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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
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[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED: DECEMBER 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
COMMISSION FILE NUMBER: 1-11106
K-III COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
(SEE TABLE OF ADDITIONAL REGISTRANTS)
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DELAWARE 13-3647573
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
745 FIFTH AVENUE, NEW YORK, NEW YORK 10151
(Address of principal executive offices) (Zip Code)
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(212) 745-0100
(Registrant's telephone number, including area code)
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SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
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NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
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COMMON STOCK, PAR VALUE $.01 PER SHARE......................... NEW YORK STOCK EXCHANGE
SENIOR EXCHANGEABLE PREFERRED STOCK, PAR VALUE $.01 PER
SHARE........................................................ NEW YORK STOCK EXCHANGE
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SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
NONE
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes__X__ No____
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate market value of the voting stock of K-III Communications
Corporation ("K-III") which is held by non-affiliates of K-III at March 17, 1997
was approximately $232 million.
As of March 17, 1997, 129,150,691 shares of K-III's Common Stock were
outstanding.
The following documents are incorporated into this Form 10-K by reference:
K-III's notice of annual meeting and proxy statement for its 1997 annual meeting
of shareholders into Part III hereof.
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TABLE OF ADDITIONAL REGISTRANTS
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STATE OR OTHER PRIMARY STANDARD I.R.S.
EXACT NAME OF JURISDICTION OF INDUSTRIAL EMPLOYER
REGISTRANT AS SPECIFIED INCORPORATION OR CLASSIFICATION IDENTIFICATION
IN ITS CHARTER ORGANIZATION CODE NUMBER NUMBER
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Argus Publishers Corporation................................. California 2721 95-2219151
American Heat Video Productions, Inc......................... Missouri 7389 43-1418177
ASTN, Inc.................................................... Delaware 7389 75-2590386
A WEP Company................................................ California 2721 95-4129732
Bacon's Information, Inc..................................... Delaware 7389 36-4011543
Bankers Consulting Company................................... Missouri 7389 43-1771756
Channel One Communications Corp.............................. Delaware 4833 13-3783278
DRF Finance, Inc. ........................................... Delaware 2721 13-3616341
Daily Racing Form, Inc. ..................................... Delaware 2721 13-3616342
Data Book, Inc............................................... Georgia 2741 58-1482678
The Electronics Source Book, Inc. ........................... Delaware 2741 36-0645610
Excellence in Training Corporation........................... Delaware 7389 75-2532442
Funk & Wagnalls Yearbook Corp. .............................. Delaware 2731 13-3603787
Gareth Stevens, Inc.......................................... Wisconsin 2731 39-1462742
Haas Publishing Companies, Inc. ............................. Delaware 2741 58-1858150
Intermodal Publishing Company, Ltd. ......................... New York 2721 13-2633752
IDTN Leasing Corporation..................................... Delaware 7389 13-3414420
Industrial Training Systems Corporation...................... New Jersey 7389 22-2070040
Intertec Market Reports, Inc. ............................... Delaware 2721 36-1534790
Intertec Presentations, Inc. ................................ Colorado 2721 84-0840004
Intertec Publishing Corporation.............................. Delaware 2721 48-1071277
K-III Directory Corporation.................................. Delaware 2721 13-3555670
K-III Holdings Corporation III............................... Delaware 6719 13-3617238
K-III HPC, Inc. ............................................. Delaware 6719 58-2105885
K-III KG Corp.--Massachussetts............................... Massachussetts 8222 04-3218659
K-III Magazine Corporation................................... Delaware 2721 13-3616344
K-III Magazine Finance Corporation........................... Delaware 2721 13-3616343
K-III Prime Corporation...................................... Delaware 6719 13-3631019
K-III Reference Corporation.................................. Delaware 2731 13-3603781
The Katharine Gibbs Corporation--Melville.................... New York 8222 11-3193464
The Katharine Gibbs Corporation--New York.................... New York 8222 13-3751139
The Katharine Gibbs Schools, Inc. ........................... Delaware 6719 13-3755180
The Katharine Gibbs School of Montclair, Inc................. New Jersey 8222 22-3275485
The Katharine Gibbs School of Norwalk, Inc................... Connecticut 8222 06-1388463
The Katharine Gibbs School of Piscataway, Inc. .............. New Jersey 8222 22-3275484
The Katharine Gibbs School of Providence, Inc. .............. Rhode Island 8222 05-0475713
Krames Communications Incorporated........................... Delaware 2731 94-3151780
Law Enforcement Television Network, Inc...................... Delaware 7389 13-3935034
Law Enforcement Television Network, Inc...................... Texas 7389 75-2257839
Lifetime Learning Systems, Inc. ............................. Delaware 2741 13-3783276
Lockert Jackson & Associates, Inc............................ Washington 7389 91-1395126
MH West, Inc. ............................................... California 2721 95-4190756
McMullen Argus Publishing, Inc. ............................. California 2721 95-2663753
Musical America Publishing, Inc. ............................ Delaware 2721 13-2782528
Nelson Information, Inc. .................................... Delaware 2741 13-3740812
Newbridge Communications, Inc. .............................. Delaware 5961 13-1932571
PJS Publications, Inc. ...................................... Delaware 2721 52-1654079
Paramount Publishing, Inc. .................................. California 2741 33-0087025
R.E.R. Publishing Corporation................................ New York 2721 13-3090623
Stagebill, Inc. ............................................. Delaware 2721 36-2693071
Straight Down, Inc........................................... California 2721 95-3824415
Symbol of Excellence Publishers, Inc. ....................... Alabama 2721 63-0845698
Tel-A-Train, Inc............................................. Delaware 7389 75-2532446
TI-IN Acquisition Corporation................................ Texas 7389 75-2478738
Tunnell Publications, Inc. .................................. Texas 2721 74-0955120
Weekly Reader Corporation.................................... Delaware 2721 13-3603780
</TABLE>
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STATE OR OTHER PRIMARY STANDARD I.R.S.
EXACT NAME OF JURISDICTION OF INDUSTRIAL EMPLOYER
REGISTRANT AS SPECIFIED INCORPORATION OR CLASSIFICATION IDENTIFICATION
IN ITS CHARTER ORGANIZATION CODE NUMBER NUMBER
--------------------------------- ---------------- ------------------- -------------
Westcott Communications, Inc. ............................... Texas 7389 75-2110878
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Westcott Communications Michigan, Inc........................ Michigan 7389 38-2955660
Westcott ECI, Inc............................................ Texas 7389 75-2475419
Western Empire Publications, Inc............................. Delaware 2721 95-3363328
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The address, including zip code, and telephone number, including area code,
of each additional registrant's principal executive office is 745 Fifth Avenue,
New York, New York 10151 (212-745-0100).
The financial statements of the guarantor subsidiaries are omitted because
K-III believes the separate financial statements would not be material to the
shareholders and potential investors. The total assets, revenues, income or
equity of non-guarantor subsidiaries, both individually and on a combined basis
are inconsequential in relation to the total assets, revenues, income or equity
of K-III. All of the equity securities of each of the additional registrants set
forth in the table above are owned, either directly or indirectly, by K-III, and
there has been no default during the preceding 36 calendar months with respect
to any indebtedness or material long-term leases of K-III or any of the
additional registrants.
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K-III COMMUNICATIONS CORPORATION
ANNUAL REPORT ON FORM 10-K
DECEMBER 31, 1996
CROSS REFERENCE SHEET FOR
PARTS I, II, III AND IV
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PART I
Item 1.
Business...................................................................................... 1
Item 2.
Properties.................................................................................... 9
Item 3.
Legal Proceedings............................................................................. 9
Item 4.
Submission of Matters to a Vote of Security Holders........................................... 9
PART II
Item 5.
Market for Registrant's Common Equity and Related Stockholder Matters......................... 10
Item 6.
Selected Financial Data....................................................................... 11
Item 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations......... 13
Item 8.
Financial Statements and Supplementary Data................................................... 23
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.......... 57
PART III-- Omitted, except Item 10 as to Executive Officers is included as part of Part I
Item 1......................................................................................... 57
PART IV
Item 14.
Exhibits, Financial Statement Schedules and Reports on Form 8-K............................... 57
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PART I
ITEM 1. BUSINESS.
GENERAL
K-III COMMUNICATIONS CORPORATION (WHICH TOGETHER WITH ITS SUBSIDIARIES (AND
ITS PREDECESSORS) IS HEREIN REFERRED TO AS EITHER "K-III" OR THE "COMPANY"
UNLESS THE CONTEXT IMPLIES OTHERWISE) IS THE AUTHORITATIVE SOURCE FOR
SPECIALIZED INFORMATION TARGETED TO SPECIFIC HIGH GROWTH SEGMENTS IN THE
EDUCATION, BUSINESS AND SPECIAL INTEREST CONSUMER MARKETS. Most of K-III's
products are premier brands with leadership positions in the specialty niche
markets in which such products compete: education (E.G., CHANNEL ONE NEWS,
WEEKLY READER and WESTCOTT); information (E.G., APARTMENT GUIDE, WARD'S, THE
WORLD ALMANAC and BACON'S); and specialty media (E.G., SEVENTEEN, AMERICAN BABY,
SOAP OPERA DIGEST, TRUCKIN' and SEW NEWS). The specialty media segment has in
prior years been referred to as the media segment, but the Company believes the
term specialty media is more descriptive of the underlying business; the same
underlying business previously described as part of the media segment.
The Company has achieved substantial growth through the development of its
franchises, combined with its operating expertise and a successful acquisition
strategy. From 1991 through 1996, net sales have grown at a compound annual rate
of 19% to $1,374 million. Operating income in 1996 was $86 million compared to a
net operating loss of $37 million in 1991 (after deductions for amortization and
depreciation of $191 million in 1996 and $142 million in 1991).
THE COMPANY PLANS TO FOCUS ON THE AREAS OF ITS BUSINESS THAT HAVE THE
GREATEST POTENTIAL FOR STRONG ORGANIC GROWTH AND GROWTH THROUGH PRODUCT LINE
ACQUISITIONS. Those areas by segment are: education-- classroom learning and
workplace learning; information--consumer directories and business directories;
and specialty media--specialty consumer and technical and trade magazines. As
part of that strategy, K-III, intends to divest certain businesses that do not
fit within the Company's growth vehicles. See
"--Non-Core Businesses Being Sold."
EDUCATION
THE COMPANY IS A LEADING PROVIDER OF SUPPLEMENTAL EDUCATIONAL MATERIALS AND
PROGRAMMING IN THE UNITED STATES, TARGETING BOTH CLASSROOM AND WORKPLACE
LEARNING. K-III's best-known brands in classroom learning include CHANNEL ONE
and WEEKLY READER, and in workplace learning, WESTCOTT. Classroom learning takes
advantage of the growth in spending on supplementary educational materials, up
44% from 1991 to 1995, and the projected increases in elementary and secondary
school enrollments over the next decade (in particular, high school enrollments
are expected to rise 17% between 1995 and 2005). Workplace learning focuses on
the $60 billion training market of which the outsourced segment is the fastest
growing portion, rising 49% between 1991 and 1996.
CLASSROOM LEARNING
THE COMPANY OPERATES CHANNEL ONE, WEEKLY READER, FILMS FOR THE HUMANITIES
AND SCIENCES ("FILMS") AND NEWBRIDGE EDUCATIONAL PUBLISHING.
CHANNEL ONE'S NEWS PROGRAM, CHANNEL ONE NEWS, IS THE ONLY DAILY NEWS PROGRAM
TARGETED TO SECONDARY SCHOOL STUDENTS. CHANNEL ONE NEWS broadcasts every school
day via satellite to over eight million students in approximately 12,000
secondary schools in the United States. Established in 1990, CHANNEL ONE
pioneered the delivery of world events and educational programming into
classrooms via satellite. Its award-winning daily news broadcast reaches more
students than any other electronically delivered educational product. CHANNEL
ONE NEWS has more teen viewers than the news programs of ABC, CBS, NBC and CNN
combined.
SCHOOLS SIGN UP FOR CHANNEL ONE NEWS UNDER A THREE-YEAR CONTRACT PURSUANT TO
WHICH THEY AGREE TO SHOW CHANNEL ONE NEWS, IN ITS ENTIRETY, AT LEAST 90% OF ALL
SCHOOL DAYS. CHANNEL ONE provides to schools a turnkey system of video cassette
recorders and networked televisions. These products and services are provided to
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schools at no charge; sales are generated by two minutes of advertising shown
during the 12-minute daily newscast. All school contracts have come up for
renewal and approximately 99% have been renewed.
CHANNEL ONE NEWS IS PRODUCED AT THE HACIENDA, CHANNEL ONE'S LOS ANGELES
STUDIO, USING STAFF ANCHORS AND CORRESPONDENTS WHO REPORT FROM U.S. AND
INTERNATIONAL LOCATIONS. CHANNEL ONE has a library of over 1,250 broadcasts
including approximately 175 single subject series, 45 of which have been
released as educational videos under the Hacienda
Productions-Registered Trademark- trademark.
CHANNEL ONE NEWS HAS NO DIRECT COMPETITION IN THE SCHOOLS BUT DOES COMPETE
FOR ADVERTISING DOLLARS WITH OTHER MEDIA AIMED AT TEENAGERS. The Company's
primary competitive advantage is its total audience of over eight million
teenagers each school day. For 1996, approximately 65% of CHANNEL ONE'S
advertising net sales were from contracts having terms of three or more years.
The top five advertisers in 1996 by dollars were PepsiCo, M&M Mars, Nintendo,
Quaker Oats and Reebok, which together accounted for approximately 62% of
advertising net sales, and all of which are under contract through 1997 or 1998.
IN ADDITION, CHANNEL ONE'S THE CLASSROOM CHANNEL OFFERS A RANGE OF
INSTRUCTIONAL PROGRAMMING TO ENHANCE THE SCHOOLS' CURRICULUM. THE CLASSROOM
CHANNEL offers an average of 90 minutes of daily programming at no charge to
schools.
WEEKLY READER IS THE BEST-KNOWN AND HIGHEST-CIRCULATION STUDENT NEWSPAPER IN
THE UNITED STATES, WITH OVER 6.8 MILLION SUBSCRIPTIONS FOR ELEMENTARY SCHOOL
STUDENTS ALONE. WEEKLY READER and its related products are sold in approximately
70% of all elementary schools and 59% of all secondary schools, and for the
1995-1996 school year had a 57% share of the elementary school market and a 41%
share of the secondary school market.
EIGHT SEPARATE EDITIONS OF WEEKLY READER, EACH CONSISTING OF 26 ISSUES PER
YEAR, ARE DISTRIBUTED TO ELEMENTARY SCHOOL STUDENTS. Each edition is written and
designed for a particular reading and comprehension level in order to bring
current world news to children at a level commensurate with their comprehension
abilities. A teacher's guide with background information, discussion topics and
follow-up questions is included with each edition. Other titles produced and
distributed by WEEKLY READER include READ, CURRENT EVENTS, CURRENT SCIENCE and
CURRENT HEALTH. Editorial materials for these publications are generated by in-
house writers and freelance authors. The Company's largest competitor in these
markets is Scholastic Corporation. WEEKLY READER generally competes on the basis
of editorial quality, content and price.
FILMS IS THE EXCLUSIVE DISTRIBUTOR OF APPROXIMATELY 6,500 EDUCATIONAL VIDEOS
AS WELL AS VIDEODISCS, CD-ROMS AND RELATED PRODUCTS THAT ARE SOLD PRIMARILY BY
DIRECT MAIL TO TEACHERS, INSTRUCTORS AND LIBRARIANS SERVING GRADES K TO 12 AND
COLLEGE MARKETS. FILMS is the largest distributor of such products to colleges
and high schools and competes on the basis of quality and breadth of the subject
matter it markets.
THROUGH NEWBRIDGE EDUCATIONAL PUBLISHING, THE COMPANY DEVELOPS AND MARKETS
SUPPLEMENTARY EDUCATIONAL PROGRAMS WHICH ARE MARKETED TO TEACHERS FOR USE IN
GRADES PRE-K TO 6. Many of these materials are sold under the "Macmillan" name.
Most of the programs are marketed on a continuity basis; at December 31, 1996,
there were approximately 132,000 subscribers to these continuity programs. The
Company is the largest provider of continuities sold for use in schools and
competes in this market primarily with Scholastic Corporation.
WORKPLACE LEARNING
WESTCOTT COMMUNICATIONS, INC., ACQUIRED BY THE COMPANY IN JUNE 1996, IS A
LEADING PROVIDER OF HIGH QUALITY WORKPLACE EDUCATIONAL PROGRAMMING. WESTCOTT has
approximately 20,000 corporate and institutional subscribers and provides
workplace learning to approximately 2.5 million professionals in the healthcare,
automotive, financial services, government, public service and corporate fields.
The Company's production capabilities enable it to design, produce and deliver
content targeted to over 24 different disciplines, via satellite and video
cassette.
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THE COMPANY'S LEADING NETWORKS INCLUDE THE EXECUTIVE EDUCATION NETWORK
("EXEN") AND THE INTERACTIVE MEDICAL NETWORKS ("IMN"). EXEN delivers executive
education courses taught by professors from leading business schools including
Harvard University, the University of Texas and the University of Southern
California to corporate and professional clients nationwide. Participants in
EXEN interact on a real-time basis using one-way video, two-way audio and data
response keypads. IMN offers a variety of live programming, telecourses and
other video products, including graduate degree courses, in-service training and
accredited continuing education programming, designed to reach multiple target
audiences within the hospital setting. In addition, the Company's Interactive
Distance Training Network provides customized interactive programming for
corporate, professional and government clients, including Intel, EDS and Eli
Lilly.
WESTCOTT DOES NOT HAVE ANY MULTI-INDUSTRY COMPETITORS IN THE WORKPLACE
LEARNING MARKET. The Company competes with a number of businesses and
governmental agencies that provide videotaped training material, consulting
services and instruction at seminars, trade shows and conventions, or certain
television programming.
DURING 1996, THE EDUCATION SEGMENT ALSO INCLUDED KRAMES COMMUNICATIONS, THE
KATHARINE GIBBS SCHOOLS AND NEWBRIDGE BOOK CLUBS. See "--General" and
"--Non-Core Businesses Being Sold."
INFORMATION
THE COMPANY PRODUCES OVER 140 HIGHLY TARGETED CONSUMER AND BUSINESS
DIRECTORIES, MOST OF WHICH HOLD DOMINANT POSITIONS IN THEIR NICHE MARKETS. The
Company's premier consumer directories include APARTMENT GUIDE, THE WORLD
ALMANAC and such specialty reference products as FACTS ON FILE NEWS SERVICE
which is used by public and institutional libraries. Its leading business
directories include BACON'S for public relations professionals and NELSON'S for
financial professionals.
Consumer directories take advantage of the trend toward more targeted
advertising. From 1990 to 1995, organic advertising revenue growth at K-III's
consumer guides has more than tripled growth of newspaper classified
advertising, the medium with which they most directly compete. Business
directories capitalize on the growth in business spending on information which
has increased 8% on a compound annual basis, or 123% from $10.2 billion to $22.7
billion, between 1985 and 1995.
CONSUMER DIRECTORIES
THE COMPANY PUBLISHES OVER 70 CONSUMER DIRECTORIES AND SPECIALIZED REFERENCE
PRODUCTS. These products are distributed nationally in retail outlets and are
sold to public and institutional libraries. The Company publishes and
distributes consumer guides in three categories: rental apartments, new homes
and computer shopping. The Company's leading reference products include THE
WORLD ALMANAC, FACTS ON FILE NEWS SERVICE and the GARETH STEVENS line of
juvenile reference works.
THE COMPANY IS THE LEADING PUBLISHER OF RENTAL APARTMENT GUIDES IN THE
UNITED STATES WITH 58 LOCAL VERSIONS OF ITS APARTMENT GUIDE DIRECTORY PRODUCT,
EACH OF WHICH IS PUBLISHED NO LESS THAN MONTHLY AND PROVIDES INFORMATIONAL
LISTINGS ABOUT FEATURED APARTMENT COMMUNITIES. These listings are paid for by
apartment community managers, who need to fill vacant apartments, and who
represent 100% of the apartment guide net sales. In November 1996, the Company
acquired apartment guides in Boston and Hartford, providing a strong
Northeastern presence. The Company is the dominant information provider in
apartment guides. The Company's only competitor, FOR RENT, is present in 32 of
the Company's markets. In those markets, on average, the Company captured 51% of
total 1996 advertising pages, with FOR RENT capturing 41% of such advertising
pages.
IN 1996, THE COMPANY ADDED NEW TYPES OF CONSUMER DIRECTORIES TO ITS
PORTFOLIO WITH THE ACQUISITION OF NEW HOMES AND COMPUTER SHOPPING GUIDES. In
1996, the Company acquired new homes guides in Philadelphia, New Jersey,
Raleigh-Durham and Chapel Hill, North Carolina and Atlanta. In November 1996,
the Company acquired MICROTIMES, distributed in Northern and Southern
California. MICROTIMES provides
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consumers with information on computer products through paid listings, and also
contains informative articles reviewing products for both the business and home
computer shopper.
THE COMPANY'S DISTRIBUTECH DIVISION IS THE NATION'S LARGEST DISTRIBUTOR OF
FREE PUBLICATIONS, INCLUDING ITS OWN CONSUMER DIRECTORIES AND OVER 600 OTHER
TITLES. In 1996, it managed distribution of free publications to over 15,500
grocery, convenience and drug stores in 60 U.S. cities, as well as universities,
military bases and major employers. The majority of these locations are operated
under exclusive distribution agreements. The Company's consumer directories
typically are displayed in free standing, multi-pocket racks. DistribuTech
generates substantial revenues by leasing additional distribution rack pockets
to other publications that it also distributes. DistribuTech competes on the
basis of price paid to the retail locations and service on the rack program.
THE COMPANY HAS ESTABLISHED WEB SITES IN ALL THREE CONSUMER DIRECTORY
GROUPS. The Company's WWW.APTGUIDES.COM is the most comprehensive web site in
the multi-family dwelling industry, with over 12,000 communities included in its
on-line database.
THE WORLD ALMANAC IS THE LEADING ALMANAC IN THE ENGLISH LANGUAGE RANKED BY
UNIT SALES AND DATA CONTENT WITH OVER 1.3 MILLION COPIES OF THE 1997 EDITION
SOLD AS OF DECEMBER 31, 1996. In 1996, the Company introduced THE WORLD ALMANAC
JOB FINDER'S GUIDE and published the second annual edition of THE WORLD ALMANAC
FOR KIDS, which sold over 300,000 copies. THE WORLD ALMANAC licenses its content
for use on four CD-ROM products and five on-line services. The Company's World
Almanac Education Division sells reference books to the school and library
market by catalog. Facts on File News Service, acquired in March 1996, publishes
subscription products that are sold to schools and libraries. The flagship
product, WORLD NEWS DIGEST, published weekly, is available in print, CD-ROM and
on-line formats, and has a subscriber base of approximately 7,000. GARETH
STEVENS, a publisher and distributor of juvenile reference works and a
distributor of multi-media products, was acquired by the Company in February
1997. GARETH STEVENS has a title list of approximately 700 titles and its market
focus is North America's primary and secondary school libraries and public
libraries. FUNK & WAGNALLS' NEW ENCYCLOPEDIA licenses its editorial content, for
electronic delivery, to Microsoft Corporation as the textual basis for
Microsoft's ENCARTA CD-ROM product and to The Learning Company for inclusion in
the INFOPEDIA CD-ROM as well as to three other on-line services and a classroom
computer instruction service. FUNK & WAGNALLS also sells a print verson of its
NEW ENCYCLOPEDIA. The Company experiences competition for its reference products
from other print and electronic products from a variety of publishers.
BUSINESS DIRECTORIES
THE COMPANY PUBLISHES OVER 70 SPECIALIZED DIRECTORIES, AS WELL AS ANCILLARY
PRODUCTS DERIVED FROM ITS DATABASES. The Company's business directories target
the financial services, public relations, transportation, musical performance,
credit and collection, construction and global trade industries. The databases
are compiled by an in-house editorial staff, marketed directly to subscribers
and advertisers primarily by an in-house sales staff and distributed
predominantly on a paid subscription basis. The Company's Bacon's Information,
Inc. unit publishes MEDIASOURCE, a CD-ROM directory for public relations and
media professionals, as well as print directories including BACON'S
INTERNATIONAL MEDIA DIRECTORY and BACON'S BUSINESS MEDIA DIRECTORY. To
complement its public relations directories, the Company operates a periodicals
clipping service. NELSON'S is a premier brand name in the institutional
investment industry, providing specialized investment research and management
information through products such as INSTITUTIONAL MARKETPLACE FOR WINDOWS.
THE COMPANY ALSO PUBLISHES NEWSLETTERS THAT PROVIDE IN-DEPTH INFORMATION ON
SELECTED MARKETS. WARD'S AUTOMOTIVE REPORTS is recognized as the authoritative
source for industry-wide statistics on automotive production and sales. This
newsletter competes on the basis of the nature and quality of its editorial
content. In addition, the Company publishes, in print and electronic formats,
used vehicle valuation information. Titles include MARKET REPORTS, MARINE BLUE
BOOK and AIRCRAFT BLUEBOOK. Other databases
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include THE ELECTRONICS SOURCE BOOK, AC-U-KWIK, WATERWAY GUIDES and equipment
servicing information and manuals.
MOST OF THE BUSINESS DIRECTORIES PUBLISHED BY THE COMPANY HAVE NO
COMPETITION, AND WHERE COMPETITION DOES EXIST, IN MOST CASES, THE COMPANY'S
PUBLICATION IS DOMINANT. Competition, where present, is on the basis of price
and quality of data. Management believes that the comprehensiveness and quality
of its data and the specialized focus of its publications have prevented others
from launching competing publications or competing effectively.
DURING 1996, THE INFORMATION SEGMENT ALSO INCLUDED THE DAILY RACING FORM.
See "--General" and
"-- Non-Core Businesses Being Sold."
SPECIALTY MEDIA
The specialty media segment consists of specialty consumer magazines and
technical and trade magazines. In 1996, 60% of its 63 specialty consumer
magazines and 56% of its 63 technical and trade magazines, were number one as
measured by advertising pages or circulation in their respective markets. Some
of the Company's specialty consumer magazines include SOAP OPERA DIGEST,
SEVENTEEN, NEW YORK, CHICAGO, TRUCKIN' and SEW NEWS, while leading technical and
trade publications include TELEPHONY, FLEET OWNER and THE ELECTRONICS SOURCE
BOOK. Advertising in specialty consumer magazines grew at a 9% compound annual
growth rate or 136% between 1985 and 1995, outpacing advertising growth in
general interest magazines, radio, broadcast television and newspapers.
SPECIALTY CONSUMER MAGAZINES
THE COMPANY'S SPECIALTY CONSUMER MAGAZINES INCLUDE SOAP OPERA DIGEST, SOAP
OPERA WEEKLY, SEVENTEEN, AMERICAN BABY, OVER 20 AUTOMOTIVE MAGAZINES AND
NUMEROUS BRIDAL, SEWING, CRAFTS AND OTHER TITLES. The principal sources for
specialty consumer magazines' net sales are advertising and circulation. In the
year ended December 31, 1996, approximately 54% of the specialty consumer
magazines' net sales were from advertising, 41% were from circulation and 5%
were from other sources.
SOAP OPERA DIGEST AND SOAP OPERA WEEKLY ARE THE LEADING PUBLICATIONS
COVERING SOAP OPERAS AIRED ON NETWORK TELEVISION. SOAP OPERA DIGEST, which
focuses on synopses of episodes, was in 1996 a bi-weekly publication with
average circulation of 1.4 million. In the spring of 1997, SOAP OPERA DIGEST
will become a weekly publication. SOAP OPERA WEEKLY, which reports primarily on
soap opera news, had average 1996 circulation of 500,000. Both publications are
distributed mainly at supermarket, convenience store and drugstore checkout
counters. They compete for circulation on the basis of editorial content and
quality against SOAP OPERA MAGAZINE and SOAP OPERA UPDATE, both of which have
substantially lower circulation. SOAP OPERA DIGEST On-Line, launched in February
1996, has become one of the most utilized magazine sites on America Online.
SEVENTEEN IS THE LEADING YOUNG WOMEN'S MAGAZINE BASED ON BOTH CIRCULATION
AND ADVERTISING PAGES, WITH FASHION, BOYS, BEAUTY, TALENT AND LIFESTYLE
EDITORIAL TARGETED TO GIRLS AGED 12 TO 19. In 1996, SEVENTEEN had average
monthly circulation of 2.4 million, an increase of over 250,000 readers over the
prior year. Its principal competitor is YM. SEVENTEEN competes for circulation
based on the nature and quality of its editorial.
AMERICAN BABY, A BABY CARE PUBLICATION DISTRIBUTED MONTHLY TO APPROXIMATELY
1.4 MILLION EXPECTANT AND NEW PARENTS IN 1996, CONTAINS ARTICLES ON ALL ASPECTS
OF PREGNANCY AND BABY CARE. AMERICAN BABY ranks first in baby product related
advertising pages. While the magazine competes with PARENTS, PARENTING and CHILD
for the larger childcare market, AMERICAN BABY'S principal competitor is BABY
TALK. AMERICAN BABY also offers several ancillary products including sampling
and couponing programs and a cable television show.
5
<PAGE>
THE COMPANY'S OTHER SPECIALTY CONSUMER MAGAZINES INCLUDE AUTOMOBILE, WHICH
CATERS TO THE HIGH-END AUTOMOTIVE MARKET, MODERN BRIDE, A GUIDE TO BRIDAL
FASHIONS, HOME FURNISHINGS AND HONEYMOONS, THE CITY MAGAZINES NEW YORK AND
CHICAGO, TRUCKIN', THE LEADING TRUCK CUSTOMIZATION PUBLICATION, SEW NEWS, THE
PREMIER SEWING TITLE AND DOG WORLD, THE LEADING PUBLICATION FOR DOG BREEDERS.
The Company's automotive titles are primarily newsstand driven, the sewing and
crafts titles are primarily sold by subscription, and the other titles have
significant sales both by subscription and on the newsstand. Subscriptions are
obtained using printed advertisements, direct mail, clearinghouses and
subscription cards in each magazine.
READERS VALUE SPECIALTY CONSUMER MAGAZINES FOR THEIR EDITORIAL CONTENT AND
ALSO RELY ON THEM AS A CATALOG OF PRODUCTS IN THE RELEVANT TOPIC AREA. This
catalog aspect makes the specialty consumer magazines an important media buy for
advertisers. Advertising sales for the Company's specialty consumer magazines
are generated by a combination of in-house staff and outside advertising firms.
The magazines compete for advertising on the basis of circulation and the niche
markets they serve. Each of the Company's specialty consumer magazines faces
competition in its subject area from a variety of publishers, and competes for
readers on the basis of high quality, targeted editorial, which is provided by
in-house writers and freelance authors.
TECHNICAL AND TRADE MAGAZINES
THE COMPANY PUBLISHES 63 TECHNICAL AND TRADE MAGAZINES THAT PROVIDE VITAL
INFORMATION TO PROFESSIONALS IN FIELDS SUCH AS TELECOMMUNICATIONS (TELEPHONY AND
CELLULAR BUSINESS), AGRICULTURE (SOYBEAN DIGEST), TRANSPORTATION (FLEET OWNER)
AND REAL ESTATE (NATIONAL REAL ESTATE INVESTOR). In 1996, 34 of these
publications ranked number one, and approximately 85% of these publications
ranked number one or two, in the fields they serve based on advertising pages.
These magazines are distributed primarily on a "controlled circulation" basis to
members of a targeted industry group and provide career and business-enhancing
technical and tutorial editorial content. Capitalizing on the centralized
circulation, fulfillment, production and other back office services, new titles
can be spun-off from existing titles or acquired and integrated.
DURING 1996, APPROXIMATELY 83% OF THE NET SALES OF THE TECHNICAL AND TRADE
TITLES WERE GENERATED FROM ADVERTISING. Because each of the technical and trade
magazines is distributed almost exclusively to purchasing decision makers in a
targeted industry group, product and service providers are able to focus their
advertising. The advertising rates charged are based on the size of the
circulation within the target group as well as competitive factors. These
magazines compete for advertising on the basis of advertising rates,
circulation, reach, editorial content and readership commitment. Advertising
sales are made by in-house sales forces, supplemented by independent
representatives in selected regions and overseas. Classified advertising is sold
through telemarketing. Magazine editorial is provided by in-house writers and
freelance authors, well-known in their specific industry niches.
In addition to its technical and trade magazines, the Company sponsors
seminars and trade shows, including LIGHTING DIMENSIONS INTERNATIONAL,
INTERNATIONAL WIRELESS COMMUNICATIONS EXPOSITION and THE SATELLITE EXPOSITIONS
CONFERENCE, serving the advertisers and readers of the corresponding
publications.
DURING 1996, THE SPECIALTY MEDIA SEGMENT ALSO INCLUDED NEW WOMAN MAGAZINE.
See "--General" and "--Non-Core Businesses Being Sold."
NEW PRODUCTS AND NEW MEDIA
IN 1996, THE COMPANY LAUNCHED OVER 70 NEW PRODUCTS IN PRINT, ELECTRONIC AND
MULTI-MEDIA FORMATS. The Company had over 40 web sites at year-end 1996, all of
which can be accessed directly as well as via WWW.KIII.COM. New web sites in
1996 included the apartment guides web site (WWW.APTGUIDES.COM), WEEKLY READER
web site (WWW.WEEKLYREADER.COM), FACTS ON FILE NEWS SERVICE web site
(WWW.FACTS.COM) and NELSON'S web site (WWW.NELNET.COM). The Company released a
dozen CD-ROM products in 1996, including the BACON'S MEDIASOURCE CD-ROM for
public relations and media professionals, the JUST CROSS STITCH PATTERN CD-ROM
and the SAIL MAGAZINE BUYERS GUIDE CD-ROM. The Company's television programs
include
6
<PAGE>
CHANNEL ONE'S ONEZONE, which appears on public television stations nationwide,
the SOAP OPERA DIGEST AWARDS, which appear on network television, and AMERICAN
BABY'S THE HEALTHY KIDS SHOW, which appears on the Family Channel.
NON-CORE BUSINESSES BEING SOLD
AS PART OF ITS STRATEGY TO FOCUS ON AREAS OF ITS BUSINESS THAT HAVE THE
GREATEST POTENTIAL FOR GROWTH, THE COMPANY INTENDS TO DIVEST CERTAIN BUSINESSES
THAT DO NOT FIT WITHIN ITS GROWTH VEHICLES. Those businesses are: the DAILY
RACING FORM group, which includes a national daily newspaper covering
thoroughbred horseracing and PRO FOOTBALL WEEKLY; KRAMES COMMUNICATIONS, a
leading publisher of patient information sold to healthcare providers for
distribution to patients and other healthcare users; the KATHARINE GIBBS
SCHOOLS, a chain of seven business schools; NEWBRIDGE BOOK CLUBS, the largest
book club organization for professionals in the United States; and NEW WOMAN
magazine, a guide for personal relationships and careers.
PRODUCTION AND FULFILLMENT
Virtually all of the Company's print products are printed and bound by
independent printers. The Company believes that outside printing services at
competitive prices are readily available. Electronic and video products
generally are created and mastered in-house; with the exception of WESTCOTT and
FILMS which produce video products in-house, all other production and
duplication of electronic and video products is performed by third party
vendors.
The principal raw material used in the Company's products is paper. The
Company has paper supply contracts and, in almost all cases, supplies paper used
by its outside printers. The Company believes that even if at some point in the
future paper is in limited supply, the existing arrangements providing for the
supply of paper will be adequate. The Company was able to meet its paper
requirements during 1996. In 1996, approximately 37% and 22% of the Company's
paper purchases were supplied by Lindenmeyr Central and Bulkley Dunton,
respectively. The Company's relationship with these suppliers is good and is
expected to continue to be good for the foreseeable future.
Many of the Company's products are packaged and delivered to the U.S. Postal
Service directly by the printer. Other products are sent from warehouses and
other facilities operated by the Company.
COMPANY ORGANIZATION
K-III was incorporated on November 22, 1991 in the State of Delaware. The
principal executive office of the Company is located at 745 Fifth Avenue, New
York, New York 10151, telephone number (212) 745-0100.
7
<PAGE>
EXECUTIVE OFFICERS
The following table sets forth certain information regarding the executive
officers of K-III:
<TABLE>
<CAPTION>
NAME AGE POSITION(S)
- ----------------------------------------------------- --- -----------------------------------------------------
<S> <C> <C>
William F. Reilly.................................... 58 Chairman of the Board and Chief Executive Officer and
Director
Charles G. McCurdy................................... 41 President and Director
Beverly C. Chell..................................... 54 Vice Chairman, General Counsel, Secretary and
Director
Harry A. McQuillen................................... 50 Executive Vice President
Jack L. Farnsworth................................... 51 Vice President
George Philips....................................... 66 Vice President
Curtis A. Thompson................................... 45 Vice President and Controller
Michaelanne C. Discepolo............................. 44 Vice President
Douglas B. Smith..................................... 36 Treasurer
</TABLE>
Mr. Reilly is Chairman of the Board, Chief Executive Officer and a Director
of K-III and has served in such capacities since November 1991. Mr. Reilly is
also a director of FMC Corporation.
Mr. McCurdy is President and a Director of K-III and has served in such
capacities since November 1991 and was Treasurer from 1991 to August 1993.
Ms. Chell is Vice Chairman, General Counsel, Secretary and a Director of
K-III. Ms. Chell has served as Vice Chairman, General Counsel and Secretary
since November 1991 and as Director since March 1992.
Mr. McQuillen has been Executive Vice President of K-III since December
1995, President of K-III Specialty Media Group since December 1992 and President
of K-III Magazines since November 1991. Prior thereto he was Vice President of
K-III from May 1992 through December 1995.
Mr. Farnsworth has been Vice President of K-III since May 1992, President of
K-III Information Group since May 1992 and President of Westcott Communications,
Inc. since June 1996.
Mr. Philips has been a Vice President of K-III since May 1992 and President
of K-III Reference Corporation since March 1992.
Mr. Thompson is Vice President and Controller of K-III and has served in
such capacities since November 1991.
Ms. Discepolo is a Vice President of K-III and has served in such capacity
since January 1993. She joined the Company in March 1991 as Director of Human
Resources.
Mr. Smith is Treasurer of K-III and has served in such capacity since August
1993. Prior thereto he was at The Bank of New York starting in 1982 holding
various positions. He held the position of Senior Vice President prior to
joining K-III.
Mr. Pedro Mata served as Vice President of K-III and President of K-III
Education Group from November 1995 through March, 1997. He was previously the
Senior Vice President of W.R. Grace & Co. and President and CEO of Grace Cocoa.
The business address of Messrs. Reilly, McCurdy, Farnsworth, McQuillen,
Philips, Thompson, Smith and Mses. Chell and Discepolo is the address of the
principal executive offices of K-III.
EMPLOYEES
As of January 2, 1997, the Company had approximately 7,200 full- and
part-time employees, of whom approximately 26 were union members. Management
considers its relations with its employees to be good.
8
<PAGE>
ITEM 2. PROPERTIES
The Company's principal leased properties used by the education segment are
located in California, Connecticut, Iowa, Massachusetts, New Jersey, New York,
Rhode Island, Tennessee and Texas; used by the information segment are in
Arizona, California, Georgia, Illinois, Maryland, New Jersey, New York, Ohio and
Wisconsin and used by the media segment are in Alabama, California, Colorado,
Georgia, Illinois, Kansas, Massachusetts, Michigan, Minnesota, Missouri, New
York and Tennessee. Property is owned by the Company and used in the education
segment in Connecticut, New Jersey and Tennessee, in the information segment in
New Jersey and Georgia and in the media segment in California, Illinois and
Missouri. The Company's only production facilities are small printing operations
for the DAILY RACING FORM and FILMS and video duplicating facilities for
WESTCOTT and FILMS. The Company's distribution properties and their capacity is
adequate to satisfy the Company's needs.
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings and no material legal
proceedings including any that were terminated in the fourth quarter of 1996, to
which the Company is or was a party other than ordinary routine litigation
incidental to the business of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no matters submitted to a vote of security holders during the
fourth quarter of 1996.
9
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
K-III Common Stock is listed on the New York Stock Exchange. As of March 17,
1997, there were 2,767 holders of K-III Common Stock. The Company has not and
has no present intention to pay dividends on its Common Stock. Trading commenced
November 1, 1995. The high and low sales prices for the period November 1, 1995
to December 31, 1995 were $12 5/8 to $10 1/2, respectively. High and low stock
prices for 1996 were as follows:
<TABLE>
<CAPTION>
SALES PRICE
--------------------
QUARTER ENDED HIGH LOW
- -------------------------------------------------------------------- --------- ---------
<S> <C> <C>
March 31............................................................ $ 12 5/8 $ 11 1/4
June 30............................................................. $ 12 7/8 $ 10 5/8
September 30........................................................ $ 12 5/8 $ 10
December 31......................................................... $ 11 5/8 $ 8 1/2
</TABLE>
10
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
The selected consolidated financial data were derived from the consolidated
financial statements of the Company which are included elsewhere in this Annual
Report. The data should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the consolidated
financial statements and the related notes thereto included herein.
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------
1996 1995 1994 1993 1992
------------ ------------ ------------ ----------- -----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Sales, net.................................. $ 1,374,449 $ 1,046,329 $ 964,648 $ 844,748 $ 778,224
Depreciation and amortization............... 190,702 192,276 136,866 143,267 171,581
Other charges(1)............................ -- 50,114 15,025 2,644 --
Operating income (loss)(2).................. 85,901 (26,275) 10,203 (7,669) (46,230)
Interest expense............................ 125,506 105,837 78,351 74,336 76,719
Income tax benefit(3)....................... 53,300 59,600 42,100 -- 314
Net income (loss)(2)(4)..................... 8,044 (75,435) (41,403) (86,496) (145,342)
Preferred stock dividends................... 43,526 28,978 25,959 22,290 16,530
Loss applicable to common shareholders...... (35,482) (104,413) (67,362) (108,786) (161,872)
Loss per common and common equivalent
share(5).................................. $ (.27) $ (.91) $ (.65) $ (1.18) $ (1.77)
Weighted average common and common
equivalent shares outstanding(5).......... 130,007,632 115,077,498 103,642,668 92,392,189 91,317,610
OTHER DATA:
EBITDA(6)................................... $ 276,603 $ 216,115 $ 162,094 $ 138,242 $ 125,351
Capital expenditures........................ 29,661 25,179 16,118 13,416 14,497
Net cash provided by operating activities... 149,287 64,062 64,890 27,072 16,618
Net cash used in investing activities....... (721,709) (318,712) (442,126) (95,669) (79,725)
Net cash provided by financing activities... $ 581,851 $ 263,644 $ 383,924 $ 63,579 $ 60,877
Deficiency of earnings to fixed
charges(7)(8)............................. (45,256) (135,035) (83,503) (86,496) (145,656)
Deficiency of earnings to fixed charges and
preferred stock dividends(7)(8)........... (88,782) (164,013) (109,462) (108,786) (162,186)
<CAPTION>
AT DECEMBER 31,
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................... $ 36,655 $ 27,226 $ 18,232 $ 11,544 $ 16,562
Working capital (deficiency)(9)............. (44,705) (56,560) 1,338 3,605 1,189
Intangible assets, gross.................... 2,649,805 1,996,564 1,656,590 1,343,482 1,276,123
Less accumulated amortization............... 896,824 762,393 602,542 504,538 383,784
------------ ------------ ------------ ----------- -----------
Intangible assets, net...................... 1,752,981 1,234,171 1,054,048 838,944 892,339
Total assets................................ 2,552,215 1,881,416 1,589,692 1,166,502 1,197,896
Long-term debt(10).......................... 1,565,686 1,134,916 1,034,689 661,297 704,802
Exchangeable preferred stock................ 442,729 231,606 216,229 202,453 97,171
Common stock subject to redemption.......... 5,957 28,022 16,552 25,287 16,746
Shareholders' equity:
Convertible Preferred Stock............... -- -- -- -- 78,797
Common stock.............................. 1,283 1,259 1,053 947 853
Additional paid-in capital................ 772,642 748,194 572,940 488,541 421,926
Accumulated deficit....................... (691,098) (655,616) (551,203) (483,841) (375,055)
Cumulative foreign currency translation
adjustments............................. (1,270) (1,275) (1,324) (1,220) (222)
------------ ------------ ------------ ----------- -----------
Total shareholders' equity............ $ 81,557 $ 92,562 $ 21,466 $ 4,427 $ 126,299
------------ ------------ ------------ ----------- -----------
------------ ------------ ------------ ----------- -----------
</TABLE>
(see Notes on the following page)
11
<PAGE>
NOTES TO SELECTED FINANCIAL DATA
(1) Represents provision for restructuring and other costs in 1995, net
provision for loss on the sales of businesses in 1995 and 1994 and provision
for write-down of real estate no longer utilized in 1993.
(2) The adoption of a change in method of accounting for advertising costs (the
"Accounting Change") resulted in an increase in operating income or decrease
in operating loss and a decrease in net loss of approximately $2,000 ($.02
per share), $11,800 ($.10 per share) and approximately $9,800 ($.09 per
share) for the years ended December 31, 1996, 1995 and 1994, respectively.
(3) The income tax benefit in 1992 reflects the reversal of an overprovision for
Canadian income taxes. At December 31, 1996, 1995 and 1994, management of
the Company reviewed recent operating results for the years then ended and
projected future operating results for the years through December 31, 2002
and determined that a portion of the net deferred income tax assets at
December 31, 1996, 1995 and 1994 would likely be realized. Accordingly, the
Company recorded an income tax benefit of $53,300 in 1996, $59,600 in 1995
and $42,100 in 1994. At December 31, 1996, the Company had net operating
loss carryforwards for Federal and state income tax purposes ("NOLs") of
approximately $713,000 which will be available to reduce future taxable
income. In addition, management estimates that $757,000 of unamortized
goodwill and other intangible assets will be available as deductions from
any future taxable income.
(4) The write-off of unamortized deferred financing costs as a result of the
refinancings in 1996, 1994 and 1992 decreased net income or increased net
loss by $8,648, $11,874 and $19,814 for the years ended December 31, 1996,
1994 and 1992, respectively. In 1995 and 1993, there were no write-offs of
unamortized deferred financing costs.
(5) Loss per common and common equivalent share, as well as the weighted average
common and common equivalent shares outstanding, were computed as described
in Note 3 of the notes to the audited consolidated financial statements
included elsewhere in this Annual Report.
(6) Earnings before interest, taxes, depreciation, amortization and provision
for one-time charges ("EBITDA") is not intended to represent cash flow from
operations and should not be considered as an alternative to net income
(loss) as an indicator of the Company's operating performance or to cash
flows as a measure of liquidity. The Company believes 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 herein to permit a more complete comparative analysis of the
Company's operating performance relative to other companies in its industry.
(7) The deficiency of earnings to fixed charges consists of loss before income
taxes plus fixed charges. Loss before income taxes includes (i) depreciation
and amortization of prepublication costs, deferred financing costs, property
and equipment, intangible assets and excess of purchase price over net
assets acquired, (ii) interest expense, (iii) write-off of unamortized
deferred financing costs, (iv) provision for write-down of real estate no
longer utilized, (v) net provision for loss on sales of businesses, (vi)
restructuring and other costs, and (vii) that portion of operating rental
expense that represents interest. Prepublication costs include editorial,
artwork, composition and printing plate costs incurred prior to publication
date. Fixed charges consist of interest expense on long-term debt and other
non-current obligations (including current maturities of long-term debt),
amortization of deferred financing costs and that portion of operating
rental expense that represents interest.
(8) The Company's earnings (defined as pretax income or loss from continuing
operations) were inadequate to cover fixed charges and fixed charges plus
preferred stock dividends by $45,256 and $88,782 for 1996, $135,035 and
$164,013 for 1995, $83,503 and $109,462 for 1994, $86,496 and $108,786 for
1993 and $145,646 and $162,186 for 1992. Such earnings have been reduced by
non-cash charges for depreciation and amortization of property and
equipment, prepublication costs, intangible assets, excess of purchase price
over net assets acquired and deferred financial costs, write-offs of
unamortized deferred financing costs, provision for write-down of real
estate no longer utilized, net provision for loss on the sales of
businesses, restructuring and other costs, non-cash interest expense on an
acquisition obligation, distribution advance and other current liability,
and non-cash preferred stock dividend requirements of approximately
$218,125, $259,014, $187,111, $168,754 and $210,802 for the years ending
December 31, 1996, 1995, 1994, 1993 and 1992, respectively. Adjusted to
eliminate these non-cash charges, earnings would have exceeded fixed charges
and fixed charges plus preferred stock dividends by approximately $156,287
and $129,343 for 1996, $106,501 and $95,001 for 1995, $89,149 and $77,649
for 1994, $71,468 and $59,968 for 1993 and $56,761 and $48,616 for 1992.
(9) Includes current maturities of long-term debt.
(10) Excludes current maturities of long-term debt.
12
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
INTRODUCTION
The following discussion of the consolidated financial condition and related
results of operations of the Company should be read in conjunction with the
Company's historical consolidated financial statements and the related notes
thereto included elsewhere in this Annual Report.
SELECTED FINANCIAL DATA
THE COMPANY ORGANIZES ITS BUSINESSES INTO THREE SEGMENTS: EDUCATION,
INFORMATION AND SPECIALTY MEDIA. The specialty media segment has in prior years
been referred to as the media segment, but the Company believes the term
specialty media is more descriptive of the underlying businesses; the same
underlying businesses previously described as part of the media segment.
Additional selected financial data for the Company organized on the foregoing
basis are presented below.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------
1996 1995 1994
------------ ------------ ----------
<S> <C> <C> <C>
Sales, net:
Education............................................................... $ 376,217 $ 330,414 $ 430,134
Information............................................................. 313,891 263,542 192,732
Specialty Media......................................................... 684,341 452,373 341,782
------------ ------------ ----------
Total................................................................... $ 1,374,449 $ 1,046,329 $ 964,648
------------ ------------ ----------
------------ ------------ ----------
Depreciation, amortization and other charges(1):
Education............................................................... $ 63,252 $ 106,492 $ 46,426
Information............................................................. 52,122 78,513 51,677
Specialty Media......................................................... 74,549 56,682 53,156
Corporate............................................................... 779 703 632
------------ ------------ ----------
Total................................................................... $ 190,702 $ 242,390 $ 151,891
------------ ------------ ----------
------------ ------------ ----------
Operating income (loss):
Education............................................................... $ 15,011 $ (32,024) $ 10,590
Information............................................................. 33,473 (8,683) (2,307)
Specialty Media......................................................... 59,693 32,169 15,877
Corporate............................................................... (22,276) (17,737) (13,957)
------------ ------------ ----------
Total................................................................... 85,901 (26,275) 10,203
Other income (expense):
Interest expense........................................................ (125,506) (105,837) (78,351)
Amortization of deferred financing and organizational costs............. (3,662) (3,135) (3,080)
Write-off of unamortized deferred financing costs....................... (8,648) -- (11,874)
Other, net.............................................................. 6,659 212 (401)
------------ ------------ ----------
Loss before income tax benefit.......................................... (45,256) (135,035) (83,503)
Income tax benefit...................................................... 53,300 59,600 42,100
------------ ------------ ----------
Net income (loss)....................................................... $ 8,044 $ (75,435) $ (41,403)
------------ ------------ ----------
------------ ------------ ----------
</TABLE>
- ------------------------
(1) Other charges includes net provision for loss on the sales of businesses and
provision for restructuring and other costs in 1995 and 1994.
13
<PAGE>
1996 COMPARED TO 1995
CONSOLIDATED RESULTS: CONSOLIDATED NET SALES INCREASED BY $328,120 OR 31.4%
TO $1,374,449 IN 1996 OVER 1995 DUE TO INTERNAL GROWTH IN ALL THREE SEGMENTS AS
WELL AS THE IMPACT OF ACQUISITIONS. Specifically, the acquisitions of Cahners
Consumer Magazines ("Cahners"), Westcott Communications, Inc. and the trade
magazines of Argus Inc. ("Argus") added $199,144 to net sales growth.
CONSOLIDATED OPERATING INCOME WAS $85,901 IN 1996 COMPARED TO AN OPERATING
LOSS OF $26,275 IN 1995. This improvement was driven by the increase in sales,
the impact of recent acquisitions and the effect of several one-time,
principally non-cash charges totalling $68,072 in the second quarter of 1995.
The increase occurred despite an 8.4% increase in the Company's average purchase
price for paper in 1996 and the effect of the required adoption of a new method
of accounting for advertising costs (the "Accounting Change"), which K-III
adopted on July 1, 1994. The Accounting Change had a $8,343 net positive impact
on operating income in the first six months of 1995 versus 1996, predominantly
within the education segment. In periods subsequent to June 30, 1996, the
comparative effects of the adoption of the Accounting Change are not material.
The increase in corporate expenses resulted predominantly from growth in
corporate service requirements.
INTEREST EXPENSE INCREASED BY $19,669 OR 18.6% IN 1996 OVER 1995 PRIMARILY
DUE TO THE INCREASED LEVEL OF BORROWINGS ASSOCIATED WITH ACQUISITIONS. During
1996, non-cash charges of $8,648 were recorded to write-off unamortized deferred
financing costs related to previous bank financings.
THE COMPANY REPORTED AN INCOME TAX BENEFIT OF $53,300 IN 1996 COMPARED TO
$59,600 IN 1995 ASSOCIATED WITH THE PARTIAL RECOGNITION OF NOLS AND OTHER
DEFERRED INCOME TAX ASSETS. At the end of each year, the Company reviews its
recent operating results and projected future operating results and for 1996
determined that there should be sufficient future taxable income and that a
portion of the net deferred income tax assets would likely be realized. Such
future taxable income is determined principally from management's projection of
future operating results in conjunction with scheduled reductions in intangible
asset amortization expense. The amount of the net deferred tax asset considered
realizable, however, could be reduced in the near term if estimates of future
taxable income during the carryforward period are reduced. Such reductions in
taxable income could occur as the result of many external factors including but
not limited to increased paper and postage costs and rates of interests. The
Company reported consolidated net income of $8,044 in 1996 versus a consolidated
net loss of $75,435 in 1995.
EDUCATION: THE EDUCATION SEGMENT'S NET SALES INCREASED BY $45,803 OR 13.9%
IN 1996 OVER 1995. Increases at Weekly Reader Corporation ("Weekly Reader"),
Films and Krames Communications Incorporated ("Krames") and the addition of
Westcott, which contributed $52,288 to the increase in net sales, offset
declines at Newbridge Communications, Inc. ("Newbridge"). At Newbridge, the book
club business remained soft, but performance indicators improved from year ago
levels. The education segment's operating profit increased to $15,011 in 1996 as
compared to an operating loss of $32,024 in 1995. This improvement is primarily
due to the one-time charges in the second quarter of 1995 for a provision for
loss associated with the sale of Newfield Publications, Inc. ("Newfield") and a
restructuring charge at Newbridge. Offsetting those charges, the Accounting
Change had a $8,541 net positive impact on operating profit in the first six
months of 1995 versus 1996.
