EXHIBIT 4 (b)
MODIFICATION AGREEMENT
MODIFICATION AGREEMENT ("AGREEMENT") ENTERED INTO AS OF THE 7TH DAY OF JULY,
1999 BY AND BETWEEN KABLE NEWS COMPANY, INC., AN ILLINOIS CORPORATION
("BORROWER"), AMREP CORPORATION, AN OKLAHOMA CORPORATION ("PARENT"), KABLE NEWS
EXPORT, LTD., A DELAWARE CORPORATION, KABLE NEWS COMPANY OF CANADA LTD, AN
ONTARIO, CANADA CORPORATION, KABLE NEWS INTERNATIONAL, INC., A DELAWARE
CORPORATION, AND KABLE FULFILLMENT SERVICES OF OHIO, INC., A DELAWARE
CORPORATION (COLLECTIVELY REFERRED TO HEREIN AS "SUBSIDIARIES" AND BORROWER,
PARENT AND SUBSIDIARIES COLLECTIVELY REFERRED TO HREREIN AS "BORROWING
PARTIES"), AND AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO ("AGENT"),
HELLER FINANCIAL, INC. ("HELLER"), MERRILL LYNCH BUSINESS FINANCIAL SERVICES
INC. ("MERRILL") AND FIRST BANK ("FIRST BANK") (AGENT, HELLER, MERRILL AND FIRST
BANK COLLECTIVELY REFERRED TO HEREIN AS "LENDERS")
W I T N E S S E T H
WHEREAS, Borrower and Lenders have executed that certain Loan Agreement
dated September 15, 1998 ("Loan Agreement") relating to certain Loans ("Loans")
made by Lenders to Borrower, to wit, a certain Forty Million and No/100
($40,000,000.00) Dollar Secured Revolving Credit Facility, a certain One Million
Two Hundred Thousand and No/100 ($1,200,000.00) Dollar Secured Term Loan and a
certain One Million Five Hundred Thousand No/100 ($1,500,000.00) Dollar Secured
Term Loan; and
WHEREAS, the Loans are evidenced by Notes (the "Notes") all dated September
15, 1998 executed by Borrower and delivered to the Lenders; and
WHEREAS, in connection with the Loans, Borrower and each Subsidiary have
executed and delivered those certain Security Agreements ("Security Agreements")
all dated September 15, 1998; and
WHEREAS, in connection with the Loans, Borrower has executed and delivered
that certain Trademark Collateral Assignment and Security Agreement ("Trademark
Assignment") dated September 15, 1998; and
WHEREAS, in connection with the Loans, Parent and each Subsidiary have
executed and delivered those certain Guaranties ("Guaranties") all dated
September 15, 1998; and
WHEREAS, in connection with the Loans, Parent has executed and delivered
that certain Stock Pledge Agreement ("Stock Pledge") dated September 15, 1998
(the Loan Agreement, the Notes, Security Agreements, Trademark Assignment,
Guaranties and Stock Pledge all collectively referred to herein as the "Loan
Documents"); and
WHEREAS, Lenders and Borrowing Parties are desirous of modifying certain
terms of the Loan Documents in accordance with the terms of this Agreement as
hereafter set forth.
NOW, THEREFORE, in consideration of the mutual premises of the parties
hereto, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged,
IT IS AGREED:
1. Preambles. The preambles to this Agreement are fully incorporated herein
by this reference thereto with the same force and effect as though restated
herein.
2. Defined Terms. To the extent not otherwise defined herein to the
contrary, all capitalized terms and/or phrases used in this Agreement shall have
the respective meanings assigned to them in the Loan Documents.
3. Modification of Loan Agreement and Waiver of Previous Non-Compliance.
Borrowing Parties and Lenders hereby agree that as of the date of this Agreement
and hereafter Section 6.24.5 of the Loan Agreement is hereby amended and
restated to read:
-6.24.5 Ratio of Returns. The Borrower and its Subsidiaries will never allow
the ratio of (x) the sum of consolidated actual returns, allowances and
discounts for the current month plus the two preceding months to (y) the sum
of the consolidated reserves for returns from the three months preceding the
current month to be more than sixty six (66%) percent during the term of this
Agreement."
To the extent Borrower and its Subsidiaries have not been in compliance
with the Ratio of Returns ("Non-Compliance"), as previously stated and described
in Section 6.24.5 of the Loan Agreement, said Non-Compliance is hereby waived by
the Lenders.
4. Other Loan Document Modifications. All Loan Documents are hereby deemed
amended and modified to provide that any and all references to the Loan
Agreement therein are hereby deemed to be references to the Loan Agreement as
modified by this Agreement.
5. Other Documents. At Agent's request, the Borrowing Parties hereby agree
to execute and deliver promptly to Agent such other documents as Agent, in its
reasonable discretion, shall deem necessary or appropriate to evidence the
transactions contemplated herein.
6. Reaffirmation. The Borrowing Parties do hereby reaffirm each and every
covenant, condition, obligation and provision set forth in the Loan Documents,
as modified hereby. The Borrowing Parties hereby restate and reaffirm all of the
warranties and representations contained in the Loan Documents, as modified
hereby, as being true and correct as of the date hereof.
7. References. All references herein to any of the Loan Documents shall be
understood to be to the Loan Documents as modified hereby. All references in any
of the Loan Documents to any other one or more of the Loan Documents shall
hereafter be deemed to be to such document(s) as modified hereby.
