipt of such notice, have the right to terminate their outstanding purchase rights prior to the effective date of the Corporate Transaction. H. PRORATION OF PURCHASE RIGHTS. Should the total number of shares of Common Stock to be purchased pursuant to outstanding purchase rights on any particular date exceed the number of shares then available for issuance under the Plan, the Plan Administrator shall make a pro-rata allocation of the available shares on a uniform and nondiscriminatory basis, and the payroll deductions of each Participant, to the extent in excess of the aggregate purchase price payable for the Common Stock pro-rated to such individual, shall be refunded. I. ASSIGNABILITY. The purchase right shall be exercisable only by the Participant and shall not be assignable or transferable by the Participant. 6 J. STOCKHOLDER RIGHTS. A Participant shall have no stockholder rights with respect to the shares subject to his or her outstanding purchase right until the shares are purchased on the Participant's behalf in accordance with the provisions of the Plan and the Participant has become a holder of record of the purchased shares. VIII. ACCRUAL LIMITATIONS A. No Participant shall be entitled to accrue rights to acquire Common Stock pursuant to any purchase right outstanding under this Plan if and to the extent such accrual, when aggregated with (i) rights to purchase Common Stock accrued under any other purchase right granted under this Plan and (ii) similar rights accrued under other employee stock purchase plans (within the meaning of Code Section 423) of the Corporation or any Corporate Affiliate, would otherwise permit such Participant to purchase more than Twenty-Five Thousand Dollars ($25,000) worth of stock of the Corporation or any Corporate Affiliate (determined on the basis of the Fair Market Value per share on the date or dates such rights are granted) for each calendar year such rights are at any time outstanding. B. For purposes of applying such accrual limitations to the purchase rights granted under the Plan, the following provisions shall be in effect: (i) The right to acquire Common Stock under each outstanding purchase right shall accrue in a series of installments on each successive Purchase Date during the offering period on which such right remains outstanding. (ii) No right to acquire Common Stock under any outstanding purchase right shall accrue to the extent the Participant has already accrued in the same calendar year the right to acquire Common Stock under one (1) or more other purchase rights at a rate equal to Twenty-Five Thousand Dollars ($25,000) worth of Common Stock (determined on the basis of the Fair Market Value per share on the date or dates of grant) for each calendar year such rights were at any time outstanding. C. If by reason of such accrual limitations, any purchase right of a Participant does not accrue for a particular Purchase Interval, then the payroll deductions which the Participant made during that Purchase Interval with respect to such purchase right shall be promptly refunded. D. In the event there is any conflict between the provisions of this Article and one or more provisions of the Plan or any instrument issued thereunder, the provisions of this Article shall be controlling. IX. EFFECTIVE DATE AND TERM OF THE PLAN A. The Plan was adopted by the Board on February 5, 1999 and shall become effective at the Effective Time, PROVIDED no purchase rights granted under the Plan shall be exercised, and no shares of Common Stock shall be issued hereunder, until (i) the Plan shall have been approved by the stockholders of the Corporation and (ii) the Corporation shall have 7 complied with all applicable requirements of the 1933 Act (including the registration of the shares of Common Stock issuable under the Plan on a Form S-8 registration statement filed with the Securities and Exchange Commission), all applicable listing requirements of any stock exchange (or the Nasdaq National Market, if applicable) on which the Common Stock is listed for trading and all other applicable requirements established by law or regulation. In the event such stockholder approval is not obtained, or such compliance is not effected, within twelve (12) months after the date on which the Plan is adopted by the Board, the Plan shall terminate and have no further force or effect, and all sums collected from Participants during the initial offering period hereunder shall be refunded. B. Unless sooner terminated by the Board, the Plan shall terminate upon the EARLIEST of (i) the last business day in April 2009, (ii) the date on which all shares available for issuance under the Plan shall have been sold pursuant to purchase rights exercised under the Plan or (iii) the date on which all purchase rights are exercised in connection with a Corporate Transaction other than the Primedia Transaction. No further purchase rights shall be granted or exercised, and no further payroll deductions shall be collected, under the Plan following such termination. X. AMENDMENT/TERMINATION OF THE PLAN A. The Board may alter, amend, suspend or terminate the Plan at any time to become effective immediately following the close of any Purchase Interval. However, the Plan may be amended or terminated immediately upon Board action, if and to the extent necessary to assure that the Corporation will not recognize, for financial reporting purposes, any compensation expense in connection with the shares of Common Stock offered for purchase under the Plan, should the financial accounting rules applicable to the Plan at the Effective Time be subsequently revised so as to require the recognition of compensation expense in the absence of such amendment or termination. B. In no event may the Board effect any of the following amendments or revisions to the Plan without the approval of the Corporation's stockholders: (i) increase the number of shares of Common Stock issuable under the Plan or the maximum number of shares purchasable per Participant on any one Purchase Date, except for permissible adjustments in the event of certain changes in the Corporation's capitalization, (ii) alter the purchase price formula so as to reduce the purchase price payable for the shares of Common Stock purchasable under the Plan or (iii) modify eligibility requirements for participation in the Plan. XI. GENERAL PROVISIONS A. Nothing in the Plan shall confer upon the Participant any right to continue in the employ of the Corporation or any Corporate Affiliate for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Corporate Affiliate employing such person) or of the Participant, which rights are hereby expressly reserved by each, to terminate such person's employment at any time for any reason, with or without cause. 8 B. All costs and expenses incurred in the administration of the Plan shall be paid by the Corporation; however, each Plan Participant shall bear all costs and expenses incurred by such individual in the sale or other disposition of any shares purchased under the Plan. C. The provisions of the Plan shall be governed by the laws of the State of New York without regard to that State's conflict-of-laws rules. 9 SCHEDULE A ---------- CORPORATIONS PARTICIPATING IN EMPLOYEE STOCK PURCHASE PLAN AS OF FEBRUARY ___, 2001 ------------------------ About.com, Inc. 10 APPENDIX -------- The following definitions shall be in effect under the Plan: A. BOARD shall mean the Corporation's Board of Directors. B. CASH EARNINGS shall mean the (i) base salary payable to a Participant by one or more Participating Corporations during such individual's period of participation in one or more offering periods under the Plan plus (ii) all overtime payments, bonuses, commissions, current profit-sharing distributions and other incentive-type payments. Such Cash Earnings shall be calculated before deduction of (A) any income or employment tax withholdings or (B) any pre-tax contributions made by the Participant to any Code Section 401(k) salary deferral plan or any Code Section 125 cafeteria benefit program now or hereafter established by the Corporation or any Corporate Affiliate. However, Cash Earnings shall NOT include any contributions (other than Code Section 401(k) or Code Section 125 contributions) made on the Participant's behalf by the Corporation or any Corporate Affiliate to any employee benefit or welfare plan now or hereafter established. C. CODE shall mean the Internal Revenue Code of 1986, as amended. D. COMMON STOCK shall mean the Corporation's common stock. E. CORPORATE AFFILIATE shall mean any parent or subsidiary corporation of the Corporation (as determined in accordance with Code Section 424), whether now existing or subsequently established. F. CORPORATE TRANSACTION shall mean either of the following stockholder-approved transactions to which the Corporation is a party: (i) a merger or consolidation in which securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation's outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such transaction, or (ii) the sale, transfer or other disposition of all or substantially all of the assets of the Corporation in complete liquidation or dissolution of the Corporation. G. CORPORATION shall mean About.com, Inc., a Delaware corporation, and any corporate successor to all or substantially all of the assets or voting stock of About.com, Inc. which shall by appropriate action adopt the Plan. From and after the effective date of the Primedia Transaction, all references herein to "Corporation" shall be deemed to be refer to PRIMEDIA, Inc., a Delaware corporation, and all references to "Common Stock" shall be deemed to be refer to the common stock of Primedia, Inc. 11 H. EFFECTIVE TIME shall mean the time at which the Underwriting Agreement is executed. Any Corporate Affiliate which becomes a Participating Corporation after such Effective Time shall designate a subsequent Effective Time with respect to its employee-Participants. I. ELIGIBLE EMPLOYEE shall mean any person who is employed by a Participating Corporation on a basis under which he or she is regularly expected to render more than twenty (20) hours of service per week for more than five (5) months per calendar year for earnings considered wages under Code Section 3401(a). J. ENTRY DATE shall mean the date an Eligible Employee first commences participation in the offering period in effect under the Plan. The earliest Entry Date under the Plan shall be the Effective Time. K. FAIR MARKET VALUE per share of Common Stock on any relevant date shall be determined in accordance with the following provisions: (i) If the Common Stock is at the time traded on the Nasdaq National Market, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question, as such price is reported by the National Association of Securities Dealers on the Nasdaq National Market or any successor system. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists. (ii) If the Common Stock is at the time listed on any Stock Exchange, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question on the Stock Exchange determined by the Plan Administrator to be the primary market for the Common Stock, as such price is officially quoted in the composite tape of transactions on such exchange. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists. (iii) For purposes of the initial offering period which begins at the Effective Time, the Fair Market Value shall be deemed to be equal to the price per share at which the Common Stock is sold in the initial public offering pursuant to the Underwriting Agreement. L. 1933 ACT shall mean the Securities Act of 1933, as amended. M. PARTICIPANT shall mean any Eligible Employee of a Participating Corporation who is actively participating in the Plan. N. PARTICIPATING CORPORATION shall mean About.com Inc. and such Corporate Affiliate or Affiliates as may be authorized from time to time by the Board to extend the benefits of the Plan to their Eligible Employees. The Participating Corporations in the Plan are listed in attached Schedule A. 12 O. PLAN shall mean the Corporation's 1999 Employee Stock Purchase Plan, as amended and restated as set forth in this document. P. PLAN ADMINISTRATOR shall mean the committee of two (2) or more Board members appointed by the Board to administer the Plan. Q. PURCHASE DATE shall mean the last business day of each Purchase Interval. The initial Purchase Date shall be October 29, 1999. R. PRIMEDIA TRANSACTION shall mean the merger of Abracadabra, Inc., a wholly-owned subsidiary of PRIMEDIA, Inc. and a Delaware corporation, with and into About.com, Inc., such that About.com, Inc. becomes a wholly-owned subsidiary of PRIMEDIA, Inc., a Delaware corporation, in accordance with the Agreement and Plan of Merger, dated as of October 29, 2000, by and between About.com, Inc., PRIMEDIA, Inc. and Abracadabra, Inc. S. PURCHASE INTERVAL shall mean, except as provided otherwise herein, each successive six (6)-month period within the offering period at the end of which there shall be purchased shares of Common Stock on behalf of each Participant. T. SEMI-ANNUAL ENTRY DATE shall mean the first business day in May and November each year on which an Eligible Employee may first enter an offering period; provided, however, that with respect to the Special Offering Period, if any, Semi-Annual Entry Date shall mean the first day of such Special Offering Period. U. STOCK EXCHANGE shall mean either the American Stock Exchange or the New York Stock Exchange. V. UNDERWRITING AGREEMENT shall mean the agreement between the Corporation and the underwriter or underwriters managing the Corporation's initial public offering of its Common Stock. 13 EX-12.1 8 a2052089zex-12_1.txt EXHIBIT 12.1 EXHIBIT 12.1 PRIMEDIA Inc. Computation of Deficiency of Earnings to Fixed Charges