INFORMATION: THE INFORMATION SEGMENT'S NET SALES INCREASED BY $50,349 OR
19.1% IN 1996 OVER 1995 PRIMARILY BECAUSE OF DOUBLE-DIGIT ORGANIC GROWTH AT THE
APARTMENT GUIDES AS WELL AS THE IMPACT OF RECENT ACQUISITIONS WHICH CONTRIBUTED
$17,600 TO THE INCREASE IN NET SALES. The information segment's operating profit
increased to $33,473 in 1996 as compared to an operating loss of $8,683 in 1995
due to the increase in sales and a decrease in amortization expense. Goodwill
and intangible asset amortization expense decreased by $24,277 in 1996 over 1995
primarily as a result of an adjustment to the carrying values of goodwill and
other intangible assets totalling $17,958 in the second quarter of 1995.
SPECIALTY MEDIA: The specialty media segment's net sales increased by
$231,968 or 51.3% in 1996 over 1995 due to growth of existing properties as well
as the impact of the Cahners and Argus acquisitions.
14
<PAGE>
The increases at the existing properties were primarily due to double-digit
organic revenue growth at the specialty consumer magazines led by SEVENTEEN,
SOAP OPERA DIGEST, TRUCKIN' and CRAFTS. The full year effect of Argus, acquired
in December 1995, and Cahners, acquired in January 1996, contributed $51,459 and
$95,397 respectively to the 1996 sales growth. Operating profit increased by
$27,524 or 85.6% in 1996 over 1995. The increase was the result of an increase
in net sales partially offset by a 14.1% increase in average paper prices for
magazine operations in 1996 over 1995.
1995 COMPARED TO 1994
CONSOLIDATED RESULTS: EXCLUDING THE RESULTS OF DIVESTED OPERATIONS,
CONSOLIDATED NET SALES INCREASED BY $249,420 OR 31.3% TO $1,046,329 IN 1995 OVER
1994. This increase resulted from growth from existing operations, product
additions and acquisitions of businesses in all three segments. In 1995, the
Company divested Newfield in the education segment and PREMIERE magazine in the
specialty media segment. The Company's statement of consolidated operations
included the results of these businesses in 1994 but not in 1995. Consequently,
reported net sales including divested businesses increased only 8.5% from 1994
to 1995.
IN THE SECOND QUARTER OF 1995, THE COMPANY RECORDED SEVERAL ONE-TIME,
PRINCIPALLY NON-CASH, CHARGES TOTALLING $68,072. These included a net aggregate
provision for loss on the sales of Newfield and PREMIERE of $35,447;
restructuring and other charges of $14,667 related to a corporate restructuring
at Newbridge and the completion of manufacturing outsourcing at Daily Racing
Form, and adjustments to the carrying values of K-III Reference Corporation
("K-III Reference"), goodwill and other intangible assets totalling $17,958.
PARTIALLY OFFSETTING THESE ONE-TIME CHARGES WAS THE IMPACT OF THE ACCOUNTING
CHANGE, WHICH K-III ADOPTED ON JULY 1, 1994. The Accounting Change increased
operating income by approximately $2,000 more in 1995 than 1994. Including the
one-time charges and the effect of the Accounting Change, the consolidated
operating loss was $26,275 in 1995 as compared to consolidated operating profit
of $10,203 in 1994. The increase in the corporate expenses resulted
predominantly from growth in corporate service requirements.
INTEREST EXPENSE INCREASED BY $27,486 OR 35.1% IN 1995 OVER 1994 PRIMARILY
DUE TO THE INCREASED LEVEL OF BORROWINGS ASSOCIATED WITH ACQUISITIONS AS WELL AS
HIGHER SHORT-TERM INTEREST RATES. As a result of the refinancing during the
second quarter of 1994, a charge of $11,874 was recorded representing the
write-off of unamortized deferred financing costs related to the previous bank
financing.
THE COMPANY RECORDED AN INCOME TAX BENEFIT OF $59,600 IN 1995 COMPARED TO
$42,100 IN 1994, ASSOCIATED WITH THE PARTIAL RECOGNITION OF NOLS AND OTHER NET
DEFERRED INCOME TAX ASSETS. The consolidated net loss increased by $34,032 in
1995 over 1994 mainly due to the one-time charges.
EDUCATION: EXCLUDING THE RESULTS OF NEWFIELD, THE EDUCATION SEGMENT'S NET
SALES INCREASED 17.5% OVER 1994, REFLECTING GROWTH FROM PRODUCT ADDITIONS AND
ACQUISITIONS OF BUSINESSES, PRIMARILY CHANNEL ONE COMMUNICATIONS CORPORATION
("CHANNEL ONE") WHICH ADDED $52,370 TO THE NET SALES GROWTH IN 1995. Reported
results, however, included Newfield's sales only in 1994, thus leading to a
reported decline in the education segment's net sales of 23.2%. The Accounting
Change favorably impacted the education segment's earnings by approximately
$4,000 more in 1995 than in 1994; however, it was offset by an increase in
goodwill, intangible and other asset amortization expenses of $15,469 and an
increase in certain one-time charges of $37,377. The education segment reported
an operating loss of $32,024 in 1995 compared to an operating profit of $10,590
in 1994.
INFORMATION: THE INFORMATION SEGMENT'S NET SALES INCREASED BY $70,810 OR
36.7% IN 1995 OVER 1994 PRIMARILY AS A RESULT OF PRODUCT ADDITIONS AT BUSINESS
DIRECTORIES, THE FULL YEAR EFFECT OF THE ACQUISITION OF HAAS PUBLISHING
COMPANIES, INC. ("HAAS") AND THE SUBSEQUENT ADDITION OF NEW MARKETS FOR ITS
APARTMENT GUIDES. Product additions at K-III Directory Corporation included the
INTERNATIONAL TRADE GUIDE, the U.S. CUSTOM HOUSE GUIDE and the OFFICIAL EXPORT
GUIDE, all acquired in late 1994, as well as the Machinery Information Division
directories acquired in mid-1994. These product additions contributed
approximately $7,000 to the 1995 net sales growth. The Haas acquisition in
mid-1994 resulted in approximately $27,900 of
15
<PAGE>
the 1995 net sales growth. Additional markets added to the Haas apartment guides
in 1995 included Washington, D.C., Baltimore, MD and Detroit, MI, which
contributed approximately $8,800 to the 1995 net sales growth. The addition of
the BACON'S media relations industry directories, clipping services and mailing
services in mid-1995 added approximately $27,900 to the 1995 net sales growth.
Goodwill and intangible asset amortization expense increased by $21,889 in 1995
over 1994 principally as a result of the adjustments to goodwill and intangible
asset values at K-III Reference. This was the primary cause for an increase in
the information segment's operating loss of $6,376 in 1995 over 1994.
SPECIALTY MEDIA: THE SPECIALTY MEDIA SEGMENT'S SALES INCREASED BY $110,591
OR 32.4% IN 1995 OVER 1994 DUE TO A 32.0% INCREASE IN ADVERTISING REVENUE AND A
31.4% INCREASE IN SUBSCRIPTION REVENUE INCLUDING THE EFFECT OF THE ACQUISITIONS
OF PJS PUBLICATIONS, INC., THE MACLEAN HUNTER DIVISION OF ROGERS COMMUNICATIONS,
INC. AND MCMULLEN & YEE PUBLISHING, INC. WHICH CONTRIBUTED $40,665, $29,386 AND
$21,357, RESPECTIVELY, TO THE INCREASE IN NET SALES, OFFSET BY THE ELIMINATION
OF THE REVENUES OF PREMIERE. Excluding the effects of acquisitions and
divestitures, technical and trade magazine advertising pages and rates rose 3.7%
and 5.0%, respectively, and specialty consumer magazine advertising pages and
rates rose 3.2% and 3.3%, respectively, in 1995 over 1994. Despite an average
24% increase in paper costs in addition to the Accounting Change impact which
was $2,000 less favorable in 1995 than in 1994 the specialty media segment's
operating profit increased by $16,292 in 1995 over 1994.
LIQUIDITY AND CAPITAL RESOURCES
The following table sets forth certain information regarding the Company's
EBITDA and other net cash flow items:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
EBITDA(1):
Education................................................................ $ 78,263 $ 74,468 $ 57,016
Information.............................................................. 85,595 69,830 49,370
Specialty Media.......................................................... 134,242 88,851 69,033
Corporate................................................................ (21,497) (17,034) (13,325)
----------- ----------- -----------
Total.................................................................... $ 276,603 $ 216,115 $ 162,094
----------- ----------- -----------
----------- ----------- -----------
Net cash provided by (used in) operating activities:
Education................................................................ $ 84,541 $ 35,963 $ 43,314
Information.............................................................. 70,022 73,019 39,167
Specialty Media.......................................................... 124,719 66,601 62,902
Corporate................................................................ (129,995) (111,521) (80,493)
----------- ----------- -----------
Total.................................................................... $ 149,287 $ 64,062 $ 64,890
----------- ----------- -----------
----------- ----------- -----------
Net cash provided by (used in) investing activities:
Education................................................................ $ (439,907) $ 6,075 $ (291,501)
Information.............................................................. (66,521) (83,632) (130,110)
Specialty Media.......................................................... (213,546) (238,731) (20,181)
Corporate................................................................ (1,735) (2,424) (334)
----------- ----------- -----------
Total.................................................................... $ (721,709) $ (318,712) $ (442,126)
----------- ----------- -----------
----------- ----------- -----------
Net cash provided by (used in) financing activities:
Education................................................................ $ (3,205) $ (727) $ (2,795)
Information.............................................................. (5,633) (2,590) 375
Specialty Media.......................................................... (10,372) (5,332) (8,081)
Corporate................................................................ 601,061 272,293 394,425
----------- ----------- -----------
Total.................................................................... $ 581,851 $ 263,644 $ 383,924
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Excess (Deficiency) of Earnings to Fixed Charges(2):
Education................................................................ $ 11,200 $ (33,615) $ 6,194
Information.............................................................. 27,903 (13,449) (10,766)
Specialty Media.......................................................... 57,627 26,001 3,622
Corporate................................................................ (141,986) (113,972) (82,553)
----------- ----------- -----------
Total.................................................................... $ (45,256) $ (135,035) $ (83,503)
----------- ----------- -----------
----------- ----------- -----------
Excess (Deficiency) of Earnings to Fixed Charges and Cash Preferred Stock
Dividends(2):
Education................................................................ $ 11,200 $ (33,615) $ 6,194
Information.............................................................. 27,903 (13,449) (10,766)
Specialty Media.......................................................... 57,627 26,001 3,622
Corporate................................................................ (185,512) (142,950) (108,512)
----------- ----------- -----------
Total.................................................................... $ (88,782) $ (164,013) $ (109,462)
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
- ------------------------
(1) Earnings before interest, taxes, depreciation, amortization and provision
for one-time charges ("EBITDA") is not intended to represent cash flow from
operations and should not be considered as an alternative to net income
(loss) as an indicator of the Company's operating performance or to cash
flows as a measure of liquidity. The Company believes 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 herein to permit a more complete comparative analysis of the
Company's operating performance relative to other companies in its industry.
(2) The deficiency of earnings to fixed charges consists of loss before income
taxes plus fixed charges. Loss before income taxes includes (i) depreciation
or amortization of prepublication costs, deferred financing costs, property
and equipment, intangible assets and excess of purchase price over net
assets acquired, (ii) interest expense, (iii) write-off of unamortized
deferred financing costs, (iv) net provision for loss on sales of
businesses, (v) restructuring and other costs, and (vi) that portion of
operating rental expense that represents interest. Prepublication costs
include editorial, artwork, composition and printing plate costs incurred
prior to publication date. Fixed charges consist of interest expense on
long-term debt and other non-current obligations (including current
maturities of long-term debt), amortization of deferred financing costs and
that portion of operating rental expense that represents interest.
CONSOLIDATED WORKING CAPITAL (DEFICIENCY) INCLUDING CURRENT MATURITIES OF
LONG-TERM DEBT WAS $(44,705) AT DECEMBER 31, 1996 COMPARED TO $(56,560) AT
DECEMBER 31, 1995. Consolidated working capital (deficiency) reflects certain
industry working capital practices and accounting principles, including the
expensing of editorial and product development costs when incurred and the
recording of unearned subscription income 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.
1996 COMPARED TO 1995
CONSOLIDATED EBITDA INCREASED BY $60,488 OR 28% IN THE YEAR ENDED DECEMBER
31, 1996 OVER 1995 MAINLY AS A RESULT OF GROWTH FROM EXISTING OPERATIONS, NEW
PRODUCT ADDITIONS AND ACQUISITIONS OF BUSINESSES. The net cash provided by
operating activities during the year ended December 31, 1996, after interest
payments of $112,657, was $149,287, an increase of $85,225 over 1995 resulting
mainly from EBITDA growth. Capital expenditures, net of gross proceeds from
sales of assets, were $28,790 during 1996 as compared to $23,414 for 1995. These
expenditures included data processing equipment, televisions, videocassette
recorders, satellite dishes, furniture and leasehold improvements and were
financed with net
17
<PAGE>
cash provided from operations. Payments of $700,990 (including certain
immaterial purchase price adjustments relating to previous acquisitions) were
made during the year ended December 31, 1996 for the acquisitions described in
Note 4 to the Company's consolidated financial statements. Net cash used in
investing activities increased as a result of increased acquisition activities,
substantially all of which were financed with borrowings under the then existing
credit agreements and funds from operations.
THE COMPANY'S EARNINGS (DEFINED AS PRETAX INCOME OR LOSS FROM CONTINUING
OPERATIONS) WERE INADEQUATE TO COVER FIXED CHARGES AND FIXED CHARGES PLUS
PREFERRED STOCK DIVIDENDS BY $45,256 AND $88,782 AND $135,035 AND $164,013 FOR
1996 AND 1995, RESPECTIVELY. Such earnings have been reduced by non-cash charges
(including depreciation, amortization and non-cash dividends) of approximately
$218,125 and $259,014 for the years ended December 31, 1996 and 1995,
respectively. Adjusted to eliminate these non-cash charges, earnings would have
exceeded fixed charges and fixed charges plus cash preferred stock dividends by
approximately $156,287 and $129,343 and $106,501 and $95,001 for the years ended
December 31, 1996 and 1995, respectively.
1995 COMPARED TO 1994
CONSOLIDATED EBITDA INCREASED BY $54,021 OR 33.3% IN THE YEAR ENDED DECEMBER
31, 1995 OVER 1994 MAINLY AS A RESULT OF GROWTH FROM EXISTING OPERATIONS, NEW
PRODUCT ADDITIONS, ACQUISITIONS OF BUSINESSES AND THE ACCOUNTING CHANGE, WHICH
K-III ADOPTED ON JULY 1, 1994. The net cash provided by operating activities
during the year ended December 31, 1995, after interest payments of $102,040,
was $64,062. Net cash provided by operating activities declined by $828 during
the year ended December 31, 1995 from 1994 due primarily to the EBITDA growth
offset by higher acquisition related interest payments and growth in inventories
and prepaid expenses. Capital expenditures, net of gross proceeds from sales of
assets, were $23,414 during 1995 as compared to $14,184 for 1994. These
expenditures included data processing equipment, televisions, videocassette
recorders, satellite dishes, furniture and leasehold improvements and were
financed with net cash provided by operations. Payments of $353,954 (including
certain immaterial purchase price adjustments relating to previous acquisitions)
were made during the year ended December 31, 1995 for the acquisitions described
in Note 4 to the Company's consolidated financial statements. Net cash used in
investing activities decreased as a result of the proceeds from the sale of
Newfield and PREMIERE and the lower cost of the acquisitions in 1995 as compared
to the acquisitions in 1994, all of which were financed with borrowings under
existing credit facilities.
NET OPERATING LOSS CARRYFORWARDS
AT DECEMBER 31, 1996, THE COMPANY HAD NOLS OF APPROXIMATELY $713,000 WHICH
WILL BE AVAILABLE TO REDUCE FUTURE TAXABLE INCOME. In addition, management
estimates that approximately $757,000 of unamortized goodwill and other
intangible assets will be available as deductions from any future taxable
income.
FINANCING ARRANGEMENTS
ON JANUARY 24, 1996, THE COMPANY COMPLETED A PRIVATE OFFERING OF 2,000,000
SHARES OF $10 SERIES C EXCHANGEABLE PREFERRED STOCK ("SERIES C PREFERRED STOCK")
AT $100 PER SHARE. Annual dividends of $10 per share on the Series C Preferred
Stock were cumulative and payable quarterly, in cash, commencing May 1, 1996. On
August 21, 1996, the Company exchanged the Series C Preferred Stock for
2,000,000 shares of $10 Series D Exchangeable Preferred Stock ("Series D
Preferred Stock"). Dividend payment terms of the Series D Preferred Stock are
the same as the Series C Preferred Stock. The Series D Preferred Stock has been
registered under the Securities Act of 1933. On and after February 1, 2001, the
Series D Preferred Stock may be redeemed in whole or in part, at the option of
the Company, at specified redemption prices plus accrued and unpaid dividends.
The Company is 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 the option
18
<PAGE>
of the Company, on any scheduled dividend payment date into 10% Class D
Subordinated Exchange Debentures due 2008 ("Class D Subordinated Debentures")
provided that no shares of the Senior Preferred Stock are outstanding on the
date of exchange. Net proceeds from the Series C Preferred Stock offering of
approximately $193,000 were primarily used to pay down revolving credit
borrowings.
ON JANUARY 24, 1996, K-III COMPLETED A PRIVATE OFFERING OF $300,000 OF
8 1/2% SENIOR NOTES DUE 2006 ("PRIVATE 8 1/2% NOTES"). The Private 8 1/2% Notes
were issued at 99.578% of the aggregate principal amount thereof with related
issuance costs of approximately $7,000. On August 21, 1996, the Company
exchanged its Private 8 1/2% Notes for a new series of $300,000 of 8 1/2% Senior
Notes due 2006 ("8 1/2% Notes"). The 8 1/2% Notes have been registered under the
Securities Act of 1933. The 8 1/2% Notes mature on February 1, 2006 and have no
sinking fund. Interest on the 8 1/2% Notes is payable semi-annually in February
and August at the annual rate of 8 1/2%. The 8 1/2% Notes may not be redeemed
prior to February 1, 2001 other than in connection with a change of control.
Beginning in 2001 and thereafter, the 8 1/2% Notes are redeemable in whole or in
part, at the option of the Company, at prices declining ratably from 104.25% to
100% in 2003 plus accrued and unpaid interest. Net proceeds from the Private
8 1/2% Notes offering of approximately $293,000 were primarily used to pay down
revolving credit borrowings. The 8 1/2% Notes are fully and unconditionally
guaranteed jointly and severally on a senior basis by each of the domestic
restricted subsidiaries.
IN THE FOURTH QUARTER OF 1996, THE COMPANY ENTERED INTO SIX, ONE-YEAR
INTEREST RATE SWAP AGREEMENTS WITH AN AGGREGATE NOTIONAL AMOUNT OF $600,000.
Under these new swap agreements, the Company receives a floating rate of
interest based on three-month LIBOR, which resets quarterly, and pays a fixed
rate of interest, each quarter, for the term of the agreements. As of December
31, 1996, the weighted average variable rate and weighted average fixed rate
were 5.5% and 5.8%, respectively.
AT DECEMBER 31, 1996, A $250,000 TERM LOAN ("TERM LOAN"), $628,000 OF
TRANCHE A REVOLVING LOAN COMMITMENT ("TRANCHE A REVOLVING LOAN COMMITMENT"),
$6,992 OF CANADIAN DOLLAR LOANS AND $4,850 OF LETTERS OF CREDIT WERE OUTSTANDING
UNDER CREDIT FACILITIES WITH THE CHASE MANHATTAN BANK, THE BANK OF NEW YORK,
BANKERS TRUST COMPANY AND THE BANK OF NOVA SCOTIA AS AGENTS (THE "NEW CREDIT
FACILITIES"). Also, at December 31, 1996, K-III had outstanding $233,250 of
10 5/8% Senior Notes due 2002 (the "10 5/8% Senior Notes"), $100,000 of 10 1/4%
Senior Notes due 2004 (the "10 1/4% Senior Notes"), $300,000 of 8 1/2% Notes,
4,000,000 shares of $2.875 Senior Exchangeable Preferred Stock (the "Senior
Preferred Stock"), 1,531,526 shares of $11.625 Series B Exchangeable Preferred
Stock (the "Series B Preferred Stock") and 2,000,000 shares of Series D
Preferred Stock. The Senior Preferred Stock is exchangeable, at K-III's option,
for the 11 1/2% Subordinated Debentures, the Series B Preferred Stock is
exchangeable, at K-III's option, for the 11 5/8% Class B Subordinated Exchange
Debentures and the Series D Preferred Stock is exchangeable, at K-III's option,
for Class D Subordinated Debentures. Before May 1, 1998, dividends or interest,
as the case may be, on the Series B Preferred Stock or the 11 5/8% Class B
Subordinated Exchange Debentures may be paid in cash or by issuing additional
shares of the Series B Preferred Stock or additional 11 5/8% Class B
Subordinated Exchange Debentures, as the case may be. On or after May 1, 1998,
such dividends or interest must be paid in cash.
THE ABOVE INDEBTEDNESS, AMONG OTHER THINGS, LIMITS THE ABILITY OF THE
COMPANY TO CHANGE THE NATURE OF ITS BUSINESSES, INCUR INDEBTEDNESS, CREATE
LIENS, SELL ASSETS, ENGAGE IN MERGERS, CONSOLIDATIONS OR TRANSACTIONS WITH
AFFILIATES, MAKE INVESTMENTS IN OR LOANS TO CERTAIN SUBSIDIARIES, ISSUE
GUARANTEES AND MAKE CERTAIN RESTRICTED PAYMENTS. The Company is restricted from
declaring or making dividend payments on its common and preferred stock. Under
the Company's most restrictive debt covenants, the Company must maintain a
minimum interest coverage ratio of 1.8 to 1 and a minimum fixed charge coverage
ratio of 1.05 to 1 and its maximum allowable leverage ratio is 6.0 to 1. The
Company believes it is in compliance with the financial and operating covenants
of its principal financing arrangements.
19
<PAGE>
The mandatory reductions of the Tranche A Revolving Loan Commitment and the
Term Loan under the New Credit Facilities are $75,000 in 1999, $200,000 per year
in 2000 through 2003 with a final reduction or paydown of $125,000 in 2004.
THE 10 1/4% SENIOR NOTES MATURE IN JUNE 2004 AND THE 8 1/2% NOTES MATURE IN
FEBRUARY 2006. The per annum principal and interest payments relating to an
acquisition obligation are scheduled to be $6,000, $14,333, $21,167, $19,167 and
$8,833 to be made in semi-annual installments in 1997 through 2001,
respectively. The Company's aggregate lease obligations for 1997, 1998 and 1999
are expected to be approximately $35,000, $32,000 and $28,000, respectively. The
Company believes its liquidity, capital resources and cash flow are sufficient
to fund planned capital expenditures, working capital requirements, interest and
principal payments on its debt, the payment of preferred stock dividends and
other anticipated expenditures for the foreseeable future.
RECENT ACCOUNTING PRONOUNCEMENTS
IN FEBRUARY 1997, THE FINANCIAL ACCOUNTING STANDARDS BOARD ISSUED STATEMENT
OF FINANCIAL ACCOUNTING STANDARDS ("SFAS") NO. 128, "EARNINGS PER SHARE" WHICH
BECOMES EFFECTIVE FOR THE COMPANY'S 1997 CONSOLIDATED FINANCIAL STATEMENTS
BEGINNING IN THE FOURTH QUARTER OF 1997. SFAS No. 128 will eliminate the
disclosure of primary earnings per share which includes the dilutive effect of
stock options, warrants and other convertible securities ("Common Stock
Equivalents") and instead requires reporting of "basic" earnings per share,
which will exclude Common Stock Equivalents. Additionally, SFAS No. 128 changes
the methodology for fully diluted earnings per share. In the opinion of the
Company's management, it is not anticipated that the adoption of this new
accounting standard will have a material effect on the reported earnings per
share of the Company.
RECENT DEVELOPMENTS
THROUGH MARCH 12, 1997, THE COMPANY COMPLETED THREE PRODUCT-LINE
ACQUISITIONS CONSISTING OF SPECIALTY CONSUMER MAGAZINES AND SPECIALIZED
REFERENCE PRODUCTS. The aggregate purchase price was approximately $56,000.
ON MARCH 11, 1997 THE COMPANY ANNOUNCED ITS INTENTION TO MAKE PUBLIC
OFFERINGS OF APPROXIMATELY 12.5 MILLION SHARES OF ITS COMMON STOCK, PAR VALUE
$.01 PER SHARE (THE "OFFERINGS"). The net proceeds of the Offerings will be used
to redeem the Company's outstanding Senior Preferred Stock and repay debt.
AS A PART OF ITS STRATEGY TO FOCUS ON AREAS OF ITS BUSINESS THAT HAVE THE
GREATEST POTENTIAL FOR GROWTH, THE COMPANY INTENDS TO DIVEST CERTAIN BUSINESSES
THAT DO NOT FIT WITHIN ITS GROWTH VEHICLES. Those businesses are: the DAILY
RACING FORM group, which includes a national daily newspaper covering
thoroughbred horseracing and PRO FOOTBALL WEEKLY; KRAMES COMMUNICATIONS, a
leading publisher of patient information sold to healthcare providers for
distribution to patients and other healthcare users; the KATHARINE GIBBS
SCHOOLS, a chain of seven business schools; NEWBRIDGE BOOK CLUBS, the largest
book club organization for professionals in the United States; and NEW WOMAN
magazine, a guide for personal relationships and careers. The proceeds from
these sales will be used to repay indebtedness. These businesses represented
approximately 19% of 1996 net sales of the Company. The unaudited combined
operating results for the year ended December 31, 1996 and total assets at
December 31, 1996 of these business units are approximately as follows:
<TABLE>
<S> <C>
Sales, net........................................................ $ 255,000
Operating income (loss)........................................... (3,950)
Depreciation and amortization .................................... 27,800
Total assets(1)................................................... 304,700
</TABLE>
- ------------------------
(1) At December 31, 1996, KATHARINE GIBBS SCHOOLS is reflected as an asset held
for sale in the accompanying consolidated balance sheet.
20
<PAGE>
IN JANUARY 1997, THE COMPANY PURCHASED, IN AGGREGATE, $20,850 PRINCIPAL
AMOUNT OF 10 5/8% SENIOR NOTES AT A WEIGHTED AVERAGE PRICE OF 105%, PLUS ACCRUED
AND UNPAID INTEREST, FROM VARIOUS BROKERS ON THE OPEN MARKET (THE "REPURCHASE").
In March 1997, the Company called for redemption all of its outstanding 10 5/8%
Senior Notes. On May 1, 1997, the Company will redeem $212,400 principal amount
of 10 5/8% Senior Notes, at a redemption price of 104% of the outstanding
principal amount thereof, plus accrued and unpaid interest to the date of
redemption. The Repurchase was in addition to the purchases of $16,750 principal
amount of 10 5/8% Senior Notes during November and December of 1996 which are
reflected in the Company's consolidated balance sheet at December 31, 1996.
IMPACT OF INFLATION
THE IMPACT OF INFLATION WAS IMMATERIAL DURING 1996 WITH THE EXCEPTION OF
PAPER PRICES. PAPER PRICES BEGAN TO RISE AROUND MID-YEAR 1994 AND CONTINUED TO
RISE MORE DRAMATICALLY IN 1995 AND EARLY 1996. Overall, the Company's average
purchase price for paper increased approximately 8.4% during 1996 compared to
1995. In 1996, paper costs represented approximately 10% of the Company's total
operating costs and expenses. Due to recent softening in certain segments of the
paper market, paper price increases of the magnitude experienced in 1995 and
1996 seem unlikely in the foreseeable future. Postage for product distribution
and direct mail solicitations is also a significant expense of the Company. The
Company uses the U.S. Postal Service for distribution of many of its products
and marketing materials. Postage costs increase periodically and can be expected
to increase in the future. In the past, the effects of inflation on operating
expenses have substantially been offset by K-III's ability to increase selling
prices. No assurances can be given that the Company can pass such cost increases
through to its customers. In addition, to pricing actions, the Company is
continuing to examine all aspects of the manufacturing and purchasing processes
to identify ways to offset some of these price increases.
FORWARD LOOKING INFORMATION
This report contains certain forward-looking statements concerning the
Company's operations, economic performance and financial condition. These
statements are based upon a number of assumptions and estimates which are
inherently subject to uncertainties and contingencies, many of which are beyond
the control of the Company, and reflect future business decisions which are
subject to change. Some of these assumptions may not materialize and
unanticipated events will occur which can affect the Company's results.
21
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22
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
TABLE OF CONTENTS TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Report of Independent Auditors--Deloitte & Touche LLP................................ 24
Statements of Consolidated Operations for the Years Ended December 31, 1996, 1995 and
1994............................................................................... 25
Consolidated Balance Sheets as of December 31, 1996 and 1995......................... 26
Statements of Consolidated Cash Flows for the Years Ended December 31, 1996, 1995 and
1994............................................................................... 27
Statements of Shareholders' Equity for the Years Ended December 31, 1996, 1995 and
1994............................................................................... 28
Notes to Consolidated Financial Statements for the Years Ended December 31, 1996,
1995 and 1994...................................................................... 30
</TABLE>
23
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Shareholders and Board of Directors of
K-III Communications Corporation
New York, New York:
We have audited the accompanying consolidated balance sheets of K-III
Communications Corporation and subsidiaries as of December 31, 1996 and 1995,
and the related statements of consolidated operations, shareholders' equity and
consolidated cash flows for each of the three years in the period ended December
31, 1996. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of the Company and subsidiaries at
December 31, 1996 and 1995, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 1996 in
conformity with generally accepted accounting principles.
As discussed in Note 2 to the consolidated financial statements, the Company
changed its method of accounting for advertising costs to conform with Statement
of Position 93-7--"Reporting on Advertising Costs" of the American Institute of
Certified Public Accountants in 1994.
DELOITTE & TOUCHE LLP
New York, New York
January 29, 1997
(March 19, 1997 as to Note 26)
24
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------
NOTES 1996 1995 1994
-------------- -------------- -------------
<S> <C> <C> <C> <C>
Sales, net:
Education.............................................. $ 376,217 $ 330,414 $ 430,134
Information............................................ 313,891 263,542 192,732
Specialty Media........................................ 684,341 452,373 341,782
-------------- -------------- -------------
Total sales, net......................................... 1,374,449 1,046,329 964,648
Operating costs and expenses:
Cost of goods sold..................................... 337,065 251,347 206,390
Marketing and selling.................................. 249,301 177,167 197,379
Distribution, circulation and fulfillment.............. 230,533 188,147 180,962
Editorial.............................................. 104,484 73,703 64,235
Other general expenses................................. 154,966 122,816 140,263
Corporate administrative expenses...................... 21,497 17,034 13,325
Depreciation and amortization of prepublication costs,
property and equipment............................... 11 38,233 25,761 16,190
Provision for loss on the sales of businesses, net..... 6 -- 35,447 15,025
Restructuring and other costs.......................... 7 -- 14,667 --
Amortization of intangible assets, excess of purchase
price over net assets acquired and other............. 8, 12 152,469 166,515 120,676
-------------- -------------- -------------
Operating income (loss).................................. 85,901 (26,275) 10,203
Other income (expense):
Interest expense....................................... (125,506) (105,837) (78,351)
Amortization of deferred financing and organizational
costs................................................ 13 (3,662) (3,135) (3,080)
Write-off of unamortized deferred financing costs...... (8,648) -- (11,874)
Other, net............................................. 6 6,659 212 (401)
-------------- -------------- -------------
Loss before income tax benefit........................... (45,256) (135,035) (83,503)
Income tax benefit....................................... 16 53,300 59,600 42,100
-------------- -------------- -------------
Net income (loss)........................................ 8,044 (75,435) (41,403)
Preferred stock dividends:
Non-cash............................................... (16,582) (17,478) (14,459)
Cash................................................... (26,944) (11,500) (11,500)
-------------- -------------- -------------
Loss applicable to common shareholders................... $ (35,482) $ (104,413) $ (67,362)
-------------- -------------- -------------
-------------- -------------- -------------
Loss per common and common equivalent share.............. 3 $ (.27) $ (.91) $ (.65)
-------------- -------------- -------------
-------------- -------------- -------------
Weighted average common and common equivalent shares
outstanding............................................ 3 130,007,632 115,077,498 103,642,668
-------------- -------------- -------------
-------------- -------------- -------------
</TABLE>
See notes to consolidated financial statements.
25
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
NOTES 1996 1995
------------ ------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................................. $ 36,655 $ 27,226
Accounts receivable, net.............................................. 9 233,603 173,771
Inventories, net...................................................... 10 52,743 70,844
Net assets held for sale.............................................. 5 18,684 5,253
Prepaid expenses and other............................................ 34,834 26,732
------------ ------------
Total current assets.............................................. 376,519 303,826
Property and equipment, net............................................. 11 122,823 112,013
Other intangible assets, net............................................ 12 781,316 699,617
Excess of purchase price over net assets acquired, net.................. 12 971,665 534,554
Deferred income tax asset, net.......................................... 16 176,200 113,800
Other non-current assets................................................ 13 123,692 117,606
------------ ------------
$ 2,552,215 $ 1,881,416
------------ ------------
------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable...................................................... $ 107,258 $ 90,414
Accrued interest payable.............................................. 22,150 9,326
Accrued expenses and other............................................ 14 140,959 125,967
Deferred revenues..................................................... 144,857 128,679
Current maturities of long-term debt.................................. 15 6,000 6,000
------------ ------------
Total current liabilities......................................... 421,224 360,386
------------ ------------
Long-term debt.......................................................... 15, 26 1,565,686 1,134,916
------------ ------------
Other non-current liabilities........................................... 35,062 33,924
------------ ------------
Commitments and contingencies 22
Exchangeable preferred stock (aggregated liquidation and redemption
values of $453,153 and $236,571 at December 31, 1996 and 1995,
respectively)......................................................... 17 442,729 231,606
------------ ------------
Common stock subject to redemption ($.01 par value, 643,310 shares and
2,406,513 shares outstanding at December 31, 1996 and 1995,
respectively)......................................................... 18 5,957 28,022
------------ ------------
Shareholders' equity:
Common stock ($.01 par value, 250,000,000 shares authorized;
128,349,045 shares and 125,921,221 shares outstanding at December
31, 1996 and 1995, respectively).................................... 18 1,283 1,259
Additional paid-in capital............................................ 18 772,642 748,194
Accumulated deficit................................................... 19 (691,098) (655,616)
Cumulative foreign currency translation adjustments................... (1,270) (1,275)
------------ ------------
Total shareholders' equity........................................ 81,557 92,562
------------ ------------
$ 2,552,215 $ 1,881,416
------------ ------------
------------ ------------
</TABLE>
See notes to consolidated financial statements.
26
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------
<S> <C> <C> <C>
1996 1995 1994
---------- --------- ---------
<CAPTION>
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss)............................................................ $ 8,044 $ (75,435) $ (41,403)
Adjustments to reconcile net income (loss) to net cash provided by operating
activities:
Depreciation, amortization and other....................................... 194,364 195,411 139,946
Provision for loss on the sales of businesses, net......................... -- 35,447 15,025
Accretion of discount on acquisition obligation, distribution advance and
other.................................................................... 6,398 8,147 9,617
Write-off of deferred financing costs...................................... 8,648 -- 11,874
Income tax benefit......................................................... (53,300) (59,600) (42,100)
Other, net................................................................. (6,213) (122) 177
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable, net................................................... (24,692) (2,525) (2,510)
Inventories, net........................................................... 24,531 (23,630) 1,329
Prepaid expenses and other................................................. (598) (13,127) (14,367)
Increase (decrease) in:
Accounts payable........................................................... 5,807 6,742 5,971
Accrued interest payable................................................... 12,824 1,131 877
Accrued expenses and other................................................. (12,674) (26,857) (13,492)
Deferred revenues.......................................................... (11,201) 16,971 (4,984)
Other non-current liabilities.............................................. (2,651) 1,509 (1,070)
---------- --------- ---------
Net cash provided by operating activities.................................. 149,287 64,062 64,890
---------- --------- ---------
INVESTING ACTIVITIES:
Additions to property, equipment and other................................... (29,661) (25,179) (16,118)
Proceeds from sales of businesses............................................ 8,071 58,656 --
Proceeds from sales of property, equipment and other......................... 871 1,765 1,934
Payments for businesses acquired............................................. (700,990) (353,954) (427,942)
---------- --------- ---------
Net cash used in investing activities...................................... (721,709) (318,712) (442,126)
---------- --------- ---------
FINANCING ACTIVITIES:
Borrowings under credit agreements........................................... 1,683,787 622,459 766,329
Repayments of borrowings under credit agreements............................. (1,384,800) (522,500) (678,800)
Proceeds from issuance of 8 1/2% Senior Notes, net of discount............... 298,734 -- --
Payments of acquisition obligation........................................... (6,000) (6,000) (6,000)
Payments of floating rate indebtedness....................................... (150,000) -- --
Proceeds from issuance of common stock, net of redemptions................... 3,498 187,520 76,360
Proceeds from issuance of 10 1/4% Senior Notes............................... -- -- 100,000
Borrowings under BONY Term Loan.............................................. -- -- 150,000
Proceeds from issuance of Old Preferred Stock................................ -- 50,000 75,050
Proceeds from issuance of Series C (exchanged into Series D) Preferred Stock,
net of issuance costs...................................................... 193,451 -- --
Redemption of Old Preferred Stock............................................ -- (52,691) (76,324)
Purchases of 10 5/8% Senior Notes............................................ (16,750) -- --
Dividends paid to preferred shareholders..................................... (26,944) (11,500) (11,500)
Deferred financing costs paid................................................ (13,132) (3,204) (10,842)
Other........................................................................ 7 (440) (349)
---------- --------- ---------
Net cash provided by financing activities.................................. 581,851 263,644 383,924
---------- --------- ---------
Increase in cash and cash equivalents.......................................... 9,429 8,994 6,688
Cash and cash equivalents, beginning of period................................. 27,226 18,232 11,544
---------- --------- ---------
Cash and cash equivalents, end of period....................................... $ 36,655 $ 27,226 $ 18,232
---------- --------- ---------
---------- --------- ---------
SUPPLEMENTAL INFORMATION:
Businesses acquired:
Fair value of assets acquired.............................................. $ 779,192 $ 429,810 $ 517,412
Liabilities assumed........................................................ 78,202 75,856 89,470
---------- --------- ---------
Cash paid for businesses acquired.......................................... $ 700,990 $ 353,954 $ 427,942
---------- --------- ---------
---------- --------- ---------
Interest paid................................................................ $ 112,657 $ 102,040 $ 71,395
---------- --------- ---------
---------- --------- ---------
Non-cash investing and financing activities:
Asset acquired under a capital lease obligation............................ $ -- $ 11,738 $ --
---------- --------- ---------
---------- --------- ---------
Preferred stock dividends in kind.......................................... $ 16,582 $ 17,478 $ 14,459
---------- --------- ---------
---------- --------- ---------
Accretion in carrying value of preferred stock............................. $ 1,090 $ 590 $ 590
---------- --------- ---------
---------- --------- ---------
Accretion (reduction) in carrying value of common stock subject to
redemption............................................................... $ (885) $ 9,927 $ --
---------- --------- ---------
---------- --------- ---------
</TABLE>
See notes to consolidated financial statements.
27
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
<S> <C>
Balance at January 1, 1994..................................................................
Issuances of common stock, net of issuance costs............................................
Expiration of redemption feature on common stock subject to redemption......................
$11.625 Series B Exchangeable Preferred Stock-dividends in kind.............................
$2.875 Senior Exchangeable Preferred Stock--cash dividends..................................
Old Preferred Stock--dividends in kind......................................................
Accretion of differences between carrying value and redemption value of:
$2.875 Senior Exchangeable Preferred Stock..............................................
$11.625 Series B Exchangeable Preferred Stock...........................................
Cumulative foreign currency translation adjustments.........................................
Net loss....................................................................................
Balance at December 31, 1994................................................................
Issuances of common stock, net of issuance costs............................................
Expiration of redemption feature on common stock subject to redemption......................
$11.625 Series B Exchangeable Preferred Stock--dividends in kind............................
$2.875 Senior Exchangeable Preferred Stock--cash dividends..................................
Old Preferred Stock--dividends in kind......................................................
Accretion of differences between carrying value and redemption value of:
$2.875 Senior Exchangeable Preferred Stock..............................................
$11.625 Series B Exchangeable Preferred Stock...........................................
Common stock subject to redemption......................................................
Cumulative foreign currency translation adjustments.........................................
Net loss....................................................................................
Balance at December 31, 1995................................................................
Issuances of common stock, net of issuance costs............................................
Expiration of redemption feature on common stock subject to redemption......................
$11.625 Series B Exchangeable Preferred Stock--dividends in kind............................
$2.875 Senior Exchangeable Preferred Stock--cash dividends..................................
$10.00 Series D Exchangeable Preferred Stock--cash dividends................................
Reduction (accretion) of differences between carrying value and redemption value of:
$2.875 Senior Exchangeable Preferred Stock..............................................
$11.625 Series B Exchangeable Preferred Stock...........................................
$10.00 Series D Exchangeable Preferred Stock............................................
Common stock subject to redemption......................................................
Cumulative foreign currency translation adjustments.........................................
Net income..................................................................................
Balance at December 31, 1996................................................................
</TABLE>
See notes to consolidated financial statements.
28
<PAGE>
<TABLE>
<CAPTION>
CUMULATIVE
FOREIGN
COMMON STOCK ADDITIONAL CURRENCY
- ------------------------ PAID-IN ACCUMULATED TRANSLATION
SHARES AMOUNT CAPITAL DEFICIT ADJUSTMENTS TOTAL
- ------------- --------- ---------- ------------ ----------- -----------
<C> <C> <C> <C> <C>
94,705,557 $ 947 $ 488,541 $ (483,841) $ (1,220) $ 4,427
9,381,250 94 74,956 75,050
1,251,002 12 10,033 10,045
(13,185) (13,185)
(11,500) (11,500)
(1,274) (1,274)
(273) (273)
(317) (317)
(104) (104)
(41,403) (41,403)
- ------------- --------- ---------- ------------ ----------- -----------
105,337,809 1,053 572,940 (551,203) (1,324) 21,466
20,435,782 204 184,964 185,168
147,630 2 807 809
(14,787) (14,787)
(11,500) (11,500)
(2,691) (2,691)
(273) (273)
(317) (317)
(9,927) (9,927)
49 49
(75,435) (75,435)
- ------------- --------- ---------- ------------ ----------- -----------
125,921,221 1,259 748,194 (655,616) (1,275) 92,562
681,890 7 3,440 3,447
1,745,934 17 21,213 21,230
(16,582) (16,582)
(11,500) (11,500)
(15,444) (15,444)
(273) (273)
(317) (317)
(500) (500)
885 885
5 5
8,044 8,044
- ------------- --------- ---------- ------------ ----------- -----------
128,349,045 $ 1,283 $ 772,642 $ (691,098) $ (1,270) $ 81,557
- ------------- --------- ---------- ------------ ----------- -----------
- ------------- --------- ---------- ------------ ----------- -----------
</TABLE>
29
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
1. DESCRIPTION OF BUSINESS
K-III COMMUNICATIONS CORPORATION (WHICH TOGETHER WITH ITS SUBSIDIARIES IS
HEREIN REFERRED TO AS EITHER "K-III" OR THE "COMPANY" UNLESS THE CONTEXT IMPLIES
OTHERWISE) IS THE AUTHORITATIVE SOURCE FOR SPECIALIZED INFORMATION TO TARGETED
MARKETS. The Company's three business segments are education, information and
specialty media. The specialty media segment has in prior years been referred to
as the media segment, but the Company believes that the use of specialty media
is more descriptive of the underlying businesses. The education segment includes
Channel One, Westcott, Weekly Reader, Newbridge, Krames and Katharine Gibbs
Schools. This segment specializes in providing educational materials to the
classroom and workplace learning markets. The information segment includes K-III
Reference, K-III Directory, Haas, Bacon's, a portion of Intertec, Nelson and
Daily Racing Form. The information segment produces consumer and business
directories in a variety of formats for decision makers in business,
professional and special interest consumer markets. The information is compiled
and sold through reference works, newspapers, CD-ROMs, almanacs and directories.
The specialty media segment includes K-III Magazines, PJS, McMullen Argus and
the majority of Intertec. The specialty media segment is concentrated primarily
on specialty consumer magazines, and technical and trade magazines.
2. CHANGE IN METHOD OF ACCOUNTING FOR ADVERTISING COSTS
Effective July 1, 1994, the Company adopted the American Institute of
Certified Public Accountants' Statement of Position 93-7, "Reporting on
Advertising Costs" (the "SOP").
Under the Company's previous accounting policy, general advertising costs
were expensed as incurred; promotional and subscription acquisition costs were
capitalized prior to the launching of a direct marketing or subscription
acquisition campaign and then expensed when the promotional materials were
mailed or displayed. In compliance with the new SOP, the Company now expenses
advertising costs the first time the advertising takes place, except for
direct-response advertising qualifying for capitalization under the SOP which is
capitalized and amortized over its expected period of future benefit. Direct-
response advertising consists of product promotional mailings, catalogues,
telemarketing and subscription promotions. The capitalized costs of advertising
are amortized using a ratio of current period revenues to total current and
estimated future period revenues. The amortization periods range from 6 months
to 2 years subsequent to the promotional event. Amortization of direct-response
advertising costs is included in marketing and circulation expenses on the
accompanying statements of consolidated operations. The adoption of this new
accounting method resulted in a decrease in the net loss of approximately $2,000
($.02 per share), $11,800 ($.10 per share) and $9,800 ($.09 per share) for the
years ended December 31, 1996, 1995 and 1994, respectively. At December 31,
1996, 1995 and 1994, $28,452, $25,408 and $16,895 of advertising costs,
respectively, were reported as net assets and included in other non-current
assets on the accompanying consolidated balance sheets. Advertising expense was
approximately $100,687, $88,176 and $100,357, during the years ended December
31, 1996, 1995 and 1994, respectively.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION. The consolidated financial statements include the
accounts of K-III and its subsidiaries. All significant intercompany accounts
and transactions have been eliminated in consolidation. The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the amounts of
assets, liabilities, revenues and expenses reported in the consolidated
financial statements.
30
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Significant accounting estimates used include estimates for sales returns
and allowances and estimates for the realization of deferred tax assets.
Management has exercised reasonableness in deriving these estimates. However,
actual results may differ.
Certain reclassifications have been made to the prior year consolidated
financial statements to conform with the presentation used in the current
period.
Effective January 1, 1996, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." SFAS No. 121
establishes the accounting for the impairment of long-lived assets, certain
identifiable intangibles and goodwill related to those assets to be held and
used, and for long-lived assets and certain identifiable intangibles to be
disposed of. The adoption of this new accounting standard did not have a
material effect on the results of operations of the Company.
Effective January 1, 1996, the Company adopted SFAS No. 123, "Accounting for
Stock-Based Compensation" ("SFAS No. 123"). This Statement defines a fair value
based method of accounting for an employee stock option or similar equity
instrument and encourages all entities to adopt that method of accounting for
all of their employee stock compensation plans. However, it also allows an
entity to continue to measure compensation cost for those plans using the
intrinsic value based method of accounting prescribed by Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB No. 25").
The Company has elected to continue to account for its employee stock
compensation plans under APB No. 25. Pro forma disclosures of net income (loss)
and loss per common and common equivalent share, as if the fair value based
method of accounting defined in SFAS No. 123 had been applied, are presented in
Note 18.
In February 1997, the Financial Accounting Standards Board issued SFAS No.
128, "Earnings Per Share" which becomes effective for the Company's 1997
consolidated financial statements beginning in the fourth quarter of 1997. SFAS
No. 128 will eliminate the disclosure of primary earnings per share which
includes the dilutive effect of stock options, warrants and other convertible
securities ("Common Stock Equivalents") and instead requires reporting of
"basic" earnings per share, which will exclude Common Stock Equivalents.
Additionally, SFAS No. 128 changes the methodology for fully diluted earnings
per share. In the opinion of the Company's management, it is not anticipated
that the adoption of this new accounting standard will have a material effect on
the reported earnings per share of the Company.
CASH AND CASH EQUIVALENTS. Management considers all highly liquid
instruments purchased with an original maturity of 90 days or less to be cash
equivalents.
INVENTORIES. Inventories, including paper, purchased manuscripts,
photographs and art, are valued at the lower of cost or market principally on a
first-in, first-out ("FIFO") basis and include the value of inventory for which
a provision for estimated sales returns has been made.
PROPERTY AND EQUIPMENT. Property and equipment are stated at cost less
accumulated depreciation and amortization. Depreciation of property and
equipment, and the amortization of leasehold improvements are provided at rates
based on the estimated useful lives or lease terms, if shorter, using primarily
the straight-line method. Improvements are capitalized while maintenance and
repairs are expensed as incurred.
EDITORIAL AND PRODUCT DEVELOPMENT COSTS. Editorial costs and product
development costs are generally expensed as incurred. Product development costs
include the cost of artwork, graphics, prepress, plates and photography for new
products.
31
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
ADVERTISING AND SUBSCRIPTION ACQUISITION COSTS. Advertising and
subscription acquisition costs are expensed the first time the advertising takes
place, except for direct-response advertising, the primary purpose of which is
to elicit sales from customers who can be shown to have responded specifically
to the advertising and that results in probable future economic benefits. These
direct-response advertising costs are reported as assets and amortized over the
estimated period of future benefit. Prior to July 1, 1994, direct-response
advertising costs were capitalized prior to launching a direct marketing or
subscription acquisition campaign and were expensed when the promotional
materials were mailed (see Note 2).
DEFERRED FINANCING COSTS. Deferred financing costs are being amortized by
the straight-line method over the terms of the related indebtedness.
DEFERRED WIRING AND INSTALLATION COSTS. Wiring and installation costs
incurred by Channel One and Westcott have been capitalized and are being
amortized by the straight-line method over 15 and five years, respectively, the
related estimated useful life.
$2.875 SENIOR EXCHANGEABLE PREFERRED STOCK ("SENIOR PREFERRED STOCK"),
$11.625 SERIES B EXCHANGEABLE PREFERRED STOCK ("SERIES B PREFERRED STOCK") and
the $10.00 SERIES D EXCHANGEABLE PREFERRED STOCK ("SERIES D PREFERRED
STOCK"). The Senior Preferred Stock, Series B Preferred Stock and Series D
Preferred Stock are stated at fair value on the date of issuance less issuance
costs. The difference between their carrying values and their redemption values
is being amortized (using the interest method) by periodic charges to additional
paid-in capital.
COMMON STOCK SUBJECT TO REDEMPTION. The common stock subject to redemption
is stated at redemption value which at December 31, 1996 and 1995, is equal to
quoted market value. The difference between the carrying value of such stock and
its redemption value is recorded by periodic charges to additional paid-in
capital.
COMPUTER SOFTWARE. Computer software costs are expensed as incurred.
INTEREST RATE SWAP AGREEMENTS. The Company's interest rate swap agreements
are designated and effective as modifications to existing debt obligations to
reduce the impact of changes in the interest rates on its floating rate
borrowings and, accordingly, are accounted for using the settlement method of
accounting. The differentials to be paid or received under the interest rate
swap agreements are accrued as interest rates change and are recognized as
adjustments to interest expense. The Company considers swap terms including the
reference rate, payment and maturity dates and the notional amount in
determining if an interest rate swap agreement is effective at modifying an
existing debt obligation. If the criteria for designation are no longer met or
the underlying instrument matures or is extinguished, the Company will account
for outstanding swap agreements at fair market value and any resulting gain or
loss will be recognized as other income or expense. Any gains or losses upon
early termination of the agreements will be deferred and amortized over the
shorter of the remaining life of the hedged existing debt obligation or the
original life of the interest rate swap agreement.
PURCHASE ACCOUNTING. With respect to the acquisitions, the total purchase
price has been allocated to the tangible and intangible assets and liabilities
based on their respective fair values.
EXCESS OF PURCHASE PRICE OVER NET ASSETS ACQUIRED AND INTANGIBLE
ASSETS. Intangible assets are being amortized using both accelerated and
straight-line methods over periods ranging from 1/4 of 1 year to 40 years. The
excess of purchase price over net assets acquired is being amortized on a
straight-line basis over 40 years. The recoverability of the carrying values of
the excess of the purchase price over the net assets
32
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
acquired and intangible assets is evaluated quarterly to determine if an
impairment in value has occurred. An impairment in value will be considered to
have occurred when it is determined that the undiscounted future operating cash
flows generated by the acquired businesses are not sufficient to recover the
carrying values of such intangible assets. If it has been determined that an
impairment in value has occurred, the excess of the purchase price over the net
assets acquired and intangible assets would be written down to an amount which
will be equivalent to the present value of the future operating cash flows to be
generated by the acquired businesses.
REVENUE RECOGNITION. Advertising revenues for all consumer magazines are
recognized as income at the on-sale date, net of provisions for estimated
rebates, adjustments and discounts. Other advertising revenues are generally
recognized based on the publications' cover dates. Newsstand sales are
recognized as income at the on-sale date for all publications, net of provisions
for estimated returns. Subscriptions are recorded as deferred revenue when
received and recognized as income over the term of the subscription. Westcott
subscription and broadcast fees for satellite and videotape network services are
recognized in the month services are rendered. Sales of books and other items
are recognized as revenue principally upon shipment, net of an allowance for
returns which is provided based on sales. Distribution costs charged to
customers are recognized as revenue when the related product is shipped. Tuition
is recorded as deferred revenue when received and recognized ratably as income
over the length of the school term. Channel One advertising revenue, net of
commissions, is recognized as advertisements are aired on the program. Certain
advertisers are guaranteed a minimum number of viewers per advertisement shown;
the revenue recognized is based on the actual viewers delivered not to exceed
the original contract value.
FOREIGN CURRENCY. Gains and losses on foreign currency transactions, which
are not significant, have been included in other, net. The effects of
translation of foreign currency financial statements into U.S. dollars are
included in the cumulative foreign currency translation adjustments account in
shareholders' equity.
LOSS PER COMMON AND COMMON EQUIVALENT SHARE. Loss per common and common
equivalent share for the years ended December 31, 1996, 1995 and 1994 was
computed using the weighted average number of common and common equivalent
shares outstanding during each year. The weighted average number of common and
common equivalent shares outstanding during 1995 (for the quarters prior to the
initial filing of the registration statement) and 1994, includes incremental
shares for the common stock issued and non-qualified options granted to purchase
common stock which were issued within one year prior to the initial filing of
the registration statement for an initial public offering at a purchase price
below $10.00 per share; and during the fourth quarters of 1996, 1995 and 1994,
the weighted average of common and common equivalent shares includes incremental
shares for non-qualified stock options granted to purchase common stock
(collectively, the "Incremental Shares"). Such Incremental Shares were
determined utilizing the treasury stock method. Loss per common share assuming
full dilution is not presented because such calculation is antidilutive.
4. ACQUISITIONS
The Company acquired certain net assets or stock of:
1994--Channel One, which produces and distributes a daily advertising
supported television news show for secondary school students and associated
video programming; a publisher of directories of residential apartments
available to rent; a producer and distributor of privately sponsored
supplemental
33
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
4. ACQUISITIONS (CONTINUED)
educational materials; and Katharine Gibbs Schools, a network of seven
post-secondary career schools. In addition to the aforementioned, the Company
completed several other smaller acquisitions during 1994.