8. No Defense, Counterclaims. Each Borrowing Party hereby represents and
warrants to, and covenants with, Lenders that as of the date hereof, (a) each
Borrowing Party has no defenses, offsets or counterclaims of any kind or nature
whatsoever against any Lender with respect to the Loans or any of the Loan
Documents, or any action previously taken or not taken by any Lender with
respect thereto or with respect to any security interest, encumbrance, lien or
collateral in connection therewith to secure the liabilities of each Borrowing
Party, and (b) that the Lenders have fully performed all obligations to each
Borrowing Party which it may have had or has on and of the date hereof.
9. Release. Without limiting the generality of the foregoing, each
Borrowing Party, on its own behalf and on the behalf of its representatives,
partners, shareholders, subsidiaries, affiliated and related entities,
successors and assigns (hereinafter collectively referred to as the "Borrowing
Group" and as to the Borrowing Group, each Borrowing Party represents and
warrants that it has the right, power and authority to waive, release and
forever discharge on behalf of the Borrowing Group, the "Bank Group" as
hereinafter defined) waives, releases and forever discharges each Lender, and
their respective officers, directors, subsidiaries, affiliated and related
companies or entities, agents, servants, employees, shareholders,
representatives, successors, assigns, attorneys, accountants, assets and
properties, as the case may be (together hereinafter referred to as the "Bank
Group") from and against all manner of actions, cause and causes of action,
suits, debts, sums of money, accounts, reckonings, bonds, bills, specialties,
covenants, contracts, controversies, agreements, promises, obligations,
liabilities, costs, expenses, losses, damages, judgments, executions, claims and
demands, of whatsoever kind or nature, in law or in equity, whether known or
unknown, whether or not concealed or hidden, arising out of or relating to any
matter, cause or thing whatsoever, that any of the Borrowing Group, jointly or
severally, may have had, or now have or that may subsequently accrue against the
Bank Group by reason of any matter or thing whatsoever arising out of or in way
connected to, directly or indirectly, the Loans and/or any of the Loan Documents
through the date hereof. Each Borrowing Party acknowledges and agrees that
Lenders are specifically relying upon the representations, warranties, covenants
and agreements contained herein and that such representations, warranties,
covenants and agreements constitute a material inducement to enter into this
Agreement.
10. No Custom. This Agreement shall not establish a custom or waive, limit
or condition the rights and remedies of Lenders under the Loan Documents, all of
which rights and remedies are expressly reserved
11. Reaffirmation of Loan Documents, No Novation. Except as may be
expressly set forth herein to the contrary, the Loan Documents remain
unmodified, and all other terms and conditions thereof remain in full force and
effect. Notwithstanding anything to the contrary contained herein, Borrowing
Parties and Lenders expressly state, declare and acknowledge that this Agreement
is intended only to modify each Borrowing Party's continuing obligations in the
manner set forth herein, and is not intended as a novation of any and all
amounts presently due and owing from any Borrowing Party to Lenders.
12. Captions; Counterparts. The captions used herein are for convenience of
reference only and shall not be deemed to limit or affect the construction and
interpretation of the terms of this Agreement. This Agreement may be signed in
counterparts, each of which shall be deemed an original and all of which shall
be deemed one Agreement.
13. Choice of Law and Severability. This Agreement shall be governed and
construed under the laws of the State of Illinois. If any provision of this
Agreement is held invalid or unenforceable, the remainder of this Agreement will
not be affected thereby and the provisions of this Agreement shall be severable
in any such instance.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
BORROWER:
KABLE NEWS COMPANY, INC.,
an Illinois corporation
By:/s/ Daniel Friedman
Title: Chairman of the Board,
President and CEO
LENDERS: SUBSIDIARIES:
AMERICAN NATIONAL BANK AND KABLE NEWS EXPORT, LTD,
TRUST COMPANY OF CHICAGO, a Delaware corporation
Individually and as Agent
By:/s/______________________ By:_/s/ Daniel Friedman
Title: A.V.P. Title: Chairman of the
Board, President and CEO
HELLER FINANCIAL, INC. KABLE NEWS COMPANY OF
CANADA LTD, an Ontario,
Canada Corporation
By:_________________________ By:/s/ Daniel Friedman
Title: _____________________ Title:__________________
MERRILL LYNCH BUSINESS KABLE NEWS
FINANCIAL SERVICES INC. INTERNATIONAL, INC.,
a Delaware Corporation
By:_________________________ By:/s/ Daniel Friedman
Title: _____________________ Title:__________________
FIRST BANK KABLE FULFILLMENT
SERVICES OF OHIO, INC.,
a Delaware Corporation
By:_________________________ By:/s/ Daniel Friedman
Title: _____________________ Title:Chairman of the
Board, President and CEO
PARENT:
AMREP CORPORATION, an
Oklahoma corporation
By:/s/ Daniel Friedman
Title: Senior Vice President
LENDERS: SUBSIDIARIES:
AMERICAN NATIONAL BANK AND KABLE NEWS EXPORT, LTD,
TRUST COMPANY OF CHICAGO, a Delaware corporation
Individually and as Agent
By:_________________________ By:_____________________
Title: _____________________ Title:__________________
HELLER FINANCIAL, INC. KABLE NEWS COMPANY OF
CANADA LTD, an Ontario,
Canada corporation
By:_________________________ By:_____________________
Title: _____________________ Title:__________________
MERRILL LYNCH BUSINESS KABLE NEWS
FINANCIAL SERVICES INC. INTERNATIONAL, INC.,
a Delaware corporation
By:_________________________ By:_____________________
Title: _____________________ Title:__________________
FIRST BANK KABLE FULFILLMENT
SERVICES OF OHIO, INC.,
a Delaware corporation
By:_________________________ By:_____________________
Title: _____________________ Title:__________________
PARENT:
AMREP CORPORATION, an Oklahoma corporation
By:_________________________
Title:______________________