Six Months Ended Years Ended December 31, June 30, --------------------------------------------------------- --------------------- 1996 1997 1998 1999 2000 2000 2001 --------- --------- --------- --------- --------- --------- --------- (dollars in thousands) Earnings: Loss from continuing operations before income taxes $ (35,703) $(159,124) $ (37,736) $(113,613) $(305,626) (46,499) (225,488) Fixed Charges: Interest expense and amortization of deferred financing costs 128,263 139,696 147,488 168,195 147,824 77,258 75,917 Equity losses in subsidiaries -- -- -- -- 10,137 724 29,305 Interest in rent expense 10,520 12,281 12,094 12,700 13,770 6,018 8,248 --------- --------- --------- --------- --------- --------- --------- Earnings $ 103,080 $ (7,147) $ 121,846 $ 67,282 $(133,895} $ 37,501 $(112,018) ========= ========= ========= ========= ========= ========= ========= Fixed Charges: Interest expense and amortization of deferred financing costs $ 128,263 $ 139,696 $ 147,488 $ 168,195 $ 147,824 $ 77,258 $ 75,917 interest in rent expense 10,520 12,281 12,094 12,700 13,770 6,018 8,248 --------- --------- --------- --------- --------- --------- --------- Fixed Charges $ 138,783 $ 151,977 $ 159,582 $ 180,895 $ 161,594 $ 83,276 84,165 ========= ========= ========= ========= ========= ========= ========= Deficiency of earnings to fixed charges $ (35,703) $(159,124) $ (37,736) $(113,613) $(295,489] $ (45,775) $(196,183) ========= ========= ========= ========= ========= ========= =========
PRIMEDIA Inc. Computation of Deficiency of Earnings to Fixed Charges and Preferred Stock Dividends and Related Accretion
Six Months Ended Years Ended December 31, June 30, --------------------------------------------------------- --------------------- 1996 1997 1998 1999 2000 2000 2001 --------- --------- --------- --------- --------- --------- --------- (dollars in thousands) Earnings: Loss from continuing operations before income taxes $ (35,703) $(159,124) $ (37,736) $(113,613) $(305,626) (46,499) (225,488) Fixed Charges: Interest expense and amortization of deferred financing costs 128,263 139,696 147,488 168,195 147,824 77,258 75,917 Equity losses in subsidiaries -- -- -- -- 10,137 724 29,305 Interest in rent expense 10,520 12,281 12,094 12,700 13,770 6,018 8,248 --------- --------- --------- --------- --------- --------- --------- Earnings $ 103,080 $ (7,147) $ 121,846 $ 67,282 $(133,895} $ 37,501 $(112,018) ========= ========= ========= ========= ========= ========= ========= Fixed Charges and Preferred Stock Dividends and Related Accretion: Interest expense and amortization of deferred financing costs $ 128,263 $ 139,696 $ 147,488 $ 168,195 $ 147,824 $ 77,258 $ 75,917 Interest in rent expense 10,520 12,281 12,094 12,700 13,770 6,018 8,248 Preferred stock dividends and related accretion 43,526 65,073 63,285 53,062 53,063 26,531 27,347 --------- --------- --------- --------- --------- --------- --------- Fixed Charges and Preferred Stock Dividends and Related Accretion: $ 182,309 $ 217,050 $ 222,867 $ 233,957 $ 214,657 $ 109,807 $ 111,512 ========= ========= ========= ========= ========= ========= ========= Deficiency of earnings to fixed charges and preferred stock dividends and related accretion $ (79,229) $(224,197) $(101,021) $(166,675) $(348,552] $ (72,306) $(223,530) ========= ========= ========= ========= ========= ========= =========
EX-21.1 9 a2052089zex-21_1.txt EXHIBIT 21.1 Exhibit 21.1 PRIMEDIA INC SUBSIDIARIES About.com, Inc., a Delaware corporation Adams/Intertec International, Inc., a Delaware corporation Adams/Laux Company, Inc., a Delaware corporation AgriClick LLC, a Delaware corporation Bacon's Information, Inc., a Delaware corporation Bowhunter Magazine, Inc., a Pennsylvania corporation Canadian Red Book, Inc., a Canadian company Canoe & Kayak, Inc., a Delaware corporation Channel One Communications Corporation, a Delaware corporation Channel One Interactive, Inc., a Delaware corporation Climbing, Inc., a Delaware corporation Communication Concepts, Inc., a Nevada corporation ConsumerClick Corp., a Delaware corporation Cover Concepts Marketing Services, LLC, a Delaware limited liability company Cowles History Group, Inc., a Virginia corporation Creative Technologies LLC, a Delaware corporation CSK Publishing Company, Inc., a Delaware corporation Digibid LLC, a Delaware corporation Electrical Construction LLC, a Delaware corporation ENO Productions, Inc., a Delaware corporation Films for the Humanities & Sciences, Inc., a Delaware corporation Game & Fish Publications, Inc., a Delaware corporation Go Lo Entertainment, Inc., a California corporation GR8RIDE.com, Inc., a Delaware corporation Guias do Brasil Ltda., a Brazilian company Haas Publishing Companies, Inc., a Delaware corporation Hacienda Productions, Inc., a Delaware corporation Horse & Rider, Inc., a California corporation HPC Brazil, Inc., a Delaware corporation HPC do Brasil Ltda., a Brazilian company HPC Interactive, Inc., a Delaware corporation HPC Interactive, LLC, a Delaware corporation In New York LLC, a Delaware corporation IndustryClick Corp., a Delaware corporation IntelliChoice, Inc., a California corporation PRIMEDIA Business Magazines & Media Inc., a Delaware corporation Intertec Publishing (UK) Limited, a United Kingdom company Kagan Asia Media Ltd., a United Kingdom company Kagan Media Appraisals, Inc., a California corporation Kagan Seminars, Inc., a California corporation Kagan World Media, Inc., a Delaware corporation Kagan World Media Limited, a United Kingdom company 2 Kitplanes Acquisition Company, a Delaware corporation Low Rider Publishing Group, Inc., a California corporation MarketingClick LLC, a Delaware corporation McMullen Argus Publishing, Inc., a California corporation Media Central Acquisition, LLC, a Delaware corporation MediaCentral LLC, a Delaware corporation Miramar Communications, Inc., a California corporation Paul Kagan Associates, Inc., a Delaware corporation PRIMEDIA Companies Inc., a Delaware corporation PRIMEDIA Digital Video Holdings LLC, a Delaware corporation PRIMEDIA Enterprises, Inc., a Delaware corporation PRIMEDIA Enthusiast Publications, Inc., a Pennsylvania corporation PRIMEDIA Finance Shared Services, Inc., a Delaware corporation PRIMEDIA Holdings III, Inc., a Delaware corporation PRIMEDIA Information, Inc., a Delaware corporation PRIMEDIA International, Inc., a Delaware corporation PRIMEDIA Magazines, Inc., a Delaware corporation PRIMEDIA Magazine Finance, Inc., a Delaware corporation PRIMEDIA Productions Dallas LLC, a Delaware corporation PRIMEDIA Special Interest Publications, Inc., a Delaware corporation PRIMEDIA TeenClick Corporation, a Delaware corporation PRIMEDIA Ventures, Inc., a Delaware corporation PRIMEDIANet Inc., a Delaware corporation PRIMEDIA Workplace Learning LLC, a Delaware corporation PRIMEDIA Workplace Learning LP, a Delaware limited partnership PRIMEDIA Enthusiast Publications, Inc., a Pennsylvania corporation Simba Information, Inc., a Connecticut corporation Symbol of Excellence Publishers, Inc., an Alabama corporation TelecomClick LLC, a Delaware corporation The Virtual Flyshop, Inc., a Colorado corporation Westcott PRIMEDIA Limited, a United Kingdom company EX-23.2 10 a2052089zex-23_2.txt EXHIBIT 23.2 EXHIBIT 23.2 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this registration statement of PRIMEDIA, Inc. on Form S-4 of our reports dated February 1, 2001 (February 28, 2001 as to Note 3), appearing in the Annual Report on Form 10-K of PRIMEDIA, Inc. for the year ended December 31, 2000 and to the reference to us under the heading "Experts" in such registration statement. /s/ Deloitte & Touche LLP New York, New York August 13, 2001 EX-23.3 11 a2052089zex-23_3.txt EXHIBIT 23.3 Exhibit 23.3 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" in the Registration Statement (Form S-4) and related Prospectus of PRIMEDIA Inc. for the registration of $500.0 million 8 7/8% Senior Notes due 2011 and to the incorporation by reference therein of our report dated January 29, 2001 (except Note 6, as to which the date is March 29, 2001) with respect to the consolidated financial statements of About.com, Inc. and subsidiaries included in PRIMEDIA Inc.'s Current Report on Form 8-K/A dated April 26, 2001, filed with the Securities and Exchange Commission. /s/ Ernst & Young LLP New York, New York August 13, 2001 EX-25.1 12 a2052089zex-25_1.txt EXHIBIT 25.1 Exhibit 25.1 = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| --------------------------- THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) --------------------------- PRIMEDIA Inc. (Exact name of obligor as specified in its charter) Delaware 13-3647573 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Adams/Intertec International, Inc. (Exact name of obligor as specified in its charter) Delaware 95-3549600 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Adams/Laux Company, Inc. (Exact name of obligor as specified in its charter) Delaware 04-3250143 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Bacon's Information, Inc. (Exact name of obligor as specified in its charter) Delaware 36-4011543 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Canoe & Kayak, Inc. (Exact name of obligor as specified in its charter) Delaware 41-1895510 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Channel One Communications Corporation (Exact name of obligor as specified in its charter) Delaware 13-3783278 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Climbing, Inc. (Exact name of obligor as specified in its charter) Delaware 41-1885204 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) -2- Cover Concepts Marketing Services, LLC (Exact name of obligor as specified in its charter) Delaware 04-3370389 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) CSK Publishing Company, Inc. (Exact name of obligor as specified in its charter) Delaware 13-3023395 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) ENO Productions, Inc. (Exact name of obligor as specified in its charter) Delaware 13-4162379 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Films for the Humanities & Sciences, Inc. (Exact name of obligor as specified in its charter) Delaware 13-1932571 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Game & Fish Publications, Inc. (Exact name of obligor as specified in its charter) Delaware 13-4082334 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) -3- Haas Publishing Companies, Inc. (Exact name of obligor as specified in its charter) Delaware 58-1858150 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Hacienda Productions, Inc. (Exact name of obligor as specified in its charter) Delaware 13-4167234 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) HPC Brazil, Inc. (Exact name of obligor as specified in its charter) Delaware 13-4083040 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Intertec Publishing Corporation (Exact name of obligor as specified in its charter) Delaware 48-1071277 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Kitplanes Acquisition Company (Exact name of obligor as specified in its charter) Delaware 95-4617433 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) -4- Paul Kagan Associates, Inc. (Exact name of obligor as specified in its charter) Delaware 13-4140957 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) PRIMEDIA Enterprises, Inc. (Exact name of obligor as specified in its charter) Delaware 13-4113525 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) PRIMEDIA Finance Shared Services, Inc. (Exact name of obligor as specified in its charter) Delaware 13-4144616 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) PRIMEDIA Holdings III, Inc. (Exact name of obligor as specified in its charter) Delaware 13-3617238 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) PRIMEDIA Information, Inc. (Exact name of obligor as specified in its charter) Delaware 13-3555670 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) -5- PRIMEDIA Magazines, Inc. (Exact name of obligor as specified in its charter) Delaware 13-3616344 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) PRIMEDIA Magazine Finance, Inc. (Exact name of obligor as specified in its charter) Delaware 