1995--a publisher of 13 specialty consumer magazine titles serving the
sewing, crafts, woodworking and shooting sports areas; a publisher of 11 trade
magazines in the mining, printing and packaging industries, a specialty consumer
magazine, 15 truck and automobile price guides and three marketing and sales
oriented magazines; an information provider for the public relations industry; a
publisher of 21 specialty consumer magazines serving the automobile, truck,
motorcycle and watercraft areas; a publisher of specialty consumer magazines
serving the automotive area; and a publisher of trade magazines and directories
and an operator of trade shows. In addition to the aforementioned, the Company
completed several other smaller acquisitions during 1995.
1996--Cahners Consumer Magazines, a publisher of specialty consumer
magazines including AMERICAN BABY, MODERN BRIDE, SAIL and POWER & MOTORYACHT,
along with 20 related properties and Westcott which utilizes various multi-media
technologies to provide workplace training, news, and information to
professionals and students in the corporate and professional, automotive,
banking, government and public service, education, health care, and interactive
distance training markets. In addition to the aforementioned, the Company
completed several other smaller acquisitions during 1996.
The acquisitions have been accounted for by the purchase method. The
preliminary purchase cost allocations for the above-mentioned acquisitions are
subject to adjustment when additional information concerning asset and liability
valuations are obtained. The final asset and liability fair values may differ
from those set forth in the accompanying consolidated balance sheet at December
31, 1996; however, the changes are not expected to have a material effect on the
consolidated financial position of the Company. The consolidated financial
statements include the operating results of these acquisitions subsequent to
their respective dates of acquisition. The foregoing acquisitions, except for
Channel One, Cahners and Westcott, if they had occurred on January 1 of the year
prior to acquisition, would not have had a material impact on the results of
operations.
The following unaudited pro forma information presents the results of
operations of the Company as if the acquisitions of Channel One, Cahners and
Westcott had taken place on January 1, 1994:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
<S> <C> <C> <C>
1996 1995 1994
------------ ------------ ------------
Sales, net.................................................... $ 1,413,930 $ 1,238,254 $ 1,194,673
Operating income (loss)....................................... 82,100 (12,563) 14,861
Net income (loss)............................................. (8,239) (106,012) (84,688)
Loss applicable to common shareholders........................ (51,765) (134,990) (110,647)
Loss per common and common equivalent share................... (0.40) (1.17) (1.07)
</TABLE>
5. NET ASSETS HELD FOR SALE
In 1995, the Company decided to sell, as of the acquisition date, certain
technical and trade magazines which were originally acquired as part of a larger
acquisition (see Note 6). During September 1996, the Company decided to divest
Katharine Gibbs and expects to complete the sale in 1997. The net assets of
these operations were recorded at net realizable value and have been classified
as a current asset in net assets held for sale on the accompanying consolidated
balance sheets.
34
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
6. DIVESTITURES
In June 1995, the Company sold certain newly acquired technical and trade
magazines and PREMIERE and on July 28, 1995, the Company sold Newfield. In
connection with these sales, the Company has received aggregate cash proceeds of
$58,656 and has recorded amounts due from buyer of approximately $5,000 on the
accompanying consolidated balance sheets at December 31, 1996 and 1995. In
connection with these sales, the Company recorded net aggregate provisions for
loss on the sales of businesses of $35,447 for the year ended December 31, 1995
and $15,025 for the year ended December 31, 1994.
During the second quarter of 1996, the Company completed the sale of certain
technical and trade magazines. The differences between the proceeds received and
the carrying values of the assets held for sale were treated as adjustments to
the excess of purchase price over net assets acquired related to the retained
businesses. In addition, during the second quarter of 1996, the Company sold a
monthly tabloid targeted to electronic design engineers for consideration of a
motion picture and television production magazine and cash proceeds. During the
fourth quarter of 1996, the Company completed the sale of the Kits and Leaflets
Division of PJS and certain specialty consumer magazines. In connection with
these sales, the Company received aggregate cash proceeds of approximately
$8,100 and recorded a net gain on sale of businesses of approximately $5,800.
7. RESTRUCTURING AND OTHER COSTS
In the second quarter of 1995, the Company recorded charges of $14,667
related to a corporate restructuring effort at Newbridge, its professional book
club business, and the completion of a manufacturing outsourcing effort at Daily
Racing Form. Included in the restructuring charge of $7,272 are employee
separation costs of $1,287, litigation matters of $3,349, a write-down of
inventory and other assets of $2,086 related to the exit of a product line at
Newbridge and costs associated with the termination of a real estate lease which
is no longer needed in the operations of Daily Racing Form of $550. Included in
the other costs of $7,395 are costs incurred and associated with the correction
of customer and accounting systems and write-down of certain assets. During 1994
and early 1995, the Company experienced certain operational problems at
Newbridge relating to periodic mailings which described its then current product
offerings. These operational problems resulted in higher than normal levels of
bad debts and returns. In addition, Newbridge implemented a new customer
information processing system which inadvertently suppressed a number of
customer and product offering mailings resulting in lower than anticipated
demand for certain products and a corresponding increase in obsolete inventory.
Subsequently, the operational and new system problems were corrected. Based on
information which was then available, appropriate provisions for inventory
obsolescence of approximately $500 and for bad debts of approximately $2,500
were recorded in the first quarter of 1995. Expenses associated with the outside
consultants and systems corrections of approximately $1,400 were recorded in the
second quarter of 1995. Additional obsolescence provisions of approximately
$2,000 and bad debt provisions of approximately $1,000 were identified and
recorded in the second quarter of 1995. Approximately $4,100 of the
restructuring and other charges were paid in cash in 1995 and at December 31,
1995, approximately $2,600 of these charges is included in accrued liabilities.
Approximately $1,200 of the restructuring and other charges were paid in cash in
1996 and at December 31, 1996, $1,400 of these charges is included in accrued
liabilities, which is expected to be paid in 1997.
8. ADJUSTMENTS TO THE CARRYING VALUES OF LONG-LIVED ASSETS
In accordance with its accounting policy, during 1995, the Company recorded
aggregate write-downs of $17,958 and $5,786 to the carrying values of the
identifiable intangible assets and goodwill of K-III
35
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
8. ADJUSTMENTS TO THE CARRYING VALUES OF LONG-LIVED ASSETS (CONTINUED)
Reference and a product line of Newbridge, respectively. These adjustments are
included in amortization of intangible assets, excess of purchase price over net
assets acquired and other on the accompanying statement of consolidated
operations for the year ended December 31, 1995 and affect the operating results
of the information and education segments.
9. ACCOUNTS RECEIVABLE, NET
Accounts receivable consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
<S> <C> <C>
1996 1995
---------- ----------
Accounts receivable................................................... $ 273,119 $ 211,150
Less: Allowance for doubtful accounts................................. 15,418 14,364
Allowance for returns and rebates................................ 24,098 23,015
---------- ----------
$ 233,603 $ 173,771
---------- ----------
---------- ----------
</TABLE>
10. INVENTORIES, NET
Inventories consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
<S> <C> <C>
1996 1995
--------- ---------
Finished goods.......................................................... $ 41,497 $ 49,026
Work in process......................................................... 2,111 969
Raw materials........................................................... 17,838 27,978
--------- ---------
61,446 77,973
Less: allowance for obsolescence........................................ 8,703 7,129
--------- ---------
$ 52,743 $ 70,844
--------- ---------
--------- ---------
</TABLE>
36
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
11. PROPERTY AND EQUIPMENT, NET
Property and equipment, including that held under capital leases, consist of
the following:
<TABLE>
<CAPTION>
DECEMBER 31,
RANGE OF LIVES ----------------------
(YEARS) 1996 1995
--------------- ---------- ----------
<S> <C> <C> <C>
Land.................................................. -- $ 2,022 $ 2,043
Buildings and improvements............................ 1-40 24,219 19,296
Furniture and fixtures................................ 4-10 26,027 19,387
Machinery and equipment............................... 2-9 94,091 65,187
School equipment...................................... 10 55,860 54,625
Other................................................. 3-7 2,401 1,232
---------- ----------
204,620 161,770
Less: accumulated depreciation and amortization....... 81,797 49,757
---------- ----------
$ 122,823 $ 112,013
---------- ----------
---------- ----------
</TABLE>
Included in machinery and equipment above is an asset which was acquired
under a capital lease in the amount of $11,738 with accumulated amortization of
$1,739 and $434 at December 31, 1996 and 1995, respectively (see Note 22).
12. INTANGIBLE ASSETS AND EXCESS OF PURCHASE PRICE OVER NET ASSETS ACQUIRED, NET
Other intangible assets consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
RANGE OF LIVES --------------------------
(YEARS) 1996 1995
--------------- ------------ ------------
<S> <C> <C> <C>
Trademarks........................................ 40 $ 448,490 $ 416,524
Membership, subscriber and customer lists......... 2-20 504,951 435,960
Non-compete agreements............................ 1-10 227,312 217,101
Trademark license agreements...................... 2-15 17,500 17,500
Copyrights........................................ 12-20 47,849 47,849
Video library..................................... 1-7 14,837 14,835
Databases......................................... 4-12 121,377 128,468
Advertiser lists.................................. .25-15 133,850 80,577
Distribution agreements........................... 1-7 15,336 15,336
Other............................................. 1.5-15 63,875 20,971
------------ ------------
1,595,377 1,395,121
Less: accumulated amortization.................... 814,061 695,504
------------ ------------
$ 781,316 $ 699,617
------------ ------------
------------ ------------
</TABLE>
The excess of the purchase price over the fair value of the net assets
acquired is net of accumulated amortization of $82,763 and $66,889,
respectively, at December 31, 1996 and 1995.
37
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
13. OTHER NON-CURRENT ASSETS
Other non-current assets consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
<S> <C> <C>
1996 1995
---------- ----------
<CAPTION>
<S> <C> <C>
Deferred financing costs, net......................................... $ 22,814 $ 19,711
Deferred wiring and installation costs, net........................... 58,086 62,937
Direct-response advertising costs, net (see Note 2)................... 28,452 25,408
Prepublication and programming costs, net............................. 6,506 3,821
Other................................................................. 7,834 5,729
---------- ----------
$ 123,692 $ 117,606
---------- ----------
---------- ----------
</TABLE>
The deferred financing costs are net of accumulated amortization of $9,794
and $8,139 at December 31, 1996 and 1995, respectively. The deferred wiring and
installation costs are net of accumulated amortization of $12,850 and $7,163 at
December 31, 1996 and 1995, respectively. Direct-response advertising costs are
net of accumulated amortization of $70,661 and $29,569 at December 31, 1996 and
1995, respectively. Prepublication and programming costs are net of accumulated
amortization of $4,852 and $4,121 at December 31, 1996 and 1995, respectively.
14. ACCRUED EXPENSES AND OTHER
Accrued expenses and other current liabilities consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
<S> <C> <C>
1996 1995
---------- ----------
<CAPTION>
<S> <C> <C>
Payroll, commissions and related employee benefits.................... $ 40,553 $ 43,482
Systems costs......................................................... 2,991 5,661
Rent and lease liabilities............................................ 13,502 10,027
Retail display costs and allowances................................... 8,263 10,723
Promotion costs....................................................... 2,663 2,032
Royalties............................................................. 8,362 8,067
Circulation costs..................................................... 5,420 3,382
Professional fees..................................................... 4,408 2,566
Taxes................................................................. 17,162 6,778
Customer advances..................................................... 2,482 3,031
Other................................................................. 35,153 30,218
---------- ----------
$ 140,959 $ 125,967
---------- ----------
---------- ----------
</TABLE>
38
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
15. LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
<S> <C> <C>
1996 1995
------------ ------------
<CAPTION>
<S> <C> <C>
Borrowings under Revolving Credit Agreement....................... $ -- $ 435,988
Borrowings under New Credit Facilities............................ 884,992 --
BONY Term Loan.................................................... -- 150,000
Chase Term Loan................................................... -- 150,000
10 5/8% Senior Notes due 2002..................................... 233,250 250,000
10 1/4% Senior Notes due 2004..................................... 100,000 100,000
8 1/2% Senior Notes due 2006..................................... 298,811 --
------------ ------------
1,517,053 1,085,988
Acquisition obligation payable.................................... 54,633 54,928
------------ ------------
1,571,686 1,140,916
Less: current maturities of long-term debt........................ 6,000 6,000
------------ ------------
$ 1,565,686 $ 1,134,916
------------ ------------
------------ ------------
</TABLE>
On May 31, 1996, the Company replaced its existing credit facilities under
the Revolving Credit Agreement, BONY Term Loan and the Chase Term Loan through
which the Company could borrow $970,000 in the aggregate with new credit
facilities with The Chase Manhattan Bank, the Bank of New York, Bankers Trust
Company and the Bank of Nova Scotia as agents (the "New Credit Facilities").
Under the New Credit Facilities, the Company has commitments of $1,250,000 and
can borrow up to $1,500,000 in the aggregate. The Company used approximately
$910,000 of the proceeds from the New Credit Facilities to repay borrowings
under the previously existing credit facilities and to pay certain related fees
and expenses.
The New Credit Facilities are comprised of a $750,000 Tranche A Revolving
Loan Commitment ("Tranche A Loan Commitment"), a $250,000 Term Loan ("Term
Loan") and an additional $250,000 Revolving Loan Commitment, ("Revolver/Term
Loan"). In addition, the Company has the right to solicit commitments of up to
$250,000 under the Tranche B Revolving Loan Facility ("Tranche B Facility"). The
Tranche A Loan Commitment may be utilized through the incurrence of Tranche A
revolving credit loans, swingline loans which may not exceed $40,000 in total,
Canadian dollar loans which may not exceed the Canadian dollar equivalent of
$40,000 in total or the issuance of letters of credit which may not exceed
$40,000. The Revolver/Term Loan may be utilized through the incurrence of
revolving credit loans. If the Company establishes commitments under the Tranche
B Facility, the Tranche B Facility may be utilized through the incurrence of
Tranche B revolving credit loans. The proceeds of the New Credit Facilities may
be used for general corporate and working capital purposes as well as to finance
certain future acquisitions.
The commitments under the Tranche A Loan Commitment and the Tranche B
Facility are subject to mandatory reductions semi-annually on June 30 and
December 31 with the first reduction on June 30, 1999
39
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
15. LONG-TERM DEBT (CONTINUED)
and the final reduction on June 30, 2004. The mandatory reductions for the
Tranche A Loan Commitment are as follows:
<TABLE>
<CAPTION>
YEARS ENDING
DECEMBER 31,
------------
<S> <C>
1999............................................................................ $ 75,000
2000............................................................................ 150,000
2001............................................................................ 150,000
2002............................................................................ 150,000
2003............................................................................ 150,000
2004............................................................................ 75,000
------------
$ 750,000
------------
------------
</TABLE>
The mandatory reductions for the Tranche B Facility are based on defined
percentages of the total Tranche B Facility. To the extent that the total
revolving credit loans outstanding exceed the reduced commitment amount, these
loans must be paid down to equal 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.
The principal amount of the Term Loan will be repaid semi-annually on June
30 and December 31 each year, with an initial payment of $25,000 on June 30,
2000, installments of $25,000 on each payment date thereafter through December
31, 2003 and a final payment of $50,000 on June 30, 2004.
As of December 31, 1996, the borrowings under the New Credit Facilities
consist of the $634,992 under the Tranche A Loan Commitment and $250,000 under
the Term Loan.
If the Company incurs indebtedness under the Revolver/Term Loan, the
revolving loans outstanding will automatically convert to term loans on May 23,
1997 and will mature on June 30, 2004. If the Company exercises that right, then
the term loans will be repaid according to the same installment schedule as
stated for the Term Loan above. If the Company does not incur indebtedness prior
to May 23, 1997, the Revolver/ Term Loan will expire.
The amounts borrowed (other than swingline loans) pursuant to the New Credit
Facilities bear interest at the following rates per annum, at the Company's
option: (i) the higher of (a) the Federal Funds Effective Rate as published by
the Federal Reserve Bank of New York plus 0.5% and (b) the prime commercial
lending rate announced by the Agent from time to time (the "Base Rate"); plus,
in each case, an applicable margin of up to 1/8 of 1% as specified in the New
Credit Facilities or (ii) the Eurodollar Rate plus an applicable margin ranging
from 1/2 of 1% to 1 1/2% as specified in the New Credit Facilities. All
swingline loans bear interest at the Base Rate plus the applicable margin of up
to 1/8 of 1% as specified in the New Credit Facilities. During 1996, the
weighted average interest rate on the Revolving Credit Agreement, BONY Term
Loan, Chase Term Loan and New Credit Facilities were 7.04%, 7.50%, 6.94% and
7.07%. During 1995, the weighted average interest rates on the Revolving Credit
Agreement, BONY Term Loan and Chase Term Loan, were 7.28%, 7.94% and 7.48%,
respectively. Interest rates on the borrowings under the New Credit Facilities
outstanding at December 31, 1996 ranged from 7.00% to 7.13%. The interest rate
on the borrowings under the Revolving Credit Agreement outstanding at December
31, 1995 ranged from 6.75% to 7.44%. The interest rate on the BONY Term Loan
outstanding
40
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
15. LONG-TERM DEBT (CONTINUED)
at December 31, 1995 was 7.81% and the interest rate on the Chase Term Loan
outstanding at December 31, 1995 was 7.63%
The Company has agreed to pay commitment fees equal to 3/8 of 1% per annum
on the daily average unused commitment of Tranche A Loan Commitment and Tranche
B Facility, certain fees with respect to the issuance of letters of credit and
an annual administration fee. The Company has agreed to pay a commitment fee of
1/8 of 1% per annum on the daily average unused commitment of the $250,000
revolving credit under the Revolver/Term Loan.
10 5/8% SENIOR NOTES. Interest on the 10 5/8% Senior Notes is payable
semi-annually at the annual rate of 10 5/8%. The 10 5/8% Senior Notes mature on
May 1, 2002. The 10 5/8% Senior Notes may not be redeemed prior to May 1, 1997
other than in connection with a change of control; however, a sinking fund
payment on May 1, 2001 is required to retire 50% of the 10 5/8% Senior Notes
prior to maturity. On May 1, 1997 and thereafter, the 10 5/8% Senior Notes are
redeemable at prices ranging from 104% with annual reductions to 100% in 2000
plus accrued and unpaid interest. During November and December 1996, the Company
purchased $16,750 of the 10 5/8% Senior Notes at a premium of 105.4% plus
accrued interest from various brokers on the open market (see Note 26).
10 1/4% SENIOR NOTES. The annual interest rate of 10 1/4% is payable
semi-annually in June and December. The 10 1/4% Senior Notes mature on June 1,
2004, with no sinking fund. The 10 1/4% Senior Notes are redeemable on or after
June 1, 1999; however, 35% of the aggregate principal amount of the 10 1/4%
Senior Notes may be redeemed at a price of 109 1/4% plus accrued and unpaid
interest on or prior to June 1, 1997 with net proceeds of a public equity
offering. In addition, upon a change of control, the Company may redeem the
10 1/4% Senior Notes. Beginning in 1999 and thereafter, the 10 1/4% Senior Notes
are redeemable at prices ranging from 104.95% with annual reductions to 100% in
2002 plus accrued and unpaid interest.
8 1/2% SENIOR NOTES. On January 24, 1996, the Company completed a private
offering of $300,000 of 8 1/2% Senior Notes. The 8 1/2% Senior Notes were issued
at 99.578% with related issuance costs of approximately $7,000. On August 21,
1996, the Company exchanged its 8 1/2% Senior Notes ("Old Notes") for a new
series of $300,000 8 1/2% Senior Notes due 2006 ("New Notes"). The New Notes
have been registered under the Securities Act of 1933. The New Notes mature on
February 1, 2006, with no sinking fund. Interest on the New Notes is payable
semi-annually in February and August at the annual rate of 8 1/2%. The New Notes
may not be redeemed prior to February 1, 2001 other than in connection with a
change of control. Beginning in 2001 and thereafter, the New Notes are
redeemable in whole or in part, at the option of the Company, at prices ranging
from 104.25% with annual reductions to 100% in 2003 plus accrued and unpaid
interest. Net proceeds from the Old Notes of approximately $293,000 were
primarily used to pay down borrowings under the Revolving Credit Agreement.
The 10 5/8% Senior Notes, 10 1/4% Senior Notes and 8 1/2% Senior Notes
(together referred to as the "Senior Notes"), and the New Credit Facilities, all
rank senior in right of payment to all subordinated indebtedness of K-III
Communications Corporation (a holding company).
The above indebtedness, among other things, limits the ability of the
Company to change the nature of its businesses, incur indebtedness, create
liens, sell assets, engage in mergers, consolidations or transactions with
affiliates, make investments in or loans to certain subsidiaries, make
guarantees and certain restricted payments. The Company is restricted from
declaring or making dividend payments on its common and preferred stock. Under
the Company's most restrictive debt covenants, the Company must
41
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
15. LONG-TERM DEBT (CONTINUED)
maintain a minimum interest coverage ratio of 1.8 to 1 and a minimum fixed
charge coverage ratio of 1.05 to 1. The Company's maximum allowable leverage
ratio is 6.0 to 1. The Company believes it is in compliance with the financial
and operating covenants of its principal financing arrangements. Borrowings
under the above indebtedness are guaranteed by each of the domestic wholly-owned
subsidiaries of the Company. Such guarantees are full, unconditional and joint
and several. The separate financial statements of the domestic subsidiaries are
not presented because the Company believes the separate financial statements
would not be material to the shareholders and potential investors. The Company's
foreign subsidiaries are not guarantors of the above indebtedness. The total
assets, revenues, income or equity of such foreign subsidiaries, both
individually and on a combined basis, are inconsequential in relation to the
total assets, revenues, income or equity of the Company.
ACQUISITION OBLIGATION. In connection with the acquisition of certain of
the Company's specialty consumer magazine operations and Daily Racing Form, an
obligation was recorded equivalent to the present value of the principal and
interest payments of the notes payable in the amount of $54,633 at December 31,
1996 and $54,928 at December 31, 1995. The interest rate used in calculating the
present value was 13%, which represents management's estimate of the prevailing
market rate of interest for such obligation at the time of the acquisition.
Principal and interest amounts aggregating $69,500 will be repaid from June 1997
through June 2001.
INTEREST RATE SWAP AGREEMENTS. In May 1995, the Company entered into two,
three-year interest rate swap agreements with an aggregate notional amount of
$200,000. Under these swap agreements, the Company receives a floating rate of
interest based on three-month LIBOR, which resets quarterly, and pays a fixed
rate of interest which increases each year during the terms of the respective
agreements. The weighted average variable rate and weighted average fixed rate
were 5.5% and 6.2%, respectively, in 1996 and 6.0% and 6.05%, respectively, in
1995. Also, in May 1995, the Company entered into a three-year interest rate cap
agreement. As a result of this transaction, the Company currently has the right
to receive payments based on a notional principal amount of $100,000 to the
extent that three-month LIBOR exceeds 7.75% in year one, 8.75% in year two and
9.75% in year three of the agreement. Any interest differential to be received
will be recognized as an adjustment to interest expense. The interest rate cap
fee is recognized as an adjustment to interest expense over the life of the
interest rate cap agreement.
In the fourth quarter of 1996, the Company entered into six, one-year
interest rate swap agreements with an aggregate notional amount of $600,000.
Under these new swap agreements, the Company receives a floating rate of
interest based on three-month LIBOR, which resets quarterly, and pays a fixed
rate of interest, each quarter, for the term of the agreements. As of December
31, 1996, the weighted average variable rate and weighted average fixed rate
were 5.5% and 5.8%, respectively.
The net interest differential, charged to interest expense in 1996, 1995 and
1994 was $1,943, $539 and $4,258, respectively. The Company is exposed to credit
risk in the event of nonperformance by counterparties to its interest rate swap
and cap agreements. Credit risk is limited by entering into such agreements with
primary dealers only; therefore, the Company does not anticipate that
nonperformance by counterparties will occur. Notwithstanding this, the Company's
treasury department monitors counterparty credit ratings at least quarterly
through reviewing independent credit agency reports. Both current and potential
exposure are evaluated, as necessary, by obtaining replacement cost information
from alternative dealers. Potential loss to the Company from credit risk on
these agreements is limited to amounts receivable, if any.
42
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
16. INCOME TAXES
At December 31, 1996, the Company had aggregate net operating loss
carryforwards for Federal and state income tax purposes ("NOLs") of
approximately $713,000 which will be available to reduce future taxable income.
The utilization of such NOLs is subject to certain limitations under Federal
income tax laws. In certain instances, such NOLs may only be used to reduce
future taxable income of the respective company which generated the NOL. The
NOLs are scheduled to expire in the following years:
<TABLE>
<S> <C>
2003.............................................................. $ 24,900
2004.............................................................. 60,300
2005.............................................................. 121,800
2006.............................................................. 93,400
2007.............................................................. 82,700
2008.............................................................. 83,700
2009.............................................................. 68,900
2010.............................................................. 156,100
2011.............................................................. 21,200
---------
$ 713,000
---------
---------
</TABLE>
Deferred income taxes reflect the net tax effects of (a) temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes, and (b)
operating loss carryforwards. The tax effects of significant items comprising
the Company's net deferred income tax assets are as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1996
---------------------------------
<S> <C> <C> <C>
FEDERAL STATE TOTAL
---------- --------- ----------
<CAPTION>
<S> <C> <C> <C>
DEFERRED INCOME TAX ASSETS:
Difference between book and tax basis of inventory............................. $ 3,550 $ 1,041 $ 4,591
Difference between book and tax basis of accrued expenses and other............ 18,583 5,444 24,027
Reserves not currently deductible.............................................. 2,277 667 2,944
Difference between book and tax basis of other intangible assets............... 31,043 9,094 40,137
Operating loss carryforwards................................................... 192,267 56,326 248,593
---------- --------- ----------
Total.......................................................................... 247,720 72,572 320,292
---------- --------- ----------
DEFERRED INCOME TAX LIABILITIES:
Difference between book and tax basis of other intangible assets............... 32,612 9,554 42,166
Difference between book and tax basis of property and equipment................ 11,382 3,335 14,717
Other.......................................................................... 9,757 2,858 12,615
---------- --------- ----------
Total.......................................................................... 53,751 15,747 69,498
---------- --------- ----------
Net deferred income tax assets................................................. 193,969 56,825 250,794
Less: Valuation allowances..................................................... 57,692 16,902 74,594
---------- --------- ----------
Net............................................................................ $ 136,277 $ 39,923 $ 176,200
---------- --------- ----------
---------- --------- ----------
</TABLE>
43
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
16. INCOME TAXES (CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31, 1995
---------------------------------
<S> <C> <C> <C>
FEDERAL STATE TOTAL
---------- --------- ----------
<CAPTION>
<S> <C> <C> <C>
DEFERRED INCOME TAX ASSETS:
Difference between book and tax basis of inventory............................. $ 4,878 $ 1,429 $ 6,307
Difference between book and tax basis of accrued expenses and other............ 19,991 5,856 25,847
Reserves not currently deductible.............................................. 12,872 3,771 16,643
Difference between book and tax basis of other intangible assets............... 18,875 5,530 24,405
Operating loss carryforwards................................................... 168,310 49,309 217,619
---------- --------- ----------
Total.......................................................................... 224,926 65,895 290,821
---------- --------- ----------
DEFERRED INCOME TAX LIABILITIES:
Difference between book and tax basis of other intangible assets............... 24,515 7,182 31,697
Difference between book and tax basis of property and equipment................ 964 283 1,247
Other.......................................................................... 7,783 2,280 10,063
---------- --------- ----------
Total.......................................................................... 33,262 9,745 43,007
---------- --------- ----------
Net deferred income tax assets................................................. 191,664 56,150 247,814
Less: Valuation allowances..................................................... 103,649 30,365 134,014
---------- --------- ----------
Net............................................................................ $ 88,015 $ 25,785 $ 113,800
---------- --------- ----------
---------- --------- ----------
</TABLE>
At December 31, 1996, 1995 and 1994, management of the Company reviewed
recent operating results and projected future operating results. At the end of
each of the respective years, management determined that a portion of the net
deferred income tax assets would likely be realized. Accordingly, in 1996, the
Company reduced the valuation allowances by $62,400 and recorded an income tax
benefit of $53,300 ($41,200 and $12,100 related to Federal and state income tax
benefits, respectively) and a reduction of the excess of purchase price over net
assets acquired of $9,100; in 1995, the Company reduced the valuation allowances
by $67,700 and recorded an income tax benefit of $59,600 ($46,100 and $13,500
related to Federal and state income tax benefits, respectively) and a reduction
of the excess of purchase price over net assets acquired of $8,100; and in 1994,
the Company reduced the valuation allowances by $46,100 and recorded an income
tax benefit of $42,100 ($32,600 and $9,500 related to Federal and state income
tax benefits, respectively) and a reduction of the excess of purchase price over
net assets acquired of $4,000. The amount of the net deferred tax asset
considered realizable, however, could be reduced in the near term if estimates
of future taxable income during the carryforward period are reduced. During
1996, 1995 and 1994, after the reduction in the valuation allowances discussed
above, there were net decreases in the valuation allowances of approximately
$59,420, $1,404 and $13,800 respectively.
A portion of the valuation allowances in the amount of approximately $30,200
at December 31, 1996 relates to net deferred tax assets which were recorded in
accounting for the acquisitions of various entities. The recognition of such
amount in future years will be allocated to reduce the excess of the purchase
price over the net assets acquired and other non-current intangible assets.
44
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
17. EXCHANGEABLE PREFERRED STOCK
Exchangeable Preferred Stock consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
1996 1995
---------- ----------
<S> <C> <C>
$2.875 Senior Exchangeable Preferred Stock................................................ $ 98,266 $ 97,992
$11.625 Series B Exchangeable Preferred Stock............................................. 150,513 133,614
$10.000 Series D Exchangeable Preferred Stock............................................. 193,950 --
---------- ----------
$ 442,729 $ 231,606
---------- ----------
---------- ----------
</TABLE>
$2.875 SENIOR EXCHANGEABLE PREFERRED STOCK
The Company authorized 4,000,000 shares of $.01 par value Senior Preferred
Stock, all of which was issued and outstanding at December 31, 1996 and 1995.
The liquidation and redemption value at December 31, 1996 and 1995 was $100,000.
Annual dividends of $2.875 per share on the Senior Preferred Stock are
cumulative and payable quarterly. Cash dividends of $11,500 have been paid
during each of the years 1996, 1995 and 1994. The Senior Preferred Stock may be
redeemed at the option of the Company, in whole or in part, at any time on or
after May 1, 1997 at redemption prices set at 105.8% in 1997 with annual
reductions to 100% in 2002 plus accrued and unpaid dividends to the date of
redemption. The Company is required to redeem 50% of the Senior Preferred Stock
on each of May 1, 2003 and May 1, 2004 at the liquidation preference of $25 per
share plus accrued and unpaid dividends. Upon any voluntary or involuntary
liquidation, the Senior Preferred Stock has a liquidation preference of $25 per
share plus accrued and unpaid dividends. The Senior Preferred Stock is
exchangeable, in whole but not in part, at the option of the Company, on any
scheduled dividend payment date for 11 1/2% Subordinated Debentures due 2004.
The Senior Preferred Stock is recorded on the accompanying consolidated balance
sheets at the aggregate redemption value (net of issuance costs) of $98,266 and
$97,992 at December 31, 1996 and 1995, respectively.
$11.625 SERIES B EXCHANGEABLE PREFERRED STOCK
The Company authorized 2,000,000 shares of $.01 par value Series B Preferred
Stock, 1,531,526 shares and 1,365,707 shares of which were issued and
outstanding at December 31, 1996 and 1995, respectively. The liquidation and
redemption value at December 31, 1996 and 1995 was $153,153 and $136,571,
respectively. Annual dividends of $11.625 per share on the Series B Preferred
Stock are cumulative and payable quarterly in cash or by issuing additional
shares of the Series B Preferred Stock. On and after May 1, 1998, dividends must
be paid in cash. On or after February 1, 1998, the Series B Preferred Stock may
be redeemed in whole or in part, at the option of the Company, at specified
redemption prices plus accrued and unpaid dividends. The Company is required to
redeem the Series B Preferred Stock on May 1, 2005 at a redemption price equal
to the liquidation preference of $100 per share, plus accrued and unpaid
dividends. The Series B Preferred Stock is exchangeable at the option of the
Company on or after an initial public offering of the Company's common stock for
its 11 5/8% Class B Subordinated Exchange Debentures due 2005 provided no shares
of the Senior Preferred Stock are then outstanding. Such debentures are
subordinate to all existing and future liabilities and obligations of the
Company and its subsidiaries. The Series B Preferred Stock is recorded on the
accompanying consolidated balance sheets at the aggregate redemption value (net
of issuance costs) of $150,513 and $133,614 at December 31, 1996 and 1995,
respectively.
45
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
17. EXCHANGEABLE PREFERRED STOCK (CONTINUED)
$10.00 SERIES D EXCHANGEABLE PREFERRED STOCK
On January 24, 1996, the Company completed a private offering of 2,000,000
shares of $.01 par value, $10 Series C Exchangeable Preferred Stock ("Series C
Preferred Stock") at $100 per share. Annual dividends of $10 per share on the
Series C Preferred Stock were cumulative and payable quarterly, in cash,
commencing May 1, 1996. On August 21, 1996, the Company exchanged the Series C
Preferred Stock for 2,000,000 shares of $.01 par value, Series D Preferred
Stock. Dividend payment terms of the Series D Preferred Stock are the same as
the terms of the Series C Preferred Stock. The Series D Preferred Stock has been
registered under the Securities Act of 1933. The liquidation and redemption
value at December 31, 1996 was $200,000. On and after February 1, 2001, the
Series D Preferred Stock may be redeemed in whole or in part, at the option of
the Company, at specified redemption prices plus accrued and unpaid dividends.
The Company is 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 the option of the Company, on any
scheduled dividend payment date into 10% Class D Subordinated Exchange
Debentures due 2008 provided that no shares of the Senior Preferred Stock are
outstanding on the date of exchange. Net proceeds from the Series C Preferred
Stock offering of approximately $193,000 were primarily used to pay down
borrowings under the Revolving Credit Agreement. The Series D Preferred Stock is
recorded on the accompanying consolidated balance sheets at the aggregate
redemption value (net of issuance costs) of $193,950 at December 31, 1996.
18. COMMON STOCK
In October 1995, the Company increased the authorized number of shares of
common stock by 50,000,000 shares to 250,000,000 shares. During November 1995,
the Company completed a public offering of 17,250,000 shares of common stock at
a price of $10.00 per share. Proceeds from this initial public offering, net of
commissions and other related expenses of approximately $9,500, were
approximately $163,000. The Company used the net proceeds from this initial
public offering to repay borrowings outstanding under its Revolving Credit
Agreement, which could be reborrowed for general corporate purposes including
acquisitions (see Note 15).
STOCK PURCHASE AND OPTION PLAN. The K-III Stock Purchase and Option Plan
(the "Plan") authorizes sales of shares of common stock and grants of incentive
awards in the forms of, among other things, stock options to key employees and
other persons with a unique relationship with the Company. The stock options are
granted with exercise prices at quoted market value at time of issuance. For the
purpose of determining fair value prior to November 1995, it was recognized that
the Company's common stock was not readily saleable to third parties at that
time, and therefore, was valued at a discount to a publicly-traded common stock.
The common stock issued and redeemed is included in the table of the activity of
the common stock subject to redemption.
COMMON STOCK SUBJECT TO REDEMPTION. Under the following circumstances,
employees have the right to resell their shares of common stock to the Company:
termination of employment in connection with the sale of the business for which
they work, death, disability or retirement after age 65. The resale feature
expires five years after the effective purchase date of the common stock. Since
inception of the Company,
46
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
18. COMMON STOCK (CONTINUED)
none of the employees has exercised such resale feature as a result of such
sale, death, disability or retirement and the likelihood of significant resales
is considered by management to be remote.
The following summarizes the activity of the common stock subject to
redemption:
<TABLE>
<CAPTION>
SHARES AMOUNT
----------- ----------
<S> <C> <C>
Balance at January 1, 1994.............................................................. 3,185,946 $ 25,488
Acquisitions of common stock held by management......................................... (27,436) (169)
Issuances of common stock............................................................... 244,672 1,943
Expiration of redemption feature........................................................ (1,251,002) (10,045)
----------- ----------
Balance at December 31, 1994............................................................ 2,152,180 17,217
Acquisitions of common stock held by management......................................... (57,031) (430)
Issuances of common stock............................................................... 458,994 3,274
Expiration of redemption feature........................................................ (147,630) (809)
Accretion in carrying value............................................................. -- 9,927
----------- ----------
Balance at December 31, 1995............................................................ 2,406,513 29,179
Acquisitions of common stock held by management......................................... (17,269) (148)
Expiration of redemption feature........................................................ (1,745,934) (21,230)
Reduction in carrying value............................................................. -- (885)
----------- ----------
Balance at December 31, 1996............................................................ 643,310 $ 6,916
----------- ----------
----------- ----------
</TABLE>
The redemption values of the common stock subject to redemption of $6,916
and $29,179 at December 31, 1996 and 1995, respectively, were based on a
repurchase price of $10.750 per share and $12.125 per share which are the quoted
market values at December 31, 1996 and 1995, respectively. Common stock subject
to redemption is recorded on the accompanying consolidated balance sheets net of
the amounts of notes receivable from employees (related to common stock
issuances) outstanding of $959 and $1,157 at December 31, 1996 and 1995,
respectively.
ACCOUNTING FOR EMPLOYEE STOCK BASED COMPENSATION The K-III Stock Purchase
and Option Plan has authorized the grant of options to management personnel for
up to 25,000,000 shares of the Company's common stock. The options are
exercisable at the rate of 20% per year over a five-year period commencing on
the effective date of the grant; however, some optionees have received credit
for periods of employment with the Company and its predecessors and subsidiaries
prior to the date the options were granted. All options granted pursuant to the
Plan will expire no later than ten years from the date the option was granted.
47
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
18. COMMON STOCK (CONTINUED)
A summary of the status of the Company's fixed stock option plan as of
December 31, 1996, 1995 and 1994, and changes during the years ending on those
dates is presented below:
<TABLE>
<CAPTION>
1996 1995 1994
------------------------------------- ------------------------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
WEIGHTED WEIGHTED
AVG. AVG.
EXERCISE EXERCISE EXERCISE EXERCISE EXERCISE
OPTIONS PRICE PRICE OPTIONS PRICE PRICE OPTIONS PRICE
--------- ------------- ----------- --------- ------------- ----------- --------- -------------
Outstanding--
beginning of
year............ 12,326,087 $5.00-$8.00 $ 5.98 9,610,447 $5.00-$8.00 $ 5.31 8,865,297 $5.00-$7.00
Granted......... 1,830,400 1$0.00-$11.94 $ 11.12 3,139,325 $ 8.00 $ 8.00 850,000 $ 8.00
Exercised....... (681,890) $5.00-$8.00 $ 5.36 (193,401) $5.00-$8.00 $ 5.19 (13,872) $ 5.00
Forfeited....... (263,385) $5.00-$8.00 $ 7.69 (230,284) $5.00-$8.00 $ 6.28 (90,978) $5.00-$8.00
--------- --------- ---------
Outstanding--end
of the year..... 13,211,212 $5.00-$11.94 $ 6.69 12,326,087 $5.00-$8.00 $ 5.98 9,610,447 $5.00-$8.00
--------- --------- ---------
--------- --------- ---------
Exercisable at end
of the year..... 8,707,528 $5.00-$8.00 $ 5.38 7,269,817 $5.00-$8.00 $ 5.18 5,701,789 $5.00-$7.00
--------- --------- ---------
--------- --------- ---------
<CAPTION>
<S> <C>
WEIGHTED
AVG.
EXERCISE
PRICE
-----------
Outstanding--
beginning of
year............ $ 5.05
Granted......... $ 8.00
Exercised....... $ 5.00
Forfeited....... $ 5.26
Outstanding--end
of the year..... $ 5.31
Exercisable at end
of the year..... $ 5.02
</TABLE>
The weighted-average fair value per option for options granted in 1996 and
1995 was $4.13 and $3.06, respectively.
The following table summarizes information about stock options outstanding
at December 31, 1996:
<TABLE>
<CAPTION>
NUMBER WEIGHTED WEIGHTED
RANGE OF OUTSTANDING AVERAGE REMAINING AVERAGE
EXERCISE PRICES AT 12/31/96 CONTRACTUAL LIFE EXERCISE PRICE
- --------------- ----------- ----------------------- ---------------
<S> <C> <C> <C>
$5.00-$5.44 7,638,282 5 $ 5.00
$7.00 155,400 6 $ 7.00
$8.00 3,588,730 8 $ 8.00
$10.00-$11.94 1,828,800 9 $ 11.13
-----------
13,211,212 6 $ 6.69
-----------
-----------
</TABLE>
SFAS No. 123 provides for a fair-value based method of accounting for
employee options and measures compensation expense using an option valuation
model that takes into account, as of the grant date, the exercise price and
expected life of the option, the current price of the underlying stock and its
expected volatility, expected dividends on the stock, and the risk-free interest
rate for the expected term of the option. The Company has elected to continue
accounting for employee stock-based compensation under APB No. 25 and related
interpretations. Under APB No. 25, because the exercise price of the Company's
employee stock options equals the market price of the underlying stock on the
date of grant, no compensation expense is recognized.
Pro forma information regarding net income and earnings per share is
required by SFAS No. 123, and has been determined as if the Company had
accounted for its employee stock options under the fair value method of SFAS No.
123. The fair value of these options was estimated at the date of grant using
the Black-Scholes option pricing model for options granted in 1996 and 1995. The
following weighted-average assumptions were used for 1996 and 1995,
respectively: risk-free interest rates of 6.36% and 6.34%, dividend yields of
0.0% and 0.0%, volatility factors of the expected market price of the Company's
48
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
18. COMMON STOCK (CONTINUED)
common stock of 20.83% and 22.59%; and a weighted-average expected life of the
option of 6 years. The estimated fair value of options granted during 1996 and
1995 was $7,560 and $9,592, respectively.
The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
Because the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.
For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the option's vesting period. The Company's
pro forma information is as follows:
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Pro forma net income (loss).................................................................. $ 5,738 $ (76,388)
Pro forma loss applicable to common shareholders............................................. $ (37,788) $(105,366)
Pro forma loss per common and common equivalent share........................................ $ (.29) $ (.92)
</TABLE>
The Company had reserved 20,837,921 shares of common stock for future
issuances in connection with the plan at December 31, 1996.
19. ACCUMULATED DEFICIT
The accumulated deficit of $691,098 at December 31, 1996 includes non-cash
expenses related to the accumulated amortization of intangible assets, the
excess of the purchase price over the net assets acquired and deferred financing
costs, the write-offs of the unamortized balance of deferred financing costs
(associated with all previous financings), the restructuring and other costs and
the net provision on sales of businesses in the aggregate amount of
approximately $924,900 which is net of the non-cash income tax benefits
aggregating $155,000 through December 31, 1996.
49
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
20. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts and the estimated fair values of the Company's
financial instruments for which it is practicable to estimate fair value are as
follows:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------------
<S> <C> <C> <C> <C>
1996 1995
---------------------- ----------------------
<CAPTION>
CARRYING CARRYING
VALUE FAIR VALUE VALUE FAIR VALUE
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
10 5/8% Senior Notes............................................. $ 233,250 $ 260,950 $ 250,000 $ 267,950
10 1/4% Senior Notes............................................. 100,000 105,400 100,000 107,720
8 1/2% Senior Notes.............................................. 298,811 291,750 -- --
Acquisition Obligation........................................... 54,633 55,339 54,928 52,604
Senior Preferred Stock........................................... 98,266 107,500 97,992 109,000
Series B Preferred Stock......................................... 150,513 154,684 133,614 135,888
Series D Preferred Stock......................................... 193,950 196,000 -- --
Interest Rate Swap Agreements.................................... 982 3,531 449 5,057
Purchased Interest Rate Cap Agreement............................ (159) (2) (274) (2)
</TABLE>
The bracketed amounts above represent assets.
The fair values of the senior notes and preferred stocks were determined
based on the quoted market prices and the fair value of the acquisition
obligation was estimated using discounted cash flow analysis, based on current
incremental borrowing rates for similar types of borrowing arrangements. The
fair value of the interest rate swap agreements was determined using discounted
cash flow models.
For instruments including cash and cash equivalents, accounts receivable and
accounts payable, the carrying amount approximates fair value because of the
short maturity of these instruments. The fair value of floating-rate long-term
debt approximates carrying value because these instruments re-price frequently
at current market prices.
21. RETIREMENT PLANS
Substantially all of the Company's employees are eligible to participate in
defined contribution plans. The expense recognized for all of these plans was
$5,432 in 1996, $5,245 in 1995 and $3,693 in 1994.
In addition, the employees at K-III Magazines and the non-union employees at
Daily Racing Form are eligible to participate in the K-III Pension Plan
("Pension Plan") which is a non-contributory defined benefit pension plan. The
benefits to be paid under the Pension Plan are based on years of service and
compensation amounts for the highest consecutive five years of service in the
most current ten years. The Pension Plan is funded by means of contributions by
the Company to the plan's trust. The pension funding policy is consistent with
the funding requirements of U.S. Federal and other governmental laws and
regulations. Plan assets consist primarily of fixed income, equity and other
short-term investments. The
50
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
21. RETIREMENT PLANS (CONTINUED)
components of the net periodic pension cost of the Pension Plan for the years
ended December 31, 1996, 1995 and 1994 are summarized as follows:
<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Service cost......................................................................... $ 1,203 $ 755 $ 761
Interest cost........................................................................ 769 581 491
Actual investment (gain) or loss on plan assets...................................... (610) (812) 20
Net amortization and deferral........................................................ 462 774 16
--------- --------- ---------
Net periodic pension cost............................................................ $ 1,824 $ 1,298 $ 1,288
--------- --------- ---------
--------- --------- ---------
</TABLE>
The following is a reconciliation of the funded status of the Pension Plan:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1996 1995
--------- ---------
<S> <C> <C>
Actuarial present value of benefit obligation:
Vested................................................................. $ (6,342) $ (3,700)
Non-vested............................................................. (617) (400)
--------- ---------
Accumulated benefit obligation........................................... (6,959) (4,100)
Additional liability based on projected compensation levels.............. (5,118) (4,841)
--------- ---------
Projected benefit obligation............................................. (12,077) (8,941)
Plan assets at fair value................................................ 5,473 4,273
--------- ---------
Projected benefit obligation in excess of plan assets.................... (6,604) (4,668)
Unrecognized net loss (gain)............................................. 172 (1,011)
Obligation recorded at acquisition date.................................. 2,861 3,135
--------- ---------
Accrued pension cost..................................................... $ (3,571) $ (2,544)
--------- ---------
--------- ---------
</TABLE>
The obligation recorded at the acquisition date of K-III Magazines and Daily
Racing Form is the excess of the projected benefit obligation over the plan
assets at the date of acquisition which is included in other non-current
liabilities. The weighted average discount rate and the weighted average rate of
compensation increases used in determining the actuarial present value of the
projected benefit obligation were 7.5% and 4.0% for 1996 and 1995, respectively.
The weighted average expected long-term rate of return on plan assets was 8.5%
for 1996 and 1995.
51
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
22. COMMITMENTS AND CONTINGENCIES
COMMITMENTS. Total rent expense under operating leases was $31,561, $24,409
and $23,996 for the years ended December 31, 1996, 1995 and 1994, respectively.
Certain leases are subject to escalation clauses and certain leases contain
renewal options. Minimum rental commitments under noncancellable operating
leases are approximately as follows:
<TABLE>
<CAPTION>
YEARS ENDING DECEMBER 31,
-------------------------
<S> <C>
1997............................................................... $ 33,040
1998............................................................... 29,762
1999............................................................... 25,565
2000............................................................... 23,546
2001............................................................... 18,510
Thereafter......................................................... 52,340
----------
$ 182,763
----------
----------
</TABLE>
Future minimum lease payments under a capital lease (see Note 11) are
approximately as follows:
<TABLE>
<CAPTION>
YEARS ENDING DECEMBER 31,
-------------------------
<S> <C>
1997............................................................... $ 1,980
1998............................................................... 1,980
1999............................................................... 1,980
2000............................................................... 1,980
2001............................................................... 1,980
Thereafter......................................................... 5,275
--------
15,175
Less: amount representing interest................................. 4,593
--------
Present value of net minimum lease payments........................ 10,582
Less: current portion.............................................. 969
--------
Long-term obligations (included in other non-current
liabilities)..................................................... $ 9,613
--------
--------
</TABLE>
CONTINGENCIES. The Company is involved in ordinary and routine litigation
incidental to its business. In the opinion of management, there is no pending
legal proceeding that would have a material adverse affect on the consolidated
financial statements of the Company.
At December 31, 1996, the Company had letters of credit outstanding of
approximately $4,850.
23. RELATED PARTY TRANSACTIONS
During each of the years ended December 31, 1996, 1995 and 1994, the Company
paid $1,000 in administrative and other fees to Kohlberg Kravis Roberts & Co.
("KKR"), an affiliated party, and an aggregate of $180, in directors' fees to
certain partners of KKR. In addition, in connection with the Channel One
acquisition, the Company paid $2,500 in investment advisory fees to KKR. On
September 30, 1994, in order to finance the Channel One acquisition, the Company
issued 1,501 shares of Series C
52
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
23. RELATED PARTY TRANSACTIONS (CONTINUED)
Preferred Stock ("Old Preferred Stock") at $50,000 per share and 9,381,250
shares of common stock at $8.00 per share, which was the fair value at such
date, to partnerships affiliated with KKR. Gross proceeds of $150,100 were
received from these issuances. Dividends were payable at the higher of 11 3/4%
and the interest rates associated with United States Treasury bills and notes
plus applicable margins. The Old Preferred Stock was redeemed on November 21,
1994 for $76,324 which represented a redemption price of $50,000 per share plus
the accumulated and unpaid dividends of $1,274.
On March 1, 1995, 3,125,000 shares of common stock were issued to a
partnership affiliated with KKR at $8.00 per share which was the fair value per
share at such date. On March 1, 1995, pursuant to the related certificate of
designations, 2,500 shares of Old Preferred Stock were authorized for issuance
and 1,000 shares were issued to partnerships affiliated with KKR at $50,000 per
share, which was the liquidation value per share at such date. The proceeds from
both issuances were used to pay down the borrowings under the Revolving Credit
Agreement. On August 3, 1995, the Company redeemed all 1,054 shares then
outstanding (which included dividends accrued through redemption date) of the
Old Preferred Stock at $50,000 per share for a total of $52,691. This
transaction was financed with borrowings under the Revolving Credit Agreement
(see Note 15).
24. UNAUDITED QUARTERLY FINANCIAL INFORMATION
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER TOTAL
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
FOR THE YEAR ENDED DECEMBER 31, 1996:
Sales, net...................................... $314,953 $335,680 $344,418 $379,398 $1,374,449
Operating income................................ 6,985 23,280 18,519 37,117 85,901
Net income (loss)............................... (20,740) (14,638) (11,895) 55,317 8,044
Income (loss) applicable to common
shareholders.................................. (27,584) (27,041) (23,973) 43,116 (35,482)
Earnings (loss) per common and common equivalent
share......................................... $(.21) $(.21) $(.19) $.32 $(.27)
Weighted average common and common equivalent
shares outstanding............................ 128,502,847 128,787,528 128,874,002 133,866,152 130,007,632
FOR THE YEAR ENDED DECEMBER 31, 1995:
Sales, net...................................... $238,664 $257,228 $265,604 $284,833 $1,046,329
Operating income (loss)......................... 4,663 (50,491) 13,130 6,423 (26,275)
Net income (loss)............................... (20,701) (78,929) (14,635) 38,830 (75,435)
Income (loss) applicable to common
shareholders.................................. (27,115) (87,009) (22,386) 32,097 (104,413)
Earnings (loss) per common and common equivalent
share......................................... $(.25) $(.78) $(.20) $.25 $(.91)
Weighted average common and common equivalent
shares outstanding............................ 109,622,179 111,371,697 110,909,810 128,406,304 115,077,498
</TABLE>
53
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
24. UNAUDITED QUARTERLY FINANCIAL INFORMATION (CONTINUED)
As a result of previous bank refinancings, the Company wrote off $7,572 of
unamortized deferred financings costs in the second quarter of 1996 and $1,076
of unamortized deferred financing costs in the fourth quarter of 1996. In
addition, in the fourth quarter of 1996, the Company recognized income tax
benefits of $53,300. In the fourth quarter of 1996, the Company recorded certain
catch-up adjustments to the amortization of identifiable intangible assets and
goodwill due to the receipt of independent appraisal reports for intangible
assets.
The change in method of accounting for advertising costs resulted in a
decrease to operating loss or increase to operating income and a decrease to net
loss of approximately $16,000, $1,000 and $300 in the first, second and third
quarters of 1995, respectively. This accounting change decreased operating
income and net income by approximately $5,500 in the fourth quarter of 1995.
During the second quarter of 1995, the Company recorded a provision for loss on
the sales of businesses in the amount of $35,447, an aggregate write-down of
$17,958 of the carrying values of the identifiable intangible assets and
goodwill of K-III Reference and restructuring and other costs in the amount of
$14,667. In addition, in the fourth quarter of 1995, the Company recognized
income tax benefits of $59,600 and recorded a provision to write-off $5,786 of
goodwill related to a product line of Newbridge. In the fourth quarter of 1995,
the Company recorded certain catch-up adjustments to the amortization of
identifiable intangible assets and goodwill due to the receipt of independent
appraisal reports for intangible assets. For all quarters presented prior to the
initial filing of the registration statement for the November 1995 initial
public offering, the weighted average number of common stock shares outstanding
include Incremental Shares as described in Note 3.
54
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
25. BUSINESS SEGMENT INFORMATION
The Company's operations have been classified into three business segments:
education, information and specialty media (see Note 1). Summarized financial
information by business segment as of December 31, 1996, 1995 and 1994 and for
each of the years then ended is set forth below:
<TABLE>
<CAPTION>
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
SALES, NET:
Education......................................... $ 376,217 $ 330,414 $ 430,134
Information....................................... 313,891 263,542 192,732
Specialty Media................................... 684,341 452,373 341,782
------------ ------------ ------------
Total............................................. $ 1,374,449 $ 1,046,329 $ 964,648
------------ ------------ ------------
------------ ------------ ------------
OPERATING INCOME (LOSS):
Education......................................... $ 15,011 $ (32,024) $ 10,590
Information....................................... 33,473 (8,683) (2,307)
Specialty Media................................... 59,693 32,169 15,877
Corporate......................................... (22,276) (17,737) (13,957)
------------ ------------ ------------
Total............................................. $ 85,901 $ (26,275) $ 10,203
------------ ------------ ------------
------------ ------------ ------------
TOTAL ASSETS:
Education......................................... $ 939,947 $ 547,587 $ 613,897
Information....................................... 531,771 499,418 462,861
Specialty Media................................... 908,374 723,711 464,626
Corporate......................................... 172,123 110,700 48,308
------------ ------------ ------------
Total............................................. $ 2,552,215 $ 1,881,416 $ 1,589,692
------------ ------------ ------------
------------ ------------ ------------
DEPRECIATION, AMORTIZATION AND OTHER (1):
Education......................................... $ 64,228 $ 107,284 $ 47,258
Information....................................... 53,091 79,435 52,497
Specialty Media................................... 76,281 58,100 54,571
Corporate......................................... 764 706 645
------------ ------------ ------------
Total............................................. $ 194,364 $ 245,525 $ 154,971
------------ ------------ ------------
------------ ------------ ------------
CAPITAL EXPENDITURES:
Education......................................... $ 14,471 $ 10,896 $ 8,768
Information....................................... 4,343 6,119 4,133
Specialty Media................................... 9,107 5,737 2,839
Corporate......................................... 1,740 2,427 378
------------ ------------ ------------
Total............................................. $ 29,661 $ 25,179 $ 16,118
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
- ------------------------
(1) Other includes net provision for loss on the sales of businesses, provision
for restructuring and other costs and amortization of deferred financing and
organizational costs.