13-3616344 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) PRIMEDIA Special Interest Publications, Inc. (Exact name of obligor as specified in its charter) Delaware 52-1654079 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) PRIMEDIA Workplace Learning LP (Exact name of obligor as specified in its charter) Delaware 13-4119787 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Bowhunter Magazine, Inc. (Exact name of obligor as specified in its charter) Pennsylvania 23-2667502 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) -6- PRIMEDIA Enthusiast Publications, Inc. (Exact name of obligor as specified in its charter) Pennsylvania 23-1577768 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Communication Concepts, Inc. (Exact name of obligor as specified in its charter) Nevada 88-0329261 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Cowles History Group, Inc. (Exact name of obligor as specified in its charter) Virginia 54-1606227 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Symbol Of Excellence Publishers, Inc. (Exact name of obligor as specified in its charter) Alabama 63-0845698 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) The Virtual Flyshop, Inc. (Exact name of obligor as specified in its charter) Colorado 84-1318377 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) -7- Go Lo Entertainment, Inc. (Exact name of obligor as specified in its charter) California 95-4301031 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Horse & Rider, Inc. (Exact name of obligor as specified in its charter) California 33-0480523 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) IntelliChoice, Inc. (Exact name of obligor as specified in its charter) California 77-0168905 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Kagan Media Appraisals, Inc. (Exact name of obligor as specified in its charter) California 77-0157500 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Kagan Seminars, Inc. (Exact name of obligor as specified in its charter) California 94-2515843 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) -8- Low Rider Publishing Group, Inc. (Exact name of obligor as specified in its charter) California 95-4307029 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) McMullen Argus Publishing, Inc. (Exact name of obligor as specified in its charter) California 95-2663753 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Miramar Communications, Inc. (Exact name of obligor as specified in its charter) California 95-2845391 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Simba Information, Inc. (Exact name of obligor as specified in its charter) Connecticut 06-1281600 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Kagan World Media, Inc. (Exact name of obligor as specified in its charter) Delaware 77-0225377 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) -9- MediaCentral LLC (Exact name of obligor as specified in its charter) Delaware 13-4113602 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) PRIMEDIA Companies Inc. (Exact name of obligor as specified in its charter) Delaware 13-4177687 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 745 Fifth Avenue New York, New York 10151 (Address of principal executive offices) (Zip code) --------------------------- 8-7/8% Senior Notes due 2011 (Title of the indenture securities) = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = -10- 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.
- --------------------------------------------------------- -------------------------------------------- Name Address - --------------------------------------------------------- -------------------------------------------- Superintendent of Banks of the State of New York 2 Rector Street, New York, N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. Yes. 2. AFFILIATIONS WITH OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. None. 16. LIST OF EXHIBITS. EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R. 229.10(D). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. -11- SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 5th day of July, 2001. THE BANK OF NEW YORK By: /s/ MING SHIANG ---------------------------------- Name: MING SHIANG Title: VICE PRESIDENT -12- Exhibit 7 - -------------------------------------------------------------------------------- Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 2001, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts ASSETS In Thousands Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin.. $2,811,275 Interest-bearing balances........................... 3,133,222 Securities: Held-to-maturity securities......................... 147,185 Available-for-sale securities....................... 5,403,923 Federal funds sold and Securities purchased under agreements to resell................................ 3,378,526 Loans and lease financing receivables: Loans and leases held for sale...................... 74,702 Loans and leases, net of unearned income............................................ 37,471,621 LESS: Allowance for loan and lease losses...................................... 599,061 Loans and leases, net of unearned income and allowance.............................. 36,872,560 Trading Assets......................................... 11,757,036 Premises and fixed assets (including capitalized leases)............................................. 768,795 Other real estate owned................................ 1,078 Investments in unconsolidated subsidiaries and associated companies................................ 193,126 Customers' liability to this bank on acceptances outstanding......................................... 592,118 Intangible assets...................................... Goodwill............................................ 1,300,295 Other intangible assets............................. 122,143 Other assets........................................... 3,676,375 ---------
Total assets........................................... $70,232,359 =========== LIABILITIES Deposits: In domestic offices................................. $25,962,242 Noninterest-bearing................................. 10,586,346 Interest-bearing.................................... 15,395,896 In foreign offices, Edge and Agreement subsidiaries, and IBFs............................ 24,862,377 Noninterest-bearing................................. 373,085 Interest-bearing.................................... 24,489,292 Federal funds purchased and securities sold under agreements to repurchase............................ 1,446,874 Trading liabilities.................................... 2,373,361 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)........................... 1,381,512 Bank's liability on acceptances executed and outstanding......................................... 592,804 Subordinated notes and debentures...................... 1,646,000 Other liabilities...................................... 5,373,065 ----------- Total liabilities...................................... $63,658,235 =========== EQUITY CAPITAL Common stock........................................... 1,135,284 Surplus................................................ 1,008,773 Retained earnings...................................... 4,426,033 Accumulated other comprehensive income................. 4,034 Other equity capital components........................ 0 - ---------------------------------------------------------------------------- Total equity capital................................... 6,574,124 ----------- Total liabilities and equity capital................... $70,232,359 ===========
I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Thomas J. Mastro, Senior Vice President and Comptroller We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. Thomas A. Renyi Gerald L. Hassell Directors Alan R. Griffith - -------------------------------------------------------------------------------- EX-99.1 13 a2052089zex-99_1.txt EXHIBIT 99.1 EXHIBIT 99.1 LETTER OF TRANSMITTAL FOR $500,000,000 8 7/8% SENIOR NOTES DUE 2011 OF PRIMEDIA INC. - ---------------------------------------------------------------- THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2001 (THE "EXPIRATION DATE") UNLESS EXTENDED BY PRIMEDIA INC. - -------------------------------------------------------------------------------- THE EXCHANGE AGENT IS: The Bank of New York FOR DELIVERY BY REGISTERED BY FACSIMILE TRANSMISSION BY HAND OR FOR OVERNIGHT OR CERTIFIED MAIL: (FOR ELIGIBLE INSTITUTIONS ONLY): DELIVERY ONLY: The Bank of New York CONFIRM FACSIMILE BY TELEPHONE ONLY: The Bank of New York 101 Barclay Street 101 Barclay Street New York, NY 10286 New York, NY 10286 Att: Reorganization Att: Reorganization Section 7/E Section 7/E
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION VIA FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. The undersigned acknowledges receipt of the Prospectus dated , 2001 (the "Prospectus") of PRIMEDIA, Inc. (the "Company"), and this Letter of Transmittal (the "Letter of Transmittal"), which together describe the Company's offer (the "Exchange Offer") to exchange its 8 7/8% Senior Notes due 2011, which have been registered under the Securities Act of 1933, as amended (the "Securities Act") (the "New Notes") for each of its 8 7/8% Senior Notes due 2011 (the "Old Notes" and, together with the New Notes, the "Notes") from the holders thereof. The terms of the New Notes are identical in all material respects (including principal amount, interest rate and maturity) to the terms of the Old Notes for which they may be exchanged pursuant to the Exchange Offer, except that the New Notes are freely transferable by holders thereof (except as provided herein or in the Prospectus). YOUR BANK OR BROKER CAN ASSIST YOU IN COMPLETING THIS FORM. THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT. The undersigned has checked the appropriate boxes below and signed this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer. PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS CAREFULLY BEFORE CHECKING ANY BOX BELOW. List below the Old Notes to which this Letter of Transmittal relates. If the space provided below is inadequate, the certificate numbers and aggregate principal amounts should be listed on a separate signed schedule affixed hereto. - ---------------------------------------------------------------------------------------------------- DESCRIPTION OF OLD NOTES TENDERED HEREWITH - ---------------------------------------------------------------------------------------------------- AGGREGATE PRINCIPAL NAME(S) AND ADDRESS(ES) OF REGISTERED AMOUNT HOLDER(S) CERTIFICATE REPRESENTED BY PRINCIPAL AMOUNT (PLEASE FILL IN) NUMBER(S)* OLD NOTES* TENDERED** - ---------------------------------------------------------------------------------------------------- ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- Total - ---------------------------------------------------------------------------------------------------- * Need not be completed by book-entry holders. ** Unless otherwise indicated, the holder will be deemed to have tendered the full aggregate principal amount represented by such Old Notes. See instruction 2. - ----------------------------------------------------------------------------------------------------
Holders of Old Notes whose Old Notes are not immediately available or who cannot deliver all other required documents to the Exchange Agent on or prior to the Expiration Date or who cannot complete the procedures for book-entry transfer on a timely basis, must tender their Old Notes according to the guaranteed delivery procedures set forth in the Prospectus. Unless the context otherwise requires, the term "holder" for purposes of this Letter of Transmittal means any person in whose name Old Notes are registered or any other person who has obtained a properly completed bond power from the registered holder or any person whose Old Notes are held of record by The Depository Trust Company ("DTC"). / / CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING: Name of Registered Holder(s) _______________________________________________ Name of Eligible Institution that Guaranteed Delivery ______________________ Date of Execution of Notice of Guaranteed Delivery _________________________ 2 If Delivered by Book-Entry Transfer: _______________________________________ Name of Tendering Institution ______________________________________________ Account Number _____________________________________________________________ Transaction Code Number ____________________________________________________ / / CHECK HERE IF NEW NOTES ARE TO BE DELIVERED TO PERSON OTHER THAN PERSON SIGNING THIS LETTER OF TRANSMITTAL: Name _______________________________________________________________________ Address ____________________________________________________________________ / / CHECK HERE IF NEW NOTES ARE TO BE DELIVERED TO AN ADDRESS DIFFERENT FROM THAT LISTED ELSEWHERE IN THIS LETTER OF TRANSMITTAL: Name _______________________________________________________________________ Address ____________________________________________________________________ / / CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED OLD NOTES FOR YOUR OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING ACTIVITIES AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO: Name: ______________________________________________________________________ Address: ___________________________________________________________________ If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of New Notes. If the undersigned is a broker-dealer that will receive New Notes for its own account in exchange for Old Notes that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such New Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. A broker-dealer may not participate in the Exchange Offer with respect to Old Notes acquired other than as a result of market-making activities or other trading activities. Any holder who is an "affiliate" of the Company or who has an arrangement or understanding with respect to the distribution of the New Notes to be acquired pursuant to the Exchange Offer, or any broker-dealer who purchased Old Notes from the Company to resell pursuant to Rule 144A under the Securities Act or any other available exemption under the Securities Act must comply with the registration and prospectus delivery requirements under the Securities Act. 3 PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY Ladies and Gentlemen: Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby tenders to the Company the principal amount of the Old Notes indicated above. Subject to, and effective upon, the acceptance for exchange of all or any portion of the Old Notes tendered herewith in accordance with the terms and conditions of the Exchange Offer (including, if the Exchange Offer is extended or amended, the terms and conditions of any such extension or amendment), the undersigned hereby exchanges, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to such Old Notes as are being tendered herewith. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as its true and lawful agent and attorney-in-fact of the undersigned (with full knowledge that the Exchange Agent also acts as the agent of the Company, in connection with the Exchange Offer) to cause the Old Notes to be assigned, transferred and exchanged. The undersigned represents and warrants that it has full power and authority to tender, exchange, assign and transfer the Old Notes and to acquire New Notes issuable upon the exchange of such tendered Old Notes, and that, when the same are accepted for exchange, the Company will acquire good and unencumbered title to the tendered Old Notes, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim. The undersigned also warrants that it will, upon request, execute and deliver any additional documents deemed by the Exchange Agent or the Company to be necessary or desirable to complete the exchange, assignment and transfer of the tendered Old Notes or transfer ownership of such Old Notes on the account books maintained by the book-entry transfer facility. The undersigned further agrees that acceptance of any and all validly tendered Old Notes by the Company and the issuance of New Notes in exchange therefor shall constitute performance in full by the Company of its obligations under the Registration Rights Agreement, dated May 8, 2001 (the "Registration Rights Agreement"), among the Company, the guarantors named therein, and the initial purchasers named therein and that the Company shall have no further obligations or liabilities thereunder except as provided in the first paragraph of Section 4 of such agreement. The undersigned will comply with its obligations under the Registration Rights Agreement. The undersigned has read and agrees to all terms of the Exchange Offer. The Exchange Offer is subject to certain conditions as set forth in the Prospectus under the caption "The Exchange Offer--Certain Conditions to the Exchange Offer." The undersigned recognizes that as a result of these conditions (which may be waived, in whole or in part, by the Company), as more particularly set forth in the Prospectus, the Company may not be required to exchange any of the Old Notes tendered hereby and, in such event, the Old Notes not exchanged will be returned to the undersigned at the address shown below unless indicated otherwise above, promptly following the expiration or termination of the Exchange Offer. In addition, the Company may amend the Exchange Offer at any time prior to the Expiration Date if any of the conditions set forth under "The Exchange Offer--Certain Conditions to the Exchange Offer" occur. The undersigned understands that tenders of Old Notes pursuant to any one of the procedures described in the Prospectus and in the instructions attached hereto will, upon the Company's acceptance for exchange of such tendered Old Notes, constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Exchange Offer. The undersigned recognizes that, under circumstances set forth in the Prospectus, the Company may not be required to accept for exchange any of the Old Notes. By tendering shares of Old Notes and executing this Letter of Transmittal, the undersigned represents that New Notes acquired in the exchange will be obtained in the ordinary course of business of the undersigned, that the undersigned has no arrangement or understanding with any person to participate in a distribution (within the meaning of the Securities Act) of such New Notes, that the 4 undersigned is not an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act and that if the undersigned or the person receiving such New Notes, whether or not such person is the undersigned, is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of New Notes. If the undersigned or the person receiving such New Notes, whether or not such person is the undersigned, is a broker-dealer that will receive New Notes for its own account in exchange for Old Notes that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such New Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. If the undersigned is a person in the United Kingdom, the undersigned represents that its ordinary activities involve it in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of its business. Any holder of Old Notes using the Exchange Offer to participate in a distribution of the New Notes (i) cannot rely on the position of the staff of the Securities and Exchange Commission enunciated in its interpretive letter with respect to EXXON CAPITAL HOLDINGS CORPORATION(available April 13, 1989) or similar interpretive letters and (ii) must comply with the registration and prospectus requirements of the Securities Act in connection with a secondary resale transaction. All authority herein conferred or agreed to be conferred shall survive the death, bankruptcy or incapacity of the undersigned and every obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Tendered Old Notes may be withdrawn at any time prior to the Expiration Date in accordance with the terms of this Letter of Transmittal. Except as stated in the Prospectus, this tender is irrevocable. Certificates for all New Notes delivered in exchange for tendered Old Notes and any Old Notes delivered herewith but not exchanged, and registered in the name of the undersigned, shall be delivered to the undersigned at the address shown below the signature of the undersigned. The undersigned, by completing the box entitled "Description of Old Notes Tendered Herewith" above and signing this letter, will be deemed to have tendered the Old Notes as set forth in such box. 5 TENDERING HOLDER(S) SIGN HERE (COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9) MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON CERTIFICATE(S) FOR OLD NOTES HEREBY TENDERED OR IN WHOSE NAME OLD NOTES ARE REGISTERED ON THE BOOKS OF DTC OR ONE OF ITS PARTICIPANTS, OR BY ANY PERSON(S) AUTHORIZED TO BECOME THE REGISTERED HOLDER(S) BY ENDORSEMENTS AND DOCUMENTS TRANSMITTED HEREWITH. IF SIGNATURE IS BY A TRUSTEE, EXECUTOR, ADMINISTRATOR, GUARDIAN, ATTORNEY-IN-FACT, OFFICER OF A CORPORATION OR OTHER PERSON ACTING IN A FIDUCIARY OR REPRESENTATIVE CAPACITY, PLEASE SET FORTH THE FULL TITLE OF SUCH PERSON. SEE INSTRUCTION 3. ________________________________________________________________________________ ________________________________________________________________________________ (SIGNATURE(S) OF HOLDER(S)) Date ___________________________________________________________________________ Name(s) ________________________________________________________________________ (PLEASE PRINT) Capacity (full title) __________________________________________________________ Address ________________________________________________________________________ ________________________________________________________________________________ (INCLUDING ZIP CODE) Daytime Area Code and Telephone No. ____________________________________________ Taxpayer Identification No. ____________________________________________________ GUARANTEE OF SIGNATURE(S) IF REQUIRED--SEE INSTRUCTION 3) Authorized Signature ___________________________________________________________ Date ___________________________________________________________________________ Name(s) ________________________________________________________________________ Title __________________________________________________________________________ Name of Firm ___________________________________________________________________ Address ________________________________________________________________________ ________________________________________________________________________________ (INCLUDE ZIP CODE) Area Code and Telephone No. ____________________________________________________ 6 - ------------------------------------------- SPECIAL ISSUANCE INSTRUCTIONS (SEE INSTRUCTIONS 3 AND 4) To be completed ONLY if New Notes or Old Notes not tendered are to be issued in the name of someone other than the registered holder of the Old Notes whose name(s) appear(s) above. Issue / / Old Notes not tendered to: / / New Notes to: Name(s) ____________________________________________________________________ Address ____________________________________________________________________ ____________________________________________________________________________ (INCLUDE ZIP CODE) Daytime Area Code and Telephone No. ______________________________________________________________ Tax Identification No. _____________________________________________________ - ------------------------------------------- - ------------------------------------------- SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 3 AND 4) To be completed ONLY if New Notes or Old Notes not tendered are to be sent to someone other than the registered holder of the Old Notes whose name(s) appear(s) above, or such registered holder(s) at an address other than that shown above. Mail / / Old Notes not tendered to: / / New Notes to: Name(s) ____________________________________________________________________ Address ____________________________________________________________________ ____________________________________________________________________________ (INCLUDE ZIP CODE) Area Code and Telephone No. ______________________________________________________________ - ------------------------------------------ INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER 1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY PROCEDURES. A holder of Old Notes may tender the same by (i) properly completing and signing this Letter of Transmittal or a facsimile hereof (all references in the Prospectus to the Letter of Transmittal shall be deemed to include a facsimile thereof) and delivering the same, together with the certificate or certificates, if applicable, representing the Old Notes being tendered and any required signature guarantees and any other documents required by this Letter of Transmittal, to the Exchange Agent at its address set forth above on or prior to the Expiration Date, or (ii) complying with the procedure for book-entry transfer described below, or (iii) complying with the guaranteed delivery procedures described below. Holders of Old Notes may tender Old Notes by book-entry transfer by crediting the Old Notes to the Exchange Agent's account at DTC in accordance with DTC's Automated Tender Offer Program ("ATOP") and by complying with applicable ATOP procedures with respect to the Exchange Offer. DTC participants that are accepting the Exchange Offer should transmit their acceptance to DTC, which will edit and verify the acceptance and execute a book-entry delivery to the Exchange Agent's account at DTC. DTC will then send a computer-generated message (an "Agent's Message") to the Exchange Agent for its acceptance in which the holder of the Old Notes acknowledges and agrees to be bound by the terms of, and makes the representations and warranties contained in, this Letter of Transmittal, the DTC participant confirms on behalf of itself and the beneficial owners of such Old Notes all provisions of this Letter of Transmittal (including any representations and warranties) applicable to it and such beneficial owner as fully as if it had completed the information required herein and executed and transmitted this Letter of Transmittal to the Exchange Agent. 