There were no significant intersegment sales or transfers during 1996, 1995
and 1994. Operating income (loss) by business segment excludes interest income
and interest expense. Corporate assets consist primarily of cash, receivables,
property and equipment and the net deferred income tax asset. Depreciation,
amortization and other does not include the write-off of unamortized deferred
financing costs of $8,648 in 1996 and $11,874 in 1994 but it does include the
net provision for loss on sale of a business of $15,025 in 1994, the net
provision for loss on sales of businesses of $35,447 in 1995 and provision for
restructuring and other costs of $14,667 in 1995.
55
<PAGE>
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
25. BUSINESS SEGMENT INFORMATION (CONTINUED)
The adoption of a change in method of accounting for advertising costs
resulted in an increase in operating income in 1994 for the education and
specialty media segments of approximately $6,500 ($.06 per share) and $3,300
($.03 per share), respectively. This change in method of accounting for
advertising costs resulted in a decrease in operating loss in 1995 for the
education and information segments of approximately $10,500 ($.09 per share) and
$200, respectively, and an increase in operating income in 1995 for the
specialty media segment of approximately $1,100 ($.01 per share) (see Note 2).
In 1996, the change in method of accounting for advertising costs was immaterial
for the education and information segments and resulted in an increase in
operating income of approximately $1,700 ($.01 per share) for the specialty
media segment.
26. SUBSEQUENT EVENTS
Through March 12, 1997, the Company completed three product-line
acquisitions consisting of specialty consumer magazines and specialized
reference products. The aggregate purchase price was approximately $56,000.
On March 11, 1997, the Company announced its intention to make public
offerings of approximately 12.5 million shares of its common stock, par value
$.01 per share (the "Offerings"). The net proceeds of the Offerings will be used
to redeem the Company's outstanding Senior Preferred Stock and repay debt.
As part of its strategy to focus on areas of its business that have the
greatest potential for growth, the Company intends to divest certain businesses
that do not fit within its growth vehicles. Those businesses are: the DAILY
RACING FORM group, which includes a national daily newspaper covering
thoroughbred horseracing and PRO FOOTBALL WEEKLY; KRAMES COMMUNICATIONS, a
leading publisher of patient information sold to healthcare providers for
distribution to patients and other healthcare users; the KATHARINE GIBBS
SCHOOLS, a chain of seven business schools; NEWBRIDGE BOOK CLUBS, the largest
book club organization for professionals in the United States; and NEW WOMAN
magazine, a guide for personal relationships and careers. The proceeds of these
sales will be used to repay indebtedness. These businesses represented
approximately 19% of 1996 net sales of the Company. The unaudited combined
operating results for the years ended December 31, 1996, 1995 and 1994 and total
assets and liabilities at December 31, 1996 of these business units are
approximately as follows:
<TABLE>
<CAPTION>
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Sales, net............................................... $ 255,000 $ 259,400 $ 263,000
---------- ---------- ----------
---------- ---------- ----------
Operating income (loss).................................. $ (3,950) $ (5,330) $ (1,110)
---------- ---------- ----------
---------- ---------- ----------
Total assets (1)......................................... $ 304,700
----------
----------
Total liabilities........................................ $ 73,100
----------
----------
</TABLE>
- ------------------------
(1) At December 31, 1996, KATHARINE GIBBS SCHOOLS is reflected as an asset held
for sale in the accompanying consolidated balance sheet.
IN JANUARY 1997, THE COMPANY PURCHASED, IN AGGREGATE, $20,850 OF THE 10 5/8%
SENIOR NOTES AT A WEIGHTED AVERAGE PRICE OF 105%, PLUS ACCRUED AND UNPAID
INTEREST, FROM VARIOUS BROKERS ON THE OPEN MARKET. In March 1997, the Company
called for redemption all of its outstanding 10 5/8% Senior Notes. On May 1,
1997, the Company will redeem $212,400 principal amount of 10 5/8% Senior Notes,
at a redemption price of 104% of the outstanding principal amount thereof, plus
accrued and unpaid interest to the date of redemption.
56
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
None
PART III
Items 10, 11, 12 and 13 are omitted, except for information as to Executive
Officers set forth in Part I, Item 1.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
(a) Documents filed as part of this report:
1. Index to Financial Statements
See Table of Contents to Financial Statements included in Part II, Item 8
of this report.
2. Index to Financial Statement Schedules
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
K-III Communications Corporation and Subsidiaries
For the Year Ended December 31, 1996.............................................................. S-1
For the Year Ended December 31, 1995.............................................................. S-2
For the Year Ended December 31, 1994.............................................................. S-3
Independent Auditors' Report on Schedules--Deloitte & Touche LLP.................................... S-4
</TABLE>
All schedules, except those set forth above, have been omitted since the
information required to be submitted has been included in the Consolidated
Financial Statements or Notes thereto or has been omitted as not applicable or
not required.
(b)--Reports on Form 8-K
<TABLE>
<S> <C> <C>
--The Company has not filed any reports on Form 8-K during the fourth
quarter of 1996.
</TABLE>
(c)--Exhibits
<TABLE>
<S> <C> <C>
3.1 --Certificate of Incorporation of K-III. (7)
3.2 --Certificate of Designations of the Senior Preferred Stock. (2)
3.3 --Certificate of Designations of the Series B Preferred Stock. (3)
3.4 --Certificate of Designations of the Series C Preferred Stock. (9)
3.5 --Amended and Restated By-laws of K-III. (7)
3.6 --Certificate of Incorporation of K-III Prime Corporation. (2)
3.7 --By-laws of K-III Prime Corporation. (2)
3.8 --Certificate of Incorporation of Intertec Publishing Corporation. (2)
3.9 --Amended and Restated By-laws of Intertec Publishing Corporation. (2)
3.10 --Certificate of Incorporation of Newbridge Communications, Inc. (2)
3.11 --By-laws of Newbridge Communications, Inc. (2)
3.12 --Certificate of Incorporation of K-III Directory Corporation (1)
</TABLE>
57
<PAGE>
<TABLE>
<S> <C> <C>
3.13 --By-laws of K-III Directory Corporation (1)
3.14 --Certificate of Incorporation of R.E.R. Publishing Corporation. (2)
3.15 --Amended and Restated By-laws of R.E.R. Publishing Corporation. (2)
3.16 --Certificate of Incorporation of Intermodal Publishing Company, Ltd. (2)
3.17 --Amended and Restated By-laws of Intermodal Publishing Company, Ltd. (2)
3.18 --Certificate of Incorporation of Weekly Reader Corporation. (2)
3.19 --By-laws of Weekly Reader Corporation. (2)
3.20 --Certificate of Incorporation of K-III Reference Corporation. (9)
3.21 --By-laws of K-III Reference Corporation. (2)
3.22 --Certificate of Amendment to Certificate of Incorporation of Funk &
Wagnalls Corporation (changing name to K-III Reference Corporation)(*)
3.23 --Certificate of Incorporation of Funk & Wagnalls Yearbook Corp. (2)
3.24 --By-laws of Funk & Wagnalls Yearbook Corp. (2)
3.25 --Certificate of Incorporation of Krames Communications Incorporated. (2)
3.26 --By-laws of Krames Communications Incorporated. (2)
3.27 --Certificate of Incorporation of Daily Racing Form, Inc. (2)
3.28 --By-laws of Daily Racing Form, Inc. (2)
3.29 --Certificate of Incorporation of DRF Finance, Inc. (2)
3.30 --By-laws of DRF Finance, Inc. (2)
3.31 --Certificate of Incorporation of K-III Magazine Corporation. (2)
3.32 --By-laws of K-III Magazine Corporation. (2)
3.33 --Certificate of Incorporation of K-III Magazine Finance Corporation. (2)
3.34 --By-laws of K-III Magazine Finance Corporation. (2)
3.35 --Certificate of Incorporation of Musical America Publishing, Inc. (1)
3.36 --By-laws of Musical America Publishing, Inc. (1)
3.37 --Certificate of Incorporation of K-III Holdings Corporation III. (2)
3.38 --By-laws of K-III Holdings Corporation III. (2)
3.39 --Certificate of Incorporation of Paramount Publishing Inc. (5)
3.40 --By-laws of Paramount Publishing, Inc. (5)
3.41 --Certificate of Incorporation of Nelson Information, Inc. (5)
3.42 --Certificate of Amendment to Certificate of Incorporation of Nelson
Publications, Inc. (changing name to Nelson Information, Inc.)(*)
3.43 --By-laws of Nelson Information, Inc. (5)
3.44 --Certificate of Incorporation of The Katharine Gibbs Schools, Inc. (8)
3.45 --By-laws of The Katharine Gibbs Schools, Inc. (5)
3.46 --Certificate of Incorporation of The Katharine Gibbs School of Norwalk,
Inc. (9)
3.47 --By-laws of The Katharine Gibbs School of Norwalk, Inc. (5)
3.48 --Certificate of Incorporation of K-III KG Corporation-Massachusetts (5)
3.49 --By-laws of K-III KG Corporation-Massachusetts (5)
3.50 --Certificate of Incorporation of The Katharine Gibbs School of Montclair,
Inc. (9)
3.51 --By-laws of The Katharine Gibbs School of Montclair, Inc. (5)
3.52 --Certificate of Incorporation of The Katharine Gibbs of Piscataway, Inc.
(9)
3.53 --By-laws of The Katharine Gibbs of Piscataway, Inc. (5)
3.54 --Certificate of Incorporation of The Katharine Gibbs Corporation-Melville
(5)
3.55 --By-laws of The Katharine Gibbs Corporation-Melville (5)
3.56 --Certificate of Incorporation of The Katharine Gibbs Corporation-New York
(5)
</TABLE>
58
<PAGE>
<TABLE>
<S> <C> <C>
3.57 --By-laws of The Katharine Gibbs Corporation-New York (5)
3.58 --Certificate of Incorporation of The Katharine Gibbs School of Providence,
Inc. (8)
3.59 --By-laws of The Katharine Gibbs School of Providence, Inc. (5)
3.60 --Certificate of Incorporation of K-III HPC, Inc. (5)
3.61 --By-laws of K-III HPC, Inc. (5)
3.62 --Certificate of Incorporation of Haas Publishing Companies, Inc. (5)
3.63 --By-laws of Haas Publishing Companies, Inc. (5)
3.64 --Certificate of Incorporation of Stagebill, Inc. (8)
3.65 --By-laws of Stagebill, Inc. (8)
3.66 --Certificate of Incorporation of Lifetime Learning Systems, Inc. (8)
3.67 --By-laws of Lifetime Learning Systems, Inc. (8)
3.68 --Certificate of Incorporation of Channel One Communications Corporation.
(8)
3.69 --By-laws of Channel One Communications Corporation. (8)
3.70 --Certificate of Incorporation of Bacon's Information, Inc. (9)
3.71 --By-laws of Bacon's Information, Inc. (9)
3.72 --Certificate of Incorporation of Intertec Market Reports, Inc. (9)
3.73 --By-laws of Intertec Market Reports, Inc. (8)
3.74 --Certificate of Incorporation of Intertec Presentations, Inc. (9)
3.75 --By-laws of Intertec Presentations, Inc. (8)
3.76 --Certificate of Incorporation of MH West, Inc. (8)
3.77 --By-laws of MH West, Inc. (8)
3.78 --Certificate of Incorporation of Argus Publishers Corporation (9)
3.79 --By-laws of Argus Publishers Corporation (9)
3.80 --Certificate of Incorporation of Law Enforcement Television Network, Inc.
(Del) (*)
3.81 --By-laws of Law Enforcement Television Network, Inc. (Del) (*)
3.82 --Certificate of Incorporation of PJS Publications, Inc. (8)
3.83 --By-laws of PJS Publications, Inc. (8)
3.84 --Certificate of Incorporation of Symbol of Excellence Publishers, Inc. (8)
3.85 --By-laws of Symbol of Excellence Publishers, Inc. (8)
3.86 --Certificate of Incorporation of American Heat Video Productions, Inc. (*)
3.87 --By-laws of American Heat Video Productions, Inc. (*)
3.88 --Certificate of Incorporation of ASTN, Inc. (*)
3.89 --By-laws of ASTN, Inc. (*)
3.90 --Certificate of Incorporation of A WEP Company (*)
3.91 --By-laws of A WEP Company (*)
3.92 --Certificate of Incorporation of Bankers Consulting Company (*)
3.93 --By-laws of Bankers Consulting Company (*)
3.94 --Certificate of Incorporation of Data Book, Inc. (*)
3.95 --By-laws of Data Book, Inc. (*)
3.96 --Certificate of Incorporation of Excellence in Training Corporation (*)
3.97 --By-laws of Excellence in Training Corporation (*)
3.98 --Certificate of Incorporation of Gareth Stevens, Inc. (*)
3.99 --By-laws of Gareth Stevens, Inc. (*)
3.100 --Certificate of Incorporation of IDTN Leasing Corporation (*)
3.101 --By-laws of IDTN Leasing Corporation (*)
</TABLE>
59
<PAGE>
<TABLE>
<S> <C> <C>
3.102 --Certificate of Incorporation of Industrial Training Systems Corporation
(*)
3.103 --By-laws of Industrial Training Systems Corporation (*)
3.104 --Certificate of Incorporation of Law Enforcement Television Network, Inc.
(TX) (*)
3.105 --By-laws of Law Enforcement Television Network, Inc. (TX) (*)
3.106 --Certificate of Incorporation of Lockert Jackson & Associates, Inc. (*)
3.107 --By-laws of Lockert Jackson & Associates, Inc. (*)
3.108 --Certificate of Incorporation of Straight Down, Inc. (*)
3.109 --Agreement of shareholders of Straight Down, Inc. (*)
3.110 --Certificate of Incorporation of Tel-A-Train, Inc. (*)
3.111 --By-laws of Tel-A-Train, Inc. (*)
3.112 --Certificate of Incorporation of TI-IN Acquisition Corporation (*)
3.113 --By-laws of TI-IN Acquisition Corporation (*)
3.114 --Certificate of Incorporation of Westcott Communications, Inc. (*)
3.115 --By-laws of Westcott Communications, Inc. (*)
3.116 --Certificate of Incorporation of Westcott Communications Michigan, Inc. (*)
3.117 --By-laws of Westcott Communications Michigan, Inc. (*)
3.118 --Certificate of Incorporation of Westcott ECI, Inc. (*)
3.119 --By-laws of Westcott ECI, Inc. (*)
3.120 --Certificate of Incorporation of Western Empire Publications, Inc. (*)
3.121 --By-laws of Western Empire Publications, Inc. (*)
3.122 --Certificate of Incorporation of McMullen Argus Publishing, Inc. (*)
3.123 --By-laws of McMullen Argus Publishing, Inc. (*)
3.124 --Certificate of Incorporation of The Electronics Source Book, Inc. (*)
3.125 --By-laws of The Electronics Source Book, Inc. (*)
3.126 --Certificate of Incorporation of Tunnell Publications, Inc. (*)
3.127 --By-laws of Tunnell Publications, Inc. (*)
3.128 --Certificate of Amendment of the Certificate of Incorporation of K-III KG
Corporation--New York I (changing name to The Katharine Gibbs
Corporation-- Melville)(*)
3.129 --Certificate of Amendment of the Certificate of Incorporation of K-III KG
Corporation--New York II (changing name to The Katharine Gibbs
Corporation-- New York)(*)
4.1 --10 5/8% Senior Note Indenture (including form of note and form of
guarantee). (1)
4.2 --Form of 11 1/2% Subordinated Debenture Indenture,
(including form of debenture). (1)
4.3 --Form of Class B Subordinated Debenture Indenture
(including form of debenture). (2)
4.4 --10 1/4% Senior Note Indenture (including form of note and form of
guarantee). (8)
4.5 --8 1/2% Senior Note Indenture (including forms of note and guarantee). (9)
4.6 --Form of Class D Subordinated Debenture Indenture. (11)
10.1 --Non-Competition Agreement, dated as of June 17, 1991, between News America
Holdings Incorporated, K-III Holdings Corporation III, K-III Magazines and
Daily Racing Form. (2)
10.2 --Agreement and Plan of Merger, dated as of April 22, 1996, by and among the
Company, K-III Prime Corporation, Acquiror Sub and Wettcott. (10)
</TABLE>
60
<PAGE>
<TABLE>
<S> <C> <C>
10.3 --$250,000 Credit Facility with The Chase Manhattan Bank, The Bank of New
York, Bankers Trust Company and The Bank of Nova Scotia, as agents
(including forms of Guaranty and Contribution Agreements). (*)
10.4 --$1,250,000 Credit Facility with The Chase Manhattan Bank, The Bank of New
York, Bankers Trust Company and the Bank of Nova Scotia,
as agents (including forms of Guaranty and Contribution Agreements).(*)
+10.5 --Form of Amended and Restated K-III 1992 Stock Purchase and Option Plan.
(7)
+10.6 --Amendment No. 1 to the 1992 Stock Purchase and Option Plan Amended and
Restated as of March 5, 1997. (*)
+10.7 --Form of Common Stock Purchase Agreement between K-III and senior
management. (2)
+10.8 --Form of Common Stock Purchase Agreement between K-III and various
purchasers. (2)
+10.9 --Form of Non-Qualified Stock Option Agreement between K-III and various
employees. (2)
10.10 --Form of Common Stock Purchase Agreement between K-III and senior
management. (2)
10.11 --Form of Common Stock Purchase Agreement between K-III and various
purchasers. (2)
+10.12 --Form of Non-Qualified Stock Option Agreement between K-III and various
employees. (2)
10.13 --Amended Registration Rights Agreement dated as of May 13, 1992 among
K-III, MA Associates, L.P., FP Associates, L.P., Magazine Associates,
L.P., Publishing Associates, L.P. and KKR Partners II, L.P. with respect
to common stock of K-III. (1)
10.14 --Registration Rights Agreement dated as of September 30, 1994 among K-III,
Channel One Associates, L.P. and KKR Partners II, L.P. with respect to
common stock of K-III. (8)
10.15 --Registration Rights Agreement dated as of March 1, 1995 among K-III and
Channel One Associates, L.P. with respect to common stock of K-III. (8)
+10.16 --Free Cash Flow Long-Term Plan. (1)
+10.17 --Executive Incentive Compensation Plan. (8)
+10.18 --Thrift and Retirement Plans. (1)
+10.19 --Pension Plan. (1)
+10.20 --1995 Restoration Plan. (8)
+10.21 --Form of K-III Communications Short Term Senior Executive
Non-Discretionary Plan. (7)
+10.22 --Form of K-III Communications Short Term Senior Executive Performance Plan.
(7)
+10.23 --Form of K-III Communications Corporation Directors' Deferred Compensation
Plan. (*)
+10.24 --Agreement, dated as of December 24, 1996, between K-III Communications
Corporation and Harry A. McQuillen (*)
+10.25 --Agreement, dated as of December 24, 1996, between K-III Communications
Corporation and Jack L. Farnsworth (*)
11 --Statement Regarding Computation of Per Share Earnings (*)
12 --Statement Regarding Computation of Earnings to Fixed Charges(*)
21 --Subsidiaries of K-III. (*)
27 --Financial Data Schedule. (*)
</TABLE>
61
<PAGE>
- ------------------------
(1) Incorporated by reference to K-III Communications Corporation's Annual
Report on Form 10-K for the year ended December 31, 1992. File No. 1-11106.
(2) Incorporated by reference to K-III Communications Corporation's Registration
Statement on Form S-1, File No. 33-46116.
(3) Incorporated by reference to K-III Communications Corporation's Registration
Statement on Form S-1, File No. 33-60786.
(4) Incorporated by reference to K-III Communications Corporation's Annual
Report on Form 10-K for the year ended December 31, 1993. File No. 1-11106.
(5) Incorporated by reference to K-III Communications Corporation's Registration
Statement on Form S-1, File No. 33-77520.
(6) Incorporated by reference to K-III Communications Corporation's Current
Report on Form 8-K dated September 30, 1994.
(7) Incorporated by reference to K-III Communications Corporation's Registration
Statement on Form S-1, File No. 33-96516.
(8) Incorporated by reference to K-III Communications Corporation Annual Report
on Form 10-K for the year ended December 31, 1994, File No. 1-11106.
(9) Incorporated by reference to K-III Communications Corporation's Form 10-K
for the year ended December 31, 1995, File No. 1-11106.
(10) Incorporated by reference to K-III Communications Corporation's Form 10-Q
for the quarter ended March 31, 1996.
(11) Incorporated by reference to K-III Communications Corporation's
Registration Statement on Form S-4, File No. 333-3691.
(*) Filed herewith.
+ Executive contract or compensation plan or arrangement.
62
<PAGE>
SUPPLEMENTAL INFORMATION
The foregoing information is being provided to comply with the annual report
requirements of the New York Stock Exchange.
The Company's Board of Directors is:
<TABLE>
<CAPTION>
William F. Reilly Chairman of the Board and Chief
Executive Officer, K-III Communications
Corporation
<S> <C>
Beverly C. Chell Vice Chairman, General Counsel and
Secretary, K-III Communications
Corporation
Meyer Feldberg Professor and Dean, Columbia University
Graduate School of Business
Perry Golkin General Partner, KKR Associates; member
of the limited liability company which
serves as the general partner of KKR
Henry R. Kravis Founding Partner, Kohlberg Kravis
Roberts & Co., L.P.; managing member of
the Executive Committee of the limited
liability company which serves as the
general partner of KKR
Charles G. McCurdy President, K-III Communications
Corporation
George R. Roberts Founding Partner, Kohlberg Kravis
Roberts & Co., L.P.; managing member of
the Executive Committee of the limited
liability company which serves as the
general partner of KKR
Michael T. Tokarz General Partner, KKR Associates; member
of the limited liability company which
serves as the general partner of KKR
</TABLE>
Messrs. Reilly, Golkin, Kravis and Tokarz are members of the Executive
Committee. Mr. Feldberg is the sole member of the Audit Committee. Messrs.
Golkin, Kravis and Tokarz are members of the Compensation Committee.
The Company's Registrar and Transfer Agent for the Common Stock is the Bank
of New York.
63
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this Annual Report on Form 10-K to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York,
State of New York on March 28, 1997.
K-III COMMUNICATIONS CORPORATION
By /s/ BEVERLY C. CHELL
...................................
(Beverly C. Chell)
VICE CHAIRMAN AND SECRETARY
Pursuant to the requirements of the Securities and Exchange Act of 1934,
this Annual Report on Form 10-K has been signed below by the following persons
in the capacities indicated on March 28, 1997.
<TABLE>
<CAPTION>
SIGNATURES TITLE
- --------------------------------------------------- ------------------------------------------------------------
<S> <C>
/s/ WILLIAM F. REILLY Chairman, Chief Executive Officer and Director (Principal
................................................... Executive Officer)
(William F. Reilly)
/s/ CHARLES G. MCCURDY President and Director (Principal Financial Officer)
...................................................
(Charles G. McCurdy)
/s/ BEVERLY C. CHELL Vice Chairman, Secretary and Director
...................................................
(Beverly C. Chell)
Director
...................................................
(Meyer Feldberg)
/s/ PERRY GOLKIN Director
...................................................
(Perry Golkin)
Director
...................................................
(Henry Kravis)
Director
...................................................
(George R. Roberts)
/s/ MICHAEL T. TOKARZ Director
...................................................
(Michael T. Tokarz)
/s/ CURTIS A. THOMPSON Vice President and Controller (Principal Accounting Officer)
...................................................
(Curtis A. Thompson)
</TABLE>
64
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this Annual Report on Form 10-K to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York,
State of New York on March 28, 1997.
ARGUS PUBLISHERS, CORPORATION
THE KATHARINE GIBBS SCHOOL OF
PISCATAWAY, INC.
AMERICAN HEAT VIDEO PRODUCTIONS,
INC.
THE KATHARINE GIBBS SCHOOL OF
PROVIDENCE, INC.
ASTN, INC.
KRAMES COMMUNICATIONS
INCORPORATED
A WEP COMPANY
LAW ENFORCEMENT TELEVISION
NETWORK, INC.
BACON'S INFORMATION, INC.
LAW ENFORCEMENT TELEVISION
NETWORK, INC.
BANKERS CONSULTING COMPANY
LIFETIME LEARNING SYSTEMS,
INC.
CHANNEL ONE COMMUNICATIONS
CORP.
LOCKERT JACKSON & ASSOCIATES,
INC.
DRF FINANCE, INC.
MH WEST, INC.
DAILY RACING FORM, INC.
MCMULLEN ARGUS PUBLISHING,
INC.
DATA BOOK, INC.
MUSICAL AMERICA PUBLISHING,
INC.
THE ELECTRONICS SOURCE BOOK,
INC.
NELSON INFORMATION, INC.
EXCELLENCE IN TRAINING
CORPORATION
NEWBRIDGE COMMUNICATIONS, INC.
FUNK & WAGNALLS YEARBOOK CORP.
PJS PUBLICATIONS, INC.
GARETH STEVENS, INC.
PARAMOUNT PUBLISHING, INC.
HAAS PUBLISHING COMPANIES,
INC.
R.E.R. PUBLISHING CORPORATION
INTERMODAL PUBLISHING COMPANY,
LTD.
STAGEBILL, INC.
IDTN LEASING CORPORATION
STRAIGHT DOWN, INC.
INDUSTRIAL TRAINING SYSTEMS
CORPORATION
SYMBOL OF EXCELLENCE
PUBLISHERS, INC.
INTERTEC MARKET REPORTS, INC.
TEL-A-TRAIN, INC.
INTERTEC PRESENTATIONS, INC.
TI-IN ACQUISITION CORPORATION
INTERTEC PUBLISHING
CORPORATION
TUNNELL PUBLICATIONS, INC.
K-III DIRECTORY CORPORATION
WEEKLY READER CORPORATION
K-III HOLDINGS CORPORATION III
WESTCOTT COMMUNICATIONS, INC.
K-III HPC, INC.
WESTCOTT COMMUNICATIONS
MICHIGAN, INC.
K-III KG CORP.--MASSACHUSETTS
WESTCOTT ECI, INC.
K-III MAGAZINE CORPORATION
WESTERN EMPIRE PUBLICATIONS,
INC.
K-III MAGAZINE FINANCE CORPORATION
K-III PRIME CORPORATION
<TABLE>
<S> <C>
K-III REFERENCE CORPORATION
THE KATHARINE GIBBS CORPORATION--MELVILLE
THE KATHARINE GIBBS CORPORATION--NEW YORK
THE KATHARINE GIBBS SCHOOLS, INC.
THE KATHARINE GIBBS SCHOOL OF MONTCLAIR, INC.
THE KATHARINE GIBBS SCHOOL OF NORWALK, INC.
/s/ BEVERLY C. CHELL
-------------------------------
(Beverly C. Chell)
VICE CHAIRMAN AND SECRETARY
</TABLE>
Pursuant to the requirements of the Securities and Exchange Act of 1934,
this Annual Report on Form 10-K has been signed below by the following persons
in the capacities indicated on March 28, 1997.
<TABLE>
<CAPTION>
SIGNATURES TITLE
- --------- --------------------------------------
/s/ WILLIAM F. REILLY Chairman and Director (Principal Executive Officer)
...................................................
(William F. Reilly)
<S> <C> <C>
/s/ CHARLES G. MCCURDY Vice Chairman, Chief Financial Officer and Director (Principal Financial
................................................... Officer)
(Charles G. McCurdy)
/s/ BEVERLY C. CHELL Vice Chairman, Secretary and Director
...................................................
(Beverly C. Chell)
/s/ CURTIS A. THOMPSON Vice President (Principal Accounting Officer)
...................................................
(Curtis A. Thompson)
</TABLE>
65
<PAGE>
SCHEDULE II
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEAR ENDED DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
BALANCE AT CHARGED TO CHARGED TO BALANCE AT
BEGINNING OF COSTS AND OTHER END OF
DESCRIPTION PERIOD EXPENSES ACCOUNTS DEDUCTIONS PERIOD
- -------------------------------------------------- ------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Accounts receivable
Allowance for doubtful
accounts...................................... $ 14,364 $ 21,438 $ 62(1) $(21,069)(3) $ 15,418
$ 970(2)
$ (347)(4)
Allowance for sales returns and
rebates....................................... $ 23,015 $ 79,819 $ -- $(78,736)(3) $ 24,098
Inventory
Allowance for obsolescence...................... $ 7,129 $ 4,423 $ 279(2) $ (3,128)(3) $ 8,703
Accumulated amortization
Goodwill........................................ $ 66,889 $ 23,576 $ (640)(4) $ (7,062)(3) $ 82,763
Other intangibles............................... $695,504 $122,140 $(2,932)(4) $ (651)(3) $ 814,061
Deferred financing costs........................ $ 8,139 $ 3,662 -- $ (2,007)(3) $ 9,794
Deferred wiring and
installation costs............................ $ 7,163 $ 6,753 -- $ (1,066)(3) $ 12,850
Prepublication and programming costs............ $ 4,121 $ 2,847 -- $ (2,116)(3) $ 4,852
Direct-response advertising costs............... $ 29,569 $ 41,481 -- $ (389)(3) $ 70,661
</TABLE>
- ------------------------
Notes:
(1) Increases in related valuation account result from acquisitions.
(2) Increases in related valuation account result from the recovery of amounts
previously written off.
(3) Deductions from related valuation account result from write-offs and actual
returns.
(4) Deductions from related valuation account result from reclassifications and
write-offs related to net assets held for sale.
S-1
<PAGE>
SCHEDULE II
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEAR ENDED DECEMBER 31, 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
BALANCE AT CHARGED TO CHARGED TO BALANCE AT
BEGINNING OF COSTS AND OTHER END OF
DESCRIPTION PERIOD EXPENSES ACCOUNTS DEDUCTIONS PERIOD
- -------------------------------------------------- ------------ ---------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Accounts receivable
Allowance for doubtful
accounts...................................... $ 13,482 $ 19,276 $1,195(1) $(20,526)(3) $ 14,364
$ 937(2)
Allowance for sales returns and
rebates....................................... $ 23,543 $ 80,859 $ 663(2) $(82,072)(3) $ 23,015
$ 22(2)
Inventory
Allowance for obsolescence...................... $ 5,138 $ 2,662 $ 622(1) $ (1,463)(3) $ 7,129
$ 170(2)
Accumulated amortization
Goodwill........................................ $ 29,312 $ 37,572 $ 5(2) -- $ 66,889
Other intangibles............................... $573,230 $122,609 -- $ (335)(3) $ 695,504
Deferred financing costs........................ $ 5,004 $ 3,135 -- -- $ 8,139
Deferred wiring and
installation costs............................ $ 1,413 $ 6,334 -- $ (584)(3) $ 7,163
Prepublication and programming costs............ $ 6,732 $ 1,954 -- $ (4,565)(3) $ 4,121
Direct-response advertising costs............... $ 3,126 $ 28,774 -- $ (2,331)(3) $ 29,569
</TABLE>
- ------------------------
Notes:
(1) Increases in related valuation account result from acquisitions.
(2) Increases in related valuation account result from the recovery of amounts
previously written off.
(3) Deductions from related valuation account result from write-offs and actual
returns.
S-2
<PAGE>
SCHEDULE II
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEAR ENDED DECEMBER 31, 1994
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
BALANCE AT CHARGED TO CHARGED TO BALANCE AT
BEGINNING OF COSTS AND OTHER END OF
DESCRIPTION PERIOD EXPENSES ACCOUNTS DEDUCTIONS PERIOD
- -------------------------------------------------- ------------ ---------- ---------- ----------- --------------
<S> <C> <C> <C> <C> <C>
Accounts receivable
Allowance for doubtful
accounts...................................... $ 28,137 $ 46,686 $1,686(2) $ (45,537)(3) $ 13,482
$1,736(1) $ (19,226)(4)
Allowance for sales returns
and rebates................................... $ 30,421 $142,268 $ 35(2) $ (143,644)(3) $ 23,543
$ 495(1) $ (6,032)(4)
Inventory
Allowance for obsolescence...................... $ 8,320 $ 4,519 $ 207(2) $ (4,708)(3) $ 5,138
$ 327(1) $ (3,527)(4)
Accumulated amortization
Goodwill........................................ $ 20,942 $ 9,419 -- $ (1,049)(4) $ 29,312
Other intangibles............................... $483,596 $109,752 -- $ (20,118)(4) $ 573,230
Deferred financing costs........................ $ 5,990 $ 3,080 -- $ (4,066)(3) $ 5,004
Deferred wiring and
installation costs............................ -- $ 1,505 -- $ (92)(3) $ 1,413
Prepublication and programming costs............ $ 4,675 $ 2,099 -- $ (42)(3) $ 6,732
Direct-response advertising
costs......................................... -- $ 5,251 -- $ (2,125)(4) $ 3,126
</TABLE>
- ------------------------
Notes:
(1) Increases in related valuation account result from acquisitions.
(2) Increases in related valuation account result from the recovery of amounts
previously written off.
(3) Deductions from related valuation account result from write-offs and actual
returns.
(4) Deductions from related valuation account result from reclassifications and
write-offs related to net assets held for sale.
S-3
<PAGE>
INDEPENDENT AUDITORS' REPORT ON SCHEDULES
To the Shareholders and Board of Directors of
K-III Communications Corporation
New York, New York:
We have audited the consolidated balance sheets of K-III Communications
Corporation and subsidiaries as of December 31, 1996 and 1995, and the related
statements of consolidated operations, consolidated cash flows and shareholders'
equity for each of the three years in the period ended December 31, 1996, and
have issued our report thereon dated January 29, 1997 (March 19, 1997 as to Note
26); such report is included elsewhere in this Form 10-K. Our audits also
included the financial statement schedules of K-III Communications Corporation
and subsidiaries, listed in Item 14. These financial statement schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion based on our audits. In our opinion, such financial statement schedules,
when considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.
DELOITTE & TOUCHE LLP
New York, New York
January 29, 1997
(March 19, 1997 as to Note 26)
S-4
<PAGE>
Exhibit 3.22
Page 1
State of Delaware
Office of the Secretary of State
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT
OF "FUNK & WAGNALLS CORPORATION", CHANGING ITS NAME FROM "FUNK & WAGNALLS
CORPORATION" TO "K-III REFERENCE CORPORATION", FILED IN THIS OFFICE ON THE
TWENTIETH DAY OF DECEMBER, A.D. 1995, AT 3 O'CLOCK P.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS FOR RECORDING.
[SEAL] /s/ Edward J. Freel
-------------------------------------
Edward J. Freel, Secretary of State
2247702 8100 AUTHENTICATION: 7764562
950302568 DATE: 12-22-95
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
FUNK & WAGNALLS CORPORATION
----------
Pursuant to Section 242 of the General Corporation
Law of the State of Delaware
Funk & Wagnalls Corporation, a corporation organized and existing under and
by virtue of the Delaware General Corporation Law (hereinafter called the
"Corporation"). DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation, by unanimous written
consent of its members, filed with the minutes of the Board duly adopted
resolutions setting forth a proposed amendment to the Certificate of
Incorporation of said Corporation, declaring said amendment to be advisable and
proposing such amendment to the sole stockholder of the Corporation for such
stockholder's consideration. The resolution setting forth the proposed amendment
as follows:
"RESOLVED, that the Board of Directors hereby deems it advisable and
in the best interests of the Corporation and its stockholders that the
Certificate of Incorporation of the Corporation (the "Charter") be amended
by deleting Article FIRST thereof in its entirety and by substituting, in
lieu of said Article, the following new Article:
`FIRST: The name of the Corporation is K-III Reference Corporation;
and
RESOLVED, that the foregoing amendment to the Charter be, and the same
hereby is, approved and adopted, subject to the approval of such amendment
by the sole stockholder of the Corporation; and further
RESOLVED, that the submission of the foregoing amendment for approval
by the sole stockholder of the Corporation be, and the same hereby is,
approved."
SECOND: That thereafter, by written consent filed with the minutes of the
Corporation, the sole stockholder approved said amendment as adopted by the
Board of Directors.
THIRD: That the above amendment was duly adopted in accordance with the
provisions of Section 242 General Corporation Law of the State of Delaware.
<PAGE>
IN WITNESS WHEREOF, said Funk & Wagnalls Corporation has caused this
certificate to be signed by Curtis A. Thompson, Vice President, and attested by
Beverly C. Chell, Secretary, this 19th day of December, 1995.
Funk & Wagnalls Corporation
By: /s/ Curtis A. Thompson
-----------------------------
Curtis A. Thompson
Vice President
ATTEST:
By: /s/ Beverly C. Chell
-----------------------------
Beverly C. Chell
Secretary
<PAGE>
State of Delaware
[LOGO]
Office of Secretary of State
----------------------------
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF DELAWARE DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT
OF FUNK & WAGNALLS ACQUISITION CORPORATION FILED IN THIS OFFICE ON THE
FOURTEENTH DAY OF JUNE, A.D. 1991, AT 10 O'CLOCK A.M.
/s/ Michael Harkins,
------------------------------------
Michael Harkins, Secretary of State
DEPARTMENT OF STATE
OFFICE OF THE SECRETARY OF STATE
DELAWARE
AUTHENTICATION: 3079951
721165021 DATE: 06/14/1991
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
FUNK & WAGNALLS ACQUISITION CORPORATION
* * * * * * *
Pursuant to Section 242 of the General Corporation
Law of the State of Delaware
* * * * * * *
Funk & Wagnalls Acquisition Corporation a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware (hereinafter called the "Corporation"), DOES HEREBY CERTIFY:
FIRST: that the Board of Directors of the Corporation, by unanimous written
consent of its members, filed with the minutes of the Board, duly adopted
resolutions setting forth a proposed amendment to the Certificate of
Incorporation of said Corporation, declaring said amendment to be advisable and
proposing such amendment to the sole stockholder of said Corporation for such
stockholder's consideration. The resolution setting forth the proposed amendment
is as follows:
RESOLVED, that the Certificate of Incorporation of the Corporation be
amended by deleting Article FIRST thereof in its entirety and substituting
in lieu of said Article the following new Article: FIRST: The name of the
Corporation is Funk & Wagnalls Corporation".
SECOND: That thereafter, upon written waiver of notice any by written
consent, filed with the minutes of the
<PAGE>
Corporation, the sole stockholder approved said amendment as proposed by the
Board of Directors.
THIRD: The amendment was duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said Funk & Wagnalls Acquisition Corporation has caused
this certificate to be signed by Charles G. McCurdy, its President, and attested
by Beverly C. Chell, its Secretary, the 13th day of June, 1991.
Funk & Wagnalls Acquisition
Corporation
/s/ Charles G. McCurdy
-----------------------------------
Charles G. McCurdy
Vice President
ATTEST:
By /s/ Beverly C. Chell
- -----------------------------------
Beverly C. Chell
Secretary
<PAGE>
State of Delaware
[LOGO]
Office of Secretary of State
----------------------------
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF DELAWARE DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
INCORPORATION OF FUNK & WAGNALLS ACQUISITION CORPORATION FILED IN THIS OFFICE ON
THE TWENTY-EIGHTH DAY OF NOVEMBER, A.D. 1990, AT 11 O'CLOCK A.M.
/s/ Michael Harkins,
------------------------------------
Michael Harkins, Secretary of State
DEPARTMENT OF STATE
OFFICE OF THE SECRETARY OF STATE
DELAWARE
AUTHENTICATION: 2868437
720332086 DATE: 11/28/1990
<PAGE>
CERTIFICATE OF INCORPORATION
OF
FUNK & WAGNALLS ACQUISITION CORPORATION
The undersigned, in order to form a corporation for the purpose
hereinafter stated, under and pursuant to the provisions of the Delaware General
Corporation Law, hereby certifies that:
FIRST: The name of the Corporation is Funk & Wagnalls Acquisition
Corporation.
SECOND: The registered office and registered agent of the Corporation
is The Corporation Trust Company, 1209 Orange Street, Wilmington, New Castle
County, Delaware 19801.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of Delaware.
FOURTH: The total number of shares of stock that the Corporation is
authorized to issue is 1,000 shares of Common Stock par value $.01 each.
FIFTH: The name and address of the incorporator is Beverly C. Chell,
717 Fifth Avenue, New York City, New York 10022.
SIXTH: The Board of Directors of the Corporation acting by majority
vote, may alter, amend or repeal the By-Laws of the Corporation.
SEVENTH: Except as otherwise provided by the Delaware General
Corporation Law as the same exists or may hereafter be amended, no director of
the Corporation shall be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director.
Any repeal or modification of this Article SEVENTH by the stockholders of the
Corporation shall not adversely affect any right or protection of a director of
the Corporation existing at the time of such repeal or modification.
IN WITNESS WHEREOF, the undersigned has signed this Certificate of
Incorporation on November 28, 1990.
/s/ Beverly C. Chell
-----------------------------
Beverly C. Chell
<PAGE>
Exhibit 3.42
PAGE 1
State of Delaware
Office of the Secretary of State
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT
OF "NELSON PUBLICATIONS, INC.", CHANGING ITS NAME FROM "NELSON PUBLICATIONS,
INC." TO "NELSON INFORMATION, INC.", FILED IN THIS OFFICE ON THE THIRD DAY OF
FEBRUARY, A.D. 1997, AT 11 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS FOR RECORDING.
/s/ Edward J. Freel
-----------------------------------
Edward J. Freel, Secretary of State
DEPARTMENT OF STATE
OFFICE OF THE SECRETARY OF STATE
DELAWARE
AUTHENTICATION: 8314528
2355105 8100 DATE: 02-04-97
971035254
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
NELSON PUBLICATIONS, INC.
* * * * * * *
Pursuant to Section 242 of the General Corporation
Law of the State of Delaware
Nelson Publications, Inc., a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware (hereinafter
called the "Corporation"), DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation, by unanimous written
consent of its members, filed with the minutes of the Board, duly adopted
resolutions and declaring advisable the following amendment to the Certificate
of Incorporation of said corporation:
RESOLVED, that the Certificate of Incorporation of the Corporation be
amended by deleting Article FIRST thereof in its entirety and substituting
in lieu of said Article the following new Article: "FIRST: The name of the
Corporation is Nelson Information, Inc."
SECOND: That in lieu of a meeting and vote of stockholders, the
stockholders have given unanimous written consent to said amendment in
accordance with the provision of Section 228 of the General Corporation Law of
the State of Delaware.
<PAGE>
THIRD: That the aforesaid amendment was duly adopted in accordance with the
provisions of Section 242 and 228 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, said Nelson Publications, Inc. has caused this
certificate of be signed by Beverly C. Chell, its Vice Chairman this 3rd day of
February, 1997.
Nelson Publications, Inc.
/s/ Beverly C. Chell
---------------------------------
Beverly C. Chell
Vice Chairman
<PAGE>
PAGE 1
State of Delaware
Office of the Secretary of State
I, WILLIAM T. QUILLEN, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
INCORPORATION OF "NELSON PUBLICATIONS, INC." FILED IN THIS OFFICE ON THE
THIRTEENTH DAY OF OCTOBER, A.D. 1993, AT 4:30 O'CLOCK P.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO NEW CASTLE
COUNTY RECORDER OF DEEDS FOR RECORDING.
* * * * * * * * * *
/s/ William T. Quillen
--------------------------------------
William T. Quillen, Secretary of State
AUTHENTICATION: *4100712
DATE: 10/14/1993
723286125
<PAGE>
CERTIFICATE OF INCORPORATION
OF
NELSON PUBLICATIONS, INC.
The undersigned, in order to form a corporation for the purpose
hereinafter stated, under and pursuant to the provisions of the Delaware General
Corporation Law, hereby certifies that:
FIRST: The name of the Corporation is Nelson Publications, Inc.
SECOND: The registered office and registered agent of the Corporation
is The Corporation Trust Company, 1209 Orange Street, Wilmington, New Castle
County, Delaware, 19801.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of Delaware.
FOURTH: The total number of shares of stock that the Corporation is
authorized to issue is 1,000 shares of Common Stock, par value $0.01 each.
FIFTH: The name and address of the incorporator is Beverly C. Chell,
745 Fifth Avenue, New York, New York 10151.
SIXTH: The Board of Directors of the Corporation, acting by majority
vote, may alter, amend or repeal the By-Laws of the Corporation.
SEVENTH: Except as otherwise provided by the Delaware General
Corporation Law as the same exists or may hereafter be amended, no director of
the Corporation shall be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director.
Any repeal or modification of this Article SEVENTH by the stockholders of the
Corporation shall not adversely affect any right or protection of a director of
the Corporation existing at the time of such repeal or modification.
IN WITNESS WHEREOF, the undersigned has signed this Certificate of
Incorporation on October 12, 1993.
/s/ Beverly C. Chell
---------------------------------
Beverly C. Chell
<PAGE>
Exhibit 3.80
CERTIFICATE OF INCORP0RATION
OF
LAW ENFORCEMENT TELEVISION NETWORK, INC.
FIRST: The name of the corporation is Law Enforcement Television Network,
Inc. (hereinafter the "Corporation").
SECOND: The address of the registered office of the Corporation in the
State of Delaware is 1209 Orange Street, County of New castle, Wilmington,
Delaware 19801. The name of its registered agent at that address is the
Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of the State of Delaware as set forth in Title 8 of the Delaware Code (the
"GCL").,
FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is One Thousand (1,000) shares of Common Stock, each
having a par value of $.10.
FIFTH:The name and mailing address of the sole incorporator are as
follows:
Name Address
---- -------
Jack E. Jacobsen 2200 Ross Avenue
Suite 2200
Dallas, Texas 75201
SIXTH: The name and mailing address of the person who is to serve as the
sole director until the-first annual meeting of the stockholders or until his
successor is elected and qualified are as follows:
Name Address
---- -------
Robin Glackin 1303 Marsh Lane
Carrollton, Texas 75006
SEVENTH: The following provisions are inserted for the management of the
business and the conduct of the affairs of the Corporation and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
<PAGE>
1. The business and affairs of the Corporation shall be managed by or under
the direction of the Board of Directors.
2. The directors shall have concurrent power with the stockholders to make,
alter, amend, change, add to or repeal the By-Laws of the corporation.
3. The number of directors of the Corporation shall be as from time to time
fixed by, or in the manner provided in, the By-Laws of the Corporation.
Election of directors need not be by written ballot unless the By-Laws so
provide.
4. To the full extent permitted by the GCL as the same exists or may hereafter
be amended, a director of the Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director. No repeal, amendment or modification of this
provision, whether direct or indirect, shall eliminate or reduce its effect
with respect to any act or omission of a director of the Corporation
occurring prior to such repeal, amendment or modification.
S. In addition to the powers and authority hereinbefore or by statute
expressly conferred upon them, the directors are hereby empowered to
exercise all such powers and do all such acts and things as may be
exercised or done by the Corporation, subject, nevertheless, to the
provisions of the GCL, this Certificate of Incorporation, and any By-Laws
adopted by the stockholders; provided, however, that no By-Laws hereafter
adopted by the stockholders shall invalidate any prior act of the directors
which would have been valid if such By-Laws had not been adopted.
EIGHTH: Meetings of stockholders may be held within or without the State
of Delaware as the Corporation's By-Laws may provide. The books of the
Corporation may be kept (subject to any provision contained in the GCL) outside
the State of Delaware at such place or places as may be designated from time to
time by the Board of Directors or in the By-Laws of the corporation.
NINTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this
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Corporation under the provisions of Section 291 of the GCL or on the application
of trustees in dissolution or of any receiver or receivers appointed for this
Corporation under the provisions of Section 279 of the GCL, order a meeting of
the creditors or class of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, to be summoned in such
manner"-as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
Corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors and/or on all the stockholders or class of
stockholders of this Corporation, as the case may be, and also on this
Corporation.
TENTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
ELEVENTH: (a) Power to Indemnify in Actions, Suits or Proceedings other
than those by or in the Rights of the Corporation. Subject to Paragraph (c) of
this Article Eleventh, the Corporation shall 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 or officer of the Corporation,
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys I 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. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contenders or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which 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
reasonable cause to believe that hid conduct was unlawful.
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(b) Power to Indemnify in Actions, Suits, or Proceedings by or in the
Ricrht of the Corporation. Subject to Paragraph (c) of this Article Eleventh,
the Corporation shall 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 he is or was a director or officer of the Corporation,
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees) actually and
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 or not opposed to the best interests of the Corporation; except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the corporation unless and only ,to
the extent that the Court of Chancery or 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, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.
(C) Authorization of Indemnification. Any indemnification under this
Article Eleventh (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of the director or officer is proper in the circumstances
because he has met the applicable standard of conduct set forth in Paragraph (a)
or (b) of this Article Eleventh, as the case may be. Such determination shall be
made (I) by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding, (ii) if such
a quorum is not obtainable, or, even if obtainable, a quorum of disinterested
directors so directs, by independent legal counsel in a written opinion, or
(iii) by the stockholders. To the extent, however, that a director or officer
has been successful on the merits or otherwise in defense of any action, suit or
proceeding described above, or in defense of any claim, issue or matter therein,
he shall be indemnified against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection therewith, without the necessity of
authorization in the specific case.
(d) Good Faith Defined. For purposes of any determination under Paragraph
(c) of this Article Eleventh, a person shall be deemed to have acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the
4
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Corporation, or, with respect to any criminal action or proceeding, to have had
no reasonable cause to believe his conduct was unlawful, if his action is based
on the records or books of account of the Corporation or another enterprise, or
on information supplied to him by the officers of the Corporation or another
enterprise in the course of their duties, or on the advice of legal counsel for
the corporation or another enterprise or on information or records given or
reports made to the Corporation or another enterprise by an independent
certified public accountant or by an appraiser or other expert selected with
reasonable care by the Corporation or another enterprise. The term "another
enterprise" as used in this Paragraph (d) shall mean any other corporation or
any partnership, joint venture, trust or other enterprise of which such person
is or was serving at the request of the corporation as a director, officer,
employee or agent. The provisions of this Paragraph (d) shall not be deemed to
be exclusive or to limit in any way the circumstances in which a person may be
deemed to have met the applicable standard of conduct set forth in Paragraph (a)
or (b) of this Article Eleventh, as the case may be.
(e) Indemnification by a court. Notwithstanding any contrary determination
in the specific case under Paragraph (c) of this Article Eleventh, and
notwithstanding the absence of any determination thereunder, any director or
officer may apply to any court of competent jurisdiction in the State of
Delaware for indemnification to the extent otherwise permissible under
Paragraphs (a) or (b) of this Article Eleventh. The basis of such
indemnification by a court shall be a determination by such court that
indemnification of the director or officer is proper in the circumstances
because he has met the applicable standards of conduct set forth in Paragraphs
(a) or (b) of this Article Eleventh, as the case may be. Notice of any
application for indemnification pursuant to this Paragraph (e) shall be given to
the Corporation promptly upon the filing of such application.
(f) Expenses Payable in Advance. Expenses incurred in defending a civil or
criminal action, suit or proceeding may be paid by the Corporation in advance of
the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount
unless it shall ultimately be determined that he is entitled to be indemnified
by the Corporation as authorized in this Article Eleventh.
(g) Non-exclusivity and Survival of Indemnification. The indemnification
expenses provided by, or granted pursuant tom this Article Eleventh shall not be
deemed exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any By-Law, agreement, vote of
stockholders or disinterested
5
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directors or pursuant to the direction (howsoever embodied) of any court of
competent jurisdiction or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office, it being the
policy of the Corporation that indemnification to the persons specified in
Paragraphs (a) and (b) of this Article Eleventh shall be made to the fullest
extent permitted by law. The-provisions of this Article Eleventh shall not be
deemed to preclude the indemnification of any person who is not specified in
Paragraphs (a) or (b) of this Article Eleventh, but whom the Corporation has the
power or obligation to indemnify under the provisions of the GCL, or otherwise.
The indemnification and advancement of expenses provided by, or granted pursuant
to, this Article Eleventh shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director or of ficer
and shall inure to the benefit of the heirs, executors and administrators of
such person.
(h) Indemnification of Employees and Acrents of the corporation. The
Corporation may, to the extent authorized from time to time by the Board of
Directors, grant rights to indemnification and to the advancement of expenses,
to any employee or agent of the Corporation to the fullest extent of the
provisions of this Article Eleventh with respect to the indemnification and
advancement of expenses of directors or of f icers of the Corporation.
(I) Insurance. The Corporation may purchase and maintain insurance on
behalf of any person who 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, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power or the obligation to
indemnify him against such liability under the provisions of this Article
Eleventh.
(j) Meaning of "Corporation" for Purposes of Article Eleventh. For
purposes of this Article Eleventh, references to "the Corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers and employees or agents, so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
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<PAGE>
partnership, joint venture, trust or other enterprise, shall stand in the same
position under the provisions of this Article Eleventh with respect to the
resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.
I, the undersigned, being the sole incorporator hereinbefore named for the
purpose of forming a corporation pursuant to the GCL, do make this Certificate,
hereby declaring and certifying that this is my act and deed and the facts
herein are true, and accordingly have hereunto set my hand this 26 day of
January, 1989.
Jack E. Jacobsen,
Sole Incorporator
<PAGE>
Exhibit 3.81
BY-LAWS
OF
LAW ENFORCEMENT TELEVISION NETWORK, INC.
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the Corporation
shall be in the City of Wilmington, County of New Castle, State of Delaware.
Section 2. Other Offices. The Corporation also may have offices at such
other places both within and without the State of Delaware as the Board of
Directors may from time to time determine.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. Meetings of the stockholders for the
election of directors or for any other purpose shall be held at such time and
place, either within or without the State of Delaware, as shall be designated
from time to time by the Board of Directors and stated in the notice of the
meeting or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. The annual meeting of stockholders shall be
held on such date and at such time as shall be designated from time to time by
the Board of Directors and stated in the notice of the meeting, at which meeting
the stockholders shall elect by a plurality vote a Board of Directors, and
transact such other business as may properly be brought before the meeting.
Written notice of the annual meeting stating the place, date, and hour of the
meeting shall be given to each stockholder entitled to vote at such meeting not
less than ten nor more than sixty days before the date of the meeting.
Section 3. Special Meetings. Unless otherwise prescribed by law or by the
Certificate of Incorporation, special meetings of stockholders, for any purpose
or purposes, may be called by either (a) the Chairman of the Board, if there be
one, or (b) the President, and shall be called by any such officer or the
Secretary at the request in writing of a majority of the Board of Directors.
such request shall state the purpose or purposes of the proposed meeting.
Written notice of a special meeting stating the place, date, and hour of the
meeting and the purpose or purposes for which the meeting is called shall be
given not less than ten nor more than sixty days before the date of the meeting
to each stockholder entitled to vote at such meeting.