7 DELIVERY OF THE AGENT'S MESSAGE BY DTC WILL SATISFY THE TERMS OF THE EXCHANGE OFFER AS TO EXECUTION AND DELIVERY OF A LETTER OF TRANSMITTAL BY THE PARTICIPANT IDENTIFIED IN THE AGENT'S MESSAGE. DTC PARTICIPANTS MAY ALSO ACCEPT THE EXCHANGE OFFER BY SUBMITTING A NOTICE OF GUARANTEED DELIVERY THROUGH ATOP. THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE OLD NOTES AND ANY OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDER, AND EXCEPT AS OTHERWISE PROVIDED BELOW, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. IF SUCH DELIVERY IS BY MAIL, IT IS SUGGESTED THAT REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, BE USED. IN ALL CASES SUFFICIENT TIME SHOULD BE ALLOWED TO PERMIT TIMELY DELIVERY. NO OLD NOTES OR LETTERS OF TRANSMITTAL SHOULD BE SENT TO THE COMPANY. Holders whose Old Notes are not immediately available or who cannot deliver their Old Notes and all other required documents to the Exchange Agent on or prior to the Expiration Date or comply with book-entry transfer procedures on a timely basis must tender their Old Notes pursuant to the guaranteed delivery procedure set forth in the Prospectus. Pursuant to such procedure: (i) such tender must be made by or through an Eligible Institution (as defined below); (ii) on or prior to the Expiration Date, the Exchange Agent must have received from such Eligible Institution a letter, telegram or facsimile transmission (receipt confirmed by telephone and an original delivered by guaranteed overnight courier) setting forth the name and address of the tendering holder, the names in which such Old Notes are registered, and, if applicable, the certificate numbers of the Old Notes to be tendered; and (iii) all tendered Old Notes (or a confirmation of any book-entry transfer of such Old Notes into the Exchange Agent's account at a book-entry transfer facility) as well as this Letter of Transmittal and all other documents required by this Letter of Transmittal, must be received by the Exchange Agent within three New York Stock Exchange trading days after the date of execution of such letter, telegram or facsimile transmission, all as provided in the Prospectus. No alternative, conditional, irregular or contingent tenders will be accepted. All tendering holders, by execution of this Letter of Transmittal (or facsimile thereof), shall waive any right to receive notice of the acceptance of the Old Notes for exchange. 2. PARTIAL TENDERS; WITHDRAWALS. If less than the entire principal amount of Old Notes evidenced by a submitted certificate is tendered, the tendering holder must fill in the aggregate principal amount of Old Notes tendered in the box entitled "Description of Old Notes Tendered Herewith." A newly issued certificate for the Old Notes submitted but not tendered will be sent to such holder as soon as practicable after the Expiration Date. All Old Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise clearly indicated. If not yet accepted, a tender pursuant to the Exchange Offer may be withdrawn prior to the Expiration Date. To be effective with respect to the tender of Old Notes, a written notice of withdrawal must: (i) be received by the Exchange Agent at one of the addresses for the Exchange Agent set forth above before the Company notifies the Exchange Agent that it has accepted the tender of Old Notes pursuant to the Exchange Offer; (ii) specify the name of the person who tendered the Old Notes to be withdrawn; (iii) identify the Old Notes to be withdrawn (including the principal amount of such Old Notes, or, if applicable, the certificate numbers shown on the particular certificates evidencing such Old Notes and the principal amount of Old Notes represented by such certificates); (iv) include a statement that such holder is withdrawing its election to have such Old Notes exchanged; and (v) be signed by the holder in the same manner as the original signature on this Letter of Transmittal (including any required signature guarantee). The Exchange Agent will return the properly withdrawn Old Notes promptly 8 following receipt of a notice of withdrawal. If Old Notes have been tendered pursuant to the procedure for book-entry transfer, any notice of withdrawal must specify the name and number of the account at the book-entry transfer facility to be credited with the withdrawn Old Notes or otherwise comply with the book-entry transfer facility's procedures. All questions as to the validity of notices of withdrawals, including time of receipt, will be determined by the Company, and such determination will be final and binding on all parties. Any Old Notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the Exchange Offer. Any Old Notes which have been tendered for exchange but which are not exchanged for any reason will be returned to the holder thereof without cost to such holder (or, in the case of Old Notes tendered by book-entry transfer into the Exchange Agent's account at the book-entry transfer facility pursuant to the book-entry transfer procedures described above, such Old Notes will be credited to an account with such book-entry transfer facility specified by the holder) as soon as practicable after withdrawal, rejection of tender or termination of the Exchange Offer. Properly withdrawn Old Notes may be retendered by following one of the procedures described under the caption "The Exchange Offer--Procedures for Tendering" in the Prospectus at any time prior to the Expiration Date. 3. SIGNATURE ON THIS LETTER OF TRANSMITTAL; WRITTEN INSTRUMENTS AND ENDORSEMENTS; GUARANTEES OF SIGNATURES. If this Letter of Transmittal is signed by the registered holder(s) of the Old Notes tendered hereby, the signature must correspond with the name(s) as written on the face of the certificates without alteration, enlargement or any change whatsoever. If any of the Old Notes tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If a number of Old Notes registered in different names are tendered, it will be necessary to complete, sign and submit as many separate copies of this Letter of Transmittal as there are different registrations of Old Notes. When this Letter of Transmittal is signed by the registered holder or holders (which term, for the purposes described herein, shall include the book-entry transfer facility whose name appears on a security listing as the owner of the Old Notes) of Old Notes listed and tendered hereby, no endorsements of certificates or separate written instruments of transfer or exchange are required. If this Letter of Transmittal is signed by a person other than the registered holder or holders of the Old Notes listed, such Old Notes must be endorsed or accompanied by separate written instruments of transfer or exchange in form satisfactory to the Company and duly executed by the registered holder, in either case signed exactly as the name or names of the registered holder or holders appear(s) on the Old Notes. If this Letter of Transmittal, any certificates or separate written instruments of transfer or exchange are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and, unless waived by the Company, proper evidence satisfactory to the Company of their authority so to act must be submitted. Endorsements on certificates or signatures on separate written instruments of transfer or exchange required by this Instruction 3 must be guaranteed by an Eligible Institution. Signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution, unless Old Notes are tendered: (i) by a holder who has not completed the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" on this Letter of Transmittal; or (ii) for the account of an Eligible Institution (as defined below). In the event that the signatures in this Letter of Transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, such guarantees must be by an eligible guarantor institution which is a member of a firm of a registered national securities 9 exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or another "eligible institution" within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (an "Eligible Institution"). If Old Notes are registered in the name of a person other than the signer of this Letter of Transmittal, the Old Notes surrendered for exchange must be endorsed by, or be accompanied by a written instrument or instruments of transfer or exchange, in satisfactory form as determined by the Company, in its sole discretion, duly executed by the registered holder with the signature thereon guaranteed by an Eligible Institution. 4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering holders should indicate, as applicable, the name and address to which the New Notes or certificates for Old Notes not exchanged are to be issued or sent, if different from the name and address of the person signing this Letter of Transmittal. In the case of issuance in a different name, the tax identification number of the person named must also be indicated. Holders tendering Old Notes by book-entry transfer may request that Old Notes not exchanged be credited to such account maintained at the book-entry transfer facility as such holder may designate. 5. TRANSFER TAXES. The Company shall pay all transfer taxes, if any, applicable to the transfer and exchange of Old Notes to it or its order pursuant to the Exchange Offer. If a transfer tax is imposed for any reason other than the transfer and exchange of Old Notes to the Company or its order pursuant to the Exchange Offer, the amount of any such transfer taxes (whether imposed on the registered holder or any other person) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exception therefrom is not submitted herewith the amount of such transfer taxes will be billed directly to such tendering holder. 6. WAIVER OF CONDITIONS. The Company reserves the absolute right to waive, in whole or in part, any of the conditions to the Exchange Offer set forth in the Prospectus. 7. MUTILATED, LOST, STOLEN OR DESTROYED SECURITIES. Any holder whose Old Notes have been mutilated, lost, stolen or destroyed, should contact the Exchange Agent at the address indicated below for further instructions. 8. SUBSTITUTE FORM W-9. Each holder (or other payee) of Old Notes whose Old Notes are accepted for exchange (or other payee) is required to provide a correct taxpayer identification number ("TIN"), generally the holder's Social Security or federal employer identification number, and certain other information, on Substitute Form W-9, which is provided under "Important Tax Information" below, and to certify that the holder is not subject to backup withholding. Failure to provide the information on the Substitute Form W-9 may subject the holder (or other payee) to a $50 penalty imposed by the Internal Revenue Service and 31% federal income tax backup withholding on payments made in connection with the Old Notes. The box in Part 3 of the Substitute Form W-9 may be checked if the holder (or other payee) has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in Part 3 is checked and a TIN is not provided by the time any payment is made in connection with the Old Notes, 31% of all such payments will be withheld until a TIN is provided. 9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating to the procedure for tendering, as well as requests for additional copies of the Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent at the address and telephone number set forth above. In addition, all questions relating to the Exchange Offer, as well as 10 requests for assistance or additional copies of the Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent at the address and telephone number indicated above. If backup withholding applies, the Exchange Agent is required to withhold 31% of any payments to be made to the holder of Old Notes. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained by filing a tax return with the Internal Revenue Service. The Exchange Agent cannot refund amounts withheld by reason of backup withholding. 