<PAGE>
Section 4. Ouorum. Except as otherwise provided by law or by the
Certificate of Incorporation, the holders of a majority of the capital stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business. If, however, such quorum shall not
be present or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy, shall have
the power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted that might have been transacted at the meeting as
originally noticed. If the adjournment is for more than thirty days, or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder entitled to vote at
the meeting.
Section 5. Voting. Unless otherwise required by law, the Certificate of
Incorporation, or these By-Laws, any question brought before any meeting of
stockholders shall be decided by the vote of the holders of a majority of the
stock represented and entitled to vote thereat. Each holder of Common Stock
represented at a meeting of stockholders shall be entitled to cast one vote for
each share of the Common Stock entitled to vote thereat held by such
stockholder. Such votes may be cast in person or by proxy but no proxy shall be
voted on or after three years from its date, unless such proxy provides for a
longer period. The Board of Directors, in its discretion, or the officer of the
Corporation presiding at a meeting of stockholders, in his discretion, may
require that any votes cast at such meeting shall be cast by written ballot.
Section 6. List of Stockholders Entitled to Vote. The officer of the
Corporation who has charge of the stock ledger of the Corporation shall prepare
and make, at least ten days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder of the Corporation who is
present.
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ARTICLE III
DIRECTORS
Section 1. Number and Election of Directors. The Board of Directors shall
consist of not less than one member, the exact number of which shall initially
be fixed by the Incorporator and thereafter from time to time by the Board of
Directors. Except as provided in Section 2 of this Article, directors shall be
elected by a plurality of the votes cast at annual meetings of stockholders, and
each director so elected shall hold office until the next annual meeting and
until his successor is duly elected and qualified, or until his earlier
resignation or removal. Any director may resign at any time upon written notice
to the Corporation. Directors need not be stockholders.
Section 2. Vacancies. Vacancies and newly created directorships resulting
from any increase in the authorized number of directors may be filled by a
majority of the directors then in office, though less than a quorum, or by a
sole remaining director, and the directors so chosen shall hold office until the
next annual election and until their successors are duly elected and qualified,
or until their earlier resignation or removal.
Section 3. Duties and Powers. The business of the Corporation shall be
managed by or under the direction of the Board of Directors, which may exercise
all such powers of the Corporation and do all such lawful acts and things as are
not by statute or by the Certificate of Incorporation or these By-Laws directed
or required to be exercised or done by the stockholders.
Section 4. Meetings. The Board of Directors of the Corporation may hold
meetings, both regular and special, either within or without the State of
Delaware. Regular meetings of the Board of Directors may be held without notice
at such time and at such place as may from time to time be determined by the
Board of Directors. Special meetings of the Board of Directors may be called by
the Chairman, if there be one, the President, or any director. Notice thereof
stating the place, date, and hour of the meeting shall be given to each director
either by mail or by telephone or telegram on twenty-four hours notice, or on
such shorter notice as the person or persons calling such meeting may deem
necessary or appropriate in the circumstances.
Section 5. Ouorum. Except as may be otherwise specifically provided by
law, the Certificate of Incorporation, or these By-Laws, at all meetings of the
Board of Directors, a majority of the entire Board of Directors shall constitute
a quorum for the transaction of business and the act of a majority of the
directors
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present at any meeting at which there is a quorum shall be the act of the Board
of Directors. If a quorum shall not be present at any meeting of the Board of
Directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present.
Section 6. Actions of Board. Unless otherwise provided by the Certificate
of Incorporation or these By-Laws, any action required or permitted to be taken
at any meeting of the Board of Directors or of any committee thereof may be
taken without a meeting, if all the members of the Board of Directors or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board of Directors or
committee.
Section 7. Meetings by Means of Conference Telephone. Unless otherwise
provided by the Certificate of Incorporation or these ByLaws, members of the
Board of Directors of the Corporation, or any committee designated by the Board
of Directors, may participate in a meeting of the Board of Directors or such
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other,
and participation in a meeting pursuant to this Section 7 shall constitute
presence in person at such meeting.
Section 8. Compensation. The directors may be paid their expenses, if any,
of attendance at each meeting of the Board of Directors and may be paid a fixed
sum for attendance at each meeting of the Board of Directors or a stated annual
fee as director. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.
Section 9. Interested Directors. No contract or transaction between the
Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof that
authorizes the contract or transaction, or solely because his or their votes are
counted for such purpose, if (a) the material facts as to his or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of Directors
or committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even though the
disinterested directors
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be less than a quorum; or (b) the material f acts as to his or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the stockholders;
or (C) the contract or transaction is fair as to the Corporation as of the time
it is authorized, approved, or ratified, by the Board of Directors, a committee
thereof, or the stockholders. Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the Board of Directors or
of a committee that authorizes the contract or transaction.
Section 10. Executive Committee. (a) The Board of Directors may, by
resolution or resolutions passed by a majority of the whole board, designate
from the directors an Executive Committee, which shall consist of two or more
members. The number of members shall be determined from time to time by
resolution passed by a majority of the whole Board of Directors. The Board of
Directors shall designate for such committee a chairman, who shall continue as
such during the pleasure of the Board of Directors. Members of the Executive
Committee shall be appointed by the Board of Directors upon establishment of the
Executive Committee and thereafter at its first meeting after each annual
meeting of stockholders and, unless sooner discharged by resolution passed by a
majority of the whole Board of Directors, shall hold office until their
respective successors are appointed and qualified or until their earlier
respective deaths or resignations. Upon establishment of the Executive
Committee, any vacancy in the Executive Committee may be filled by resolution
passed by a majority of the whole Board of Directors.
(b) Regular meetings of the Executive Committee may be held without notice
at such time and place as shall be determined from time to time by the Committee
and communicated to all of the members thereof.
(C) Special meetings of the Executive Committee may be called by the
chairman of the Executive Committee or any two members thereof at any time on
twenty-four hours notice to each member, either personally or by mail or
telegram.
(d) Unless otherwise restricted by statute, the Certificate of
Incorporation, or these By-Laws, any action required or permitted to be taken at
any meeting of the Executive Committee may be taken without a meeting if a
written consent thereto is signed by all members and such written consent is
filed with the minutes of the proceedings of the Committee.
(e) Unless otherwise restricted by statute, the Certificate of
Incorporation, or these By-Laws, members of the
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Executive committee may participate in a meeting of such Committee by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting pursuant to this Section shall constitute presence in person at such
meeting.
(f) A majority of the total number of members of the Executive Committee
then serving shall constitute a quorum for the transaction of business, and the
act of a majority of the total number of members of the Executive Committee then
serving shall be the act of the Executive Committee. The members of the
Executive Committee shall act only as a committee, and the individual members
shall have no power as such.
(g) The Executive Committee shall keep regular minutes of its meetings.
The Secretary of the Corporation, or in his absence, an assistant secretary,
shall act as secretary of the Executive Committee or the Committee may, in its
discretion, appoint its own secretary. The Executive Committee shall report its
acts and proceedings to the Board of Directors.
(h) The Executive Committee shall have and may exercise all the powers and
authority of the Board of Directors in the management of the business and
affairs of the Corporation, including the same authority to have complete and
unrestricted access to the Corporation's books, records, internal memoranda,
accounts, and all other documents relating to the Corporation or its personnel,
access to the offices and other premises owned or leased by the Corporation, and
access to the Corporation's officers and employees, and may authorize the seal
of the Corporation to be affixed to all papers that may require it; provided,
however, in no event shall the Executive Committee have any power or authority
in reference to (I) amending the Certificate of Incorporation; (ii) adopting an
agreement of merger or consolidation; recommending to the stockholders the sale,
lease or exchange of all or substantially all of the Corporation's property and
assets; (iv) recommending to the stockholders a dissolution of the Corporation
or a revocation of a dissolution; (v) amending the By-Laws of the corporation;
or (vi) unless specifically so authorized by resolution passed by a majority of
the whole Board of Directors, declaring a dividend authorizing the issuance of
stock or adopting a certificate of ownership and merger pursuant to the Delaware
General Corporation Law.
Section 11. Other Committees. The Board of Directors may, by resolution or
resolutions passed by a majority of the whole Board of Directors, designate one
or more committees other than the Executive Committee, each committee to consist
of one or more of the directors of the Corporation, which, to the extent
provided in
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such resolution or resolutions, shall have and may exercise the powers of the
Board of Directors in the management of the business and affairs of the
Corporation and may authorize the seal of the Corporation to be affixed to all
papers which may require it, subject to the same limitations set forth in
Article III, Section 10 of these By-Laws. Such committee or committees shall
have such name or names and conduct its business in such areas and under such
rules and regulations as may be determined from time to time by resolution
passed by a majority of the whole Board of Directors. Each such committee shall
keep regular minutes of its meetings and report the same to the Board of
Directors when required.
ARTICLE IV
OFFICERS
Section 1. General. The officers of the Corporation shall be chosen by the
Board of Directors and shall include a President, a Secretary, and a Treasurer.
The Board of Directors, in its discretion, also may choose a Chairman of the
Board of Directors, one or more Vice-Presidents, a General Counsel, Assistant
Secretaries, Assistant Treasurers, and other officers. Any number of offices may
be held by the same person, unless otherwise prohibited by law, the Certificate
of Incorporation, or these ByLaws. The officers of the Corporation need not be
stockholders of the Corporation nor, except in the case of the Chairman and Vice
Chairman of the Board of Directors, need such officers be directors of the
Corporation.
Section 2. Election. The Board of Directors at its first meeting held
after each annual meeting of stockholders shall elect the officers of the
Corporation, who shall hold their offices with such powers and perform such
duties as shall be determined from time to time by the Board of Directors; and
all officers of the Corporation shall hold office until their successors are
chosen and qualified, or until their earlier resignation or removal. Any officer
elected by the Board of Directors may be removed at any time by the affirmative
vote of a majority of the Board of Directors. Any vacancy occurring in any
office of the Corporation shall be filled by the Board of Directors. The
salaries of all officers of the Corporation shall be fixed by the Board of
Directors.
Section 3. Chairman of the Board of Directors. The Chairman of the Board
of Directors shall preside at all meetings of the stockholders and of the Board
of Directors. He shall see that all orders and resolutions of the Board of
Directors are carried into effect. Except where by law the signature of the
President is required, the Chairman of the Board of Directors shall possess the
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same power as the President to sign all contracts, certificates, and other
instruments of the Corporation that may be authorized by the Board of Directors.
During the absence or disability of the President, the Chairman of the Board of
Directors shall exercise all the powers and discharge all the duties of the
President. The Chairman of the Board of Directors also shall perform such other
duties and may exercise such other powers as from time to time may be assigned
to him by these By-Laws or by the Board of Directors.
Section 4. President. The President shall, subject to the control of the
Board of Directors and the Chairman or, if there be one, Vice Chairman of the
Board of Directors, be the Chief Executive officer of the Corporation and shall
have general supervision of the business operations of the Corporation. He may
execute all bonds, mortgages, contracts, and other instruments of the
Corporation requiring a seal, under the seal of the Corporation, except where
required or permitted by law to be otherwise signed and executed and except that
the other officers of the Corporation may sign and execute documents when so
authorized by these By-Laws, the Board of Directors or the President. In the
absence or disability of the Chairman and Vice Chairman of the Board of
Directors, or if there be none, the President shall preside at all meetings of
the stockholders and the Board of Directors. The President shall also perform
such other duties and may exercise such other powers as from time to time may be
assigned to him by these By-Laws or by the Board of Directors.
Section 5. Vice-Presidents. At the request of the President or in his
absence or in the event of his inability or refusal to act (and if there be no
Chairman of the Board of Directors), the Vice-President or the Vice-Presidents
if there is more than one (in the order and with such titles designated by the
Board of Directors), shall perform the duties of the President, and, when so
acting, shall have all the powers of and be so subject to all the restrictions
upon the President. Each Vice-President shall perform such other duties and have
such other powers as the Board of Directors from time to time may prescribe. If
there be no Chairman of the Board of Directors and no Vice-President, the Board
of Directors shall designate the officer of the Corporation who, in the absence
of the President or in the event of the inability or refusal of the President to
act, shall perform the duties of the President, and when so acting, shall have
all the powers of and be subject to all the restrictions upon the President.
Section 6. Secretary. The Secretary shall attend all meetings of the Board
of Directors and all meetings of stockholders kept for that purpose. The
Secretary also shall perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice of all meetings
of the stockholders and special meetings of the Board of Directors, and
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shall perform such other duties as may be prescribed by the Board of Directors
or Chairman of the Board, under whose supervision he shall be. If the Secretary
shall be unable or refuse to cause to be given notice of all meetings of the
stockholders and special meetings of the Board of Directors, and if there be no
Assistant Secretary, then either the Board of Directors or the Chairman of the
Board may choose another officer to cause such notice to be given. The Secretary
shall have custody of the seal of the Corporation and the Secretary or any
Assistant Secretary, if there be one, shall have authority to affix the same to
any instrument requiring it and when so affixed, it may be attested by the
signature of the secretary or by the signature of any such Assistant Secretary.
The Board of Directors may give general authority to any other officer to affix
the seal of the Corporation and to attest the affixing by his signature. The
Secretary shall see that all books, reports, statements, certificates, and other
documents and records required by law to be kept or filed are properly kept or
filed, as the case may be.
Section 7. Treasurer. The Treasurer shall have custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by the Board of Directors. The Treasurer
shall disburse the funds of the Corporation as may be ordered by the Board of
Directors, taking proper vouchers for such disbursements, and shall render to
the Chairman of the Board of Directors, the Vice Chairman of the Board of
Directors, the President, and the Board of Directors, at its regular meetings,
or when the Board of Directors so requires, an account of all his transactions
as Treasurer and of the financial condition of the Corporation. If required by
the Board of Directors, the Treasurer shall give the Corporation a bond in such
sum and with such surety or sureties as shall be satisfactory to the Board of
Directors for the faithful performance of the duties of his office and for the
restoration to the Corporation, in case of his death, resignation, retirement,
or removal from office, of all books, papers, vouchers, money, and other
property of whatever kind in his possession or under his control belonging to
the Corporation.
Section 8. Assistant Secretaries. Except as may be otherwise provided in
these By-Laws, Assistant Secretaries, if there be any, shall perform such duties
and have such powers as from time to time may be assigned to them by the Board
of Directors, the Chairman of the Board of Directors, the President, any
Vice-President, or the
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Secretary, and in the absence of the Secretary or in the event of his disability
or refusal to act, shall perform the duties of the Secretary, and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Secretary.
Section 9. Assistant Treasurers. Assistant Treasurers, if there be any,
shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the Chairman of the Board of
Directors, the President, any vice-President, or the Treasurer, and in the
absence of the Treasurer or in the event of his disability or refusal to act,
shall perform the duties of the Treasurer, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the Treasurer. If
required by the Board of Directors, an Assistant Treasurer shall give the
Corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the Corporation, in case of his
death, resignation, retirement, or removal from office, of all books, papers,
vouchers, money, and other property of whatever kind in his possession or under
his control belonging to the corporation.
Section 10. General Counsel. A General Counsel for the Corporation may be
appointed annually by the Board of Directors, at a level or rate of compensation
to be set by the Board of Directors. The Board of Directors, in its discretion,
may appoint an individual lawyer or law firm as General Counsel of the
Corporation. If a law firm should be selected, then one member thereof shall be
designated as the particular lawyer in such firm whose personal services are
contemplated.
Section ii. Other Officers. Such other officers as the Board of Directors
may choose shall perform such duties and have such powers as from time to time
may be assigned to them by the Board of Directors. The Board of Directors may
delegate to any other officer of the Corporation the power to choose such other
officers and to prescribe their respective duties and powers.
ARTICLE V
STOCK
Section 1. Form of Certificates. Every holder of stock in the Corporation
shall be entitled to have a certificate signed, in the name of the Corporation
(a) by the Chairman of the Board of Directors, the President, or a
Vice-President and (b) by the
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Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary
of the Corporation, certifying the number of shares owned by him in the
Corporation.
Section 2. Signatures. Where a certificate is countersigned by (a) a
transfer agent other than the Corporation or its employee or (b) a registrar
other than the Corporation or its employee, any other signature on the
certificate may be a facsimile. In case any officer, transfer agent, or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent, or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent, or registrar at the date
of issue.
Section 3. Lost Certificates. The Board of Directors may direct a new
certificate to be issued in place of any certificate theretofore issued by the
corporation alleged to have been lost, stolen, or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen, or destroyed. When authorizing such issue of a new certificate,
the Board of Directors may, in its discretion and as a condition precedent to
the issuance thereof, (a) require the owner of such lost, stolen, or destroyed
certificate, or his legal representative, to advertise the same in such manner
as the Board of Directors shall require and/or to give the Corporation a bond in
such sum as it may direct as indemnity against any claim that may be made
against the Corporation with respect to the certificate alleged to have been
lost, stolen, or destroyed or the issuance of such new certificate and (b)
fulfill such other conditions as may be reasonably necessary for the protection
of the Corporation.
Section 4. Transfers. Stock of the Corporation shall be transferable in
the manner prescribed by law and in these By-Laws. Transfers of stock shall be
made on the books of the Corporation only by the person named in the certificate
or by his attorney lawfully constituted in writing and upon the surrender of the
certificate therefor, which shall be canceled before a new certificate shall be
issued.
Section 5. Record Date. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or entitled to express consent to corporate action in
writing without a meeting, or entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion, or exchange of stock, or for the
purpose of any other lawful action, the Board of Directors may fix, in advance,
a record date, which shall not be more than sixty days nor less than ten days
before the date of such
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meeting, nor more than sixty days prior to any other action. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
section 6. Beneficial owners. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends and to vote as such owner and to hold liable for
calls and assessments, a person registered on its books as the owner of shares,
and shall not be bound to recognize any equitable or other claim to or interest
in such share or shares on the part of any other person, whether or not it shall
have express or other notice thereof, except as otherwise provided by law.
ARTICLE VI
NOTICES
Section 1. Notices. Whenever written notice is required by law, the
Certificate of Incorporation or these By-Laws to be given to any director,
member of a committee, or stockholder, such notice may be given by mail,
addressed to such director, member of a committee, or stockholder, at his
address as it appears on the records of the Corporation, with postage thereon
prepaid, and such notice shall be deemed to be given at the time when the same
shall be deposited in the United States mail. Written notice may also be given
personally or by telegram, telex or cable.
Section 2. Waivers of Notice. Whenever any notice is required by law, the
Certificate of Incorporation, or these ByLaws to be given to any director,
member of a committee, or stockholder, a waiver thereof in writing, signed by
the person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the Corporation,
subject to the provisions of the Certificate of Incorporation, if any, may be
declared by the Board of Directors at any regular or special meeting and may be
paid in cash, in property, or in shares of the capital stock. Before payment of
any dividend, there may be set aside out of any funds of the Corporation
available for dividends such sum or sums as the Board
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of Directors from time to time, in its absolute discretion, deems proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation, or for any proper
purpose, and the Board of Directors may modify or abolish any such reserve.
Section 2. Disbursements. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
Section 3. Fiscal Year. The fiscal year of the Corporation shall be fixed
by resolution of the Board of Directors.
Section 4. Corporate Seal. The corporate seal shall have inscribed thereon
the name of the Corporation, the year of its organization, and the words
"Corporate Seal, Delaware". The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced or otherwise.
Section 5. Shares of Other Corporations. The Chairman of the Board, or in
his absence the President, or in the absence of both, any Vice Chairman of the
Board or Vice President, is authorized to vote, represent, and exercise on
behalf of the Corporation all rights incident to any and all shares of any other
corporation, bank, banking association, or other entity standing in the name of
the Corporation. The authority herein granted to said officer to vote or
represent on behalf of the Corporation any and all shares held by the
Corporation in any other corporation, bank, banking association, or other entity
may be exercised either by said officer in person or by any person authorized so
to do by proxy or power of attorney duly executed by said officer.
Notwithstanding the above, however, the Board, in its discretion, may designate
by resolution any additional person to vote or represent said shares of other
banks, banking associations, and other entities.
ARTICLE VIII
AMENDMENTS
Section 1. These By-Laws may be altered, amended, or repealed, in whole or
in part, or new By-Laws may be adopted by the stockholders or by the Board of
Directors at a regular or special meeting thereof; provided, however, that if
such action shall be taken at a regular meeting, notice of such alteration,
amendment, repeal, or adoption of new By-Laws shall be contained in the notice
of such meeting of stockholders or Board of Directors, as the case may be. All
such amendments must be approved by either the holders
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of a majority of the outstanding capital stock entitled to vote thereon or by a
majority of the entire Board of Directors then in office.
Section 2. Entire Board of Directors. As used in this Article VIII and in
these By-Laws generally, the term "entire Board of Directors" means the total
number of directors that the Corporation would have if there were no vacancies.
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Exhibit 3.86
Certificate of Incorporation
WHEREAS,duplicate originals of Articles of Incorporation of American Heat
Video Productions, Inc. Have been received and filed in the office of the
Secretary of State, which Articles, in all respects, comply with the
requirements of The General and Business Corporation Law:
NOW, THEREFORE, I, ROY D. BLUNT, Secretary of State of the State of
Missouri, by virtue of the authority vested in me by law, do hereby certify and
declare American Heat Video Productions, Inc. a body corporate, duly organized
this day and that it is entitled to all rights and privileges granted
corporations organized under The General and Business Corporation Law; that the
address of its initial Registered Office in Missouri is 4943 Buckingham Court,
St. Louis, MO 63108 that its period of existence is Perpetual; and that the
amount of its Authorized Shares is 30,000 @ no par.
IN TESTIMONY WHEREOF, I hereunto set my hand and affix the GREAT SEAL of
the State of Missouri. Done at the City of Jefferson, this 9th day of May 1986.
Secretary of State
<PAGE>
Amendment of Articles of Incorporation
HONORABLE ROY D. BLUNT
SECRETARY OF STATE
STATE OF MISSOURI
P.O. BOX 778
JEFFERSON CITY, MO 65102
Pursuant to the provisions of The General and Business Corporation Law of
Missouri, the undersigned Corporation certifies the following:
1. The present name of the Corporation is American Heat Video Productions, Inc.
The name under which it was originally organized was American Heat Video
Productions, Inc.
2. An amendment to the Corporation's Articles of Incorporation was adopted by
the shareholders on July 8,1990
3. Article Number Nine is hereby added and shall read as follows:
There shall be no cumulative voting rights with respect to election cf
directors.
4. Of the 26,750 shares outstanding, 26,750 of such shares were entitled to vote
on such amendment. The number of outstanding shares of any class entitled to
vote thereon as a class were as follows:
Class Number of Outstanding Shares
Common 26,750
5. The number of shares voted for and against the amendment was as follows:
Class No. Voted For No. Voted Against
Common 18,750 8,000
6. If the amendment changed the number or par value of authorized shares
having a par value, the amount in dollars of
<PAGE>
authorized shares having a par value as changed is: N/A
If the amendment changed the number of authorized shares
without par value, the authorized number of shares without par
value as changed and the consideration proposed to be received
for such increased authorized shares without par value as are
to be presently issued are: N/A
7. If the amendment provides for an exchange, reclassification, or
cancellation of issued shares, or a reduction of the number of authorized
shares of any class below the number of issued shares of that class, the
following is a statement of the manner in which such reduction shall be
effected: N/A
IN WITNESS WHEREOF, the undersigned,President has executed this instrument and
its Secretary has affixed its corporate seal hereto and attested said seal on
the 12th day of December 1990.
PLACE
CORPORATE SEAL
HERE.
(IF NO SEAL STATE "NONE.)
American Heat Video Production,Inc
Name of Corporation
ATTEST:
Cynthia Almer By: Stephen Ray Almer
State of Missouri
County of St. Louis
I, Lana Beth Ekies, a Notary Public, do hereby certify that on this 12th
day of December, 1990, personally appeared before me Stephen Ray Almer who,
being by me first duly sworn, declared that he is the President of American Heat
Video Productions, Inc. that he signed the foregoing document as President of
the corporation, and that the statements therein contained are true.
corporation, and that the statements therein contained are true.
<PAGE>
NOTARIAL SEAL
Lana Beth Ekies
Notary Public
<PAGE>
Exhibit 3.87
BY-LAWS
OF
AMERICAN HEAT VIDEO PRODUCTIONS, INC.
ARTICLE I
Offices
The principal office of the corporation in the State of Missouri shall be
located in St. Louis County , Missouri. The corporation may have such other
offices, either within or without the State of Missouri, as the business of the
corporation may require from time to time.
The registered office of the corporation required by The General and
Business Corporation Law of Missouri to be maintained in the State of Missouri
may be, but need not be, identical with the principal office in the State of
Missouri, and the address of the registered office may be changed from time to
time by the Board of Directors.
ARTICLE II
Shareholders
Section 1. Annual Meeting: The annual meeting of the shareholders shall be
held at the our or l0:00 am on the first Saturday in may in each year, beginning
with the year for the purpose of electing directors and for the transaction of
such other business as may cane before the meeting. If the day fixed for the
annual meeting shall be a legal holiday, such meeting shall be held on the next
succeeding business day. If the election of directors shall not be held on the
day designated herein for any annual meeting, or at any adjournment thereof, the
Board of Directors shall cause the election to be held at a special meeting of
the shareholders as soon thereafter as conveniently may be.
Section 2. Special Meetings: Special meeting of the shareholders may be
called by the President, by the Board of Directors or by the holders of not less
than one-fifth of all the outstanding shares of the corporation.
<PAGE>
Section 3. Place of Meeting: The Board of Directors may designate any
place, either within or without the State of Missouri, as the place of meeting
for any annual meeting of the shareholders or for any special meeting of the
shareholders called by the Board of Directors.The shareholders may designate any
place, either within or without the State of Missouri, as the place for the
holding of such meeting, and may include the same in a waiver of notice Of any
meeting. If no designation is made, or if a special meeting be otherwise called,
the place of meeting shall be the registered office of the corporation in the
State of Missouri, except as otherwise provided in Section 5 of this article.
Section 4. Notice of Meetings: Written or printed notice stating the
place, day and hour of the meeting and, in case of a special meeting, purpose or
purposes for which the meeting is called, shall be delivered not less than ten
nor more than fifty (5O) days before the date of the meeting, either personally
or by mail, by or at the direction of the President, or the Secretary, or the
officer or persons calling the meeting, to each shareholder of record entitled
to vote at such meeting. If mailed, such notice shall be deemed to be delivered
when deposited in the United States mail in a sealed envelope addressed to the
shareholder at his address as it appears an the records of the corporation, with
postage thereon prepaid.
Section 5. Meeting of All Shareholders: If all of the share holders shall
meet at any time and place, either within or without the State of Missouri, and
consent to the holding of a meeting, such meeting shall be valid, without call
or notice, and at such meeting any corporate action may be taken.
Section 6. Closing of Transfer Books or Fixing of Record Date: The Board
of Directors of the corporation may close its stock transfer books for a period
not exceeding fifty (5O) days preceding the date of any meeting of shareholders,
or the date for the payment of any dividend or for the allotment of rights, or
the date when any change or conversion or exchange of shares shall be effective;
or, in lieu thereof, may fix in advance a date, not exceeding fifty (50) days
preceding the date of any meeting of shareholders, or to the date for the
payment of any dividend or for the allotment of rights, or to the date when any
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change or reconversion or exchange of shares shall be effective, as the record
date for the determination of shareholders entitled to notice of, or to vote at,
such meeting, or shareholders entitled to receive payment of any such dividend
or to receive any such allotment of rights, or to exercise rights in respect of
any such change, conversion or exchange of shares; and the shareholders of
record on such date of closing the transfer books, or on the record date so
fixed, shall be the shareholders entitled to notice of and to vote at, such
meeting, or to receive payment of such dividend, or to receive such allotment of
rights, or to exercise such rights, as the case may be. If the Board of
Directors shall not have closed the transfer books or set a record date for the
determination of ,its shareholders entitled to notice of, and to vote at, a
meeting of shareholders, only the shareholders who are shareholders of record at
the close of business on the 20th day preceding the date of the meeting shall be
entitled to notice of, and to vote at, the meeting, and any adjournment of the
meeting;except that, if prior to the meeting written waivers of notice of the
meeting are signed and delivered to the corporation by all Of the shareholders
of record at the time the meeting is convened, only the shareholders who are
shareholders of record at the time the meeting is convened shall be entitled to
vote at the meeting, and any adjournment of the meeting.
Section 7. Voting Lists: At least ten days before each meeting of
shareholders, the officer or agent having charge of the transfer book for shares
of the corporation shall make a complete list of the shareholders entitled to
vote at such meeting, arranged in alphabetical order with the address of, and
the number of shares held by, each shareholder, which list, for a period of ten
days prior to such meeting, shall be kept on file at the registered office of
the corporation and shall be subject to inspection by any shareholder at any
time during usual business hours. Such list shall also be produced and kept open
at the tine and place of the meeting and shall be Subject to the inspection of
any shareholder during the whole time of the meeting. The original share ledger
or transfer book, or a duplicate thereof kept in this state, shall be prima
facie evidence as to who are the shareholders entitled to examine such list or
share ledger or transfer book or to vote at any meeting of shareholders.
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Section 8. Quorum: A majority of the outstanding shares of the
corporation, represented in person or by proxy, shall constitute a quorum at any
meeting of the shareholders; provided, that if less than a majority of the
outstanding shares are represented at said meeting, a majority of the shares so
represented may adjourn the meeting, fr=,time to time, without further notice,
to a date not longer than ninety days from the date originally set for such
meeting.
Section 9. Proxies: At all meetings of shareholders, a shareholder may
vote by proxy excecuted in writing by the shareholder or by his duly authorized
attorney in fact. Such proxy shall be filed with the Secretary of the
corporation before or at the time of the meeting. No proxy shall be valid after
eleven months from the date of its execution, unless otherwise provided in the
proxy.
Section 10. Voting of Shares: Subject to the provisions of Section 12,
each outstanding share of capital stock having voting rights shall be entitled
to one vote upon each matter submitted to a vote at a meeting of shareholders.
Section 11. Voting of Shares by Certain Holders: Shares standing in the
name or another corporation, domestic or foreign, may be voted by such officer,
agent, or proxy as the by-laws of such corporation may prescribe, or, in the
absence of such provision, as the Board of Directors of such corporation may
determine.
Shares standing in the name of a deceased person may be voted by his
administrator or executor, either in person or by proxy. Shares standing in the
name of a guardian, curator, or trustee may be voted by such fiduciary, either
in person or by proxy, but no guardian, curator, or trustee shall be entitled,
as such fiduciary, to vote shares held by him without a transfer of such shares
into his name.
Shares Standing in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his name if authority so to do be
contained in an appropriate order of the court by which such receiver was
appointed.
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A shareholder whose shares are pledged shall be entitled to vote shares
until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to-vote the shares so transferred.
RESOLVED, That ARTICLE II, Section 12 of the By-Laws Of the corporation
is hereby deleted in its entirety, and the following ARTICLE II, section
12 is hereby inserted in its place:
Section 12. Cumulative Voting. Shareholders shall have no cumulative
voting rights with respect to the election of directors. Each shareholder shall
have the right to vote, in person or by proxy, by casting one vote for each
share of stock owned by him or her entitled to vote on such an issue.
ARTICLE III
Directors
Section 1. General Powers: The business and affairs of the corporation
shall be managed by its Board of Directors.
Section 2. Number, Election and Term: The number of directors of the
corporation shall be three, each of whom shall be elected at the first annual
meeting of the shareholders, and annually thereafter, for a term of one year,
and each of whom shall hold office until his successor has been elected and has
qualified.
Section 3. Regular Meetings: A regular meeting of the Board of Directors
shall be held without other notice than this By-Law, immediately after, and at
the same place as, the annual meeting of shareholders. The Board of Directors
may provide, by resolution, the time and place, either within or without the
State of Missouri, for the holding of @tional regular meetings with notice of
such resolution to all directors.
Section 4. Special Meetings: Special meetings of the Board of Directors
may be called by or at the request of the President or any two directors. The
person or persons authorized to call special meetings of the Board of Directors
may fix any place in the United States, either within or without the State of
Missouri, as the place for holding any special meeting of the
5
<PAGE>
Board of Directors called by them.
Section 5. Notice: Notice of any special meeting shall be given at least
five days previously thereto by written notice delivered personally or mailed to
each director at his business address, or by telegram provided, however, that if
the designated meeting place is outside the State of Missouri, an additional
five days notice shall be given. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail in a sealed envelope so
addressed, with postage thereon prepaid. If notice be given by telegram such
notice shall be deemed to be delivered when the telegram is delivered to the
telegraph company. Any director may waive notice of any meeting. The attendance
of a director at any meeting shall constitute a waiver of notice of such
meeting,except where a director attends a meeting for the express purpose of
objecting to the transaction of any business because the meeting is not lawfully
called or convened. Neither the business to be transacted at, nor the purpose
of,any regular or special meeting of the Board of Directors need be specified in
the notice or waiver of notice of such meeting.
Section 6. Quorum: A majority of the Board of Directors shall constitute a
quorum for the transaction of business at any meeting of the Board of Directors,
provided, that if less than a majority of the directors are present at said
meeting, majority of the directors present may adjourn the meeting from time to
time without further notice.
Section 7. Manner of Acting: The act of the majority of the directors
present at a meeting of the directors at which a quorum is present shall be the
act of the Board of Directors.
Section 8. Vacancies: In case of the death or resignation or
disqualification or one or more of the directors, a majority of the survivors or
remaining directors may fill such vacancy or vacancies until the successor or
successors are elected at the next annual meeting of the shareholders. A
director elected to fill a vacancy shall serve as such until the next annual
meeting of the shareholders.
Section 9. Compensation: Directors as such shall not receive any stated
salaries for their services, but by resolution of the
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Board of Directors, a fixed sum and expenses of attendance, if any, may be
allowed for attendance at each regular or special meeting of the Board of
Directors; provided, that nothing herein contained shall be construed to
preclude any director from serving the corporation in any other capacity and
receiving compensation therefor.
ARTICLE IV
Officers
Section 1. Number: The officers of the corporation shall be a President,
one or more Vice-Presidents (the number thereof to be determined by the Board of
Directors), a Treasurer, a Secretary and such other officers as may be elected
in accordance with the provisions of this article. The President shall be chosen
from the members of the Board of Directors. The remaining officers of the
corporation need not be chosen from the members of the Board, but they may be so
chosen. The Board of re assistant Directors, by resolution, may create the
offices of one or more assistant Treasurers and assistant Secretaries, all of
whom shall be elected by the Board of Directors. Any two or more offices may be
held by the same person.
All officers and agents of the corporation, as between themselves and the
corporation, shall have such authority and perform such duties in the management
of the property and affairs of the corporation as may.be provided in the
Bv-Laws, or, in the absence of such provision, as may be determined by
resolution of the Board of Directors.
Section 2. Election and Term of Office: The officers of corporation shall
be elected annually by the Board of Directors at the first meeting of the Board
of Directors held after each annual meeting of shareholders. If the election of
officers shall not be held at such meeting, such election shall held as soon
thereafter as conveniently may be. Vacancies may be filled or new offices
created and filled at any meeting of the Board of Directors. Each officer shall
hold office until his successor shall have been duly elected and shall have
qualified or until his death or until he shall resign or shall have been removed
in the hereinafter provided.
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Section 3. Removal: Any officer or agent elected or appointed by the Board
of Directors may be removed by the Board of Directors whenever in it's judgement
the best interests of the corporation would be saved thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.
Section 4. Vacancies: A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the Board
of Directors for the unexpired portion of the term.
Section 5. President: The President shall be the principal executive
officer of e corporation and shall in general supervise and control all of the
business and affairs of the corporation. He shall preside at all meetings of the
shareholders and of the Board of Directors. He may sign,with the Secretary or
Treasurer or any other proner officer thereunto authorized by the Board of
Directors, certificates for shares of the corporation,any deeds
mortgages,bonds,contracts, or other instruments which the Board of Directors
have authorized to be excecuted, except in, cases where the signing and
execution thereof shall be expressly delegated by the Board of Directors or by
these By-Laws to some other officer or agent of the corporation, or shall be
required by law to be otherwise signed or executed; and in general shall perform
all duties incident to the office of President and such other duties as may be
prescribed,by the Board of Directors from time to time.
Section 6. The Vice-Presidents: In the absence of the President or in the
event of his inabiiity or refusal to act, the Vice-President the event there be
more than one Vice-President, the Vice-Presidents in the order of their
election) shall perform the duties of the President, and when so acting,shalL
have all the powers of and be subject to all the restrictions upon the
President. Any Vice-President may sign, with the Secretary or an Assistant
Secretary, or with the Treasurer or an Assistant Treasurer, certificates for
shares of the corporation; and shall perform such other duties as from time to
time may be assigned to him by the President or by the Board of Directors.
Section 7. The Treasurer: If required by the Board of Directors, the
Treasurer shall give a bond for the faithful
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discharge of his duties in such sum and with such surety or sureties as the
Board of Directors shall determine. He shall: (a) have charge and custody of and
be responsible for all funds and securities of the corporation; receive and give
receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the corporation in such
banks, trust companies or other depositaries as shall be selected in accordarce
with the provisions of Article V of those By-Laws; (b) in General perform all
the duties incident to the office of Treasurer and such other duties as from
time to time may be assigned to him by the President or by the Board of
Directors.
Section 8. The Secretary: The Secretary shall: (a) keep the minutes of the
shareholders' and or the Board of Directors' meetings in one or more books
provided for that purpose; (b) see that all notices are duly given in accordance
with the provisions of these By-Laws or as required by law;(c) be custodian of
the corporate records and of the seal of the corporation and see that the seal
of the corporation is affixed to all certificates for shares prior to the issue
thereof and to all documents, the execution of,which an behalf of the
corporation under its seal is duly authorized in accordance with the provisions
of these By-Laws; (d) keep a register of the post office address of each
shareholder which shall be furnished to the Secretary by such shareholder; (e)
sign with the President, or a Vice-President, certificates for shares of the
corporation, the issue of which shall have been authorized by resolution of the
Board of Directors; (f) have general charge of the stock transfer books of the
corporation; (g) in general perform all duties incident to the office of
Secretary and such other duties as from time to time may be assigned to him by
the President or by the Board of Directors.
Section 9. Assistant Treasurers and Assistant Secretaries: The assist
treasurers shall respectively, If required by the Board of Directors, give bonds
for the faithful discharge of their duties in such sums and with such sureties
as the Board of Directors shall determine. Assistant Secretaries and Treasurers,
as thereunto authorized by the Board of Directors, may sign with the President
or a Vice-President certificates for shares of the corporation, the issue of
which shall have been authorized by a resolution of the Board of Directors. The
assistant Treasurers
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and assistant Secretaries, in general, shall perform such duties as shall be
assigned to them by the Treasurer or the Secretary, respectively, or by the
President or the Board of Directors.
Section 10. Salaries: The salaries of the officers shall be fixed from
time to time by the Board of Directors and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a director of the
corporation.
ARTICLE V
Contracts, Loans, Checks and Deposits
Section 1. Contracts: The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the corporation, and such authority
may be general or confined to specific instances.
Section 2. Loans: No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors. Such authority may be
general or confined to specific instances.
Section 3. Checks, Drafts, etc.: All checks, drafts or other orders for
the payment or money, notes or other evidences of indebtness issued in the name
of the corporation, shall be signed by such officer or officers, agent or agents
of the corporation and in such manner as shall from time to time be determined
by resolution of the Board of Directors.
Section 4. Deposits: All funds of the corporation not otherwise employed
shall be deposited from time to time to the credit of the corporation in such
banks, trust companies or other depositories as the Board of Directors may
select.
ARTICLE VI
Certificates for Shares and Their Transfer
Section l. Certificates for Shares: Certificates
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representing shares of tie corporation shall be in such form as may be
determined by the Board of Directors. Such certificates shall be signed by the
President or Vice-president and by the Secretary, Treasurer or an Assistant
Secretary or Treasurer, and shall be sealed with the seal of the corporation.
All Certificates for shares shall be consecutively numbered. The name of the
person owing the shares represented thereby with the number of shares and date
of issue shall be entered on the books of the corporation. All certificates
surrendered to the corporation for transfer shall be canceled and no new
certificate shall be issued until the former certificate for a like number of
shares shall have been surrendered and canceled, except that in case of a lost,
destroyed or mutilated certificate a new one may be issued therefor upon such
terms and indemnity to the corporation as the Board of Directors may prescribe.
Section 2. Transfers of Shares: Transfers of shares of the corporation
snail be made only on the books of the corporation by the registered holder
thereof or by his attorney thereunto authorized by power of attorney duly
executed and filed with the secretary of the corporation, and on surrender for
cancellation of the certificate for such shares. The person in whose name shares
stand on the books of the corporation shall be deemed the owner thereof for all
purposes as regards the corporation.
ARTICLE VII
Fiscal Year
The fiscal year of the corporation shall begin on the first day of in each
year and end on the last day of in each year.
ARTICLE VIII
Dividends
The Board of Directors may from time to time, declare, and the corporation
may pay, dividends on its outstanding shares in the manner and upon the terms
and conditions provided by law and its articles of incorporation.
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ARTICLE IX
Seal
The Board of Directors shall provide a corporate seal which shall be in
the form of a circle and shall have inscribed thereon the name of the
corporation and the words, "Corporate Seal, Missouri."
ARTICLE X
Waiver of Notice
Whenever any notice whatever is required to be given under the provisions
of,these By-Laws or under the provisions of the Articles of Incorporation or
under the provisions of The General and Business Corporation Act of
Missouri,waiver thereof in writing, signed by the person or persons entitled to
such notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
ARTICLE XI
INDEMNIFICATION OF OFFICERS AND DIRECTORS AGAINST
LIABILITIES AND EXPENSES IN ACTIONS
Each director or officer, or former director or officer of this
corporation, and his legal representative's, shall be indemnified by this
corporation against liabilities, expenses, counsel fees and costs reasonably
incurred by him or his estate in connection with, or arising out of, any action,
suit, proceeding or claim in which he is made a part, by reason of his being, or
having been, such director or officer; and any person who, at the request of
this corporation, served as director or officer of another corporation in which
such corporation owned corporate stock,and his legal representatives,shall in
like manner be indemnified by the corporation so requesting him to serve;
provided that in neither case shall the corporation indemnify,such director or
officer with respect to any matters as to which he shall be finally adjudged in
any such action, suit or proceeding to have been liable for negligence or
misconduct in the performance of his duties as such director or officer. The
indemnification herein provided for, however shall apply also in
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respect of any amount paid in compromise of any such action, suit, proceeding or
claim asserted against such director or officer (including expenses, counsel
fees and costs reasonably incurred in connection therewith), provided the Board
of Directors of the corporation shall have first at roved such proposed
compromise settlement and determined that the director or officer involved was
not guilty of negligence or misconduct; but in taking such action any director
involved shall not be qualified to vote thereon, and if for this reason a quorum
of the board cannot be obtained to vote on such matter it shall be determined by
a committee of three persons appointed by the shareholders at a duly called
special meeting or at a regular meeting. In determining whether or not a
director or officer was guilty of negligence or misconduct in relation to any
such matters, the Board of Directors or committee appointed by shareholders, as
the case shall be, may rely conclusively upon an opinion of independent legal
counsel selected by such board or committee. Any compromise settlement authored
herein shall not be effective until submitted to and approved by a Court of
competent jurisdiction. The right to indemnification herein provided shall not
be exclusive of any other rights to which such director or officer may be
lawfully entitled.
ARTICLE XII
Amendments
These By-Laws may be altered, amended or repealed and new By-Laws
may be adopted at any annual meeting of the shareholders or at any special
meeting of the shareholders called for that purpose. The Board of Directors may
adopt emergency by-laws as provided by law.
Adopted on
Attest:
____________________
Chairman
_____________________
Secretary
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Exhibit 3.88
CERTIFICATE OF INCORPORATION
OF
ASTN, INC.
FIRST: The name of the corporation is ASTN,Inc. (hereinafter the
"Corporation").
SECOND: The address of the registered office of the Corporation in the
State of Delaware is 1209 Orange Street, County of New Castle, Wilmington,
Delaware 19801. The registered agent at such address is The Corporation Trust
Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware as set forth in Title 8 of the Delaware Code (the
"GCL").
FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is One Thousand (1,000) shares of Common Stock, each
having a par value of $.10.
FIFTH: The name and mailing address of the sole incorporator
are as follows:
Name Address
---- -------
Jack E. Jacobsen First Republic Bank Center
3600 Tower II
Dallas, Texas 75201
SIXTH: The name and mailing address of the person who is to serve as the
sole director until the first annual meeting of the stockholders or until his
successor is elected and qualified are as follows:
Name Address
---- -------
Carl Westcott 1303 Marsh Lane
Carrollton, Texas 75006
<PAGE>
SEVENTH: The following provisions are inserted for the management of the
business and the conduct of the affairs of the Corporation and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
1. The business and affairs of the Corporation shall be managed by or under
the direction of the Board of Directors.
2. The directors shall have concurrent power with the stockholders to make,
alter, amend, change, add to or repeal the By-Laws of the Corporation.
3. The number of directors of the Corporation shall be as from time to time
fixed by, or in the manner provided in, the ByLaws of the Corporation.
Election of directors need not be by written ballot unless the ByLaws so
provide.
4. To the full extent permitted by the GCL as the same exists or may
hereafter be amended, a director of the Corporation shall not be liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director. No repeal, amendment or modification of this
provision, whether direct or indirect, shall eliminate or reduce its
effect with respect to any act or omission of a director of the
Corporation occurring prior to such repeal, amendment or modification.
5. In addition to the powers and authority hereinbefore or by statute
expressly conferred upon them, the directors are hereby empowered to
exercise all such powers and do all such acts and things as may be
exercised or done by the Corporation, subject, nevertheless, to the
provisions of the GCL, this Certificate of Incorporation, and any By-Laws
adopted by the stockholders; provided, however, that no By- Laws hereafter
adopted by the stockholders shall invalidate any prior act of the
directors which would have been valid if such By-Laws had not been
adopted.
EIGHTH: Meetings of stockholders may be held within or without the State
of Delaware as the Corporation's By-Laws may provide. The books of the
Corporation may be kept (subject to any provision contained in the GCL) outside
the State of Delaware
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at such place or places as may be designated from time to time by the Board of
Directors or in the By-Laws of the Corporation.
NINTH: Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of the GCL or on the application of trustees in
dissolution or of any receiver or receivers appointed for this Corporation under
the provisions of Section 279 of the GCL, order a meeting of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three-fourths in value of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of this Corporation as a consequence of
such compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the stockholders or class of stockholders of this Corporation, as the case
may be, and also on this Corporation.
TENTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
ELEVENTH:(a) Power to Indemnify in Actions, Suits or Proceedings other
Than Those by or in the Rights of the Corporation. Subject to Paragraph(C)) of
this Article Eleventh, the Corporation shall 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 or officer of the Corporation,
or is or was
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serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust 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. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contenders or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which 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
reasonable cause to believe that his conduct was unlawful.
(b) Power to Indemnify in Actions, Suits, or Proceed ings by or in
the Right of the Corporation. Subject to Paragraph (c) of this Article Eleventh,
the Corporation shall 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 he is or was a director or officer of the Corporation,
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees) actually and
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 or not opposed to the best interests of the Corporation; except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Corporation unless and only to
the extent that the Court of Chancery or 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, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.
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(C) Authorization of Indemnification. Any indemnification under this
Article Eleventh (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of the director or officer is proper in the circumstances
because he has met the applicable standard of conduct set forth in Paragraph (a)
or (b) of this Article Eleventh, as the case may be. Such determination shall be
made (i) by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding, or (ii) if
such a quorum is not obtainable, or, even if obtainable, a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or (iii) by the stockholders. To the extent, however, that a director
or officer has been successful on the merits or otherwise in defense of any
action, suit or proceeding described above, or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (includ ing attorneys'
fees) actually and reasonably incurred by him in connection therewith, without
the necessity of authorization in the specific case.
(d) Good Faith Defined. For purposes of any deter mination under
Paragraph (c) of this Article Eleventh, a person shall be deemed to have acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation, or, with respect to any criminal action
or proceeding, to have had no reasonable cause to believe his conduct was
unlawful, if his action is based on the records or books of account of the
Corporation or another enterprise, or on information supplied to him by the
officers of the Corporation or another enterprise in the course of their duties,
or on the advice of legal counsel for the Corporation or another enterprise or
on information or records given or reports made to the Corporation or another
enterprise by an independent certified public accountant or by an appraiser or
other expert selected with reasonable care by the Corporation or another
enterprise. The term "another enterprise" as used in this Paragraph (d) shall
mean any other corporation or any partnership, joint venture, trust or other
enterprise of which such person is or was serving at the request of the
Corporation as a director, officer, employee or agent. The provisions of this
Paragraph (d) shall not be deemed to be exclusive or to limit in any way the
circumstances in which a person may be deemed to have met the
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<PAGE>
applicable standard of conduct set forth in Paragraph (a) or (b) of this Article
Eleventh, as the case may be.
(e) Indemnification by a Court. Notwithstanding any contrary
determination in the specific case under Paragraph (c)of this Article Eleventh,
and notwithstanding the absence of any determination thereunder, any director or
officer may apply to any court of competent jurisdiction in the State of
Delaware for indemnification to the extent otherwise permissible under
Paragraphs (a) or (b) of this Article Eleventh. The basis of such
indemnification by a court shall be a determination by such court that
indemnification of the director or officer is proper in the circumstances
because he has met the applicable standards of conduct set forth in Paragraphs
(a) or (b) of this Article Eleventh, as the case may be. Notice of any
application for indemnification pursuant to this Paragraph (e) shall be given to
the Corporation promptly upon the filing of such application.
(f) Expenses Payable in Advance. Expenses incurred in defending a
civil or criminal action, suit or proceeding may be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such director or officer to repay such
amount unless it shall ultimately be determined that he is entitled to be
indemnified by the Corporation as authorized in this Article Eleventh.
(g) Nonexclusivity and Survival of Indemnification. The
indemnification and advancement of expenses provided by, or granted pursuant to,
this Article Eleventh shall not be deemed exclusive of any other rights to which
those seeking indemnifica tion or advancement of expenses may be entitled under
any By-Law, agreement, vote of stockholders or disinterested directors or
pursuant to the direction (howsoever embodied) of any court of competent
jurisdiction or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, it being the policy of the
Corporation that indemnification to the persons specified in Paragraphs (a) and
(b) of this Article Eleventh shall be made to the fullest extent permitted by
law. The provisions of this Article Eleventh shall not be deemed to preclude the
indemnification of any person who is not specified in Paragraphs (a) or (b) of
this Article Eleventh, but whom the Corporation has the power or obligation to
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<PAGE>
indemnify under the provisions of the GCL, or otherwise. The indemnification and
advancement of expenses provided by, or granted pursuant to, this Article
Eleventh shall, unless otherwise provided when authorized or ratified, continue
as to a person who has ceased to be a director or officer and shall inure to the
benefit of the heirs, executors and administrators of such person.
(h) Indemnification of Employees and Agents of the Corporation. The
Corporation may, to the extent authorized from time to time by the Board of
Directors, grant rights to indemnification and to the advancement of expenses to
any employee or agent of the Corporation to the fullest extent of the provisions
of this Article Eleventh with respect to the indemnification and advancement of
expenses of directors or officers of the Corporation.
(i) Insurance. The Corporation may purchase and main tain insurance
on behalf of any person who 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, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power or the obligation to
indemnify him against such liability under the provisions of this Article
Eleventh.
(j) Meaning of "Corporation" for Purposes of Article Eleventh. For
purposes of this Article Eleventh, references to the Corporation it shall
include, in addition to the resulting Corporation, any constituent corporation
(including any constitu ent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers and employees or agents, so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under the provisions of this Article Eleventh with respect to the
resulting or surviving corporation as he would have with respect to such
constituent corporation if
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<PAGE>
its separate existence had continued.
I, the undersigned, being the sole incorporator hereinbefore named for the
purpose of forming a corporation pursuant to the GCL, do make this Certificate,
hereby declaring and certifying that this is my act and deed and the facts
herein stated are true, and accordingly have hereunto set my hand this 21st day
of June, 1988.
Jack E. Jacobsen,
Sole Incorporator
7
<PAGE>
Exhibit 3.89
BY-LAWS
OF
ASTN, INC.
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the
Corporation shall be in the City of Wilmington, County of New Castle, State of
Delaware.
Section 2. Other Offices. The Corporation also may have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine.
ARTICLE 11
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. Meetings of the stockholders for the
election of directors or for any other purpose shall be held at such time and
place, either within or without the State of Delaware, as shall be designated
from time to time by the Board of Directors and stated in the notice of the
meeting or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. The annual meetings of stockholders
shall be held on such date and at such time as shall be designated from time to
time by the Board of Directors and stated in the notice of the meeting, at which
meetings the stockholders shall elect by a plurality vote a Board of Directors,
and transact such other business as may properly be brought before the meeting.
Written notice of the annual meeting stating the place, date, and hour of the
meeting shall be given to each stockholder entitled to vote at such meeting not
less than ten nor more than sixty days before the date of the meeting.
Section 3. Special Meetings. Unless otherwise prescribed by law or
by the Certificate of Incorporation, special meetings of stockholders, for any
purpose or purposes, may be called by either (a) the Chairman of the Board, if
there be one, or (b) the President, and shall be called by any such officer or
the Secretary at the request in writing of a majority of the
<PAGE>
Board of Directors. Such request shall state the purpose or purposes of the
proposed meeting. Written notice of a special meeting stating the place, date,
and hour of the meeting and the purpose or purposes for which the meeting is
called shall be given not less than ten nor more than sixty days before the date
of the meeting to each stockholder entitled to vote at such meeting.
Section 4. Quorum. Except as otherwise provided by law or by the
Certificate of Incorporation, the holders of a majority of the capital stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business. If, however, such quorum shall not
be present or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy, shall have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted that might have been transacted at the meeting as
originally noticed. If the adjournment is for more than thirty days, or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder entitled to vote at
the meeting.
Section 8. Voting. Unless otherwise required by law, the Certificate
of Incorporation, or these By-Laws, any question brought before any meeting of
stockholders shall be decided by the vote of the holders of a majority of the
stock represented and entitled to vote thereat. Each holder of Common Stock
represented at a meeting of stockholders shall be entitled to cast one vote for
each share of the Common Stock entitled to vote thereat held by such
stockholder. Such votes may be cast in person or by proxy but no proxy shall be
voted on or after three years from its date, unless such proxy provides for a
longer period. The Board of Directors, in its discretion, or the officer of the
Corporation presiding at a meeting of stockholders, in his discretion, may
require that any votes cast at such meeting shall be cast by written ballot.
Section 6. List of Stockholders Entitled to Vote. The officer of the
Corporation who has charge of the stock ledger of
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the Corporation shall prepare and make, at least ten days before every meeting
of stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder of the
Corporation who is present.
ARTICLE III
DIRECTORS
Section 1. Number and Election of Directors. The Board of Directors
shall consist of not less than one member, the exact number of which shall
initially be fixed by the Incorporator and thereafter from time to time by the
Board of Directors. Except as provided in Section 2 of this Article, directors
shall be elected by a plurality of the votes cast at annual meetings of
stockholders, and each director so elected shall hold office until the next
annual meeting and until his successor is duly elected and qualified, or until
his earlier resignation or removal. Any director may resign at any time upon
written notice to the Corporation. Directors need not be stockholders.
Section 2. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, though less than a quorum, or by
a sole remaining director, and the directors so chosen shall hold office until
the next annual election and until their successors are duly elected and
qualified, or until their earlier resignation or removal.