10. IRREGULARITIES. All questions as to the validity, form, eligibility (including time of receipt), and acceptance of Letters of Transmittal or Old Notes will be resolved by the Company, whose determination will be final and binding. The Company reserves the absolute right to reject any or all Letters of Transmittal or tenders that are not in proper form or the acceptance of which would, in the opinion of the Company's counsel, be unlawful. The Company also reserves the right to waive any irregularities or conditions of tender as to the particular Old Notes covered by any Letter of Transmittal or tendered pursuant to such Letter of Transmittal. Neither the Company, the Exchange Agent nor any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. The Company's interpretation of the terms and conditions of the Exchange Offer shall be final and binding. IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE OR COPY THEREOF (TOGETHER WITH CERTIFICATES OF OLD NOTES OR CONFORMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE. IMPORTANT TAX INFORMATION Under U.S. Federal income tax law, a holder whose Old Notes are accepted for exchange may be subject to backup withholding unless the holder provides The Bank of New York, as Paying Agent (the "Paying Agent"), through the Exchange Agent, such holder's correct TIN on Substitute Form W-9 below and certifies, that the TIN provided on Substitute Form W-9 is correct (or that such holder is awaiting a TIN). If such holder is an individual, the TIN is his or her social security number. If the Paying Agent is not provided with the correct TIN, the holder may be subject to a $50 penalty imposed by the Internal Revenue Service. A holder who does not have a TIN may check the box in Part 3 of the Substitute Form W-9 if the holder has applied for a number or intends to apply for a TIN in the near future. If the box in Part 3 is checked, the holder must also complete the Certificate of Awaiting Taxpayer Identification Number below in order to avoid backup withholding. If the box is checked, payments made within 60 days of the date of the form will be subject to backup withholding unless the holder has furnished the Paying Agent with his or her TIN. A holder who checks the box in Part 3 in lieu of furnishing his or her TIN should furnish the Paying Agent with his or her TIN as soon as it is received Certain holders (including, among others, all corporations and certain foreign individuals), are not subject to these backup withholding requirements. In order for a foreign individual to qualify as an exempt recipient, that holder must submit a statement, signed under penalty of perjury, attesting to that individual's exempt status (Form W-8 BEN). Forms for such statements can be obtained from the Paying Agent. Holders are urged to consult their own tax advisors to determine whether they are exempt from these backup withholding and reporting requirements. If backup withholding applies, the Paying Agent is required to withhold 31% of any payments to be made to the holder. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained by filing a tax return with the Internal Revenue Service. The Paying Agent cannot refund amounts withheld by reason of backup withholding. 11 PAYER'S NAME: THE BANK OF NEW YORK - -------------------------------------------------------------------------------------------------------------------- SUBSTITUTE Part I: PLEASE PROVIDE Social Security Number FORM W-9 YOUR TIN IN THE BOX AT OR ------------------------ Department of the Treasury RIGHT AND CERTIFY BY Employer Identification Number Internal Revenue Service SIGNING AND DATING BELOW ----------------------------------------------------------------------- Part II: For Payees exempt from backup withholding, see the enclosed Guidelines of Taxpayer Identification Number on Substitute Form W-9 and Payer's Request for Taxpayer complete as instructed under "Important Tax Information" above. Identification Number (TIN) ----------------------------------------------------------------------- Part III: Awaiting TIN / / - -------------------------------------------------------------------------------------------------------------------- CERTIFICATION. Under penalty of perjury, I certify that: (1) the number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me) and (2) I am not subject to backup withholding because (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. CERTIFICATION INSTRUCTIONS. You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of under-reporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out such item (2). Signature Date -------------------------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9. - -------------------------------------------------------------------------------- CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office, or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 31% of all reportable payments made to me will be withheld. Signature _______________________________ Date ______________________________ - -------------------------------------------------------------------------------- GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER FOR THE PAYEE (YOU) TO GIVE THE PAYER.--Social security numbers have nine digits separated by two hyphens: i.e., 000-00-0000. Employee identification numbers have nine digits separated by only one hyphen: i.e., 00-0000000. The table below will help determine the number to give the payer. All "Section" references are to the Internal Revenue Code of 1986, as amended. "IRS" is the Internal Revenue Service.
- -------------------------------------------------- GIVE THE SOCIAL FOR THIS TYPE OF SECURITY ACCOUNT: NUMBER OF - -------------------------------------------------- 1. Individual The individual 2. Two or more The actual owner of the individuals (joint account or, if combined account) funds, the first individual on the account(1) 3. Custodian account of The minor(2) a minor (Uniform Gift to Minors Act) 4. a. The usual The grantor trustee(1) revocable savings trust account (grantor is also trustee) b. So-called trust The actual owner(1) account that is not a legal or valid trust under state law 5. Sole proprietorship The owner(1) - -------------------------------------------------- GIVE THE EMPLOYER IDENTIFICATION FOR THIS TYPE OF ACCOUNT: NUMBER OF-- - -------------------------------------------------- 6. Sole proprietorship The owner(1) 7. A valid trust, The legal entity(4) estate, or pension trust 8. Corporate The corporation 9. Association, club, The organization religious, charitable, educational, or other tax-exempt organization account 10. Partnership The partnership 11. A broker or The broker or nominee registered nominee 12. Account with the The public entity Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments
- -------------------------------------------------------------------------------- (1) List first and circle the name of the person whose number you furnish. If only one person on a joint account has a social security number, that person's number must be furnished. (2) Circle the minor's name and furnish the minor's social security number. (3) You must show your individual name, but you may also enter your business or "doing business as" name. You may use either your social security number or your employer identification number (if you have one). (4) List first and circle the name of the legal trust, estate, or pension trust. (Do not furnish the taxpayer identification number of the personal representative or trustee unless the legal entity itself is not designated in the account title.) NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 PAGE 2 OBTAINING A NUMBER If you don't have a taxpayer identification number or you don't know your number, obtain Form SS-5, Application for a Social Security Card, at the local Social Administration office, or Form SS-4, Application for Employer Identification Number, by calling 1 (800) TAX-FORM, and apply for a number. PAYEES EXEMPT FROM BACKUP WITHHOLDING PAYEES SPECIFICALLY EXEMPTED FROM WITHHOLDING INCLUDE: - An organization exempt from tax under Section 501(a), an individual retirement account (IRA), or a custodial account under Section 403(b)(7), if the account satisfies the requirements of Section 401(f)(2). - The United States or a state thereof, the District of Columbia, a possession of the United States, or a political subdivision or wholly-owned agency or instrumentality of any one or more of the foregoing. - An international organization or any agency or instrumentality thereof. - A foreign government and any political subdivision, agency or instrumentality thereof. Payee that may be exempt from backup withholding include: - A corporation. - A financial institution. - A dealer in securities or commodities required to register in the United States, the District of Columbia, or a possession of the United States. - A real estate investment trust. - A common trust fund operated by a bank under Section 584(a). - An entity registered at all times during the tax year under the Investment Company Act of 1940. - A middleman known in the investment community as a nominee or who is listed in the most recent publication of the American Society of Corporate Secretaries, Inc., Nominee List. - A futures commission merchant registered with the Commodity Futures Trading Commission. - A foreign central bank of issue. PAYMENTS OF DIVIDENDS AND PATRONAGE DIVIDENDS GENERALLY EXEMPT FROM BACKUP WITHHOLDING INCLUDE: - Payments to nonresident aliens subject to withholding under Section 1441. - Payments to partnerships not engaged in a trade or business in the United States and that have at least one nonresident alien partner. - Payments of patronage dividends not paid in money. - Payments made by certain foreign organizations. - Section 404(k) payments made by an ESOP. PAYMENTS OF INTEREST GENERALLY EXEMPT FROM BACKUP WITHHOLDING INCLUDE: - Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and you have not provided your correct taxpayer identification number to the payer. - Payments of tax-exempt interest (including exempt-interest dividends under Section 852). - Payments described in Section 6049(b)(5) to nonresident aliens. - Payments on tax-free covenant bonds under Section 1451. - Payments made by certain foreign organizations. - Mortgage interest paid to you. Certain payments, other than payments of interest, dividends, and patronage dividends, that are exempt from information reporting are also exempt from backup withholding. For details, see the regulations under sections 6041, 6041A, 6042, 6044, 6045, 6049, 6050A and 6050N. EXEMPT PAYEES DESCRIBED ABOVE MUST FILE FORM W-9 OR A SUBSTITUTE FORM W-9 TO AVOID POSSIBLE ERRONEOUS BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" IN PART II OF THE FORM, AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE OF INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM. PRIVACY ACT NOTICE--Section 6109 requires you to provide your correct taxpayer identification number to payers, who must report the payments to the IRS. The IRS uses the number for identification purposes and may also provide this information to various government agencies for tax enforcement or litigation purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 31% of taxable interest, dividends, and certain other payments to a payee who does not furnish a taxpayer identification number to payer. Certain penalties may also apply. PENALTIES (1) FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty. (3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. EX-99.2 14 a2052089zex-99_2.txt EXHIBIT 99.2 EXHIBIT 99.2 NOTICE OF GUARANTEED DELIVERY FOR TENDER OF ALL OUTSTANDING $500,000,000 8 7/8% SENIOR NOTES DUE 2011 IN EXCHANGE FOR NEW $500,000,000 8 7/8% SENIOR NOTES DUE 2011 OF PRIMEDIA INC. Registered holders of outstanding 8 7/8% Senior Notes due 2011 (the "Old Notes") who wish to tender their Old Notes in exchange for a like principal amount of new 8 7/8% Senior Notes due 2011 (the "New Notes") and whose Old Notes are not immediately available or who cannot deliver their Old Notes and Letter of Transmittal (and any other documents required by the Letter of Transmittal) to The Bank of New York (the "Exchange Agent") prior to the Expiration Date, may use this Notice of Guaranteed Delivery or one substantially equivalent hereto. This Notice of Guaranteed Delivery may be delivered by hand or sent by facsimile transmission (receipt confirmed by telephone and an original delivered by guaranteed overnight courier) or mail to the Exchange Agent. See "The Exchange Offer--Procedures for Tendering" in the Prospectus. THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS: THE BANK OF NEW YORK
BY MAIL: BY FACSIMILE: BY HAND OR OVERNIGHT DELIVERY: The Bank of New York The Bank of New York The Bank of New York 101 Barclay Street 101 Barclay Street 101 Barclay Street New York, NY 10286 New York, NY 10286 New York, NY 10286 Attention: Reorganization Attention: Reorganization Attention: Reorganization Section/7E Section/7E Section/7E CONFIRM RECEIPT OF FACSIMILE BY TELEPHONE
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION VIA A FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an eligible institution (as defined in the Prospectus), such signature guarantee must appear in the applicable space provided on the Letter of Transmittal for Guarantee of Signatures. Ladies and Gentlemen: The undersigned hereby tenders the principal amount of Old Notes indicated below, upon the terms and subject to the conditions contained in the Prospectus dated , 2001 of PRIMEDIA Inc. (the "Prospectus"), receipt of which is hereby acknowledged.