Section 3. Duties and Powers. The business of the Corporation shall
be managed by or under the direction of the Board of Directors, which may
exercise all such powers of the Corporation and do all such lawful acts and
things as are not by
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statute or by the Certificate of Incorporation or by these ByLaws directed or
required to be exercised or done by the stockholders.
Section 4. Meetings. The Board of Directors of the Corporation may
hold meetings, both regular and special, either within or without the State of
Delaware. Regular meetings of the Board of Directors may be held without notice
at such time and at such place as may from time to time be determined by the
Board of Directors. Special meetings of the Board of Directors may be called by
the Chairman, if there be one, the President, or any director. Notice thereof
stating the place, date, and hour of the meeting shall be given to each director
either by mail or by telephone or telegram on twenty-four hours notice, or on
such shorter notice as the person or persons calling such meeting may deem
necessary or appropriate in the circumstances.
Section 5. Quorum. Except as may be otherwise specifically provided
by law, the Certificate of Incorporation, or these By-Laws, at all meetings of
the Board of Directors, a majority of the entire Board of Directors shall
constitute a quorum for the transaction of business and the act of a majority of
the directors present at any meeting at which there is a quorum shall be the act
of the Board of Directors. If a quorum shall not be present at any meeting of
the Board of Directors, the directors present thereat may adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present.
Section 6. Actions of Board. Unless otherwise provided by the
Certificate of Incorporation or these By-Laws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if all the members of the Board of Directors or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board of Directors or
committee.
Section 7. Meetings by Means of Conference Telephone. Unless
otherwise provided by the Certificate of Incorporation or these By-Laws, members
of the Board of Directors of the Corporation, or any committee designated by the
Board of Directors, may participate in a meeting of the Board of Directors or
such com-
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mittee by means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other, and
participation in a meeting pursuant to this Section 7 shall constitute presence
in person at such meeting.
Section 8. Compensation The directors may be paid their expenses, if
any, of attendance at each meeting of the Board of Directors and may be paid a
fixed sum for attendance at each meeting of the Board of Directors or a stated
annual fee as director. No such payment shall preclude any director from serving
the Corporation in any other capacity and receiving compensation therefor.
Members of special or standing committees may be allowed like compensation for
attending committee meetings.
Section 9. Interested Directors. No contract or transaction between
the Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof that
authorizes the contract or transaction, or solely because his or their votes are
counted for such purpose, if (a) the material facts as to his or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of Directors
or committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or (b) the material facts as to
his or their relationship or interest and as to the contract or transaction are
disclosed or are known to the stockholders entitled to vote thereon, and the
contract or transaction is specifically approved in good faith by vote of the
stockholders; or (C) the contract or transaction is fair as to the Corporation
as of the time it is authorized, approved, or ratified, by the Board of
Directors, a committee thereof, or the stockholders. Common or interested
directors may be counted in determining the presence of a quorum at a meeting of
the Board of Directors or of a committee that authorizes the contract or
transaction.
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Section 10. Executive Committee. (a) The Board of Directors may, by
resolution or resolutions passed by a majority of the whole board, designate
from the directors an Executive Committee, which shall consist of two or more
members. The number of members shall be determined from time to time by
resolution passed by a majority of the whole Board of Directors. The Board of
Directors shall designate for such committee a chairman, who shall continue as
such during the pleasure of the Board of Directors. Members of the Executive
Committee shall be appointed by the Board of Directors upon establishment of the
Executive Committee and thereafter at its first meeting after each annual
meeting of stockholders and, unless sooner discharged by resolution passed by a
majority of the whole Board of Directors, shall hold office until their
respective successors are appointed and qualified or until their earlier
respective deaths or resignations. Upon establishment of the Executive
Committee, any vacancy in the Executive Committee may be filled by resolution
passed by a majority of the whole Board of Directors.
(b) Regular meetings of the Executive Committee may be held without
notice at such time and place as shall be determined from time to time by the
Committee and communicated to all of the members thereof.
(C) Special meetings of the Executive Committee may be called by the
chairman of the Executive Committee or any two members thereof at any time on
twenty-four hours' notice to each member, either personally or by mail or
telegram.
(d) Unless otherwise restricted by statute, the Certificate of
Incorporation, or these By-Laws, any action required or permitted to be taken at
any meeting of the Executive Committee may be taken without a meeting if a
written consent thereto is signed by all members and such written consent is
filed with the minutes of the proceedings of the Committee.
(e) Unless otherwise restricted by statute, the Certificate of
Incorporation, or these By-Laws, members of the Executive Committee may
participate in a meeting of such Committee by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting pursuant to this
Section shall constitute presence in person at such
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meeting.
(f) A majority of the total number of members of the Executive
Committee then serving shall constitute a quorum for the transaction of
business, and the act of a majority of the total number of members of the
Executive Committee then serving shall be the act of the Executive Committee.
The members of the Executive Committee shall act only as a committee, and the
individual members shall have no power as such.
(g) The Executive Committee shall keep regular minutes of its
meetings. The Secretary of the Corporation, or in his absence, an assistant
secretary, shall act as secretary of the Executive Committee or the Committee
may, in its discretion, appoint its own secretary. The Executive Committee shall
report its acts and proceedings to the Board of Directors.
(h) The Executive Committee shall have and may exercise all the
powers and authority of the Board of Directors in the management of the business
and affairs of the Corporation, including the same authority to have complete
and unrestricted access to the Corporation's books, records, internal memoranda,
accounts, and all other documents relating to the Corporation or its personnel,
access to the offices and other premises owned or leased by the Corporation, and
access to the Corporation's officers and employees, and may authorize the seal
of the Corporation to be affixed to all papers that may require it; provided,
however, in no event shall the Executive Committee have any power or authority
in reference to (i) amending the Certificate of Incorporation; (ii) adopting an
agreement of merger or consolidation; (iii) recommending to the stockholders the
sale, lease or exchange of all or substantially all of the Corporation's
property and assets; (iv) recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution; (v) amending the By-Laws of the
Corporation; or (vi) unless specifically so authorized by resolution passed by a
majority of the whole Board of Directors, declaring a dividend authorizing the
issuance of stock or adopting a certificate of ownership and merger pursuant to
the Delaware General Corporation Law.
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Section 11. Other Committees. The Board of Directors may, by
resolution or resolutions passed by a majority of the whole Board of Directors,
designate one or more committees other than the Executive Committee, each
committee to consist of one or more of the directors of the Corporation, which,
to the extent provided in such resolution or resolutions, shall have and may
exercise the powers of the Board of Directors in the management of the business
and affairs of the Corporation and may authorize the seal of the Corporation to
be affixed to all papers which may require it, subject to the same limitations
set forth in Article III, Section 10 of these By-Laws. Such committee or
committees shall have such name or names and conduct its business in such areas
and under such rules and regulations as may be determined from time to time by
resolution passed by a majority of the whole Board of Directors. Each such
committee shall keep regular minutes of its meetings and report the same to the
Board of Directors when required.
ARTICLE IV
OFFICERS
Section 1. General. The officers of the Corporation shall be chosen
by the Board of Directors and shall include a President, a Secretary, and a
Treasurer. The Board of Directors, in its discretion, also may choose a Chairman
of the Board of Directors, one or more Vice-Presidents, a General Counsel,
Assistant Secretaries, Assistant Treasurers, and other officers. Any number of
offices may be held by the same person, unless otherwise prohibited by law, the
Certificate of Incorporation, or these By-Laws. The officers of the Corporation
need not be stockholders of the Corporation nor, except in the case of the
Chairman and Vice Chairman of the Board of Directors, need such officers be
directors of the Corporation.
Section 2. Election. The Board of Directors at its first meeting
held after each annual meeting of stockholders shall elect the officers of the
Corporation, who shall hold their offices with such powers and perform such
duties as shall be determined from time to time by the Board of Directors; and
all officers of the Corporation shall hold office until their successors are
chosen and qualified, or until their earlier resignation or removal. Any officer
elected by the Board of
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Director; may be removed at any time by the affirmative vote of a majority of
the Board of Directors. Any vacancy occurring in any office of the Corporation
shall be filled by the Board of Directors. The salaries of all officers of the
Corporation shall be fixed by the Board of Directors.
Section 3. Chairman of the Board of Directors. The Chairman of the
Board of Directors shall preside at all meetings of the stockholders and of the
Board of Directors. He shall see that all orders and resolutions of the Board of
Directors are carried into effect. Except where by law the signature of the
President is required, the Chairman of the Board of Directors shall possess the
same power as the President to sign all contracts, certificates, and other
instruments of the Corporation that may be authorized by the Board of Directors.
During the absence or disability of the President, the Chairman of the Board of
Directors shall exercise all the powers and discharge all the duties of the
President. The Chairman of the Board of Directors also shall perform such other
duties and may exercise such other powers as from time to time may be assigned
to him by these ByLaws or by the Board of Directors.
Section 4. President. The President shall, subject to the control of
the Board of Directors and the Chairman or, if there be one, Vice Chairman of
the Board of Directors, be the Chief Executive Officer of the Corporation and
shall have general supervision of the business operations of the Corporation. He
may execute all bonds, mortgages, contracts, and other instruments of the
Corporation requiring a seal, under the seal of the Corporation, except where
required or permitted by law to be otherwise signed and executed and except that
the other officers of the Corporation may sign and execute documents when so
authorized by these By-Laws, the Board of Directors or the President. In the
absence or disability of the Chairman and Vice Chairman of the Board of
Directors, or if there be none, the President shall preside at all meetings of
the stockholders and the Board of Directors. The President shall also perform
such other duties and may exercise such other powers as from time to time may be
assigned to him by these By-Laws or by the Board of Directors.
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Section 5. Vice-Presidents. At the request of the President or in
his absence or in the event of his inability or refusal to act (and if there be
no Chairman of the Board of Directors), the Vice-President or the
Vice-Presidents if there is more than one (in the order and with such titles
designated by the Board of Directors), shall perform the duties of the
President, and, when so acting, shall have all the powers of and be so subject
to all the restrictions upon the President. Each Vice-president shall perform
such other duties and have such other powers as the Board of Directors from time
to time may prescribe. If there be no Chairman of the Board of Directors and no
Vice-president, the Board of Directors shall designate the officer of the
Corporation who, in the absence of the President or in the event of the
inability or refusal of the President to act, shall perform the duties of the
President, and when so acting, shall have all the powers of and be subject to
all the restrictions upon the President.
Section 6. Secretary. The Secretary shall attend all meetings of the
Board of Directors and all meetings of stockholders kept for that purpose. The
Secretary also shall perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice of all meetings
of the stockholders and special meetings of the Board of Directors, and shall
perform such other duties as may be prescribed by the Board of Directors or
Chairman of the Board, under whose supervision he shall be. If the Secretary
shall be unable or refuse to cause to be given notice of all meetings of the
stockholders and special meetings of the Board of Directors, and if there be no
Assistant Secretary, then either the Board of Directors or the Chairman of the
Board may choose another officer to cause such notice to be given. The Secretary
shall have custody of the seal of the Corporation and the Secretary or any
Assistant Secretary, if there be one, shall have authority to affix the same to
any instrument requiring it and when so affixed, it may be attested by the
signature of the Secretary or by the signature of any such Assistant Secretary.
The Board of Directors may give general authority to any other officer to affix
the seal of the Corporation and to attest the affixing by his signature. The
Secretary shall see that all books, reports, statements, certificates, and other
documents and records required by law to be kept or filed are properly kept or
filed, as the case may be.
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Section 7. Treasurer. The Treasurer shall have custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the Chairman of the Board of Directors, the
Vice Chairman of the Board of Directors, the President, and the Board of
Directors, at its regular meetings, or when the Board of Directors so requires,
an account of all his transactions as Treasurer and of the financial condition
of the Corporation. If required by the Board of Directors, the Treasurer shall
give the Corporation a bond in such sum and with such surety or sureties as
shall be satisfactory to the Board of Directors for the faithful performance of
the duties of his office and for the restoration to the Corporation, in case of
his death, resignation, retirement, or removal from office, of all books,
papers, vouchers, money, and other property of whatever kind in his possession
or under his control belonging to the Corporation.
Section 8. Assistant Secretaries. Except as may be otherwise
provided in these By-Laws, Assistant Secretaries, if there be any, shall perform
such duties and have such powers as from time to time may be assigned to them by
the Board of Directors, the Chairman of the Board of Directors, the President,
any Vice-President, or the Secretary, and in the absence of the Secretary or in
the event of his disability or refusal to act, shall perform the duties of the
Secretary, and when so acting, shall have all the powers of and be subject to
all the restrictions upon the Secretary.
Section 9. Assistant Treasurers. Assistant Treasurers, if there be
any, shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the Chairman of the Board of
Directors, The President, any Vice-President, or the Treasurer, and in the
absence of the Treasurer or in the event of his disability or refusal to act,
shall perform the duties of the Treasurer, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the Treasurer. If
required by the
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Board of Directors, an Assistant Treasurer shall give the Corporation a bond in
such sum and with such surety or sureties as shall be satisfactory to the Board
of Directors for the faithful performance of the duties of his office and for
the restoration to the Corporation, in case of his death, resignation,
retirement, or removal from office, of all books, papers, vouchers, money, and
other property of whatever kind in his possession or under his control belonging
to the Corporation.
Section 10. General Counsel. A General Counsel for the Corporation
may be appointed annually by the Board of Directors, at a level or rate of
compensation to be set by the Board of Directors. The Board of Directors, in its
discretion, may appoint an individual lawyer or law firm as General Counsel of
the Corporation. If a law firm should be selected, then one member thereof shall
be designated as the particular lawyer in such firm whose personal services are
contemplated.
Section 11. Other Officers. Such other officers as the Board of
Directors may choose shall perform such duties and have such powers as from time
to time may be assigned to them by the Board of Directors. The Board of
Directors may delegate to any other officer of the Corporation the power to
choose such other officers and to prescribe their respective duties and powers.
ARTICLE V
STOCK
Section 1. Form of Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate signed, in the name of the
Corporation, (a) by the Chairman of the Board of Directors, the President, or a
Vice-President and (b) by the Treasurer or an Assistant Treasurer, or the
Secretary or an Assistant Secretary of the Corporation, certifying the number of
shares owned by him in the Corporation.
Section 2. Signatures. Where a certificate is countersigned by (a) a
transfer agent other than the Corporation or its employee or (b) a registrar
other than the Corporation or its employee, any other signature on the
certificate may be a facsimile. In case any officer, transfer agent, or
registrar who
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has signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent, or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he were such officer, transfer agent, or registrar at the date of issue.
Section 3. Lost Certificates. The Board of Directors may direct a
new certificate to be issued in place of any certificate theretofore issued by
the Corporation alleged to have been lost, stolen, or destroyed, upon the making
of an affidavit of that fact by the person claiming the certificate of stock to
be lost, stolen, or destroyed. When authorizing such issue of a new certificate,
the Board of Directors may, in its discretion and as a condition precedent to
the issuance thereof, (a) require the owner of such lost, stolen, or destroyed
certificate, or his legal representative, to advertise the same in such manner
as the Board of Directors shall require and/or to give the Corporation a bond in
such sum as it may direct as indemnity against any claim that may be made
against the Corporation with respect to the certificate alleged to have been
lost, stolen, or destroyed or the issuance of such new certificate and (b)
fulfill such other conditions as may be reasonably necessary for the protection
of the Corporation.
Section 4. Transfers. Stock of the Corporation shall be transferable
in the manner prescribed by law and in these ByLaws. Transfers of stock shall be
made on the books of the Corporation only by the person named in the certificate
or by his attorney lawfully constituted in writing and upon the surrender of the
certificate therefor, which shall be canceled before a new certificate shall be
issued.
Section 5. Record Date. In order that the Corporation may determine
the stockholders entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or entitled to express consent to corporate action
in writing without a meeting, or entitled to receive payment of any dividend
or other distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion, or exchange of stock, or for the
purpose of any other lawful action, the Board of Directors may fix, in advance,
a record date, which shall not be more than sixty days nor less than ten days
before the date of such meeting, nor more than sixty days prior to any
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other action. A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
Section 6. Beneficial Owners. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends and to vote as such owner and to hold liable for
calls and assessments, a person registered on its books as the owner of shares,
and shall not be bound to recognize any equitable or other claim to or interest
in such share or shares on the part of any other person, whether or not it shall
have express or other notice thereof, except as otherwise provided by law.
ARTICLE VI
NOTICES
Section 1. Notices. Whenever written notice is required by law, the
Certificate of Incorporation or these ByLaws to be given to any director, member
of a committee, or stockholder, such notice may be given by mail, addressed to
such director, member of a committee, or stockholder, at his address as it
appears on the records of the Corporation, with postage thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail. Written notice may also be given personally
or by telegram, telex or cable.
Section 2. Waivers of Notice. Whenever any notice is required by law,
the Certificate of Incorporation, or these ByLaws to be given to any director,
member of a committee, or stockholder, a waiver thereof in writing, signed by
the person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto.
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ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation, if
any, may be declared by the Board of Directors at any regular or special meeting
and may be paid in cash, in property, or in shares of the capital stock. Before
payment of any dividend, there may be set aside out of any funds of the
Corporation available for dividends such sum or sums as the Board of Directors
from time to time, in its absolute discretion, deems proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation, or for any proper purpose, and the
Board of Directors may modify or abolish any such reserve.
Section 2. Disbursements. All checks or demands for money and notes
of the Corporation shall be signed by such officer or officers or such other
person or persons as the Board of Directors may from time to time designate.
Section 3. Fiscal Year. The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.
Section 4. Corporate Seal. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its organization, and the words
"Corporate Seal, Delaware". The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced or otherwise.
Section 5. Shares of Other Corporations. The Chairman of the Board,
or in his absence the President, or in the absence of both, any Vice Chairman of
the Board or Vice President, is authorized to vote, represent, and exercise on
behalf of the Corporation all rights incident to any and all shares of any other
corporation, bank, banking association, or other entity standing in the name of
the Corporation. The authority herein granted to said officer to vote or
represent on behalf of the Corporation any and all shares held by the
Corporation in any other corporation, bank, banking association, or other entity
may
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be exercised either by said officer in person or by any person authorized so to
do by proxy or power of attorney duly executed by said officer. Notwithstanding
the above, however, the Board, in its discretion, may designate by resolution
any additional person to vote or represent said shares of other corporations,
banks, banking associations, and other entities.
ARTICLE VIII
AMENDMENTS
Section 1. These By-Laws may be altered, amended, or repealed, in
whole or in part, or new By-Laws may be adopted by the stockholders or by the
Board of Directors at a regular or special meeting thereof; provided, however,
that if such action shall be taken at a regular meeting, notice of such
alteration, amendment, repeal, or adoption of new By-Laws shall be contained in
the notice of such meeting of stockholders or Board of Directors, as the case
may be. All such amendments must be approved by either the holders of a majority
of the outstanding capital stock entitled to vote thereon or by a majority of
the entire Board of Directors then in office.
Section 2. Entire Board of Directors. As used in this Article VIII
and in these By-Laws generally, the term "entire Board of Directors" means the
total number of directors that the Corporation would have if there were no
vacancies.
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Exhibit 3.90
ARTICLES OF INCORPORATION
OF
A WEP COMPANY
I
NAME
The name of the corporation is A WEP COMPANY.
II
PURPOSE
The purpose of the corporation is to engage in any lawful act or activity
for which a corporation may be organized under the General Corporation Law of
California other than the banking business, the trust company business or the
practice of a profession permitted to be incorporated by the California
Corporations Code.
III
LIABILITY
The liability of the directors of the corporation for monetary damages
shall be eliminated to the fullest extent permissible under California law.
IV
AGENT FOR SERVICE OF PROCESS
The name and address in the State of California of the corporation's
initial agent for service of process is Parasec Incorporated.
AUTHORIZED SHARES
The corporation is authorized to issue only one class of shares of
<PAGE>
stock which shall be designated "common shares" and the total number of common
shares which the corporation is authorized to issue is 10,000,000.
DATED: October 19, 1987
ALAN E. BENNETT
<PAGE>
Exhibit 3.91
BYLAWS FOR THE REGULATION EXCEPT AS
OTHERWISE PROVIDED BY STATUTE OR ITS
ARTICLES OF INCORPORATION OF
A WEP COMPANY
(A California Corporation)
ARTICLE I
Offices
SECTION 1.01 Principal Executive Office. The principal executive office of
the corporation is hereby fixed and located at such place within or without the
State of California as shall be fixed from time to time by the Board of
Directors. The Board of Directors is hereby granted full power and authority to
change said principal executive office from one location to another. If the
principal executive office is located outside California, and the corporation
has one or more business offices in California, the Board of Directors shall fix
and designate a principal business office in the State of California.
SECTION 1.02 Other Offices. Other business offices may at any time be
established by the Board of Directors at any place or places where the
corporation is qualified to do business.
ARTICLE II
Meetings of Shareholders
SECTION 2.01 Place of Meetings. All meetings of shareholders shall be held
at the principal executive office of the corporation, or at any other place
within or without the State of California which may be designated either by the
Board of Directors or by the written consent of all persons entitled to vote
thereat and not present at the meeting, given either before or after the meeting
and filed with the Secretary of the corporation.
SECTION 2.02 Annual Meetings. The annual meetings of shareholders shall be
held on the first Tuesday in April of every year commencing in April 1988,
provided, however,
<PAGE>
that should said day fall upon a legal holiday, then any such annual meeting of
shareholders shall be held at the same time and place on the next day thereafter
ensuing which is a full business day. At such meetings, Directors shall be
elected, reports of the affairs of the corporation shall be considered, and any
other business may be transacted which is within the powers of the shareholders.
Written notice of each annual meeting shall be given to each shareholder
entitled to vote, either personally or by mail or other means of written
communication, charges prepaid, addressed to such shareholder at his address
appearing on the books of the corporation or given by him to the corporation for
the purpose of notice. If any notice or report addressed to the shareholder at
the address of such shareholder appearing on the books of the corporation is
returned to the corporation by the United States Postal Service marked to
indicate that the United States Postal Service is unable to deliver the notice
or report to the shareholder at such address, all future notices or reports
shall be deemed to have been duly given without further mailing if the same
shall be available for the shareholder upon written demand of the shareholder at
the principal executive office of the corporation for a period of one year from
the date of the giving of the notice or report to all other shareholders. If a
shareholder gives no address, notice shall be deemed to have been given if sent
by mail or telegraphic or other means or written communication addressed to the
place where the principal executive office of the corporation is situated, or if
published at least once in some newspaper of general circulation in the county
in which said principal executive office is located. All such notices shall be
given to each shareholder entitled thereto not less than ten (or, if the
corporation may under applicable statute or rule send such notice by third-class
mail, 30) days nor more than 60 days before each annual meeting. Any such notice
shall be deemed to have been given at the time when delivered personally, or
deposited in the mail or sent by telegram or other means of written
communication. An affidavit of mailing of any such notice in accordance with the
foregoing provisions, executed by the Secretary, Assistant Secretary, or any
transfer agent of the corporation shall be prima facie evidence of the giving of
the notice.
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Such notices shall specify:
(a) the place, the date, and the hour of such meeting;
(b) those matters which the Board, at the time of the mailing of the
notice, intends to present for action by the shareholders;
(c)if Directors are to be elected, the names of nominees intended at the
time of the notice to be presented by management for election;
(d)the general nature of a proposal, if any, to take action with respect
to approval of (I) a contract or other transaction with an interested Director,
(ii) amendment of the articles of incorporation, (iii) a reorganization of the
corporation as defined in Section 181 of the California General Corporation Law,
(iv) voluntary dissolution of the corporation, or (v) a distribution in
dissolution other than in accordance with the rights of outstanding preferred
shares, if any; and
(e)such other matters, if any, as may be expressly required by statute.
SECTION 2.03 Special Meetings. Special meetings of the shareholders, for
the purpose of taking any action permitted by the shareholders under the
California General Corporation Law and the articles of incorporation of the
corporation, may be called at any time by the Chairman of the Board or the
President, or by the Board of Directors, or by one or more shareholders holding
not less than ten percent of the votes at the meeting. Upon request in writing
that a special meeting of shareholders be called for any proper purpose,
directed to the Chairman of the Board, President, Vice President or Secretary by
any person (other than the Board of Directors) entitled to call a special
meeting of shareholders, the officer forthwith shall cause notice to be given to
shareholders entitled to vote that a meeting will be held at a time requested by
the person or persons calling the meeting, not less than 35 nor more than 60
days after receipt of the request. Except in special cases where other express
provision is made by statute, notice of such special meetings shall be given
in the same manner as for annual meetings of shareholders. in addition, to the
extent applicable, the contents of the notice
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shall be in accordance with the provisions of Section 2.02 of this Article
(i.e., items (a) through (e), inclusive).
SECTION 2.04 Quorum. The presence in person or by proxy of the persons
entitled to vote a majority of the voting shares at any meeting shall constitute
a quorum for the transaction of business. The shareholders present at a duly
called or held meeting at which a quorum is present may continue to do business
until adjournment, notwithstanding the withdrawal of enough shareholders to
leave less than a quorum, if any action taken (other than adjournment) is
approved by at least a majority of the shares required to constitute a quorum.
SECTION 2.05 Adjourned Meeting and Notice Thereof. Any shareholders'
meeting, annual not a quorum is present. may be adjourned from time to time by
the vote of a majority of the shares, the holders of which are either present In
person or represented by proxy thereat, but in the absence of a quorum no other
business may be transacted at such meeting, except as provided in Section 2.04
of this Article. When any shareholders' meeting, either annual or special, is
adjourned to another time or place, notice need not be given of the adjourned
meeting if the time and place thereof are announced at the meeting at which the
adjournment is taken, unless after the adjournment a new record date is fixed
for the adjourned meeting or unless the adjournment is for more than 45 days
from the date set for the original meeting, in which case the Board of Directors
shall set a new record date. Notice of any such adjourned meeting shall be given
to each shareholder of record entitled to vote at the adjourned meeting in
accordance with the provisions of Section 2.02 of this Article. At any adjourned
meeting the corporation may transact any business which might have been
transacted at the original meeting.
SECTION 2.06 Voting. Unless a record date for voting purposes be fixed
provided in Section 5.01 of Article V of these Bylaws then, subject to the
provisions of Sections 702 to 704, inclusive, of the California General
Corporation Law (relating to voting of shares held by a fiduciary, in the name
of a corporation, or in joint ownership), only persons in whose names shares
entitled to vote stand on the stock records of the corporation at the close of
business on the business day next preceding the day on which notice of the
meeting is given or if such notice is waived, at the close of business on the
business day next preceding the day on which the meeting of shareholders is
held, shall be entitled to vote at such
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meeting, and such day shall be the record date for such meeting. Such vote may
be viva voce or by ballot; provided, however, that all elections for Directors
must be by ballot upon demand made by a shareholder at any election and before
the voting begins. On any matter other than election of Directors, any
shareholder may vote part of his shares in favor of the proposal and refrain
from voting the remaining shares or vote them against the proposal, but, if the
shareholder fails to specify the number of shares which the shareholder is
voting affirmatively, it will be conclusively presumed that the shareholder's
approving vote is with respect to all shares such shareholder is entitled to
vote. If a quorum is present, except with respect to election of Directors, the
affirmative vote of the majority of the shares represented at the meeting and
entitled to vote on any matter shall be the act of the shareholders, unless the
vote of a greater number or voting by classes is required by the California
General Corporation Law or the articles of incorporation. Subject to the
requirements of the next sentence, every shareholder entitled to vote at any
election for Directors shall have the right to cumulate his votes and give one
candidate a number of votes equal to the number of Directors to be elected
multiplied by the number of votes to which his shares are entitled, or to
distribute his votes on the same principle among as many candidates as he shall
think fit. No shareholder shall be entitled to cumulate votes unless the name of
the candidate or candidates for whom such votes would be cast has been placed in
nomination prior to the voting and any shareholder has given notice at the
meeting prior to the voting of such shareholder's intention to cumulate his
votes. The candidates receiving the highest number of votes of shares entitled
to be voted for them, up to the number of Directors to be elected, shall be
elected.
SECTION 2.07 Validation of Defectively Called or Noticed Meetings. The
transactions of any meeting of shareholders, either annual or special, however
called and noticed, and wherever held, shall be as valid as though had at a
meeting duly held after regular call and notice, if a quorum be present either
in person or by proxy, and if, either before or after the meeting, each of the
persons entitled to vote, not present in person or by proxy, or who though
present, has, at the beginning of the meeting, properly objected to the
transaction of any business because the meeting was not lawfully called or
convened, or to particular matters of business legally required to be included
in the notice, but not so included, signs a written
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waiver of notice, or a consent to the holding of such meeting, or an approval of
the minutes thereof. All such waivers, consents or approvals shall be filed with
the corporate records or made a part of the minutes of the meeting. Neither the
business to be transacted at nor the purpose of any regular or special meeting
of shareholders need be specified in the written waiver of notice, consent to
the holding of the meeting, or approval of the Minutes thereof, unless otherwise
provided in the articles of incorporation, these Bylaws, or by statute.
SECTION 2.08 Action Without Meeting. Directors may be elected without a
meeting by a consent in writing, setting forth the action so taken, signed by
all of the persons who would be entitled to vote for the election of Directors,
provided that, without notice except as hereinafter set forth, a Director may be
elected at any time to fill a vacancy not filled by the Board of Directors by
the written consent of persons holding a majority of the outstanding shares
entitled to vote for the election of Directors. Any other action which, under
any provision of the California General Corporation Law, may be taken at a
meeting of the shareholders, may be taken without a meeting, and without notice
except as hereinafter set forth, if a consent in writing, setting forth the
action so taken, is signed by the holders of outstanding shares having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all shares entitled to vote thereon were
present and voted.
Unless the consents of all shareholders entitled to vote have been
solicited in writing:
(a) Notice of any proposed shareholder approval of, (I)a contract or other
transaction with an interested Director, (ii) indemnification of an agent of the
corporation as authorized by Section 5.08 of Article V of these Bylaws, (iii) a
reorganization of the corporation as defined in Section 181 of the California
General Corporation Law, or (iv) a distribution in dissolution other than in
accordance with the rights of outstanding preferred shares, if any, without a
meeting by less than unanimous written consent, shall be given at least ten days
before the consummation of the action authorized by such approval; and
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(b) Prompt notice shall be given of the taking of any other corporate
action approved by shareholders without a meeting by less than unanimous written
consent, to those shareholders entitled to vote who have not consented in
writing. Such notice shall be given in the manner and shall be deemed to have
been given as provided in Section 2.02 of Article II of these Bylaws.
Unless, as provided in Section 5.01 of Article V of these Bylaws, the
Board of Directors has fixed a record date for the determination of shareholders
entitled to give such written consent, the record date for such determination
shall be the day on which the first written consent is given, when no prior
action by the Board of Directors has been taken. In all other cases in which the
Board of Directors has not fixed a record date for the determination of
shareholders entitled to give such written consent as provided in Section 5.01
of Article V of these Bylaws, the record date shall be determined as set forth
in such Section 5.01.
Any shareholder giving a written consent, or the share holder's
proxyholders, or a transferee of the shares or a personal representative of the
shareholder or their respective proxyholders, may revoke the consent by a
writing received by the corporation prior to the time that written consents of
the number of shares required to authorize the proposed action have been filed
with the Secretary of the corporation, but may not do so thereafter. Such
revocation is effective upon its receipt by the Secretary of the corporation.
All written consents referred to in this Section 2.08 shall be filed with the
Secretary of the corporation and shall be maintained in the corporate records.
SECTION 2.09 Proxies. Every person entitled to vote or execute consents
shall have the right to do so either in person or by one or more agents
authorized by a written proxy executed by such person or his duly authorized
agent and filed with the Secretary of the corporation. Any proxy duly executed
is not revoked and continues in full force and effect until (I) an instrument
revoking it or a duly executed proxy bearing a later date is filed with the
Secretary of the corporation prior to the vote pursuant thereto, (ii) the person
executing the proxy attends the meeting and votes in person or (iii) written
notice of the death or incapacity of the maker of such proxy is received by the
corporation before the vote
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pursuant thereto is counted; provided that no such proxy shall be valid after
the expiration of 11 months from the date of its execution, unless the person
executing it specifies therein the length of time for which such proxy is to
continue in force.
SECTION 2.10 Inspectors of Election. In advance of any meeting of
shareholders, the Boar Directors may appoint any persons other than nominees for
office as inspectors of election to act at such meeting or any adjournment
thereof. If inspectors of election be not so appointed, the Chairman of any such
meeting may, and on the request of any shareholder or his proxy shall, make such
appointment at the meeting. The number of inspectors shall be either one or
three. If appointed at a meeting on the request of one or more shareholders or
proxies, the majority of shares represented in person or by proxy shall
determine whether one or three inspectors is to be appointed. In case any person
appointed as inspector fails to appear or fails or refuses to act, the vacancy
may, and on the request of any shareholder or a shareholder's proxy shall, be
filled by appointment by the Board of Directors in advance of the meeting, or at
the meeting by the Chairman of the meeting.
The duties of such inspectors shall be as prescribed in Section 707 of the
California General Corporation Law and shall include: (I) determining the number
of shares outstanding and the voting power of each; (ii) the shares represented
at the meeting;(iii) the existence of a quorum; (iv)the authenticity, validity
and effect of proxies;(v)receiving votes, ballots or consents; (vi) hearing and
determining all challenges and questions in any way arising in connection with
the right to vote; (vii) counting and tabulating all votes or consents; (viii)
determining when the polls shall close; (ix) determining the result; and (x)
such acts as may be proper to conduct the election or vote with fairness to all
shareholders. In the determination of the validity and effect of proxies the
dates contained on the forms of proxy shall presumptively determine the order of
execution of the proxies, regardless of the postmark dates on the envelopes in
which they are mailed.
The inspectors of election shall perform their duties impartially, in good
faith, to the best of their ability and as expeditiously as is practical. if
there are three inspectors of election, the decision, act or certificate of a
majority is
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effective in all respects as the decision, act or certificate of all. Any report
or certificate made by the inspectors of election is prima facie evidence of the
facts stated therein.
ARTICLE III
Directors
SECTION 3.01 Powers. All corporate powers of the corporation shall be
exercised by, or under authority of, and the business and affairs of the
corporation shall be controlled by, the Board of Directors, subject, however, to
such limitations as are imposed by law, the articles of incorporation, these
bylaws, or as to actions to be authorized or approved by the shareholders. The
Board of Directors may, by contract or otherwise, give general limited, or
special power and authority to the officers and employees of the corporation to
transact the general business, or any special business, of the corporation, and
may give powers of attorney to agents of the corporation to transact any special
business requiring such authorization.
SECTION 3.02 Number and Oualification of Directors. The authorized number
of Directors shall be one until changed by a duly adopted amendment to the
articles of incorporation or by an amendment to this Section 3.02 duly adopted
by a vote or written consent of holders of a majority of the outstanding shares
entitled to vote; provided, however, that if the number of Directors should ever
be increased to five or more an amendment to this Section 3.02 or an amendment
to the articles of incorporation either of which would reduce the fixed number
of Directors to a number less than five, cannot be adopted if the votes cast
against its adoption at a meeting, or the shares not consenting in the case of
action by written consent, are equal to more than 16 2/3 percent of the
outstanding shares entitled to vote.
SECTION 3.03 Election and Term of Office. The Directors shall be elected
at each annual meeting of shareholders but, if any such annual meeting is not
held or the Directors are not elected thereat, the Directors may be elected at
any special meeting of shareholders held for that purpose. All Directors shall
hold office until the next annual shareholders' meeting and until their
respective successors are elected and qualified,
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subject to the California General Corporation Law and the provisions of these
Bylaws with respect to vacancies on the Board.
SECTION 3.04 Vacancies. A vacancy in the Board of Directors shall be
deemed to exist in case of the death, resignation, disqualification or removal
of any Director: if a Director has been declared of unsound mind by order of
court or convicted of a felony; if the authorized number of Directors be
increased; or if the shareholders fail, at any annual or special meeting of
shareholders at which any Director or Directors are elected, to elect the full
authorized number of Directors to be voted for at that meeting.
Vacancies in the Board of Directors, except for a vacancy created by the
removal of a Director, may be filled by a majority of the remaining Directors,
though less than a quorum, or by a sole remaining Director, and each Director so
elected shall hold office until his successor is elected at an annual or a
special meeting of the shareholders. A vacancy in the Board of Directors created
by the removal of a Director may only be filled by the vote of a majority of the
shares entitled to vote represented at a duly held meeting at which a quorum is
present, or by the written consent of the holders of a majority of the
outstanding shares.
The shareholders may elect a Director or Directors at any time to fill any
vacancy or vacancies not filled by the remaining Directors. Any such election by
written consent shall require the consent of holders of a majority of the
outstanding shares entitled to vote.
Any Director may resign effective upon giving written notice to the
Chairman of the Board, the President, the Secretary or the Board of Directors of
the corporation, unless the notice specifies a later time for the effectiveness
of such resignation. If the Board of Directors accepts the resignation of a
Director tendered to take effect at a future time, the Board or the shareholders
shall have power to elect a successor to take office when the resignation is to
become effective.
No reduction of the authorized number of Directors shall have the effect
of removing any Director prior to the expiration
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of his term of office.
SECTION 3.05 Place of Meeting. Regular meetings of the Board of Directors
shall be held at any place within or without the State which has been designated
from time to time by resolution of the Board or by written consent of all
members of the Board. In the absence of such designation regular meetings shall
be held at the principal executive office of the corporation. Special meetings
of the Board may be held either at a place so designated or at the principal
executive office. Any meeting regular or special, may be held by conference
telephone or similar communications equipment, as long as all Directors
participating in the meeting can hear one another, and all such Directors shall
be deemed to be present in person at the meeting.
SECTION 3.06 Organization Meeting. Immediately following each annual
meeting of shareholders the Board of Directors shall hold a regular meeting at
the place of said annual meeting or at such other place as shall be fixed by the
Board of Directors, for the purpose of organization, election of officers, and
the transaction of other business. Call and notice of such meetings are hereby
dispensed with.
SECTION 3.07 Other Regular Meetings. Other regular meetings of the Board
of Directors and Provision for notice thereof may be provided for by amendment
of these Bylaws pursuant to Article VI below.
SECTION 3.08 Special Meetings. Special meetings of the Board of Directors
or any purpose or purposes may be called at any time by the Chairman of the
Board, the President, any Vice President, the Secretary or by any two Directors.
Written notice of the time and place of special meetings shall be
delivered personally to each Director or communicated to each Director by
telephone, or by telegraph or mail, charges prepaid, addressed to him at his
address as it is shown upon the records of the corporation or, if it is not so
shown on such records or is not readily ascertainable, at the place at which the
meetings of the Directors are regularly held. In case such notice is mailed, it
shall be deposited in the United States mail in the place in which the principal
executive office of the corporation is located at least four days before the
time of the
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holding of the meeting. In case the notice is delivered personally, or by
telephone or telegram, it shall be delivered personally or by telephone or to
the telegraph company, at least 48 hours before the time of the holding of the
meeting. Any oral notice given personally or by telephone may be communicated
either to the Director or to a person at the office or residence of the Director
whom the person giving the notice has reason to believe will promptly
communicate it to the Director. Such mailing, telegraphing or delivery,
personally or by telephone, as above provided, shall constitute due, legal and
personal notice to such Director.
Any notice shall state the date, place, and hour of the meeting. However,
the notice need not specify the purpose of the meeting.
SECTION 3.09 Action Without Meeting. Any action by the Board of Directors
may be taken without a meeting if all members of the Board shall individually or
collectively consent in writing to such action. Such written consent or consents
shall be filed with the minutes of the proceedings of the Board and shall have
the same force and effect as a unanimous vote of such Directors.
SECTION 3.10 Action at a Meeting: Quorum and Required Vote. Presence of
the authorized number or Directors at a meeting of the Board of Directors
constitutes a quorum for the transaction of business, except as hereinafter
provided. Members of the Board may participate in a meeting through use of
conference telephone or similar communications equipment, so long as all members
participating in such meeting can hear one another. Participation in a meeting
as permitted in the preceding sentence constitutes presence in person at such
meeting. Every act or decision done or made by a majority of the Directors
present at a meeting duly held at which a quorum is present shall be regarded as
the act of the Board of Directors# unless a greater number, or the same number
after disqualifying one or more Directors from voting, is required by law, by
the articles of incorporation or by these Bylaws. A meeting at which a quorum is
initially present may continue to transact business notwithstanding the
withdrawal of a Director, provided that any action taken is approved by at least
a majority of the required quorum for such meeting.
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SECTION 3.11 Validation of Defectively Called or Noticed Meetings. The
transactions of any meetings of Directors, however called and noticed or
wherever held, shall be as valid as though had at a meeting duly held after
regular call and notice, if a quorum is present and if, either before or after
the meeting, each of the Directors not present or who, though present, has prior
to the meeting or at its commencement, protested the lack of proper notice to
him, signs a written waiver of notice or a consent to holding such meeting or an
approval of the minutes thereof. All such waivers, consents or approvals shall
be filed with the corporate records or made a part of the minutes of the
meeting. The waiver of notice or consent need not specify the purpose of the
meeting.
SECTION 3.12 Adjournment. A majority of the Directors present, whether or
not a quorum is present, may adjourn any meeting to another time and place.
SECTION 3.13 Notice of Adjournment. If the meeting is adjourned for more
than 24 hours notice of any adjournment to another time or place shall be given
prior to the time of the adjourned meeting to the Directors who were not present
at the time of adjournment. Otherwise, notice of the time and place of holding
an adjourned meeting need not be given to absent Directors if the time and place
be fixed at the meeting adjourned.
SECTION 3.14 Committees. The Board may, by resolution adopted by a
majority of the authorized number of Directors, designate one or more committees
consisting of two or more Directors who will serve at the pleasure of the Board.
Each committee shall have all the authority of the Board, except as expressly
limited by Section 311 of the California General Corporation Law and by the
resolution of the Board designating the committee. The presence of a majority of
the designated members of any such committee shall constitute a quorum for the
transaction of business at a meeting of the committee.
SECTION 3.15 Fees and Compensation. Directors and members of committees
may receive such compensation, if any, for their services, and such
reimbursement for expenses, as may be fixed or determined by resolution of the
Board.
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ARTICLE IV
Officers
SECTION 4.01 Officers. The officers of the corporation shall be a
President, a Secretary and a Chief Financial Officer. The corporation may also
have, at the discretion of the Board of Directors, a Chairman of the Board, one
or more Vice Presidents, one or more Assistant Secretaries, and such other
officers as may be appointed in accordance with the provisions of Section 4.02
of this Article with such titles and duties as shall be determined by the Board.
SECTION 4.02 Election. The officers of the corporation, except such
officers as may be appointed in accordance with the provisions of Section 4.03
or Section 4.05 of this Article, shall be chosen annually by the Board of
Directors, and each shall hold his office until he shall resign or shall be
removed or otherwise disqualified to serve, or his successor shall be elected
and qualified.
SECTION 4.03 Subordinate Officers, Etc. The Board of Directors may
appoint, and may empower the President to appoint such other officers as the
business of the corporation may require, each of whom shall hold office for such
period, have such authority, and perform such duties as are provided in these
Bylaws or as the Board of Directors may from time to time determine.
SECTION 4.04 Removal & Resignation. Any officer may be removed, either
with or without cause, by the Board of Directors at any regular or special
meeting thereof, or, except in case of an officer chosen by the Board of
Directors, by any officer upon whom such power of removal may be conferred by
the Board of Directors (subject, in each case, to the rights, if any, of an
officer under any contract of employment).
Any officer may resign at any time by giving written notice to the Board
of Directors or to the President, or to the Secretary of the corporation,
without prejudice, however, to the rights, if any, of the corporation under any
contract to which such officer is a party. Any such resignation shall take
effect
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at the date of the receipt of such notice or at any later time specified
therein; and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
SECTION 4.05 Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in these Bylaws for regular appointments to such office.
SECTION 4.06 Chairman of the Board. The Chairman of the Board, if there
shall be such an officer, shall, if present, preside at all meetings of the
Board of Directors and exercise and perform such other powers and duties as may
be from time to time assigned to him by the Board of Directors or prescribed by
these Bylaws.
SECTION 4.07 President. Subject to such supervisory powers, if any, as may
be given by the Board of Directors to the Chairman of the Board, if there be
such an officer, the President shall be the general manager and chief executive
officer of the corporation and shall, subject to the control of the Board of
Directors, have general supervision, direction and control of the business and
officers of the corporation. He shall preside at all meetings of the
shareholders and, in the absence of the Chairman of the Board, or if there be
none, and he is also a Director, at all meetings of the Board of Directors. He
shall be ex officio a member of all the standing committees, including the
executive committee, if any, and shall have the general powers and duties of
management usually vested in the office of the President of a corporation, and
shall have such powers and duties as may be prescribed by the Board of Directors
or these Bylaws.
SECTION 4.08 Vice President. In the absence or disability of the
President, the Vice Presidents in order of their rank as fixed by the Board of
Directors or, if not ranked, the Vice President designated by the Board of
Directors, shall perform all the duties of the President, and when so acting
shall have all the powers of, and be subject to all the restrictions upon, the
President. The Vice Presidents shall have such other powers and perform such
other duties as from time to time may be prescribed for them respectively by the
Board of Directors or these Bylaws.
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SECTION 4.09 Secretary. The Secretary shall record or cause to be
recorded, and shall keep or cause to be kept, at the principal executive office
and such other place as the Board of Directors may order, a book of minutes of
actions taken at all meetings of Directors and shareholders, with the time and
place of holding, whether regular or special, and, if special, how authorized,
the notice thereof given, the names of those present at Directors' meetings, the
number of shares present or represented at shareholders' meetings, and the
proceedings thereof.
The Secretary shall keep, or cause to be kept, at the principal executive
office or at the office of the corporation's transfer agent, a share register,
or a duplicate share register, snowing the names of the shareholders and their
addresses, the number and classes of shares held by each, the number and date of
certificates issued for the same, and the number and date of cancellation of
every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all meetings of
the shareholders and of the Board of Directors required by these Bylaws or by
law to be given, shall keep the seal of the corporation in safe custody, and
shall have such other powers and perform such other duties as may be prescribed
by the Board of Directors or by these Bylaws.
SECTION 4.10 Chief Financial Officer. The Chief Financial Officer of the
corporation shall keep and maintain, or cause to be kept and maintained adequate
and correct accounts of the properties and business transactions of the
corporation, including accounts of its assets, liabilities, receipts,
disbursements, gains, losses, capital, surplus and shares. Any surplus,
including earned surplus, paid-in surplus and surplus arising from a reduction
of stated capital, shall be classified according to source and shown in a
separate account.
The Chief Financial Officer shall deposit all moneys and other valuables
in the name and to the credit of the corporation with such depositories as may
be designated by the Board of Directors. He shall disburse the funds of the
corporation as may be ordered by the Board of Directors, shall render to the
President and Directors, whenever they request it, an account of
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all of his transactions as Chief Financial officer and of the financial
condition of the corporation, and shall have such other powers and perform such
other duties as may be prescribed by the Board of Directors or these Bylaws. The
Chief Financial Officer of the corporation is, for purposes of giving any
reports or executing any certificates or other documents requiring the signature
of the "Treasurer" deemed to be also the Treasurer of the corporation.
ARTICLE V
Miscellaneous
SECTION 5.01 Record Date. The Board of Directors may fix, in advance, a
record date for the determination of the shareholders entitled to notice of and
to vote at any meeting of shareholders or entitled to give consent to corporate
action in writing without a meeting, to receive any report, to receive any
dividend or distribution, or any allotment of rights, or to exercise rights in
respect to any change, conversion, or exchange of shares. The record date so
fixed shall be not more than 60 days nor less than 10 days prior to the date of
any meeting, nor more than 60 days prior to any other event for the purposes for
which it is fixed. When a record date is so fixed, only shareholders of record
on that date are entitled to notice of and to vote at any such meeting, to give
consent without a meeting, to receive any report, to receive a dividend,
distribution, or allotment of rights, or to exercise the rights, as the case may
be, notwithstanding any transfer of any shares on the books of the corporation
after the record date, except as otherwise provided in the articles of
incorporation or Bylaws.
If no record date is fixed:
(a)the record date for determining shareholders entitled to notice of or
to vote at a meeting of shareholders shall beat the close of business on the
business day next preceding the day on which notice is given or,if, noticee is
waived, at the close of business on the business day next preceding the day on
which the meeting is held;
(b)the record date for determining shareholders entitled to give consent
to corporate action in writing without a meeting,
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when no prior action by the Board of Directors has been taken, shall be the day
on which the first written consent is given; and
(c) the record date for determining shareholders for any other purpose
shall be at the close of business on the day on which the Board of Directors
adopts the resolution relating thereto, or the 60th day prior to the date of
such other action, whichever is later.
SECTION 5.02 Inspection of Corporate Records. The accounting books and
records, the records of shareholders, and minutes of proceedings of the
shareholders and the Board and committees of the Board of the corporation and
any subsidiary of the corporation shall be open to inspection upon the written
demand on the corporation of any shareholder or holder of a voting trust
certificate at any reasonable time during usual business hours, for a purpose
reasonably related to such holder's interests as a shareholder or as the holder
of such voting trust certificate. Such inspection by a shareholder or holder of
a voting trust certificate may be made in person or by agent or attorney, and
the right of inspection includes the right to copy and make extracts.
A shareholder or shareholders holding at least five percent in the
aggregate of the outstanding voting shares of the corporation or who hold at
least one percent of such voting shares and have filed a Schedule 14B with the
United States Securities and Exchange Commission relating to the election of
Directors of the corporation shall have (in person, or by agent or attorney) the
right to inspect and copy the record of shareholders names and addresses and
shareholdings during usual business hours upon five business days' prior written
demand upon the corporation and to obtain from the transfer agent for the
corporation, upon written demand and upon the tender of its usual charges, a
list of the shareholders' names and addresses, who are entitled to vote for the
election of Directors, and their shareholdings, as of the most recent record
date for which it has been compiled or as of a date specified by the shareholder
subsequent to the date of demand. The list shall be made available on or before
the later of five business days after the demand is received or the date
specified therein as the date as of which the list is to be compiled.
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Every Director shall have the absolute right at any reasonable time to
inspect and copy all books, records and documents of every kind and to inspect
the physical properties of the corporation and each of its subsidiary
corporations. Such inspection by a Director may be made in person or by agent or
attorney and the right of inspection includes the right to copy and make
extracts.
SECTION 5.03 Checks, Drafts, Etc. All checks, drafts or other orders for
payment of money, notes or other evidences of indebtedness, issued in the name
of or payable to the corporation, shall be signed or endorsed by such person or
persons and in such manner as, from time to time, shall be determined by
resolution of the Board of Directors.
SECTION 5.04 Annual and Other Reports. The annual report to shareholders
referred to in Section 1501 of the California General Corporation Law is
expressly waived, but nothing herein shall be interpreted as prohibiting the
Board from issuing annual or other periodic reports to shareholders.
SECTION 5.05 Certificate for Shares. The certificates shall be in such
form as shall be Provided by the Board. The certificates shall be signed in the
name of the corporation by the Chairman or Vice Chairman of the Board or the
President or a Vice President and by the Chief Financial officer or an Assistant
Treasurer or the Secretary or any Assistant Secretary, certifying the number of
shares and the class or series of shares owned by the shareholder. Any of the
signatures on the certificate may be facsimile, provided that in such event at
least one signature, including that of either an officer or the corporation's
registrar or transfer agent, if any, shall be manually signed. In case any
officer, transfer agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, it may be issued
by the corporation with the same effect as if such person were an officer,
transfer agent or registrar at the date of issue.
Any such certificate shall also contain such legend or other statement as
may be required by Section 418 of the California General Corporation Law, the
Corporate Securities Law of 1968, as amended, the federal securities laws, or
any agreement between
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the corporation and the issues of such certificate.
Certificates for shares may be issued prior to full payment under such
restrictions and for such purposes as the Board of Directors or the Bylaws may
provide; provided however, that any such certificate so issued prior to full
payment shall state on the face thereof the amount remaining unpaid and the
terms of payment thereof.
The corporation may adaption accordance with Section 416(b) of the
California General Corporation Law, a system of issuance, recordation and
transfer of its shares by electronic or other means not involving any issuance
of certificates.
No new certificates for shares shall be issued in lieu of an old
certificate unless the latter is surrendered and canceled at the same time;
provided, however, that a new certificate will be issued without the surrender
and cancellation of the old certificate if (1) the old certificate is lost,
apparently destroyed or wrongfully taken; (2) the request for the issuance of
the new certificate is made within a reasonable time after the owner of the old
certificate has notice of its loss, destruction, or theft; (3) the request for
the issuance of a new certificate is made prior to the receipt of notice by the
corporation that the old certificate has been acquired by a bona fide purchaser;
(4) the owner of the old certificate files a sufficient indemnity bond with or
provides other adequate security to the corporation; and (5) the owner satisfies
any other reasonable requirements imposed by the corporation. In the event of
the issuance of a new certificate, the rights and liabilities of the
corporation, and of the holders of old and new certificates, shall be governed
by the provisions of Sections 8104 and 8405 of the California Uniform Commercial
Code.
SECTION 5.06 Representation of Shares of Other Corporations. The President
or any Vice President and the Secretary or any Assistant Secretary of the
corporation are authorized to vote, represent and exercise on behalf of the
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of the corporation. The authority herein
granted to said officers to vote or represent on behalf of the corporation any
and all shares held by the corporation in any other corporation or corporation
may be
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exercised either by such officers in person or by any other person authorized so
to do by proxy or power of attorney duly executed by said officers.
SECTION 5.07 Indemnification of Directors, Officers, Employees and Other
Agents. The corporation shall, to the maximum extent permitted by the California
General Corporation Law, indemnify each of its agents against expenses,
judgments, fines, settlements and other amounts actually and reasonably incurred
in connection with any proceeding arising by reason of the fact any such person
is or was an agent of the corporation. For purposes of this Section, an "agent"
of the corporation includes any person who is or was a director, officer,
employee, or other agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee, or agent of another foreign
or domestic corporation, partnership, Joint venture, trust or other enterprise,
or was a Director, officer, employee, or agent of a foreign or domestic
corporation which was a predecessor corporation of the corporation or of another
enterprise at the request of such predecessor corporation; 'proceeding" means
any threatened, pending or completed action or proceeding, whether civil,
criminal, administrative, or investigative; and "expenses" includes, without
limitation, attorneys' fees and any expenses of establishing a right to
indemnification from the corporation.
SECTION 5.08 Inspection of Bylaws. The corporation shall keep in its
principal execute office in California, or if its principal executive office is
not in California, then at its principal business office in California (or
otherwise provide upon written request of any shareholder) the original or a
copy of the Bylaws, as amended, or otherwise altered to date, certified by the
Secretary, which shall be open to inspection by the shareholders at all
reasonable times during office hours. if the principal executive office of the
corporation is outside California and the corporation has no principal business
office in California, the Secretary shall, upon the written request of any
shareholder, furnish to that shareholder a copy of the Bylaws as amended to
date.
SECTION 5.09 Construction and Definitions. Unless the context text
otherwise requires, the general provisions, rules of
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construction and definition contained in the California General Corporation Law
shall govern the construction of these Bylaws. Without limiting the generality
of the foregoing, the masculine gender includes the feminine and neuter, the
singular number includes the plural and the plural number includes the singular,
and the term 'person' includes a corporation as well as a natural person.