DESCRIPTION OF OLD NOTES TENDERED NAME AND ADDRESS OF CERTIFICATE REGISTERED HOLDER NUMBER(S) OF OLD AS IT NOTES TENDERED APPEARS ON THE (OR ACCOUNT PRINCIPAL AMOUNT OLD NOTES NUMBER AT BOOK- OLD NOTES NAME OF TENDERING HOLDER (PLEASE PRINT) ENTRY FACILITY) TENDERED
SIGN HERE Name of Registered or Acting Holder: Signature(s): Name(s) (Please Print): Address: Telephone Number: Date: IF OLD NOTES WILL BE TENDERED BY BOOK-ENTRY TRANSFER, PROVIDE THE FOLLOWING INFORMATION: DTC Account Number: Date: THE FOLLOWING GUARANTEE MUST BE COMPLETED GUARANTEE OF DELIVERY (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a member of a recognized signature guarantee medallion program within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, hereby guarantees to deliver to the Exchange Agent at one of its addresses set forth on the reverse hereof, the certificates representing the Old Notes (or a confirmation of book-entry transfer of such Old Notes into the Exchange Agent's account at the book-entry transfer facility), together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees, and any other documents required by the Letter of Transmittal within three New York Stock Exchange trading days after the Expiration date (as defined in the Letter of Transmittal). Name of Firm: (AUTHORIZED SIGNATURE) Address: Title: Name: (ZIP CODE) (PLEASE TYPE OR PRINT) Area Code and Telephone No.: Date: NOTE: DO NOT SEND OLD NOTES WITH THIS NOTICE OF GUARANTEED DELIVERY. OLD NOTES SHOULD BE SENT WITH YOUR LETTER OR TRANSMITTAL.
EX-99.3 15 a2052089zex-99_3.txt EXHIBIT 99.3 Exhibit 99.3 _____, 2001 EXCHANGE AGENT AGREEMENT The Bank of New York 101 Barclay Street, Floor 21 West New York, New York 10286 Attention: Corporate Trust Trustee Administration Ladies and Gentlemen: PRIMEDIA Inc., a Delaware corporation (the "Company"), proposes to make an offer (the "Exchange Offer") to exchange all of its outstanding 8 7/8% Senior Notes due 2011 (the "Outstanding Notes") for its 8 7/8% Senior Notes due 2011 (the "Exchange Notes"). The terms and conditions of the Exchange Offer as currently contemplated are set forth in a prospectus, dated ____, 2001 (the "Prospectus"), proposed to be distributed to all record holders of the Outstanding Notes. The Outstanding Notes and the Exchange Notes are collectively referred to herein as the "Notes". The Company hereby appoints The Bank of New York to act as exchange agent (the "Exchange Agent") in connection with the Exchange Offer. References hereinafter to "you" shall refer to The Bank of New York. The Exchange Offer is expected to be commenced by the Company on or about ____, 2001. The Letter of Transmittal accompanying the Prospectus (or in the case of book-entry securities, the Automated Tender Offer Program ("ATOP") of the Book-Entry Transfer Facility (as defined below)) is to be used by the holders of the Outstanding Notes to accept the Exchange Offer and contains instructions with respect to the delivery of certificates for Outstanding Notes tendered in connection therewith. The Exchange Offer shall expire at 5:00 p.m., New York City time, on __, 2001 or on such subsequent date or time to which the Company may extend the Exchange Offer (the "Expiration Date"). Subject to the terms and conditions set forth in the Prospectus, the Company expressly reserves the right to extend the Exchange Offer from time to time and may extend the Exchange Offer by giving oral (promptly confirmed in writing) or written notice to you before 9:00 a.m., New York City time, on the business day following the previously scheduled Expiration Date. The Company expressly reserves the right to amend or terminate the Exchange Offer, and not to accept for exchange any Outstanding Notes not theretofore accepted for exchange, upon the occurrence of any of the conditions of the Exchange Offer specified in the Prospectus under the caption "The Exchange Offer--Certain Conditions to the Exchange Offer." The Company will give oral (promptly confirmed in writing) or written notice of any amendment, termination or nonacceptance to you as promptly as practicable. In carrying out your duties as Exchange Agent, you are to act in accordance with the following instructions: 1. You will perform such duties and only such duties as are specifically set forth in the section of the Prospectus captioned "The Exchange Offer" or as specifically set forth herein; PROVIDED, HOWEVER, that in no way will your general duty to act in good faith be discharged by the foregoing. 2. You will establish a book-entry account with respect to the Outstanding Notes at The Depository Trust Company (the "Book-Entry Transfer Facility") for purposes of the Exchange Offer within two business days after the date of the Prospectus, and any financial institution that is a participant in the Book-Entry Transfer Facility's systems may make book-entry delivery of the Outstanding Notes by causing the Book-Entry Transfer Facility to transfer such Outstanding Notes into your account in accordance with the Book-Entry Transfer Facility's procedure for such transfer. 3. You are to examine each of the Letters of Transmittal and certificates for Outstanding Notes (or confirmation of book-entry transfer into your account at the Book-Entry Transfer Facility) and any other documents delivered or mailed to you by or for holders of the Outstanding Notes to ascertain whether: (i) the Letters of Transmittal and any such other documents are duly executed and properly completed in accordance with instructions set forth therein; and (ii) the Outstanding Notes have otherwise been properly tendered. In each case where the Letter of Transmittal or any other document has been improperly completed or executed or any of the certificates for Outstanding Notes are not in proper form for transfer or some other irregularity in connection with the acceptance of the Exchange Offer exists, you will endeavor to inform the presenters of the need for fulfillment of all requirements and to take any other action as may be reasonably necessary or advisable to cause such irregularity to be corrected. 4. With the approval of the President, Vice President, Chief Financial Officer, Secretary or Treasurer (the "Authorized Officers") (such approval, if given orally, to be promptly confirmed in writing) or any other party designated in writing, by such an officer, you are authorized to waive any irregularities in connection with any tender of Outstanding Notes pursuant to the Exchange Offer. 5. Tenders of Outstanding Notes may be made only as set forth in the Letter of Transmittal and in the section of the Prospectus captioned "The Exchange -2- Offer--Procedures for Tendering", and Outstanding Notes shall be considered properly tendered to you only when tendered in accordance with the procedures set forth therein. Notwithstanding the provisions of this Section 5, Outstanding Notes which the Authorized Officers shall approve as having been properly tendered shall be considered to be properly tendered (such approval, if given orally, shall be promptly confirmed in writing). 6. You shall advise the Company with respect to any Outstanding Notes received subsequent to the Expiration Date and accept its instructions with respect to disposition of such Outstanding Notes. 7. You shall accept tenders: (a) in cases where the Outstanding Notes are registered in two or more names only if signed by all named holders; (b) in cases where the signing person (as indicated on the Letter of Transmittal) is acting in a fiduciary or a representative capacity only when proper evidence of his or her authority so to act is submitted; and (c) from persons other than the registered holder of Outstanding Notes, provided that customary transfer requirements, including payment of any applicable transfer taxes, are fulfilled. You shall accept partial tenders of Outstanding Notes where so indicated and as permitted in the Letter of Transmittal and deliver certificates for Outstanding Notes to the registrar for split-up and return any untendered Outstanding Notes to the holder (or such other person as may be designated in the Letter of Transmittal) as promptly as practicable after expiration or termination of the Exchange Offer. 8. Upon satisfaction or waiver of all of the conditions to the Exchange Offer, the Company will notify you (such notice, if given orally, to be promptly confirmed in writing) of its acceptance, promptly after the Expiration Date, of all Outstanding Notes properly tendered and you, on behalf of the Company, will exchange such Outstanding Notes for Exchange Notes and cause such Outstanding Notes to be cancelled. Delivery of Exchange Notes will be made on behalf of the Company by you at the rate of $1,000 principal amount of Exchange Notes for each $1,000 principal amount of the corresponding series of Outstanding Notes tendered promptly after notice (such notice if given orally, to be promptly confirmed in writing) of acceptance of said Outstanding Notes by the Company; PROVIDED, HOWEVER, that in all cases, Outstanding Notes tendered pursuant to the Exchange Offer will be exchanged only after timely receipt by you of certificates for such Outstanding Notes (or confirmation of book-entry transfer into your account at the Book-Entry Transfer Facility), a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof) with any -3- required signature guarantees and any other required documents. You shall issue Exchange Notes only in denominations of $1,000 or any integral multiple thereof. 9. Tenders pursuant to the Exchange Offer are irrevocable, except that, subject to the terms and upon the conditions set forth in the Prospectus and the Letter of Transmittal, Outstanding Notes tendered pursuant to the Exchange Offer may be withdrawn at any time prior to the Expiration Date. 10. The Company shall not be required to exchange any Outstanding Notes tendered if any of the conditions set forth in the Exchange Offer are not met. Notice of any decision by the Company not to exchange any Outstanding Notes tendered shall be given (if given orally, to be promptly confirmed in writing) by the Company to you. 11. If, pursuant to the Exchange Offer, the Company does not accept for exchange all or part of the Outstanding Notes tendered because of an invalid tender, the occurrence of certain other events set forth in the Prospectus under the caption "The Exchange Offer--Certain Conditions to the Exchange Offer" or otherwise, you shall as soon as practicable after the expiration or termination of the Exchange Offer return those certificates for unaccepted Outstanding Notes (or effect appropriate book-entry transfer), together with any related required documents and the Letters of Transmittal relating thereto that are in your possession, to the persons who deposited them. 12. All certificates for reissued Outstanding Notes, unaccepted Outstanding Notes or for Exchange Notes shall be forwarded by first-class mail. 13. You are not authorized to pay or offer to pay any concessions, commissions or solicitation fees to any broker, dealer, bank or other persons or to engage or utilize any person to solicit tenders. 