ARTICLE VI
Amendments
SECTION 6.01 Power of Shareholders. New Bylaws may be adopted or these
Bylaws may be amended or repealed by the affirmative vote or written consent of
holders of a majority of the outstanding shares entitled to vote; provided,
however, that if the articles of incorporation of the corporation set forth the
number of authorized Directors of the corporation, the authorized number of
Directors may be changed only by an amendment of the articles of incorporation.
SECTION 6.02 Power of Directors. Subject to the right of shareholders as
provided in action 6.01 of this Article to adopt, amend or repeal Bylaws,
Bylaws, other than a Bylaw or amendment thereof changing the authorized number
of Directors, may be adopted, amended or repealed by the Board of Directors.
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Exhibit 3.92
ARTICLES OF INCORPORATION
OF
BANKERS CONSULTING COMPANY
The undersigned natural person of the age of eighteen years or more
for the purpose of forming a corporation under The General and Business
Corporation Law of Missouri hereby adopts the following Articles of
Incorporation:
ARTICLE ONE
The name of the corporation (hereinafter referred to as the
"Corporation") is Bankers Consulting Company.
ARTICLE TWO
The address of the corporation's initial registered office in this
state is 9440 Manchester Road, Suite 200, St. Louis, Missouri 63119. The name of
its initial agent at such address is Jean Dunaway.
ARTICLE THREE
The aggregate number, class and par value of shares which the
Corporation shall have authority to issue is one thousand (1,000) shares of
Common Stock all of which shall have a par value of One Cent ($0.01) per share.
<PAGE>
ARTICLE FOUR
The preferences, qualifications, limitations, restrictions, and the
special or relative rights, including convertible rights, if any, in respect of
the shares of each class are as follows:
1. All preemptive rights of shareholders are hereby denied, so that
no stock or other security of the Corporation shall carry with it and no holder
or owner of any share or shares of stock or other security or securities of the
corporation shall have any preferential or preemptive right to acquire
additional shares of stock or of any other security of the Corporation.
2. All cumulative voting rights are hereby denied, so that the
Common Stock of the Corporation shall not carry with it and no holder or owner
of any share or shares of the Common Stock shall have any right to cumulative
voting in the election of directors or for any other purpose.
3. The foregoing provisions are not intended to modify or prohibit
any provisions of any voting trust or agreement between or among holders or
owners of shares of stock or other securities of the Corporation.
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ARTICLE FIVE
The name and place of residence of the incorporator is:
Connie B. Walsh
454 Tree Top Lane
St. Louis, Missouri 63122
ARTICLE SIX
The number of directors to constitute the first Board of Directors
of the Corporation is two. Thereafter, the number of directors shall be fixed
by, or in the manner provided in, the Bylaws of the Corporation. Any changes in
the number will be reported to the Secretary of State within thirty calendar
days of such change.
ARTICLE SEVEN
The duration of the corporation is perpetual.
ARTICLE EIGHT
The Corporation is formed for the following purposes:
To engage in any business lawful and permitted pursuant to the laws
of the State of Missouri and to do anything permitted of corporations formed
pursuant to the provisions of The General and Business Corporation Law of
Missouri, as amended from time to time.
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ARTICLE NINE
The Board of Directors is expressly authorized to make, amend, alter
and rescind the By-laws of the Corporation.
ARTICLE TEN
A. Actions Involving Directors and Officers. The Corporation shall
indemnify each person who at any time is serving or has served as a director or
an officer of the corporation against any claim, liability or expense incurred
as a result of such service, or as a result of any other service on behalf of
the Corporation, or service at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, or other enterprise, to the maximum extent permitted by law. Without
limiting the generality of the foregoing, the Corporation shall indemnify any
such person who was or is a party (other than a party plaintiff suing on his own
behalf or in the right of the Corporation), or is threatened to be made a party,
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (including, but not limited to,
an action by or in the right of the Corporation) by reason of such services
against expenses (including attorneys' fees), judgments, fines and amounts paid
in
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settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding.
B. Actions Involving Employees or Agents.
1. The Corporation may, if it deems appropriate and as may be
permitted by this Article, indemnify any person who at any time is serving or
has served as an employee or agent of the Corporation against any claim,
liability or expense incurred as a result of such service or as a result of any
other service on behalf of the Corporation, or service at the request of the
Corporation as a director, officer, employee or agent of another Corporation,
partnership, joint venture, trust or other enterprise, to the maximum extent
permitted by law or to such lesser extent as the corporation, in its discretion,
may deem appropriate. Without limiting the generality of the foregoing, the
Corporation may indemnify any such person who was or is a party (other than a
party plaintiff suing on his own behalf or in the right of the Corporation), or
is threatened to be made a party, to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (including, but not limited to, an action by or in the right of
the Corporation) by reason of such services against expenses (including
attorneys' fees), judgments, fines and
5
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amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding.
2. To the extent that an officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Section B(l) of this Article, or in
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the action, suit or proceeding.
C. Determination of Right to Indemnification in Certain
Circumstances. Any indemnification required under Section A of this Article or
authorized by the Corporation under Section B of this Article, unless ordered by
a court shall be made by the Corporation only as authorized in the specific case
upon a determination that indemnification of the director, officer, employee or
agent is proper in the circumstances because he has met the applicable standard
of conduct set forth in or established pursuant to this Article. Such
determination shall be made (1) by the Board of Directors by a majority vote of
a quorum consisting of directors who were not parties to such action, suit or
proceeding, or (2) if such a quorum is not obtainable, or even if obtainable a
quorum of disinterested
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directors so directs, by independent legal counsel in a written opinion, or (3)
by the shareholders.
D. Advance Payment of Expenses. Expenses incurred by a person who is
or was a director or an officer of the Corporation in defending a civil or
criminal action, suit or proceeding shall be paid by the corporation in advance
of the final disposition of such action, suit or proceeding, and expenses
incurred by a person who is or was an officer, employee or agent of the
Corporation in defending a civil or criminal action, suit or proceeding may be
paid by the Corporation in advance of the final disposition of such action, suit
or proceeding as authorized by the Board of Directors, in either case upon
receipt of an undertaking by or on behalf of the director or the officer to
repay such amount unless it shall ultimately be determined that he is entitled
to be indemnified by the Corporation as authorized in or pursuant to this
Article.
E. Not Exclusive. The indemnification provided by this Article shall
not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under the By-Laws of the Corporation or any
statute, agreement, vote of shareholders or disinterested directors or
otherwise, both as to action in an official capacity and as to action in another
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capacity while holding such office.
F. Indemnification Agreements Authorized. Without limiting the other
provisions of this Article, the Corporation is authorized from time to time,
without further action by the shareholders of the Corporation, to enter into
agreements with any director, officer, employee or agent of the Corporation
providing such rights of indemnification as the Corporation may deem
appropriate, up to the maximum extent permitted by law. Any such agreement
entered into by the Corporation with a director may be authorized by the other
directors, and such authorization shall not be invalid on the basis that similar
agreements may have been or may thereafter be entered into with such other
directors.
G. Standard of Conduct. Except as may otherwise be permitted by law,
no person shall be indemnified pursuant to this Article (including without
limitation pursuant to any agreement entered into pursuant to Section F of this
Article) from or on account of such person's conduct which is finally adjudged
to have been knowingly fraudulent, deliberately dishonest or willful misconduct.
The Corporation may (but need not) adopt a more restrictive standard of conduct
with respect to the indemnification of any employee or agent of the Corporation.
8
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H. Insurance. The Corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
Corporation, or is or was otherwise serving on behalf or at the request of the
corporation in any such capacity, or arising out of his status as such, whether
or not the Corporation is obliged to or would have the power to indemnify him
against such liability under the provisions of this Article; provided, that the
obtaining of any such insurance shall not give rise to any right to
indemnification for any director, officer, employee or agent except as otherwise
specified herein, in the By-laws of the Corporation, or by separate agreement
with the Corporation.
I. Certain Definitions. For the purposes of this Article:
1. Any director or officer of the Corporation who shall serve
as a director, officer or employee of any other corporation, partnership, joint
venture, trust or other enterprise of which the Corporation, directly or
indirectly, is or was the owner of a majority of either the outstanding equity
interests or the outstanding voting stock (or comparable interests) shall be
deemed to be serving as such director, officer or employee at the request of the
Corporation, unless the
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Board of Directors of the Corporation shall determine otherwise. In all other
instances where any person shall serve as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise of
which the Corporation is or was a stockholder or creditor, or in which it is or
was otherwise interested, if it is not otherwise established that such person is
or was serving as such director, officer, employee or agent at the request of
the Corporation, the Board of Directors of the Corporation may determine whether
such service is or was at the request of the Corporation, and it shall not be
necessary to show any actual or prior request for such service.
2. References to a corporation include all constituent
corporations absorbed in a consolidation or merger as well as the resulting or
surviving corporation so that any person who is or was a director, officer,
employee or agent of such a constituent corporation or is or was serving at the
request of such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise shall stand in the same position under the provisions of this Article
with respect to the resulting or surviving corporation as he would if he had
served the resulting
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or surviving corporation in the same capacity.
3. The term "other enterprise" shall include employee benefit
plans; the term "fines" shall include any excise taxes assessed on a person with
respect to an employee benefit plan; the term "serving at the request of the
corporation" shall include any service as a director, officer, employee or agent
of the corporation which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to any employee benefit plan,
its participants, or beneficiaries; and a person who acted in good faith and in
a manner he reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have satisfied any
standard of care required by or pursuant to this Article in connection with such
plan.
J. Survival. Any indemnification rights provided pursuant to this
Article shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person. Notwithstanding any other provision in these
Articles of Incorporation, indemnification rights arising under or granted
pursuant to this Article shall survive amendment or repeal of this Article with
respect to any acts or omissions
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occurring prior to the effective time of such amendment or repeal and persons to
whom such indemnification rights are given shall be entitled to rely upon such
indemnification rights with respect to such acts or omissions as a binding
contract with the Corporation.
K. Amendment. The affirmative vote of the holders of record of
outstanding shares representing at least a majority of the outstanding shares of
capital stock of the Corporation then entitled to vote generally in the election
of directors, voting together as a single class, shall be required to amend,
repeal or adopt any provision inconsistent with this Article, notwithstanding
the fact that a lesser percentage may be specified by the laws of Missouri.
ARTICLE ELEVEN
The Corporation shall have full authority to amend these Articles of
Incorporation, at any time or from time to time, as permitted by the provisions
of The General and Business Corporation Law of Missouri, as amended from time to
time.
IN WITNESS WHEREOF, these Articles of Incorporation have been signed
this 10th day of August, 1995.
Connie B. Walsh
Incorporator
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STATE OF MISSOURI
SS.
CITY OF ST. LOUIS
I, VICTORIA R. OLIVER,a notary public, do hereby certify that on the
10th day of August, 1995, personally appeared before me, Connie B. Walsh, who
being by me first duly sworn, declared that she is the person who signed the
foregoing document as incorporator, and that the statements therein contained
are true.
Notary Public
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Exhibit 3.93
BYLAWS
OF
BANKERS CONSULTING COMPANY
ARTICLE 1: OFFICES
1.01 Registered Office and Agent. The registered office and registered
agent of the corporation shall be as designated from time to time by the
appropriate filing by the corporation in the office of the Secretary of State of
the State of Missouri.
1.02 Other Offices. The corporation may also have offices at other places
in or out of the State of Missouri as the board of directors may determine or as
the business of the corporation may require.
ARTICLE 2: SHAREHOLDERS
2.01 Place of Meetings. Meetings of shareholders shall be held at the time
and place, in or out of the State of Missouri, as stated in any notice of a
meeting or in a waiver of such notice.
2.02 Annual Meetings. Annual meetings of the shareholders shall be held at
a time, day and month to be selected by the corporation's board of directors. At
an annual meeting, the shareholders shall elect directors and transact such
other business as may properly be brought before the meeting.
2.03 Voting List. At least ten (10) days before each meeting of
shareholders, a complete list of shareholders entitled to vote at the meeting,
arranged in alphabetical order, with the address of each and the number of
voting shares held by each, shall be prepared by the officer or agent having
charge of the stock transfer books. The list, for a period of ten (10) days
prior to the meeting, shall be kept on file at the registered office or
principal place of business of the corporation and shall be subject to
inspection by any shareholder at any time during usual business hours. The list
shall also be produced and kept open at the time and place of the meeting, and
shall be subject to the inspection of any shareholder during the whole time of
the meeting.
<PAGE>
2.04 Special Meetings. Special meetings of the shareholders, unless
otherwise prescribed by statute, the articles of incorporation, or these bylaws,
may be called by the president, the board of directors, or the holders of not
less than the percentage of all the shares entitled to vote at the meeting as
required by law to call such a meeting. Business transacted at a special meeting
shall be confined to the purpose or purposes stated in the notice of such
meeting.
2.05 Notice of Meetings. Written or printed notice stating the place, day
and hour of a meeting and, in case of a special meeting, the purpose or purposes
for which such meeting is called, shall be delivered not less than ten (10) nor
more than sixty (60) days before the date of the meeting, either personally or
by mail, by or at the direction of the president, the secretary, or the officer
or person calling the meeting, to each shareholder entitled to vote at the
meeting. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail addressed to the shareholder at his address as it
appears on the stock transfer records of the corporation, with postage thereon
prepaid.
2.06 Quorum Unless otherwise provided for in the articles of
incorporation, the holders of a majority of the shares issued and outstanding
and entitled to vote at a meeting of the shareholders, present in person or
represented by proxy, shall be the requisite number of such shareholders and
shall constitute a quorum for the transaction of business. Unless otherwise
provided in the articles of incorporation or these bylaws, once a quorum is
present at a meeting of shareholders, the shareholders represented in person or
by proxy at the meeting may conduct such business as may be properly brought
before the meeting until it is adjourned, and the subsequent withdrawal from the
meeting of any shareholder or the refusal of any shareholder represented in
person or by proxy to vote shall not affect the presence of a quorum at the
meeting. Unless otherwise provided in the articles of incorporation or these
bylaws, the shareholders represented in person or by proxy at a meeting of
shareholders at which a quorum is not present may adjourn such meeting until
such time and to such place as may be determined by a vote of the holders of a
majority of the shares represented in person or by proxy at such meeting.
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2.07 Vote Required. With respect to any matter, other than the election of
directors or a matter for which the affirmative vote of the holders of a
specified portion of the shares entitled to vote is required by statute, the
affirmative vote of the holders of a majority of the shares entitled to vote on
any such matter and represented in person or by proxy at a meeting of
shareholders at which a quorum is present shall be the act of the shareholders.
2.08 Method of Voting. Except as otherwise provided in the articles of
incorporation, each outstanding share, regardless of class, shall be entitled to
one vote on each matter submitted to a vote at a meeting of shareholders. At any
meeting of the shareholders, any shareholder having the right to vote may vote
either in person or by proxy executed in writing by the shareholder. A telegram,
telex cablegram, or similar transmission by the shareholder, or a photographic,
photostatic, facsimile, or similar reproduction of a writing executed by the
shareholder, shall be treated as an execution in writing. No proxy shall be
valid after eleven (1 1) months from the date of its execution, unless otherwise
provided in such proxy. Each proxy shall be revocable unless the proxy form
conspicuously states that the proxy is irrevocable and the proxy is coupled with
an interest as provided by applicable law. Each proxy shall be filed with the
secretary of the corporation prior to or at the time of the meeting. Voting for
directors shall be in accordance with Section 3.06 of these bylaws. Any vote may
be taken by voice or by show of hands unless someone entitled to vote objects,
in which case written ballots shall be used.
2.09 Record Date:Closing Transfer Books. The board of directors may fix in
advance a record date for the purpose of determining shareholders entitled to
notice of, or to vote at, a meeting of the shareholders or any reconvening
thereof, or entitled to receive a distribution by the corporation or a share
dividend, or in order to make a determination of shareholders for any other
proper purpose, the record date to be not less than ten (10) nor more than sixty
(60) days prior to the meeting; or the board of directors may close the stock
transfer records for such purpose for a period of not less than ten (10) nor
more than sixty (60) days prior to such meeting. In the absence of any action by
the board of directors, the date upon which the notice of the meeting is mailed,
or the date on which the resolution of
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the board of directors declaring such distribution or share dividend is
declared, shall be the record date.
2.10 Order of Business at Meetings. The order of business at all meetings
of shareholders shall be as determined by the chairman of the meeting, but the
order of business to be followed at any meeting, other than a special meeting,
at which a quorum is present may be changed by a majority of the votes cast at
such meeting by the shareholders present in person or represented by proxy and
entitled to vote at the meeting. With respect to special meetings, only business
within the purpose or purposes described in the notice of the special meeting
may be conducted at a special meeting of the shareholders.
ARTICLE 3: DIRECTORS
3.01 Management. The business and affairs of the corporation shall be
managed under the direction of the board of directors who may exercise all such
powers of the corporation and do all such lawful acts and things as are not (by
statute or by the articles of incorporation or by these bylaws) directed or
required to be exercised or done by the shareholders.
3.02 Number: Qualification: Election: Term. The board of directors shall
consist of not less than one (1) nor more than four (4) directors, and within
that maximum and minimum shall be such number as shall be from time to time
specified by resolution of the board of directors; provided, however, no
director's term shall be shortened by reason of a resolution reducing the number
of directors; and further provided that the number of directors constituting the
initial board of directors shall be as provided in the articles of incorporation
and shall remain at such number unless and until changed by resolution of the
board of directors. The directors shall be elected at the annual meeting of the
shareholders, except as provided in Sections 3.03 and 3.05 hereof. Each director
elected shall hold office until his successor shall be elected and shall
qualify.
3.03 Change in Number. The number of directors may be increased or
decreased from time to time by amendment to these bylaws but no decrease shall
have the effect of shortening the term of any incumbent director. Any
directorship to be filled by
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reason of an increase in the number of directors may be filled by the board of
directors for a term of office continuing only until the election of one or more
directors by the shareholders or may be filled by election at an annual meeting
or at a special meeting of shareholders called for that purpose; provided,
however,the board of directors may fill no more than two such directorships
during the period between any two annual meetings of shareholders.
Notwithstanding the provisions of this Section 3.03 to the contrary, whenever
the holders of any class or series of shares are entitled to elect one or more
directors by the provisions of the articles of incorporation, any vacancies in
such directorships and any newly created directorships of such class or series
to be filled by reason of an increase in the number of such directors may be
filled by the affirmative vote of a majority of the directors elected by such
class or series then in office or by a sole remaining director so elected, or by
the vote of the holders of the outstanding shares of such class or series, and
such directorships shall not in any case be filled by the vote of the remaining
directors or the holders of the outstanding shares as a whole unless otherwise
provided in the articles of incorporation.
3.04 Removal. Any director may be removed either for or without cause at
any special or annual meeting of shareholders, by the affirmative vote of a
majority in number of shares of the shareholders present, in person or by proxy,
at such meeting and entitled to vote for the election of such director if notice
of intention to act upon such matter shall have been given in the notice calling
such meeting.
3.05 Vacancies. Subject to the provisions of Section 3.03 and 3.04, any
vacancy occurring in the board of directors (by death, resignation, removal or
otherwise) may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the board of directors. A director
elected to fill a vacancy shall be elected for the unexpired term of his
predecessor in office.
3.06 Election of Directors. Unless otherwise provided in the articles of
incorporation, directors shall be elected by a plurality of the votes cast by
the holders of shares entitled to vote in the election of directors at a meeting
of shareholders at which a quorum is present.
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3.07 Place of Meetings. Meetings of the board of directors, regular or
special, may be held in or out of the State of Missouri.
3.08 First Meetings. The first meeting of a newly elected board of
directors shall be held without @er notice immediately following the annual
meeting of shareholders, and at the same place, unless by unanimous consent of
the directors then elected and serving, the time or place is changed.
3.09 Regular Meetings. Regular meetings of the board of directors may be
held without notice at such time and place as shall from time to time be
determined by the board.
3.10 Special Meetings. Special meetings of the board of directors may be
called by the chairman of the board or president on five (5) days' notice to
each director, either personally, by mail, telegram or telefax. Special meetings
shall be called by the president or secretary in like manner and on like notice
upon the written request of two directors. Except as otherwise expressly
provided by statute, the articles of incorporation, or these bylaws, neither the
business to be transacted at, nor the purpose of, any special meeting need be
specified in a notice or waiver of notice.
3.11 Quorum.: Majority Vote. At meetings of the board of directors a
majority of the number of directors fixed by these bylaws (less any unfilled
vacancies) shall constitute a quorum for the transaction of business. The act of
a majority of the directors present at a meeting at which a quorum is present
shall be the act of the board of directors, except as otherwise specifically
provided by statute, the articles of incorporation, or these bylaws. If a quorum
is not present at a meeting of the board of directors, the directors present may
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum is present.
3.12 Compensation. By resolution of the board of directors, the directors
may be paid their expenses, if any, of attendance at each meeting of the board
of directors and may be paid a fixed sum for attendance at each meeting of the
board of directors or a stated salary as director. No such payment shall
preclude any director from serving the corporation in any other capacity and
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receiving compensation therefor.
3.13 Procedure. At meetings of the board of directors, business shall be
transacted in such order as the board of directors may determine. The board of
directors shall keep regular minutes of its proceedings. The minutes shall be
placed in the minute book of the corporation.
3.14 Interested Directors and Officers.
(a) Validity. If Subsection (b) of this Section is satisfied, no
contract or other transaction between the corporation and any of its
directors or officers or any corporation, partnership, association, or
other organization in which any of them have a financial interest or is
otherwise directly or indirectly interested, shall be void or voidable
solely because of this relationship or because of the presence of the
director or officer at the meeting authorizing the contract or
transaction, or his participation or vote in the meeting or authorization.
(b) Disclosure, Approval: Fairness.Subsection (a) shall apply only
if:
(I) the material facts of the relationship or interest of each
such director or officer are known or disclosed:
(A) to the board of directors or applicable committee
thereof and it nevertheless in good faith authorizes the
contract or transaction by a majority of the disinterested
directors present, even though such disinterested directors be
less than a quorum; or
(B) to the shareholders at a meeting of the shareholders
and they nevertheless in good faith approve the contract or
transaction by a majority of the shares present; or
(ii) the contract or transaction is fair to the corporation as
of the time it is authorized or ratified by the board of directors,
the applicable committee thereof or
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the shareholders.
(C) Non-Exclusive. This provision shall not be construed to
invalidate a contract or transaction which would be valid in the absence
of this provision.
3.15 Presumption of Assent. A director of the corporation who is present
at any meeting of the board of directors or applicable committee thereof at
which action on any matter is taken shall be presumed to have assented to the
action unless his dissent shall be entered in the minutes of the meeting or
unless he shall file his written dissent to such action with the person acting
as secretary of the meeting before the adjournment thereof or shall forward any
dissent by certified or registered mail to the secretary of the corporation
immediately after the adjournment of the meeting. Such right to dissent shall
not apply to a director who voted in favor of such action.
ARTICLE 4: COMMITTEES
4.01 Designation. The board of directors may, by resolution adopted by a
majority of the whole board, designate one or more committees.
4.02 Number; Qualification: Term. Each committee shall consist of one or
more directors and may have one or more alternative members who may, subject to
any limitations imposed by the board of directors, replace absent or
disqualified members at any meeting of that committee. Each committee member
shall serve as such until the earliest of (a) the expiration of his term as
director, (b) his resignation as a committee member or director, or (c) his
removal as a committee member or director.
4.03 Authority. Each committee, to the extent provided in the resolution
establishing such committee, shall have and may exercise any or all of the
authority of the board of directors in the management of the business and
affairs of the corporation. However, no committee shall have the authority of
the board in reference to:
(a) amending the articles of incorporation, except that a committee
may, to the extent provided in the resolution
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designating the committees or in the articles of incorporation or the
bylaws, exercise the authority vested in it in accordance with the General
and Business Corporation Law of Missouri;
(b) approving a plan of merger or share exchange;
(C) recommending to the shareholders the sale, lease or exchange of
all or substantially all of the property and assets of the corporation
otherwise than in the usual and regular course of its business;
(d) recommending to the shareholders a voluntary dissolution of the
corporation or a revocation thereof;
(e) amending, altering, or repealing these bylaws or adopting new
bylaws;
(f) filling vacancies in or removing members of the board of
directors or of any committee appointed by the board of directors;
(g) filling any directorship to be filled by reason of an increase
in the number of directors;
(h) electing or removing officers or members of any committee;
(I) fixing the compensation of any committee member;
(j) altering or repealing any resolution of the board of directors
which by its terms provides that it shall not be so amendable or
repealable;
(k) declaring a distribution;
(l) issuing shares of the corporation; or
(m) proposing a reduction of the stated capital of the corporation.
4.04 Change in Number. The number of members of any committee may be
increased or decreased from time to time by
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resolution adopted by a majority of the whole board of directors.
4.05 Removal. Any member of a committee may be removed by the affirmative
vote of a majority of the whole board of directors, whenever in its judgment the
best interests of the corporation will be served thereby.
4.06 Vacancies. A vacancy occurring in a committee (by death, resignation,
removal or otherwise) may be filled by the board of directors in the manner
provided for original designations in Section 4.01 hereof.
4.07 Meetings. The time, place and notice (if any) of committee meetings
shall be determined by the committee.
4.08 Quorum: Majority Vote. At meetings of any committee, a majority of
the number of members designated by the board of directors shall constitute a
quorum for the transaction of business. The act of a majority of the members
present at any meeting at which a quorum is present shall be the act of the
committee, except as otherwise specifically provided by statute, the articles of
incorporation or these bylaws. If a quorum is not present at a meeting of any
committee, the members present may adjourn the meeting from time to time,
without notice other than an announcement at the meeting, until a quorum is
present.
4.09 Compensation. By resolution of the board of directors, the members of
any committee may be paid their expenses, if any, of attendance at each meeting
of the committee and may be paid a fixed sum for attendance at each meeting of
the committee or a stated salary as a committee member. No such payment shall
preclude any committee member from serving the corporation in any other capacity
and receiving compensation therefor.
4.10 Procedure. Each committee shall keep regular minutes of its
proceedings and report the same to the board of directors when required. The
minutes of the proceedings of each committee shall be placed in the minute book
of the corporation.
411 Responsibility. The designation of any committee and the delegation of
authority to it shall not operate to relieve the board of directors, or any
member thereof, of any responsibility imposed upon it or him by law.
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ARTICLE 5: PROVISIONS RELATING TO MEETINGS
5.01 Notice of Meetings. Whenever by statute, the articles of
incorporation, these bylaws or otherwise, notice is required to be given to a
director, committee member or shareholder, and no provision is made as to how
the notice shall be given, it shall not be construed to mean personal notice,
but any such notice may be given: (a) in writing, by mail, postage prepaid,
addressed to the director, committee member or shareholder at the address
appearing on the books of the corporation; or (b) in any other method permitted
by law. Any notice required or permitted to be given by mail shall be deemed
given at the time when the same is thus ,deposited in the United States mails.
5.02 Waiver of Notice. Whenever by statute, the articles of incorporation,
these bylaws or otherwise, notice is required to be given to a director,
committee member or shareholder, a waiver thereof in writing signed by the
person or persons entitled to such notice, whether before or after the time
stated in such notice, shall be equivalent to the giving of such notice.
Attendance at a meeting shall constitute a waiver of notice of such meeting,
except where a person attends for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
5.03 Telephone and Similar Meetings. Shareholders, directors or committee
members may participate in and hold a meeting by means of a conference telephone
or similar communications equipment by means of which persons participating in
the meeting can hear each other. Participation in such a meeting shall
constitute presence in person at such meeting, except where a person
participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
5.04 Action Without Meeting. Any action which may be taken, or is required
by law, the articles of incorporation or these bylaws to be taken, at a meeting
of shareholders, directors or any committee members may be taken without notice
and without a meeting if a consent in writing, setting forth the action so
taken, shall be signed by (a) in the case of shareholders, either (I) all of the
shareholders entitled to vote with respect to such action, or (ii) if the
articles of incorporation so provide, by
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the holder or holders of shares having not less than the minimum number of votes
that would be necessary to take such action at a meeting at which the holders of
all shares entitled to vote on the action were present and voted, and (b) in the
case of directors or committee members, all of such members of the board of
directors or committee, as the case may be, entitled to vote with respect to the
subject matter thereof. Such consent shall have the same force and effect, as of
the date stated therein, as a unanimous vote of such shareholders, directors or
committee members, as the case may be, and may be stated as such in any document
filed with the Secretary of S@ of Missouri or in any certificate or other
document delivered to any person. The consent may be in one or more counterparts
so long as each shareholder, director or committee member signs one of the
counterparts. The signed consent shall be placed in the minute book of the
corporation.
ARTICLE 6: OFFICERS AND AGENTS
6.01 Number: Qualification: Election: Term.
(a) The corporation shall have: (I) a president and a secretary; and
(ii) such other officers (including a chairman of tile board, one or more
vice presidents and a treasurer) and such assistant officers and agents as
the board of directors may, from time to time, deem necessary.
(b) Officers named in Subsection 6.01(a)(I) shall be elected by the
board of directors on the expiration of an officer's term or whenever a
vacancy exists. Officers and agents named in Subsection 6.01(a)(ii) may be
elected by the board at any meeting.
(c) Any two or more offices may be held by the same person.
6.02 Removal. Any officer or agent may be removed by the board of
directors whenever in its judgment the best interest of the corporation will be
served thereby. Such removal shall be without prejudice to the contract rights,
if any, of the person so removed. Election or appointment of an officer or agent
shall not of itself create contract rights.
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6.03 Vacancies. Any vacancy occurring in any office of the corporation (by
death,resignation, removal or otherwise) may be filled by the board of
directors.
6.04 Authority. Officers and agents shall have such authority and perform
such duties in the management of the corporation as are provided in these bylaws
or as may be determined, from time to time, by resolution of the board of
directors not inconsistent with these bylaws.
6.05 Compensation. The compensation of officers and agents shall be fixed
from time to time by the board of directors; provided, that the board of
directors may delegate to any one or more officers the authority to fix such
compensation.
6.06 Chairman of the Board. The chairman of the board of directors, if
there shall be such an officer, shall, if present, preside at all meetings of
the board of directors and exercise and perform such other powers and duties as
may be from time to time assigned to him by the board of directors or prescribed
by the bylaws.
6.07 President. Unless and to the extent that such powers and duties are
expressly delegated to a chairman of the board by the board of directors, the
president shall be the chief executive officer of the corporation and, subject
to the supervision of the board of directors, shall have general management and
control of the business and affairs of the corporation in the ordinary course of
its business with all such powers with respect to such general management and
control as may be reasonably incident to such responsibilities, including, but
not limited to, the power to employ, discharge, or suspend employees and agents
of the corporation, to fix the compensation of employees and agents, and to
suspend, with or without cause, any officer of the corporation pending final
action by the board of directors with respect to continued suspension, removal,
or reinstatement of such officer. Except as otherwise expressly delegated to the
chairman of the board, the president shall preside at all meetings of the
shareholders and board of directors.
6.08 Vice Presidents. The vice presidents in the order of their seniority,
unless otherwise determined by the board of
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directors, shall, in the absence or disability of the president, perform the
duties and have the authority and exercise the powers of the president. They
shall perform such other duties and have such other authority and powers as the
board of directors may from time to time prescribe or as the president may from
time to time delegate.
6.09 Secretary.
(a) The secretary shall attend all meetings of the board of
directors and all meetings of the shareholders and record all votes,
actions and the minutes of all proceedings in a book to be kept for that
purpose and shall perform like duties for the executive and other
committees when required.
(b) He shall give, or cause to be given, notice of all meetings of
the shareholders and special meetings of the board of directors.
(C) He shall keep in safe custody the seal of the corporation and,
when authorized by the board of directors or the executive committee,
affix the same to any instrument requiring it. When so affixed, it shall
be attested by his signature or by the signature of the treasurer or an
assistant secretary.
(d) He shall be under the supervision of the president. He shall
perform such other duties and have such other authority and powers as the
board of directors may from time to time prescribe or as the president may
from time to time delegate.
6.10 Assistant Secretaries. The assistant secretaries in the order of
their seniority, unless otherwise determined by the board of directors, shall,
in the absence or disability of the secretary, perform the duties and have the
authority and exercise the powers of the secretary. They shalt perform such
other duties and have such other powers as a board of directors may from time to
time prescribe or as the president may from time to time delegate.
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6.11 Treasurer.
(a) The treasurer shall have the custody of the corporate funds and
securities, shall keep full and accurate accounts of receipts and
disbursements of the corporation, and a deposit all funds and other
valuables in the name and to the credit of the corporation in depositories
designated by the board of directors.
(b) He shall disburse the funds of the corporation as ordered by the
board of directors, and prepare financial statements as they direct.
(C) If required by the board of directors, he shall give the
corporation a bond (in such form, in such sum, and with such surety or
sureties as shall be satisfactory to the board) for the faithful
performance of the duties of his office and for the restoration to the
corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
corporation.
(d) He shall perform such other duties and have such other authority
and powers as the board of directors may from time to time prescribe or as
the president may from time to time delegate.
6.12 Assistant Treasurers. The assistant treasurers in the order of their
seniority, unless otherwise determined by the board of directors, shall, in the
absence or disability of the treasurer, perform the duties and have the
authority and exercise the powers of the treasurer. They shall perform such
other duties and have such other powers as the board of directors may from time
to time prescribe or the president may from time to time delegate,
ARTICLE 7: CERTIFICATES AND SHAREHOLDERS
7.01 Certificated and Uncertificated Shares. The shares of the corporation
may be either certificated shares or Uncertificated shares. As used herein, the
term "certificated
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shares" means shares represented by instruments in bearer Or registered form,
and the term "uncertificated shares" means shares not represented by instruments
and the transfers of which are registered upon books maintained for that purpose
by or on behalf of the corporation.
7.02 Certificates for Certificated Shares. The certificates representing
certificated shares of stock of the corporation shall be in such form as shall
be approved by the board of directors in conformity with law. The certificates
shall be consecutively numbered, shall be entered as they are issued in the
books of the corporation or in the records of the corporation's designated
transfer agent, if any, and shall state upon the face thereof: (a) that the
corporation is organized under the laws of the State of Missouri; (b) the name
of the person to whom issued; (c) the number and class of shares and the
designation of the series, if any, which such certificate represents; (d) the
par value of each share represented by such certificate, or a statement that the
shares are without par value; and (e) such other matters as may be required by
law. The certificates shall be signed by the chairman of the board, president or
any vice president, and by the secretary, an assistant secretary or any other
officer and may be sealed with the seal of the corporation or a facsimile
thereof. If any certificate is countersigned by a transfer agent or registered
by a registrar, either of which is other than the corporation itself or an
employee of the corporation, the signatures of the foregoing officers may be a
facsimile.
7.03 Issuance. Shares (both treasury and authorized but unissued) may be
issued for such consideration (not less than par value) and to such persons as
the board of directors may determine from time to time. Shares may not be issued
until the full amount of the, consideration, fixed as provided by law, has been
paid. After the issuance of uncertificated shares, the corporation or the
transfer agent of the corporation shall send to the registered owner of such
uncertificated shares a written notice containing the information required to be
stated on certificates representing shares of stock as set forth in Section 7.02
above and such additional information as may be required by the Missouri Uniform
Commercial Code as currently in effect and as the same may be amended from time
to time hereafter.
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7.04 Payment for Shares.
(a) Kind. The consideration for the issuance of shares shall consist
of money paid, labor done (including services actually performed for the
corporation) or property (tangible or intangible) actually received.
Neither promissory notes nor the promise of future services shall
constitute payment or part payment for the issuance of shares.
(b) Valuation. In the absence of fraud in the transaction, the
judgment of the board of directors as to the value of consideration
received shall be conclusive.
7.05 Subscriptions. Unless otherwise provided in the subscription
agreement, subscriptions for shares, whether made before or after organization
of the corporation, shall be paid in full at such time or in such installments
and at such times as shall be determined by the board of directors. Any call
made by the board of directors for payment on subscriptions shall be uniform as
to all shares of the same class or as to all shares of the same series, as the
case may be. In case of default in the payment on any installment or call when
payment is due, the corporation may proceed to collect the amount due in the
same manner as any debt due to the corporation.
7.06 Lost, Stolen or Destroyed Certificates. The corporation shall issue a
new certificate in place of any certificate for shares previously issued if the
registered owner of the certificate:
(a) Claim. Makes proof in affidavit form that it has been lost,
destroyed or wrongfully taken; and
(b) Timely Request. Requests the issuance of a new certificate
before the corporation has notice that the certificate has been acquired
by a purchaser for value in good faith and without notice of an adverse
claim; and
(c) Bond. Gives a bond in such form, and with such surety or
sureties, with fixed or open penalty, as the corporation may direct, to
indemnify the corporation (and
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its transfer agent and registrar, if any) against any claim that may be
made on account of the alleged loss, destruction or theft of the
certificate; and
(d) Other Requirements. Satisfies any other reasonable requirements
imposed by the corporation.
7.07 Transfer of Shares. Shares of stock and other securities of the
corporation shall be transferable in accordance with the provisions of
applicable law.
7.08 Registered Owner. The corporation may regard the person in whose name
any shares issued by the corporation are registered in the corporation's share
transfer records at any particular time as the owner of these shares at that
time for purposes of voting those shares, receiving distributions thereon or
notices in respect thereof, transferring those shares, exercising rights of
dissent with respect to those shares or for any other matters related to the
shares.
ARTICLE 8: INDEMNIFICATION
8.01 Indemnification. Subject to the articles of incorporation, the
corporation shall indemnify any officer or director to the fullest extent
permitted by law.
ARTICLE 9: GENERAL PROVISIONS
9.01 Distributions and Share Dividends.
(a) Declaration and Payment. Subject to statute and the articles of
incorporation,distributions and share dividends may be declared by the
board of directors at any regular special meeting, and paid by the
corporation.
(b) Record Date. The board of directors may fix in advance a record
date for the purpose of determining shareholders entitled to receive
payment of any dividend, the record date to be not more than sixty (60)
days prior to the payment date of such dividend,or the board of directors
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may close the stock transfer books for such purpose for a period of not
more than sixty (60) days prior to the payment date of such dividend. In
the absence of any action by the board of directors, the date upon which
the board of directors adopts the resolution declaring the dividend shall
be the record date.
9.02 Books and Records. The corporation shall keep correct and complete
books and records of account, shall keep minutes of the proceedings of its
shareholders and board of directors, and shall keep at its registered office or
principal place of business, or at the office of its transfer agent or
registrar, a record of its shareholders, giving the names and addresses of all
shareholders and the number and class of the shares held by each.
9.03 Checks and Notes. Checks, demands for money, and notes of the
corporation shall be signed by officer(s) or other person(s) designated from
time to time by the board of directors.
9.04 Year. The fiscal year of the corporation shall be fixed by resolution
of the board of directors.
9.05 Seal. The board of directors shall determine the type of seal which
may be necessary or appropriate for use by the corporation.
9.06 Resignation. A director, committee member, officer or agent may
resign by so stating at any meeting of the board of directors or by giving
written notice to the board of directors, the president or the secretary. The
resignation shall take effect at the time specified in the statement at the
board of directors meeting or in the written notice, or immediately if no time
is specified, but in no event may the effective time of such resignation be
prior to the time such statement is made or such notice is given. Unless it
specifies otherwise, a resignation shall be effective without being accepted.
9.07 Amendment of Bylaws.
(a) These bylaws may be altered, amended or repealed at any meeting
of the board of directors at which a quorum is present, by the affirmative
vote of a majority of the directors present at such meeting, provided
notice of
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the proposed alteration, amendment or repeal is contained in the notice of
the meeting.
(b) These bylaws may also be altered, amended or repealed at any
meeting of the shareholders at which a quorum is present or represented,
by the affirmative vote of the holders of a majority of the shares present
or represented at the meeting and entitled to vote thereat, provided
notice of the proposed alteration, amendment or repeal is contained in the
notice of the meeting.
9.08 Construction. Whenever the context so requires, the masculine shall
include the feminine and neuter, and the singular shall include the plural, and
conversely. If any portion of these bylaws shall be invalid or inoperative,
then, so far as is reasonable and possible:
(a) The remainder of these bylaws shall be considered valid and
operative, and
(b) Effect shall be given to the intent manifested by the portion
held invalid or inoperative.
The undersigned, as secretary of the corporation, hereby certifies that
the foregoing bylaws were adopted by the board of directors of the corporation
as of August 11th, 1995.
Robert J. Johnston
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Exhibit 3.94
ARTICLES OF INCORPORATION
Received
OF July 12, 1982
Secretary of State
DATA BOOK, INC.
I.
The name of the corporation is "Data Book, Inc."
II.
The corporation is organized pursuant to the provisions of the
Georgia Business Corporation Code.
III.
The corporation shall have perpetual duration.
IV.
The corporation is a corporation for profit and is organized to
publish, to market, to distribute, to sell and to transfer any type of
periodical or printed matter or documents and to engage in any lawful business
or activities related thereto; and to engage in any lawful act or activity for
which corporations may be organized under the Georgia Corporation Code.
V.
The corporation shall have authority, acting by its board of
directors, to issue not more than 400,000 shares of a common class having no par
value.
VI.
The corporation shall not commence business until it shall have
received consideration of not less than $500 in value for the
<PAGE>
issuance of its shares.
VII.
The shareholders of the corporation shall not have any pre-emptive
rights to acquire any unissued shares of the corporation.
VIII.
The address of the initial registered office of the corporation is
855 Loridan Circle, Atlanta, Fulton County, Georgia 30342, and the initial
registered agent of the corporation at such address is E. @lard lqight.
<PAGE>
IX.
The initial board of directors shall consist of three members, the name
and address of each of which are as follows:
(a) Ward Wight
Suite 2310, Tower Place
3340 Peachtree Road
Atlanta, Fulton County, Georgia 30327
(b) Donald Riccardi
565 Periwinkle Drive
Roswell, Fulton County, Georgia 30075
(C) E. Ward Wight
855 Loridan Circle
Atlanta, Fulton County, Georgia 30342
X.
The name and address of the incorporator is: George H. Connell, Jr.,
Attorney At Law, Suite C-4, 1401 W. Paces Ferry Road, Atlanta, Georgia 30327.
XI.
The Consent To Appointment As Registered Agent is attached hereto, marked
Exhibit "A", and by reference made a part hereof. The Certificate Of Name
Reservation is attached hereto, marked Exhibit "B", and by reference made a part
hereof.
XII.
The provisions of these Articles of Incorporation may be amended, altered,
or repealed from time to time to the extent and in the manner prescribed by the
Georgia Business Corporation Code and additional provisions authorized by
Georgia laws as are then in force and effect. All rights herein conferred to the
directors, officers and shareholders
<PAGE>
are granted subject to this reservation.
IN WITNESS WHEREOF, the undersigned incorporator has executed these
Articles of Incorporation.
This Ist day of July, 1982.
/s/ GEORGE H. CONNELL, JR.
--------------------------
GEORGE H. CONNELL, JR.
<PAGE>
Exhibit 3.95
B Y L A W S
of
DATA BOOK, INC.
I
ARTICLE I
Offices
Section 1. Registered Office. The initial registered office of the
Corporation shall be 855 Loridan Circle, Atlanta, Fulton County, Georgia; and
the name of the registered agent at this address is E. Ward Wight. The
registered office need not be identical with the principal office of the
Corporation and may be changed at any time by the Board of Directors.
Section 2. Other Offices. The Corporation may also have offices at such
other places both within and without the State of Georgia as the Board of
Directors may from time to time determine or the business of the Corporation may
require or make desirable.
ARTICLE II
Meetings of the Shareholders
Section 1. Annual Meetings. The annual meeting of the shareholders of the
Corporation shall be held at the registered office of the Corporation or at such
other place in the United States as may be determined by the Board of Directors,
on the second Tuesday in December of each year or at a time which is within four
(4) months after the close of any fiscal year if the notice of the meeting
designates it as an annual meeting, for the purpose of electing directors and
transacting such other business as may properly be brought before the meeting.
Section 2. Special Meetings. Special meetings of the shareholders shall be
held at the registered office of the Corporation or at such other place in the
United States as may be designated in the notice of said meetings, upon call of
the Chairman of the Board or of the President and shall be called by the
President or the Secretary when so directed by the Board of Directors or at the
request in writing of shareholders owning at least twenty-five percent (25%) of
the issued and outstanding capital shares of the Corporation entitled to vote.
Any such request shall state the purposes for which the meeting is to be called.
Section 3. Notice of Meetings. Written notice of every meeting and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called, shall be given by or at the direction of the Chairman of the Board,
President or the officers or persons calling the meeting personally or by mail
to each Shareholder of record entitled to vote at such date of the meeting. Such
notice shall be delivered not less than ten (10) nor more than fifty (50) days
before the date of such meeting. If mailed, such notice shall be deemed to be
delivered when
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deposited in the United States mail with first class postage thereof prepaid
addressed to the Shareholder at his address as it appears on the Corporation's
record of shareholders.
Section 4. Waiver of Notice. Attendance of a shareholder at a meeting of
shareholders, either in person or by proxy, shall constitute a waiver of notice
of such meeting and of all objections to the place or time of meeting, or the
manner in which it has been called or convened, except when a shareholder
attends a meeting solely for the purpose of stating, at the beginning of the
meeting, any such objection. Notice need not be given to any shareholder who
signs a waiver of notice, in person or by proxy, either before or after the
meeting; provided, however, that any waiver of notice of a meeting required with
respect to a plan of merger or a plan of consolidation shall only be effective
upon compliance with Section 22-604 (d) of the Georgia Business Corporation
Code.
Section 5. Quorum. The holders of a majority of the shares issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum for the transaction of business at all meetings
of the shareholders except as otherwise provided by statute, by the Articles of
Incorporation or elsewhere by these Bylaws. When a quorum is once present at a
meeting, it is not broken by the subsequent withdrawal of any of those present.
If a quorum is not present or represented at any meeting of the shareholders, a
majority of the shareholders entitled to vote, present in person or represented
by proxy, may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified. If the adjournment is for more than thirty (30) days, or if
after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each shareholder of record
entitled to vote at the meeting.
Section 6. Voting. When a quorum is present at any meeting, the vote of
the holders of a majority of the shares having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which, by express provision of law or of the
Articles of Incorporation or of these Bylaws, a different vote is required, in
which case such express provision shall govern and control the decision of the
question. Each shareholder shall at every meeting of the shareholders be
entitled to one vote in person or by proxy for each paid-up share of the capital
stock having voting power registered in his name on the books of the
Corporation, but no proxy shall be voted or acted upon after eleven (11) months
from its date, unless otherwise provided in the proxy.
Section 7. Consent of Shareholders. Any action required or permitted to be
taken at any meeting of the Shareholders may be taken without a meeting if all
of the shareholders consent thereto in writing, setting forth the action so
taken. Such consent shall have the same force and effect as a unanimous vote of
the shareholders; provided,
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however, that such consent with respect to the approval of a plan of merger or a
plan of consolidation shall be effective only upon compliance with the
requirements of Section 22-603(d) of the Georgia Business Corporation Code.
Section 8. List of Shareholders. The Corporation shall keep at its
registered office or principal place of business, or at the office of its
transfer agent or registrar, a record of its shareholders, giving their names
and the address of each. The officer who has charge of the stock transfer books
of the Corporation shall prepare and make, before every meeting of shareholders
or any adjournment thereof, a complete list of the shareholders entitled to vote
at the meeting or any adjournment thereof, arranged in alphabetical order, with
the address of and the number and class and series, if any, of shares held by
each. The list shall be produced and kept open at the time and place of the
meeting and shall be subject to inspection by any shareholder during the whole
time of the meeting for the purposes thereof. The said list may be the
Corporation's official record of shareholders if it is arranged in alphabetical
order or contains an alphabetical index.
ARTICLE III
Directors and Committees
Section 1. Powers. Except as otherwise provided by any legal agreement
among shareholders, the property, affairs and business of the Corporation shall
be managed and directed by its Board of Directors, which may exercise all powers
of the Corporation and do all lawful acts and things which are not by law, by
any legal agreement among shareholders, by the Articles of Incorporation or by
these Bylaws directed or required to be exercised or done by the shareholders.
Section 2. Number, Election and Terms. The number of directors which shall
constitute the whole Board shall be three (3). Subject to said limitation, the
number of directors may be increased or decreased from time to time by
resolution of the shareholders, but no decrease shall have the effect of
shortening the term of an incumbent director. The directors shall be elected by
plurality vote at the annual meeting of shareholders, except as hereinafter
provided, and each director elected shall hold office until his successor is
elected and qualified or until his earlier resignation, removal from office, or
death.
Section 3. Qualifications. Directors shall be natural persons who have
attained the age of twenty-one (21) years, but need not be residents of the
State of Georgia or shareholders of the Corporation.
Section 4. Vacancies. Vacancies, including vacancies resulting from any
increase in the number of directors, but not including vacancies resulting from
removal from office by the shareholders, may be filled by a majority of the
directors then in office, though less than a quorum, or by a sole remaining
director, and a director so chosen shall hold office until the next annual
election and until his successor is duly elected and qualified unless sooner
displaced. If there are no directors in office, then vacancies shall be filled
by election of the shareholders.
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Section 5. Committees. The Board of Directors may, by resolution passed by
a majority of the whole Board, designate from among its members one or more
committees, each committee to consist of two (2) of more directors. The Board
may designate one or more directors as alternate members of any committee, who
may replace any absent member at any meeting of such committee. Any such
committee, to the extent provided in the resolution, shall have and may exercise
all of the authority of the Board of Directors in the management of the business
and affairs of the Corporation, except that it shall have no authority with
respect to (1) amending the Articles of Corporation or these Bylaws; (2)
adapting a plan of merger or consolidation; (3) submitting to the shareholders
any action which requires approval of the shareholders under applicable law of
the Articles of Incorporation or Bylaws of this Corporation; (4) filling
vacancies in the Board or any committee; (5) declaring dividends or making
distributions to the shareholders; (6) selling, leasing, exchanging or otherwise
disposing of all or substantially all the property and assets of the
Corporation; and (7) a voluntary dissolution of the Corporation or a revocation
thereof. Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the Board of Directors.
Each committee and each member thereof shall serve at the pleasure of the Board,
and the designation of any such committee and the delegation thereto of
authority shall not relieve any director of any responsibility imposed by law.
So far as applicable, the provisions of these Bylaws relating to the conduct of
meetings of the Board shall govern meetings of the committees.
ARTICLE IV
Meetings of the Directors
Section 1. Meetings of Board and Committees. The Board of Directors shall
hold an annual meeting each year, without call, immediately after the annual
meeting of the shareholders. By resolution, the Board may establish a date or
dates on which regular meetings of the Board or any committee shall be held
between annual meetings. A committee of the Board may meet on the dates so
established or, if none, on the date set at its previously meeting or when
earlier called by its chairman or a majority of its members. Special meetings of
the Board may be called at any time by the Chairman of the Board, President or
by all or any two Directors.
Section 2. Place of Meetings. Meetings of the Board of Directors or
committees of the Board shall be held at any place either within or without the
State of Georgia that the Board may from time to time appoint by resolution or,
if no resolution is in force, at the principal place of business of the
Corporation, or at such other place as the annual meeting of shareholders shall
have been held immediately preceding such meeting, or at such other place as
shall have been designated in the notice of the meeting.
Section 3. Meetings by Conference Telephone or Similar Equipment. Members
of the Board of Directors or any committee designated by such Board may
participate in a meeting of such Board or committee by means
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of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other and participation
in a meeting pursuant to this Section shall constitute presence in person at the
meeting.
Section 4. Notice Requirements. Notice of annual and other regular
meetings of the Board of Directors or any committee need not be given. Notice
ofany special meeting, setting forth the place and the day and hour of the
meeting, shall be given to each director or committee member, as the case may
be, by oral, telegraphic or written notice served on each director or committee
member personally not less than two (2) days before the meeting, or by written
notice deposited in the United States mail, first class postage prepaid,
postmarked at least three (3) days prior to the date of the meeting. Neither the
business to be transacted at, nor the purpose of any regular or special meeting
need be specified in the notice or any waiver of notice.
Section 5. Waiver of Notice. Attendance of a director at a meeting of the
Board or any committee shall constitute a waiver of notice of such meeting and
waiver of all objections to the place and time of the meeting, or the manner in
which it has been called or convened, except when the director states, at the
beginning of the meeting, any such objection or objections to the transaction of
business. Whenever the Board or any committee of the Board is authorized to take
action only after notice to its members, the action may be taken with notice to
fewer than all such members if at any time prior to completion of the action?
the member or members not receiving such notice submits to the Board or
committee, as the case may be, a signed waiver of notice.
Section 6. Quorum. At all meetings of the Board or any committee of the
Board, a majority of members shall constitute a quorum for the transaction of
business, and the act of a majority of the members present at any meeting at
which there is a quorum shall be the act of the Board or of the committee, as
the case may be, except as may be otherwise specifically provided by law, by the
Articles of Incorporation, or by these Bylaws. Common or interested members may
be counted in determining the presence of a quorum at a meeting of the Board or
a committee, as the case may be, and a quorum is not broken by the subsequent
withdrawal of any of those present. If a quorum shall not be present at any
meeting of the Board or committee, the members present at such meeting may
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present.
Section 7. Presumption of Assent. A director who is present at a meeting
of the Board or any committee thereof, shall be presumed to have concurred in
any action taken at the meeting, unless his dissent to such action shall be
entered in the minutes of the meeting or unless he shall submit his written
dissent to the person acting as the secretary of the meeting before the
adjournment of the meeting or shall forward such dissent by registered or
certified mail to the Secretary of the Corporation within twenty-four (24) hours
after the adjournment of the meeting. Such right to dissent shall not apply to a
director or committee member who, being present at the meeting, failed to vote
against such action.
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Section 8. Action by Consent. Unless otherwise restricted by the Articles
of Incorporation or these Bylaws, any action required or permitted to be taken
at any meeting of the Board of Directors or of any committee thereof may be
taken without a meeting, if all members of the Board or the committee, as the
case may be, consent thereto in writing, setting forth the action so taken, alid
the writing or writings are filed with the minutes of the proceedings of the
Board or committee. Such consent shall have the same force and effect as a
unanimous vote of the Board or the committee, as the case may be.
Section 9. Removal of Directors. At any shareholders meeting with respect
to which notice of such purpose has been given, any director may be removed from
office, with or without cause, by the vote of shareholders representing a
majority of the issued and outstanding capital stock entitled to vote for the
election of directors, and his successor may be elected at the same or any
subsequent meeting of shareholders; provided that to the extent any vacancy
created by such removal is not filled by such an election within sixty (60) days
after such removal, the remaining directors shall, by majority vote, fill any
such vacancy.
Section 10. Compensation of Directors. Directors shall be entitled to such
reasonable compensation for their services as Directors or members of any
committee of the Board as shall be fixed from time to time by resolution adopted
by the Board, and shall also be entitled to reimbursements for any reasonable
expenses incurred in attending any meeting of the Board or any such committee.
ARTICLE V
Officers
Section 1. Designation. The officers of the Corporation shall be chosen by
the Board of Directors and shall be a President, a Vice President, a Secretary
and a Treasurer. The Board of Directors may also choose additional vice
Presidents, one or more Assistant Secretaries and Assistant Treasurers. Any
number of offices, except the offices of President and Secretary, may be held by
the same person. The Board of Directors may appoint such other officers and
agents as it shall deem necessary who shall hold their offices for such time and
shall exercise such powers and perform such duties as shall be determined from
time to time by the Board. Election or appointment of an officer shall not of
itself create contract rights.