14. As Exchange Agent hereunder you: (a) shall not be liable for any action or omission to act unless the same constitutes your own negligence, willful misconduct or bad faith, and in no event shall you be liable to a securityholder, the Company or any third party for special, indirect or consequential damages, or lost profits, arising in connection with this Agreement; (b) shall have no duties or obligations other than those specifically set forth herein or as may be subsequently agreed to in writing between you and the Company; (c) will be regarded as making no representations and having no responsibilities as to the validity, sufficiency, value or genuineness of any of the certificates or the Outstanding Notes represented thereby deposited with you pursuant to -4- the Exchange Offer, and will not be required to and will make no representation as to the validity, value or genuineness of the Exchange Offer; (d) shall not be obligated to take any legal action hereunder which might in your judgment involve any expense or liability, unless you shall have been furnished with indemnity satisfactory to you; (e) may conclusively rely on and shall be protected in acting in reliance upon any certificate, instrument, opinion, notice, letter, telegram or other document or security delivered to you and believed by you to be genuine and to have been signed or presented by the proper person or persons; (f) may act upon any tender, statement, request, document, agreement, certificate or other instrument whatsoever not only as to its due execution and validity and effectiveness of its provisions, but also as to the truth and accuracy of any information contained therein, which you shall in good faith believe to be genuine or to have been signed or presented by the proper person or persons; (g) may conclusively rely on and shall be protected in acting upon written or oral instructions from any authorized officer of the Company; (h) may consult with counsel of your selection with respect to any questions relating to your duties and responsibilities and the advice or opinion of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by you hereunder in good faith and in accordance with the advice or opinion of such counsel; and (i) shall not advise any person tendering Outstanding Notes pursuant to the Exchange Offer as to the wisdom of making such tender or as to the market value or decline or appreciation in market value of any Outstanding Notes. 15. You shall take such action as may from time to time be requested by the Company (and such other action as you may deem appropriate) to furnish copies of the Prospectus, Letter of Transmittal and the Notice of Guaranteed Delivery (as defined in the Prospectus) or such other forms as may be approved from time to time by the Company, to all persons requesting such documents and to accept and comply with telephone requests for information relating to the Exchange Offer, provided that such information shall relate only to the procedures for accepting (or withdrawing from) the Exchange Offer. The Company will furnish you with copies of such documents on your request. All other requests for information relating to the Exchange Offer shall be directed to the Company, Attention: Andrew Schmolka, Assistant General Counsel. 16. You shall advise by facsimile transmission Andrew Schmolka, Assistant General Counsel (at the facsimile number (212) 745-0131), and such other person or persons as the Company may request, daily (and more frequently during the -5- week immediately preceding the Expiration Date if requested) up to and including the Expiration Date, as to the number of Outstanding Notes which have been tendered pursuant to the Exchange Offer and the items received by you pursuant to this Agreement, separately reporting and giving cumulative totals as to items properly received and items improperly received. In addition, you will also inform, and cooperate in making available to, the Company or any such other person or persons upon oral request made from time to time prior to the Expiration Date of such other information as they may reasonably request. Such cooperation shall include, without limitation, the granting by you to the Company and such person as the Company may request of access to those persons on your staff who are responsible for receiving tenders, in order to ensure that immediately prior to the Expiration Date the Company shall have received information in sufficient detail to enable it to decide whether to extend the Exchange Offer. You shall prepare a final list of all persons whose tenders were accepted, the aggregate principal amount of Outstanding Notes tendered, the aggregate principal amount of Outstanding Notes accepted and deliver said list to the Company. 17. Letters of Transmittal and Notices of Guaranteed Delivery shall be stamped by you as to the date and, after the expiration of the Exchange Offer, the time, of receipt thereof and shall be preserved by you for a period of time at least equal to the period of time you preserve other records pertaining to the transfer of securities. You shall dispose of unused Letters of Transmittal and other surplus materials by returning them to the Company. 18. For services rendered as Exchange Agent hereunder, you shall be entitled to such compensation as set forth on Schedule I attached hereto. The provisions of this section shall survive the termination of this Agreement. 19. You hereby acknowledge receipt of the Prospectus and the Letter of Transmittal. Any inconsistency between this Agreement, on the one hand, and the Prospectus and the Letter of Transmittal (as they may be amended from time to time), on the other hand, shall be resolved in favor of the latter two documents, except with respect to your duties, liabilities and indemnification as Exchange Agent. 20. The Company covenants and agrees to fully indemnify and hold you harmless against any and all loss, liability, cost or expense, including attorneys' fees and expenses, incurred without gross negligence or willful misconduct on your part, arising out of or in connection with any act, omission, delay or refusal made by you in reliance upon any signature, endorsement, assignment, certificate, order, request, notice, instruction or other instrument or document believed by you to be valid, genuine and sufficient and in accepting any tender or effecting any transfer of Outstanding Notes believed by you in good faith to be authorized, and in delaying or refusing in good faith to accept any tenders or effect any transfer of Outstanding Notes. In each case, the Company shall be notified by you, by letter or facsimile transmission, of the written assertion of a claim against you or of any other action commenced against you, promptly -6- after you shall have received any such written assertion or shall have been served with a summons in connection therewith. The Company shall be entitled to participate at its own expense in the defense of any such claim or other action and, if the Company so elects, the Company shall assume the defense of any suit brought to enforce any such claim. In the event that the Company shall assume the defense of any such suit, the Company shall not be liable for the fees and expenses of any additional counsel thereafter retained by you, so long as the Company shall retain counsel satisfactory to you to defend such suit, and so long as you have not determined, in your reasonable judgment, that a conflict of interest exists between you and the Company. The provisions of this section shall survive the termination of this Agreement. 21. You shall arrange to comply with all requirements under the tax laws of the United States, including those relating to missing Tax Identification Numbers, and shall file any appropriate reports with the Internal Revenue Service. 22. You shall deliver or cause to be delivered, in a timely manner to each governmental authority to which any transfer taxes are payable in respect of the exchange of Outstanding Notes, the Company's check in the amount of all transfer taxes so payable; PROVIDED, HOWEVER, that you shall reimburse the Company for amounts refunded to you in respect of your payment of any such transfer taxes, at such time as such refund is received by you. 23. This Agreement and your appointment as Exchange Agent hereunder shall be construed and enforced in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely within such state, and shall inure to the benefit of, and the obligations created hereby shall be binding upon, the successors and assigns of each of the parties hereto. 24. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same agreement. 25. In case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 26. This Agreement shall not be deemed or construed to be modified, amended, rescinded, cancelled or waived, in whole or in part, except by a written instrument signed by a duly authorized representative of the party to be charged. This Agreement may not be modified orally. 27. Unless otherwise provided herein, all notices, requests and other communications to any party hereunder shall be in writing (including facsimile or similar writing) and shall be given to such party, addressed to it, at its address or telecopy number set forth below: -7- If to the Company: PRIMEDIA Inc. 745 Fifth Avenue 23rd Floor New York, New York 10151 Facsimile: (941) 498-8277 Attention: Andrew Schmolka Assistant General Counsel With a copy to: Simpson Thacher & Bartlett 425 Lexington Avenue New York, New York 10017 Facsimile: (941) 498-8277 Attention: Gary I. Horowitz, Esq. If to the Exchange Agent: The Bank of New York 101 Barclay Street Floor 21 West New York, New York 10286 Facsimile: (212) 815-5915 Attention: Corporate Trust Trustee Administration 28. Unless terminated earlier by the parties hereto, this Agreement shall terminate 90 days following the Expiration Date. Notwithstanding the foregoing, Sections 18 and 20 shall survive the termination of this Agreement. Upon any termination of this Agreement, you shall promptly deliver to the Company any certificates for Notes, funds or property then held by you as Exchange Agent under this Agreement. 29. This Agreement shall be binding and effective as of the date hereof. -8- Please acknowledge receipt of this Agreement and confirm the arrangements herein provided by signing and returning the enclosed copy. PRIMEDIA INC. By: --------------------------- Name: Title: Accepted as of the date first above written: THE BANK OF NEW YORK, as Exchange Agent By: --------------------------- Name: Title: -9- SCHEDULE I COMPENSATION OF EXCHANGE AGENT: [$5,000] PLUS $500 PER EXTENSION OF OFFER PLUS OUT-OF POCKET EXPENSES, INCLUDING WITHOUT LIMITATION, LEGAL FEES AND EXPENSES. -----END PRIVACY-ENHANCED MESSAGE-----