Section 2. Qualifications. Officers shall be natural persons who have
attained the age of twenty-one (21) years, but need not be residents of the
State of Georgia or shareholders of the Corporation.
Section 3. Compensation. The salaries of all officers of the Corporation
shall be fixed by the Board or Directors or a committee or officer appointed by
the Board. Salary payments made to an officer of the Corporation that shall be
disallowed in whole or in part as a deductible expense by the Corporation for
federal income tax purposes shall be reimbursed by such officer to the
Corporation to the full extent of the disallowance. It shall be the duty of the
Board of Directors to enforce payment of each such amount disallowed.
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Section 4. Term of Office. Unless otherwise provided by resolution of the
Board of Directors, the principal officers shall be chosen annually by the Board
at the first meeting of the Board following the annual meeting of shareholders
of the Corporation, or as soon thereafter as is conveniently possible.
Subordinate officers may be elected from time to time. Each officer shall serve
until expiration of the term for which he was elected or until his successor
shall have been chosen and qualified, or until his death, resignation or
removal.
Section 5. Removal. Any officer may be removed from office at any time,
with or without cause, by action of the Board of Directors whenever in its
judgment the best interest of the Corporation will be served thereby.
Section 6. Vacancies. Any vacancy in an office resulting from any cause
may be filled by the Board of Directors.
Section 7. Powers and Duties. Except as hereinafter provided, the officers
of the Corporationn shall each have such authority and perform such duties in
the management of the Corporation as usually appertain to such officers of
corporation for profit, except as may be otherwise prescribed by the Board of
Directors.
Section 8. Chairman of the Board of Directors. The Chairman of the Board
of Directors shall preside at meetings of the Board. Except when by law the
signature of the President is required, the Chairman shall possess the same
power as the President to sign all certificates, contracts and other instruments
of the Corporation which may be authorized by the Board of Directors. During the
absence or disability of the President, he shall exercise all the powers and
discharge all the duties of the President.
Section 9. President. The President of the Corporation shall be the
corporation's chief executive officer and shall exercise general supervision and
control over all the business and affairs of the Corporation. The President
shall have the following specific powers and duties:
(i) To preside at all meetings of the shareholders;
(ii) To have general and active management of the business of the Corporation;
(iii) To see that all orders and resolutions of the Board of Directors are
carried into effect;
(iv) To execute notes, drafts, bonds, mortgages, deeds or trust, security
deeds, contracts and other documents under the seal of the corporation;
(v) To appoint, discharge, and fix compensation of all employees and agents
of the Corporation other than officers duly elected or appointed by the
Board of Directors;
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(vi) To have general superintendence and direction of all the other officers
of the Corporation and of the agents and employees thereof and to see
that their respective duties are properly performed;
(vii) To operate and conduct the business and affairs of the Corporation
according to the orders and resolutions of the Board of Directors, and
according to his own discretion whenever and wherever it is not expressly
limited by such orders and resolutions;
(viii) To submit at each annual meeting of shareholders and directors a report
of the operations of the Corporation and from time to time to report to
the directors all matters within his knowledge that should be brought to
their attention in the best interests of the Corporation; and
(ix) To sign certificates of stock and to have such other powers, duties, and
authority as may be set forth elsewhere in these Bylaws and as may be
prescribed by the Board of Directors from time to time.
Section 10. Vice President. Each Vice President shall have the authority
and duties, and shall perform the functions, consonant with his department and
area of interest, specified by the Board of Directors. In case of the inability
or refusal of the President to act on account of absence, illness, or for any
other reason, his power shall be assumed and his duties discharged during the
period of such inability or refusal to act by the President, or in the event of
his inability or refusal to act, by the seniormost Vice President available, and
the acts of such officer duly authorized and performed under such conditions
shall be the acts of and binding on the Corporation. If a Vice President who has
temporarily assumed the duties of the President is unable for any reason to
continue to perform such duties, the same shall be performed by the Vice
President next in seniority who is available for the purpose. A Vice President
who acts as President under this Bylaw shall report fully to the Board of
Directors and to the President on his return to duty with respect to all actions
taken and transactions accomplished by him during the absence or disability of
the President. The order of seniority of Vice Presidents shall be designated by
the Board of Directors, or in the absence of any such designation, then
according to their respective dates of election, with the Vice President of
longest uninterrupted incumbency having the most seniority.
Section 11. Secretary. The Secretary of the Corporation shall be the
custodian of and shall maintain the corporate books and records and shall be the
recorder of the Corporation's formal actions and transactions. The Secretary
shall have the following specific powers and duties:
(i) To attend all meetings of the Board of Directors and all meetings of the
shareholders, and to record all proceedings of such meetings in a book to
be kept for that purpose and shall perform like duties for any committees
when required;
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(ii) To give or cause to be given notice of all meetings of shareholders and
special meetings of the Board of Directors and any meetings of committees
required by law, the Articles of Incorporation, or these Bylaws;
(iii) To keep the corporate seal of the Corporation and affix it to all papers
and documents requiring said seal, and to attest by his signature all
corporate documents requiring same; provided, however, the Board of Direc-
tors may give general authority to any other officer to affix the seal of
the Corporation and to attest the affixing thereof by his signature;
(iv) To keep at the principal office of the Corporation record books showing
the details required by law with respect to stock certificates of the
Corporation, including ledgers and transfer books showing all shares
issued and transferred, and the date of each issuance and transfer; and
also all other books of the Corporation excepting books of account;
(v) To keep at the principal office, open for inspection by shareholders at
all reasonable times, the original or a certified copy of the Bylaws of
the Corporation, as amended or other side altered to date;
(vi) To attend to such correspondence and to make reports as may be assigned to
him; and
(vii) To have such other powers, duties and authorities as may be set forth
elsewhere in these Bylaws and as may be prescribed by the President or the
Board of Directors from time to time.
Section 12. Treasurer. The Treasurer of the Corporation shall be its chief
fiscal officer and the custodian of its funds, securities and properties. The
Treasurer shall have the following specific powers and duties:
(i) To keep full and accurate accounts of receipts and disbursements in books
belonging to the Corporation and to deposit all monies and other valuable
effects in the name and to the credit of the Corporation in such
depositories as may be designated by the Board of Directors;
(ii) To disburse the funds of the Corporation for proper expenses and dividends
and, as may be ordered by the Board of Directors, taking proper vouchers
for such disbursements;
(iii) To render to the President and the Board of Directors, at its regular
meetings, or when they so require, an account of his transactions as
Treasurer and financial statements in form satisfactory to them of the
condition of the Corporation;
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(iv) To maintain accurate lists and descriptions of all capital assets of the
Corporation, including land, buildings and plants;
(v) To oversee the proper drafting of all checks, drafts, notes and orders for
the payment of money as required in the business of the Corporation and to
see that all such instruments are properly executed; and
(vi) To have such other powers, duties and authority as may be set forth
elsewhere in these Bylaws and as may be prescribed by the President or the
Board of Directors from time to time.
If required by the Board of Directors, the Treasurer shall give the
Corporation a bond (which shall be renewed every six [6] years) in such sum and
with such surety or sureites as shall be satisfactory to the Board of Directors
for the faithful performance of the duties of his office and for the restoration
to the Corporation, in case of his death, resignation, retirement or removal
from office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
Corporation.
Section 13. Voting Securities of the. Unless other-wise ordered by the
Board of Directors, the President shall have full power and authority on behalf
of the Corporation to attend and to act and vote at any meetings of security
holders of corporations in which the Corporation may hold securities, and at
such meetings shall possess and may exercise any and all rights and powers
incident to the ownership of such securities which the Corporation might have
possessed and exercised if it had been present. The Board of Directors by
resolution from time to time may confer like powers upon any other officer or
person.
ARTICLE VI
Loans
Section 1. Restrictions on Loans. No loans shall be contracted on behalf
of the Corporation and no indebtedness shall be issued or incurred in its name
unless authorized by a resolution of the Board of Directors. Such resolution may
grant general authority or may be confined to specific instances.
ARTICLE VII
Certification of Stock
Section 1. Form of Certificate. The shares of the Corporation shall be
represented by certificates signed by the President or a Vice President and
attested by the Secretary or an Assistant Secretary. Every holder of a fully
paid share of stock in the Corporation shall be entitled to have a certificate
in such form as the Board of Directors may from time to time prescribe.
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Section 2. Lost Certificates. The Board of Directors may direct that a new
certificate be issued in place of any certificate theretofore issued by the
Corporation and alleged to have been lost, stolen or destroyed, upon the making
of an affidavit of that fact by the person claiming the certificate of stock to
be lost, stolen or destroyed. When authorizing such issue of a new certificate,
the Board of Directors may, in its discretion and as a condition precedent to
the issuance thereof? require the owner of such lost, stolen, or destroyed
certificate, or his legal representative, to advertise the same in such manner
as it shall require and/or to give the Corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the Corporation
with respect to the certificate alleged to have been lost, stolen or destroyed.
Section 3. Transfers. (a) Transfers of shares of the capital stock of the
Corporation shall be made only on the books of the Corporation by the registered
holder thereof, or by his duly authorized attorney, or with a transfer clerk or
transfer agent appointed as provided in Section 5 of this Article, and on
surrender of the certificate or certificates for such shares properly endorsed
and the payment of all taxes thereon.
(b) The Corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends, to vote as such owner, and for all other purposes, and shall not be
bound to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by law.
(C) Shares of capital stock may be transferred by delivery of the
certificates therefor, accompanied either by any assignment in writing on the
back of the certificates or by separate written power of attorney to sell,
assign and transfer the same, signed by the record holder thereof, or by his
duly authorized attorney-in-fact, but no transfer shall affect the right of the
Corporation to pay any dividend upon the stock to the holder of record as holder
in fact thereof for all purposes, and no transfer shall be valid, except between
the parties thereto, until such transfer shall have been made upon the books of
the Corporation as herein provided.
(d) The Board may, from time to time, make such additional rules and
regulations as it may deem expedient, not inconsistent with these Bylaws or the
Articles of Incorporation, concerning the issue, transfer, and registration of
certificates for shares of the capital stock of the Corporation.
Section 4. Record Date. In order that the Corporation may determine the
share holders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect to any change, conversion or exchange of shares or for the purpose of
any other lawful action, the Board of Directors may fix, in advance, a record
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date, which shall not be more than thirty (30) days and, in the case of a
meeting of shareholders, not less than ten (10) days prior to the ate on which
the particular action requiring such determination of share holders is to be
taken. If no record date is fixed for the determination of shareholders entitled
to notice of and to vote at any meeting of shareholders, the record date shall
be at the close of business on the day next preceding the day on which' the
notice is given, or, if notice is waived, at the close of business on the day
next preceding the day on which the meeting is held. A determination of
shareholders of record entitled to notice of or to vote at a meeting of
shareholders shall apply to any adjournment of the meeting unless the Board of
Directors shall fix a nea record date for the adjourned meeting.
Section 5. Transfer Agent and Registrar. The Board of Directors may
appoint one or more transfer agents or one or more transfer clerks and one or
more registrars, and may require all certificates of stock to bear the signature
or signatures of any of them.
ARTICLE VIII
Indemnification
Section 1. General. The Corporation may indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
contemplated 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, partnership, joint
venture, trust 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 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. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in a manner which 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
reasonable cause to believe that his conduct was unlawful.
Section 2. Derivative Actions. The Corporation may indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or contemplated action or suit by or in the right of the Corporation to
procure a judgment in its favor 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, partnership, joint venture, trust or other enterprise
against expenses (including attorneys fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if he
acted
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<PAGE>
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation and except that no indemnification shall
be made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable for negligence or misconduct in the performance
of his duty to the Corporation 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, such person is fairly and reasonably entitled to indemnity for such
expenses which the court shall deem proper.
Section 3. Successful Defense. To the extent that a director, officer,
employee or agent of the Corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in Sections 1
or 2 above, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys fees) actually and reasonably
incurred by him in connection therewith.
Section 4. Authorization. Any indemnification under Sections I or 2 above,
(unless ordered by a court) shall be made by the Corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent proper in the circumstances because he has met the
applicable standard of conduct set forth in Sections 1 or 2 above. Such
determination shall be made: (a) By the Board of Directors by a majority vote of
a quorum consisting of directors who were not parties to such action, suit or
proceeding, or (b) if such a quorum is not obtainable, or even if obtainable, if
a quorum of disinterested directors so directs by independent legal counsel in a
written opinion, or by the affirmative vote of a majority of the shares entitled
to vote thereon.
Section 5. Expenses in Advance of Disposition. Expenses incurred in
defending a civil or criminal action, suit or proceeding may be paid by the
Corporation in advance of the final disposition of such action, suit or
proceeding as authorized in the specific case upon receipt of an undertaking by
or on behalf of the director, officer, employee or agent to repay such amount
unless it shall ultimately be determined that he is entitled to be indemnified
by the Corporation as authorized in this Article.
Section 6. Non-Exclusive Remedy. The indemnification provided for
hereunder shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any Bylaw or resolution approved
by the affirmative vote of the holders of a majority of the shares entitled to
vote thereon taken at a meeting, the notice of which specified that such Bylaw
or resolution would be placed before the Shareholders, both as to action by a
director, officer, employee or agent in his official capacity and as to action
in another capacity while holding such office or position, and shall continue as
to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of such a
person.
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<PAGE>
Section 7. Insurance. The Corporation may purchase and maintain insurance
on behalf of any person who 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, office, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in and such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of this Article.
Section 8. Notice. If any expenses or other amounts are paid by way of
indemnification, otherwise than by court order or action by the shareholders or
by an insurance carrier pursuant to insurance maintained by the Corporation, the
Corporation shall, not later than the next annual meeting of shareholders,
unless such meeting is held within three (3) months from the date of such
payment and, in any event, within fifteen (15) months from the date of such
payment, send by first class mail to its shareholders of record at the time
entitled to vote for the election of directors, a statement specifying the
persons paid, the amounts paid, and the nature and status at the time of such
payment of the litigation or threatened litigation.
Section 9. Definition of Corporation. For purposes of this Article,
references to "the Corporation" shall include, in addition to the surviving or
new corporation, any merging or consolidating corporation (including any merging
or consolidating corporation of a merging or consolidating corporation) absorbed
in a merger or consolidation so that any person who is or was a director, office
, employee or agent of such merging or consolidating corporation, or is or was
serving at the request of such merging or consolidating corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same position under the
provisions of this Article with respect to the resulting or surviving
corporation as he would if he had served the resulting or surviving corporation
in the same capacity; provided that no indemnification under Sections I and 2 of
this Article permitted by this Section shall be mandatory under this Section or
any Bylaw of the surviving or new corporation without the approval of such
indemnification by the Board of Directors or shareholders of the surviving or
new corporation, in the manner provided in Subsections (a) and (b) of Section 4
of this Article.
ARTICLE IX
General Provisions
Section 1. Dividends. Dividends upon the capital stock of the Corporation,
subject to the provisions of the Articles of Incorporation, may be declared by
the Board of Directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property, or in shares of the Corporation's
capital stock, subject to the provisions of the Articles of Incorporation.
Before payment of any dividend, there may be set aside out of any funds of the
Corporation available for dividends such sum or sums as the directors from time
to time, in their absolute discretion, think proper as a reserve or
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<PAGE>
reserves to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation, or for such other purpose as the
directors shall think conducive to the interest of the Corporation, and the
directors may modify or abolish any such reserve in the manner in which it was
created.
Section 2. Fiscal Year. The fiscal year of the Corporation shall be fixed
by resolution of the Board of Directors.
Section 3. Seal. The corporate seal shall have inscribed thereon the name
of the Corporation and the words "Corporate Seal". The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or reproduced or
otherwise. In the event it is inconvenient to use such a Seal at any time, the
signature of the President of the Corporation followed by the word "Seal",
enclosed in parentheses, shall be deemed the seal of the Corporation.
Section 4. Annual Statements. No later than four (4) months prior to the
next annual meeting of shareholders, the Corporation shall prepare;
(a) A balance sheet showing in reasonable detail the financial condition
of the Corporation as of the close of its immediately preceding fiscal year, and
(b) A profit and loss statement showing the results of its operations
during the preceding fiscal year.
Upon written request, the Corporation shall promptly mail to any shareholder of
record a copy of the most recent such balance sheet and profit and loss
statement.
ARTICLE X
Amendments And New Bylaws
The Board of Directors shall have the power to alter, amend or repeal the
Bylaws or adopt new Bylaws by majority vote of all of the directors, but any
Bylaws adopted by the Board of Directors may be altered, amended or repealed and
new Bylaws adopted by the shareholders by majority vote of all of the shares
having voting power.
ADOPTED this 1st day of July, 1982.
SECRETARY
[CORPORATE SEAL]
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<PAGE>
Ward Wight
E. Ward Wight
Donald M. Riccardi
Constituting all of the Directos
of Data Book, Inc.
<PAGE>
Exhibit 3.96
CERTIFICATE OF MERGER
of
EXCELLENCE IN TRAINING CORPORATION
(in Iowa corporation)
with and into
PROFESSIONAL SECURITY TELEVISION NETWORK, INC.
(a Delaware Corporation)
Pursuant to the provisions of Section 252 of the Delaware General
Corporation Law (the I DGCLII) , and Section 490. 1101 of the Iowa Business
Corporation Act, Professional Security Television Network, Inc., a Delaware
corporation ("PSTNII), and Excellence in Training Corporation, an Iowa
corporation ("ETC") do hereby adopt the following Certificate of Mcqcr for the
purpose of merging ETC with and into PSTN:
1. The name and state of incorporation of each of the constituent
corporations are:
NAME OF STATE OF
CORPORATION INCORPORATION
Professional Security
Television Network, Inc. Delaware
Excellence in Training
Corporation Iowa
2. An agreement of merger (the "Merger Agreement") has been approved, adopted
certified, executed and acknowledged by each of the constituent corporations in
accordance with the provisions of Section 252 of the DGCL providing for the
combination of ETC and PSTN and resulting in PSTN being the surviving
corporation.
3. The name of the surviving corporation shall be Professional S@ty Television
Network, Inc.
4. The Certificate of Incorporation of PSTN shall be the Certificate of
Incorporation of the surviving corporation,
<PAGE>
which is hereby amended as follows:
A. The Title of the Certificate of Incorporation is hereby amended in its
entirety to read as follows:
Certificate of Incorporation
Of
Excellence in Training Corporation
B. The first article of the Certificate of Incorporation is hereby amended
in its entirety to read as follows:
FIRST: The name of the Corporation is Excellence in Training Corporation.
STATE OF DELAWARE
SECRETARY OF STATE
OF CORPORATIONS
FILED 12:30 PM 12/12/1990
903465321 - 2249188
CERTIFICATE OF INCORPORATION
OF
PROFESSIONAL SECURITY TELEVISION NETWORK INC.
I, the undersigned natural person acting as an incorporator of a corporation
(hereinafter called the "Corporation") under the General Corporation Law of the
State of Delaware, do hereby adopt the following Certificate of Incorporation
for the Corporation;
FIRST: The name of the Corporation is Professional security Television Network,
Inc.
SECOND: Trio registered office of the Corporation in the state of Delaware is
located at Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, county of New Cattle, The name of registered agent of the
Corporation at such address in The Corporation Trust Company.
THIRD: The purpose for which the corporation is organized is to engage in in any
and all lawful acts and activity for which corporations may be organized under
the General Corporation Law of Delaware. The Corporation will
<PAGE>
have perpetual existence
FOURTH: The total number of shares of Stock which the Corporation shall have
authority to issue in $1,000 shares, par value $.0l per share, designated Common
Stock.
FIFTH: The name of the incorporator of the Corporation is Annette Beebe, and the
mailing address of such incorporator is Founders Square, Suite 100, 900 Jackson
Street, Dallas, Texas 75202-4499.
SIXTH: The number of directors constituting the initial board of directors is
one, and the name and mailing address of the person who is to serve as director
until the first annual meeting of stockholders or until his successor is elected
and qualified are Carl Wastcott, 1303 Marsh Lane, Carrollton, Texas 75006.
SEVENTH: Directors of the Corporation need not he elected by written
<PAGE>
disposition Co the maximum extent permitted under the Delaware General
Corporation Law, as the same exists or may hereafter be amended. if a claim for
indemnification or advancement of expenses hereunder is not paid in full by the
Corporation within sixty (60) days after a written claim has been received by
the Corporation, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim, and if successful in
whole or in part, the claimant shall also be entitled to be paid the expenses of
prosecuting such claim. It shall be a defense to any such action that such
indemnification or advancement of costs of defense are not permitted under the
Delaware Moral Corporation Law, but the burden of proving such defense shall be
on the Corporation. Neither the failure of the Corporation (including its board
of directors or any committee thereof, independent legal counsel, or
stockholders) to have made its determination prior to the commencement of such
action that indemnification of, or advancement of costs of defense to, the
claimant in permissible in the circumstances nor an actual determination by the
Corporation (including its board of directors or any committee thereof,
independent legal counsel, or stockholders) that such indemnification or
advancement is not permissible shall be a defense to the action or create a
presumption that such indemnification or advancement is not permissible. In the
event of the death of any person having a right of indemnification under the
foregoing provisions, such right shall inure to the benefit of his or her heirs,
executors, administrators, and personal representatives. The rights conferred
above shall not be exclusive of any other right which any person may have or
hereafter acquire under any statute, by, air, resolution of stockholders or
directors, agreement, or otherwise.
The Corporation may additionally indemnify any employee or agent of the
Corporation to the fullest extent permitted by law.
As used herein, the term "proceeding" means any threatened, pending, or
completed action,
<PAGE>
suit, or proceeding, whether civil, criminal, administrative, arbitrative, or
investigative any appeal in such an action, suit, or proceeding, and any inquiry
or investigation that could lead to such an action, suit, or proceeding.
ELEVENTH: A director of the corporation shall not he personally liable to
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the directors
duty of loyalty to
<PAGE>
ballot unless the by-laws of the Corporation otherwise provide.
EIGHT: The directors of the Corporation shall have the power to adopt, amend,
and repeal the by-laws of the Corporation.
NINTH: No contract or transaction between the Corporation and one or more of its
directors, officers, or stockholders or between the Corporation and any person
(as used herein "person"
<PAGE>
means other corporation, partnership, association, firm, trust, joint venture,
political subdivision, or instrumentality) or other organization in which one or
more of its directors, officers, or stockholders are directors, officers, or
stockholders, or have a financial interest shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the board or committee which authorizes the
contract or transaction, or solely because his, her, or their votes are counted
for such purpose, if: (I) the material facts as to his or her relationship or
interest and an to the contract or transaction are disclosed or are known to the
board of directors or the committee, and the board of directors or committee in
good faith authorizes the contract or transaction by the affirmative votes of a
majority of the disinterested directors, even though the disinterested directors
be less than a quorum; or (ii) the material facts as to his or her relationship
or interest and as to the contract or transaction are disclosed or are )known to
the stockholders entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by vote of the stockholders or (iii) the
contract or transaction is fair an to the Corporation as of the time it is
authorized, approved, or satified by the board of directors, a committee
thereof, or the stockholders. Common or interested directors may be counted in
determining the presence of a quorm at a meeting of the board of directors or of
a Committee which authorizes the contract or transaction.
TENTH. The corporation shall indemnify any person who was, is, or is
threatened to be made a party to a proceeding (as hereinafter defined) by
reason of the f act that he or she (I) is or wax a director or officer of the
corporation or (ii) while a director or officer of the Corporation, is or was
serving at the request of the Corporation as a director, officer, partner,
venturer, proprietor trustee, employee, agent, or similar functionary of another
foreign or domestic corporation, partnership joint ventures, sole
proprietorship, trust, employee benefit plan, or other enterprise, to the
fullest extent permitted under the Delaware General Corporation Law, as the same
exists or may hereafter be amended. such right shall be a contract right and as
such shall run to the benefit of any director or officer who is elected and
accepts the position of director or officer of the corporation or elect to
continue to serve an a director or officer of the Corporation while this Article
Tenth is in affect. Any repeal or amendment of this Article Tenth shall be
prospective only and shall not limit the rights of any such director or officer
or the obligations of the
<PAGE>
Corporation with respect to any claim arising from or related to the
services of such director or officer in any of the foregoing capacities prior to
any such repeal or amendment to this Article Tenth. such right shall include the
right to be paid by the Corporation Kansas incurred in defending any such
proceeding in advance of its final
2
<PAGE>
the Corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or knowing violation of law, (iii)
under section 174 of the Delaware General Corporation Law, or (iv) for any
transaction from which the director derived an improper personal benefit. Any
repeal or amendment of this Article Eleventh by the
3
<PAGE>
stockholders of the Corporation shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director of the
Corporation rising from an act or emission occurring prior to the title of such
repeal or amendment. In addition to the circumstances in which a director of the
corporation is not personally liable as met forth in the foregoing provisions of
this Article Eleventh, a director shall not be liable to the Corporation or its
stockholders to such further extent an permitted by any law hereafter enacted,
including without limitation any subsequent amendment to the Delaware General
Corporation Law.
TWELFTH: The Corporation expressly elect not to be governed by Section 203
of the General Corporation Law of Delaware.
I, the undersigned, for the purpose of forming the Corporation under the
laws of the State of Delaware, do make, file, and record this certificate of
incorporation and do certify that this is my act and dead and that the facts
stated herein are true and, accordingly, I do hereunto set my hand on this 11th
day of December, 1990.
Annette Beebe, Incorporator
4
<PAGE>
State of Delaware PAGE 1
Office of the Secretary of State
I, WILLIAM T. QUILLEN, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
MERGER, WHICH MERGES:
"EXCELLENCE IN TRAINING CORPORATION", A IOWA CORPORATION,
WITH AND INTO "PROFESSIONAL SECURITY TELEVISION NETWORK, INC." UNDER THE
NAME OF "EXCELLENCE IN TRAINING CORPORATION, A CORPORATION ORGANIZED AND
EXISTING UNDER THE LAWS OF THE STATE OF DELAWARE, AS RECEIVED AND FILED IN THIS
OFFICE THE THIRTY-FIRST DAY OF MARCH, A.D. 1994, AT:4:30 O'CLOCK P.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS FOR RECORDING.
<PAGE>
William T. Quillen, Secretary of State
2249188 8100M AUTHENTICATION: 7076648
944055212 DATE: 04-04-94
<PAGE>
The Merger Agreement is on file at the principal place of business of
the surviving corporation at 11359 Aurora Avenue, Des Moines, Iowa 50322. Copies
of the Merger Agreement will be furnished by the surviving corporation, on
request and without cost, to any stockholder of any constituent corporation.
6. The authorized shares of capital stock of each of the constituten
corporations are as follows:
CONSTITUENT
CORPORATION DESIGNATION SHARES
AUTHORIZED
PSTN Common Stock, l, 000
$.01 par value
ETC v
2,DW,DM
Type A, no par value
Voting Common Stock,
1,000,000
Type B, no par value
Voting Preferred Stock,
1,000,000
$l.00 par value per time
Non-Voting No Cumulative
Convertible Preferred Stock, $1.00
par value per share
Callable Preferred Stock,
1,000,000
$1.00 par value per share
IN WITNESS WHEREOF, the undersigned has executed this Certificate of Merger
as of the 1st day of March, 1994.
PROFESSIONAL SECURITY TELEVISION
NETWORK, INC.
<PAGE>
By:
Jack T. Smith, President
Attest:
Phyllis Farragut, Secretary
2
<PAGE>
Exhibit 3.97
BYLAWS
OF
PROFESSIONAL SECURITY TELEVISION NETWORK INC.
ARTICLE 1: OFFICES
1.01. Registered Office and Agent. The registered office and registered
agent of the corporation shall be as designated from time to time by the
appropriate filing by the corporation in the office of the Secretary of State of
the State of Delaware.
1.02. Other Offices. The corporation may also have offices at other places
in or out of the State of Delaware as the board of directors may determine or as
the business of the corporation may require.
ARTICLE 2: STOCKHOLDERS
2.01. Place of Meetings. Meetings of stockholders shall be held at the
time and place, in or out of the State of Delaware, as stated in any notice of a
meeting or in a waiver of such notice.
2.02. Annual Meetings. Annual meetings of the stockholders shall be held
at a time, day and month to be selected by the corporation's board of directors.
At an annual meeting, the stockholders shall elect directors and transact such
other business as may properly be brought before the meeting.
2.03. Voting List. At least ten (10) days before each meeting of
stockholders, a complete list of stockholders entitled to vote at the meeting,
arranged in alphabetical order, with the address of each and the number of
voting stock held by each, shall be prepared by the officer or agent having
charge of the stock transfer books. The list, for a period of ten (10) days
prior to the meeting, shall be kept on file at the registered office or
principal place of business of the corporation and shall be subject to
inspection by any stockholder at any time during usual business hours. The list
shall also be produced and kept open at the time and place of the meeting, and
shall be subject to the inspection of any stockholder during the whole time of
the meeting.
<PAGE>
2.04. Special Meetings. Special meetings of the stockholders, unless
otherwise prescribed by statute, the certificate of incorporation, or these
bylaws, may be called by the president, the board of directors, or the holders
of not less than the percentage of all the capital stock entitled to vote at the
meeting as required by law to call such a meeting. Business transacted at a
special meeting shall be confined to the purpose or purposes stated in the
notice of such meeting.
2.05. Notice of Meetings. Written or printed notice stating the place, day
and hour of a meeting and, in case of a special meeting, the purpose or purposes
for which such meeting is called, shall be delivered not less than ten (10) nor
more than sixty (60) days before the date of the meeting, either personally or
by mail, by or at the direction of the president, the secretary, or the officer
or person calling the meeting, to each stockholder entitled to vote at the
meeting. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail addressed to the stockholder at his address as it
appears on the stock transfer records of the corporation, with postage thereon
prepaid.
2.06. Quorum. Unless otherwise provided for in the certificate of
incorporation, the holders of a majority of the capital stock issued and
outstanding and entitled to vote at a meeting of the stockholders, present in
person or represented by proxy, shall be the requisite number of such
stockholders and shall constitute a quorum for the transaction of business.
Unless otherwise provided in the certificate of incorporation or these bylaws,
once a quorum is present at a meeting of stockholders, the stockholders
represented in person or by proxy at the meeting may conduct such business as
may be properly brought before the meeting until it is adjourned, and the
subsequent withdrawal from the meeting of any stockholder or the refusal of any
stockholder represented in person or by proxy to vote shall not affect the
presence of a quorum at the meeting. Unless otherwise provided in the
certificate of incorporation or these bylaws, the stockholders represented in
person or by proxy at a meeting of stockholders at which a quorum is not present
may adjourn such meeting until such time and to such place as may be determined
by a vote of the holders of a majority of the capital stock represented in
person or by proxy at such meeting.
2
<PAGE>
2.07. Vote Required. With respect to any matter, other than the election
of directors or a matter for which the affirmative vote of the holders of a
specified portion of the capital stock entitled to vote is required by statute,
the affirmative vote of the holders of a majority of the capital stock entitled
to vote on any such matter and represented in person or by proxy at a meeting of
stockholders at which a quorum is present shall be the act of the stockholders.
2.08 Method of Voting. Except as otherwise provided in the certificate of
incorporation, each outstanding share, regardless of class, shall be entitled to
one vote on each matter submitted to a vote at a meeting of stockholders. At any
meeting of the stockholders, any stockholder having the right to vote may vote
either in person or by proxy executed in writing by the stockholder. A telegram,
telex cablegram, or similar transmission by the stockholder, or a photographic,
photostatic, facsimile, or similar reproduction of a writing executed by the
stockholder, shall be treated as an execution in writing. No proxy shall be
valid after eleven (11) months from the date of its execution, unless otherwise
provided in such proxy. Each proxy shall be revocable unless the proxy form
conspicuously states that the proxy is irrevocable and the proxy is coupled with
an interest as provided by applicable law. Each proxy shall be filed with the
secretary of the corporation prior to or at the time of the meeting. Voting for
directors shall be in accordance with Section 3.06 of these bylaws. Any vote may
be taken by voice or by show of hands unless someone entitled to vote objects,
in which case written ballots shall be used.
2.09 Record Date, Closing Transfer Books. The board of directors may fix
in advance a record date for the purpose of determining stockholders entitled to
notice of, or to vote at, a meeting of the stockholders or any reconvening
thereof, or entitled to receive a distribution by the corporation or a share
dividend, or in order to make a determination of stockholders for any other
proper purpose, the record date to be not less than ten (10) nor more than sixty
(60) days prior to the meeting; or the board of directors may close the stock
transfer records for such purpose for a period of not less than ten (10) nor
more than sixty (60) days prior to such meeting. In the absence of any action by
the board of directors, the date upon which the notice of the meeting is mailed,
or the date on which the resolution of
3
<PAGE>
the board of directors declaring such distribution or share dividend is
declared, shall be the record date.
2.10 Order of Business at Meetings. The order of business at all meetings
of stockholders shall be as determined by the chairman of the meeting, but the
order of business to be followed at any meeting, other than a special meeting,
at which a quorum is present may be changed by a majority of the votes cast at
such meeting by the stockholders present in person or represented by proxy and
entitled to vote at the meeting. With respect to special meetings, only business
within the purpose or purposes described in the notice of the special meeting
may be conducted at a special meeting of the stockholders.
ARTICLE 3: DIRECTORS
3.01 Management. The business and affairs of the corporation shall be
managed under the direction of the board of directors who may exercise all such
powers of the corporation and do all such lawful acts and things as are not (by
statute or by the certificate of incorporation or by these bylaws) directed or
required to be exercised or done by the stockholders.
3.02 Number: Qualification: Election: Term. The board of directors shall
consist of not less than one (1) nor more than five (5) directors, and within
that maximum and minimum shall be such number as shall be from time to time
specified by resolution of the board of directors; provided, however, no
director's term shall be shortened by reason of a resolution reducing the number
of directors; and further provided that the number of directors constituting the
initial board of directors shall be as provided in the certificate of
incorporation and shall remain at such number unless and until changed by
resolution of the board of directors. The directors shall be elected at the
annual meeting of the stockholders, except as provided in Sections 3.03 and 3.05
hereof. Each director elected shall hold office until his successor shall be
elected and shall qualify.
3.03 Change in Number. The number of directors may be increased or
decreased from time to time by amendment to these bylaws but no decrease shall
have the effect of shortening the term of any incumbent director. Any
directorship to be filled by
4
<PAGE>
reason of an increase in the number of directors may be filled by the board of
directors for a term of office continuing only until the election of one or more
directors by the stockholders or may be filled by election at an annual meeting
or at a special meeting of stockholders called for that purpose; provided,
however, the board of directors may fill no more than two such directorships
during the period between any two annual meetings of stockholders.
Notwithstanding the provisions of this Section 3.03 to the contrary, whenever
the holders of any class or series of capital stock are entitled to elect one or
more directors by the provisions of the certificate of incorporation, any
vacancies in such directorships and any newly created directorships of such
class or series to be filled by reason of an increase in the number of such
directors may be filled by the affirmative vote of a majority of the directors
elected by such class or series then in office or by a sole remaining director
so elected, or by the vote of the holders of the outstanding capital stock of
such class or series, and such directorships shall not in any case be filled by
the vote of the remaining directors or the holders of the outstanding capital
stock as a whole unless otherwise provided in the certificate of incorporation.
3.04 Removal. Any director may be removed either for or without cause at
any special or annual meeting of stockholders, by the affirmative vote of a
majority of capital stock of the stockholders present, in person or by proxy, at
such meeting and entitled to vote for the election of such director if notice of
intention to act upon such matter shall have been given in the notice calling
such meeting.
3.05 Vacancies. Subject to the provisions of Section 3.03 and 3.04, any
vacancy occurring in the board of directors (by death, resignation, removal or
otherwise) may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the board of directors. A director
elected to fill a vacancy shall be elected for the unexpired term of his
predecessor in office.
3.06 Election of Directors. Unless otherwise provided in the certificate
of incorporation, directors shall be elected by a plurality of the votes cast by
the holders of capital stock entitled to vote in the election of directors at a
meeting of stockholders at which a quorum is present.
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3.07 Place of Meetings. Meetings of the board of directors, regular or
special, may be held in or out of the State of Delaware.
3.08 First Meetings. The first meeting of a newly elected board of
directors shall be held without further notice immediately following the annual
meeting of stockholders, and at the same place, unless by unanimous consent of
the directors then elected and serving, the time or place is changed.
3.09 Regular Meetings. Regular meetings of the board of directors may be
held without notice at such time and place as shall from time to time be
determined by the board.
3.10 Special Meetings. Special meetings of the board of directors may be
called by the chairman of the board or president on five (5) days' notice to
each director, either personally, by mail, telegram or telefax. Special meetings
shall be called by the president or secretary in like manner and on like notice
upon the written request of two directors. Except as otherwise expressly
provided by statute, the certificate of incorporation, or these bylaws, neither
the business to be transacted at, nor the purpose of, any special meeting need
be specified in a notice or waiver of notice.
3.11 Quorum: Majority Vote. At meetings of the board of directors a
majority of the number of directors fixed by these bylaws (less any unfilled
vacancies) shall constitute a quorum for the transaction of business. The act of
a majority of the directors present at a meeting at which a quorum is present
shall be the act of the board of directors, except as otherwise specifically
provided by statute, the certificate of incorporation, or these bylaws. If a
quorum is not present at a meeting of the board of directors, the directors
present may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum is present.
3.12 Compensation. By resolution of the board of directors, the directors
may be paid their expenses, if any, of attendance at each meeting of the board
of directors and may be paid a fixed sum for attendance at each meeting of the
board of directors or a stated salary as director. No such payment shall
preclude any director from serving the corporation in any other capacity and
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receiving compensation therefor.
3.13 Procedure. At meetings of the board of directors, business shall be
transacted in such order as the board of directors may determine. The board of
directors shall keep regular minutes of its proceedings. The minutes shall be
placed in the minute book of the corporation.
3.14 Interested Directors and Officers.
(a) Validity. If Subsection (b) of this Section is satisfied, no
contract or other transaction between the corporation and any of its
directors or officers or any corporation,partnership, association, or
other organization in which any of them have a financial interest or is
otherwise directly or indirectly interested, shall be void or voidable
solely because of this relationship or because of the presence of the
director or officer at the meeting authorizing the contract or
transaction, or his participation or vote in the meeting or authorization.
(b) Disclosure, Approval; Fairness. Subsection (a) shall apply only
if:
(i) the material facts of the relationship or interest of each
such director or officer are known or disclosed:
(A) to the board of directors or applicable committee
thereof and it nevertheless in good faith authorizes the
contract or transaction by a majority of the disinterested
directors present, even though such disinterested directors
be less than a quorum; or
(B) to the stockholders at a meeting of the stockholders and
they nevertheless in good faith approve the contract or
transaction by a majority of capital stock present; or
(ii) the contract or transaction is fair to the corporation as
of the time it is authorized or ratified
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by the board of directors, the applicable committee thereof or the
stockholders.
(C) Non-Exclusive. This provision shall not be construed to
invalidate a contract or transaction which would be valid in the absence
of this provision.
3.15 Presumption of Assent. A director of the corporation who is present
at any meeting of the board of directors or applicable committee thereof at
which action on any matter is taken shall be presumed to have assented to the
action unless his dissent shall be entered in the minutes of the meeting or
unless he shall file his written dissent to such action with the person acting
as secretary of the meeting before the adjournment thereof or shall forward any
dissent by certified or registered mail to the secretary of the corporation
immediately after the adjournment of the meeting. Such right to dissent shall
not apply to a director who voted in favor of such action.
ARTICLE 4: COMMITTEES
4.01 Designation. The board of directors may, by resolution adopted by a
majority of the whole board, designate one or more committees.
4.02 Number; Qualification; Term. Each committee shall consist of one or
more directors and may have one or more alternative members who may, subject to
any limitations imposed by the board of directors, replace absent or
disqualified members at any meeting of that committee. Each committee member
shall serve as such until the earliest of (a) the expiration of his term as
director, (b) his resignation as a committee member or director, or (C) his
removal as a committee member or director.
4.03 Authority. Each committee, to the extent provided in the resolution
establishing such committee, shall have and may exercise any or all of the
authority of the board of directors in the management of the business and
affairs of the corporation. However, no committee shall have the authority of
the board in reference to:
(a) amending the certificate of incorporation, except that a
committee may, to the extent provided in the
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resolution designating the committees or in the certificate of
incorporation or the bylaws, exercise the authority vested in it in
accordance with Section 141(c) of the Delaware General Corporations Law;
(b) approving a plan of merger or share exchange;
(C) recommending to the stockholders the sale, lease or exchange of
all or substantially all of the property and assets of the corporation
otherwise than in the usual and regular course of its business;
(d) recommending to the stockholders a voluntary dissolution of the
corporation or a revocation thereof;
(e) amending, altering, or repealing these bylaws or adopting new
bylaws;
(f) filling vacancies in or removing members of the Board of
directors or of any committee appointed by the board of directors;
(g) filling any directorship to be filled by reason of an increase
in the number of directors;
(h) electing or removing officers or members of any committee;
(i) fixing the compensation of any committee member;
(j) altering or repealing any resolution of the board of directors
which by its terms provides that it shall not be so amendable or
repealable;
(k) declaring a distribution;
(l)issuing stock in the corporation; or
(m) proposing a reduction of the stated capital of the corporation.
4.04 Change in Number. The number of members of any
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committee may be increased or decreased from time to time by resolution adopted
by a majority of the whole board of directors.
4.05 Removal. Any member of a committee may be removed by the affirmative
vote of a majority of the whole board of directors, whenever in its judgment the
best interests of the corporation will be served thereby.
4.06 Vacancies. A vacancy occurring in a committee (by death, resignation,
removal or otherwise) may be filled by the board of directors in the manner
provided for original designations in Section 4.01 hereof.
4.07 Meetings. The time, place and notice (if any) of committee meetings
shall be determined by the committee.
4.08 Quorum: Majority Vote. At meetings of any committee, a majority of
the number of members designated by the board of directors shall constitute a
quorum for the transaction of business. The act of a majority of the members
present at any meeting at which a quorum is present shall be the act of the
committee, except as otherwise specifically provided by statute, the certificate
of incorporation or these bylaws. If a quorum is not present at a meeting of any
committee, the members present may adjourn the meeting from time to time,
without notice other than an announcement at the meeting, until a quorum is
present.
4.09 Compensation. By resolution of the board of directors, the members of
any committee may be paid their expenses, if any, of attendance at each meeting
of the committee and may be paid a fixed sum for attendance at each meeting of
the committee or a stated salary as a committee member. No such payment shall
preclude any committee member from serving the corporation in any other capacity
and receiving compensation therefor.
4.10 Procedure. Each committee shall keep regular minutes of its
proceedings and report the same to the board of directors when required. The
minutes of the proceedings of each committee shall be placed in the minute book
of the corporation.
4.11 Responsibility. The designation of any committee and the delegation
of authority to it shall not operate to relieve the board of directors, or any
member thereof, of any
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responsibility imposed upon it or him by law.
ARTICLE 5: PROVISIONS RELATING TO MEETINGS
5.01 Notice of Meetings. Whenever by statute, the certificate of
incorporation, these bylaws or otherwise, notice is required to be given to a
director, committee member or stockholder, and no provision is made as to how
the notice shall be given, it shall not be construed to mean personal notice,
but any such notice may be given: (a) in writing, by mail, postage prepaid,
addressed to the director, committee member or stockholder at the address
appearing on the books of the corporation; or (b) in any other method permitted
by law. Any notice required or permitted to be given by mail shall be deemed
given at the time when the same is thus deposited in the United States mails.
5.02 Waiver of Notice. Whenever by statute, the certificate of
incorporation, these bylaws or otherwise, notice is required to be given to a
director, committee member or stockholder, a waiver thereof in writing signed by
the person or persons entitled to such notice, whether before or after the time
stated in such notice, shall be equivalent to the giving of such notice.
Attendance at a meeting shall constitute a waiver of notice of such meeting,
except where a person attends for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
5.03 Telephone and Similar Meetings. Stockholders, directors or committee
members may participate in and hold a meeting by means of a conference telephone
or similar communications equipment by means of which persons participating in
the meeting can hear each other. Participation in such a meeting shall
constitute presence in person at such meeting, except where a person
participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
5.04 Action Without Meeting. Any action which may be taken, or is required
by law, the certificate of incorporation or these bylaws to be taken, at a
meeting of stockholders, directors or any committee members may be taken without
notice and without a meeting if a consent in writing, setting forth the action
so
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taken, shall be signed by (a) in the case of stockholders, either (I) all of the
stockholders entitled to vote with respect to such action, or (ii) if the
certificate of incorporation so provide, by the holder or holders of capital
stock having not less than the minimum number of votes that would be necessary
to take such action at a meeting at which the holders of all capital stock
entitled to vote on the action were present and voted, and (b) in the case of
directors or committee members, all of such members of the board of directors or
committee, as the case may be, entitled to vote with respect to the subject
matter thereof. Such consent shall have the same force and effect, as of the
date stated therein, as a unanimous vote of such stockholders, directors or
committee members, as the case may be, and may be stated as such in any document
filed with the Secretary of State of Delaware or in any certificate or other
document delivered to any person. The consent may be in one or more counterparts
so long as each stockholder, director or committee member signs one of the
counterparts. The signed consent shall be placed in the minute book of the
corporation.
ARTICLE 6: OFFICERS AND AGENTS
6.01 Number; Qualification; Election; Term.
(a) The corporation shall have: (I) a president and a secretary; and
(ii) such other officers (including a chairman of the board, one or more
vice presidents and a treasurer) and such assistant officers and agents as
the board of directors may, from time to time, deem necessary.
(b) Officers named in Subsection 6.01(a)(I) shall be elected by the
board of directors on the expiration of an officer's term or whenever a
vacancy exists. Officers and agents named in Subsection 6.01(a)(ii) may be
elected by the board at any meeting.
(c) Any two or more offices may be held by the same person.
6.02 Removal. Any officer or agent may be removed by the board of
directors whenever in its judgment the best interest of the corporation will be
served thereby. Such removal shall be without prejudice to the contract rights,
if any, of the person
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so removed. Election or appointment of an officer or agent shall not of itself
create contract rights.
6.03 Vacancies. Any vacancy occurring in any office of the corporation (by
death, resignation, removal or otherwise) may be filled by the board of
directors.
6.04 Authority. Officers and agents shall have such authority and perform
such duties in the management of the corporation as are provided in these bylaws
or as may be determined, from time to time, by resolution of the board of
directors not inconsistent with these bylaws.
6.05 Compensation. The compensation of officers and agents shall be fixed
from time to time by the board of directors; provided, that the board of
directors may delegate to any one or more officers the authority to fix such
compensation.
6.06 Chairman of the Board. The chairman of the board of directors, if
there shall be such an officer, shall, if present, preside at all meetings of
the board of directors and exercise and perform such other powers and duties as
may be from time to time assigned to him by the board of directors or prescribed
by the bylaws.
6.07 President. Unless and to the extent that such powers and duties are
expressly delegated to a chairman of the board by the board of directors, the
president shall be the chief executive officer of the corporation and, subject
to the supervision of the board of directors, shall have general management and
control of the business and affairs of the corporation in the ordinary course of
its business with all such powers with respect to such general management and
control as may be reasonably incident to such responsibilities, including, but
not limited to, the power to employ, discharge, or suspend employees and agents
of the corporation, to fix the compensation of employees and agents, and to
suspend, with or without cause, any officer of the corporation pending formal
action by the board of directors with respect to continued suspension, removal,
or reinstatement of such officer. Except as otherwise expressly delegated to the
chairman of the board, the president shall preside at all meetings of the
stockholders and board of directors.
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6.08 Vice Presidents. The vice presidents in the order of their seniority
otherwise determined by the board of directors, shall, in the absence or
disability of the president, perform the duties and have the authority and
exercise the powers of the president. They shall perform such other duties and
have such other authority and powers as the board of directors may from time to
time prescribe or as the president may from time to time delegate.
6.09 Secretary.
(a) The secretary shall attend all meetings of the board of
directors and all meetings of the stockholders and record all votes,
actions and the minutes of all proceedings in a book to be kept for that
purpose and shall perform like duties for the executive and other
committees when required.
(b) He shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the board of directors.
(c) He shall keep in safe custody the seal of the corporation and,
when authorized by the board of directors or the executive committee,
affix the same to any instrument requiring it. When so affixed, it shall
be attested by his signature or by the signature of the treasurer or an
assistant secretary.
(d) He shall be under the supervision of the president. He shall
perform other duties and have such other authority and powers as the board
of directors may from time to time prescribe or as the president may from
time to time delegate.
6.10 Assistant Secretaries. The assistant secretaries in the order of
their seniority, unless otherwise determined by the board of directors, shall,
in the absence or disability of the secretary, perform the duties and have the
authority and exercise the powers of the secretary. They shall perform such
other duties and have such other powers as the board of directors may from time
to time prescribe or as the president may from time to time delegate.
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6.11 Treasurer.
(a) The treasurer shall have the custody of the corporate funds and
securities, shall keep full and accurate accounts of receipts and
disbursements of the corporation, and shall deposit all funds and other
valuables in the name and to the credit of the corporation in depositories
designated by the board of directors.
(b) He shall disburse the funds of the corporation as ordered by the
board of directors, and preparefinanciall statements as they direct.
(c) If required by the board of directors, he shall give the
corporation a bond (in such form,in such sum, and with such surety or
sureties as shall be satisfactory to the board) for the faithful
performance of the duties of his office and for the restoration to the
corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
corporation.
(d)He shall perform such other duties and have such other authority
and powers as the board of directors may from time to time prescribe or as
the president may from time to time delegate.
6.12 Assistant Treasurers. The assistant treasurers in the order of their
seniority, unless otherwise determined by the board of directors, shall, in the
absence or disability of the treasurer, perform the duties and have the
authority and exercise the powers of the treasurer. They shall perform such
other duties and have such other powers as the board of directors may from time
to time prescribe or the president may from time to time delegate.
ARTICLE 7: CERTIFICATES AND STOCKHOLDERS
7.01 Certificated and Uncertificated Stock. The capital stock of the
corporation may be either certificated stock or uncertificated stock. As used
herein, the term "certificated stock" means stock represented by instruments in
bearer or
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registered form, and the term "uncertificated stock" means stock not represented
by instruments and the transfers of which are registered upon books maintained
for that purpose by or on behalf of the corporation.
7.02 Certificates for Certificated Stock. The certificates representing
certificated stock of the corporation shall be in such form as shall be approved
by the board of directors in conformity with law. The certificates shall be
consecutively numbered, shall be entered as they are issued in the books of the
corporation or in the records of the corporation's designated transfer agent, if
any, and shall state upon the face thereof. (a) that the corporation is
organized under the laws of the State of Delaware; (b) the name of the person to
whom issued; (c) the number and class of capital stock and the designation of
the series, if any, which such certificate represents; (d) the par value of each
share represented by such certificate, or a statement that the stock is without
par value; and (e) such other matters as may be required by law. The
certificates shall be signed by the chairman of the board, president or any vice
president, and by the secretary, an assistant secretary or any other officer and
may be sealed with the seal of the corporation or a facsimile thereof. If any
certificate is countersigned by a transfer agent or registered by a registrar,
either of which is other than the corporation itself or an employee of the
corporation, the signatures of the foregoing officers may be a facsimile.
7.03 Issuance. Stock (both treasury and authorized but unissued) may be
issued for such consideration (not less than par value) and to such persons as
the board of directors may determine from time to time. Stock may not be issued
until the full amount of the consideration, fixed as provided by law, has been
paid. After the issuance of uncertificated stock, the corporation or the
transfer agent of the corporation shall send to the registered owner of such
uncertificated stock a written notice containing the information required to be
stated on certificates representing capital stock as set forth in Section 7.02
above and such additional information as may be required by law.
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7.04 Payment for Stock.
(a) Kind. The consideration for the issuance of stock shall consist
of money paid, labor done (including services actually performed for the
corporation) or property (tangible or intangible) actually received.
Neither promissory notes nor the promise of future services shall
constitute payment or part payment for the issuance of stock.
(b) Valuation. In the absence of fraud in the transaction, the
judgment of the board of directors as to the value of consideration
received shall be conclusive.
7.05 Subscriptions. Unless otherwise provided in the subscription
agreement, subscriptions for capital stock, whether made before or after
organization of the corporation, shall be paid in full at such time or in such
installments and at such times as shall be determined by the board of directors.
Any call made by the board of directors for payment on subscriptions shall be
uniform as to all stock of the same class or as to all capital stock of the same
series, as the case may be. In case of default in the payment on any installment
or call when Payment is due, the corporation may proceed to collect the amount
due in the same manner as any debt due to the corporation.
7.06 Lost, Stolen or Destroyed Certificates. The corporation shall issue a
new certificate in place of any certificate for stock previously issued if the
registered owner of the certificate:
(a) Claim. Makes proof in affidavit form that it has been lost,
destroyed or wrongfully taken; and
(b) Timely Request. Requests the issuance of a new certificate
before the corporation has notice that the certificate has been acquired
by a purchaser for value in good faith and without notice of an adverse
claim; and
(c) Bond. Gives a bond in such form, and with such surety or
sureties, with fixed or open penalty, as the corporation may direct, to
indemnify the corporation (and
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its transfer agent and registrar, if any) against any claim that may be
made on account of the alleged loss, destruction or theft of the
certificate; and
(d) Other Requirements. Satisfies any other reasonable requirements
imposed by the corporation.
7.07 Transfer of Stock. Stock and other securities of the corporation
shall be transferable in accordance with law and these Bylaws. Transfers of
stock will be made on the books of the corporation only by the person named in
the certificate of by his attorney lawfully constituted in writing and upon the
surrender of the certificate therefor, which will be canceled before a new
certificate will be issued.
7.08 Registered Owner. The corporation may regard the person in whose name
any stock issued by the corporation are registered in the corporation's share
transfer records at any particular time as the owner of the stock at that time
for purposes of voting the stock, receiving distributions thereon or notices in
respect thereof, transferring the stock, exercising rights of dissent with
respect to the stock or for any other matters related to the stock.
ARTICLE 8: INDEMNIFICATION
8.01 Indemnification. The corporation shall indemnify any officer or
director to the fullest extent permitted by law.
ARTICLE 9: GENERAL PROVISIONS
9.01 Distributions and Share Dividends.
(a) Declaration and Payment. Subject to statute and the certificate
of incorporation, distributions and share dividends may be declared by the
board of directors at any regular or special meeting, and paid by the
corporation.
(b) Record Date. The board of directors may fix in advance a record
date for the purpose of determining stockholders entitled to receive
payment of any dividend, the record date to be not more than sixty (60)
days prior to
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the payment date of such dividend, or the board of directors may close the
stock transfer books for such purpose for a period of not more than sixty
(60) days prior to the payment date of such dividend. In the absence of
any action by the board of directors, the date upon which the board of
directors adopts the resolution declaring the dividend shall be the record
date.
9.02 Books and Records. The corporation shall keep correct and complete
books and records of account, shall keep minutes of the proceedings of its
stockholders and board of directors, and shall keep at its registered office or
principal place of business, or at the office of its transfer agent or
registrar, a record of its stockholders, giving the names and addresses of all
stockholders and the number and class of the stock held by each.
9.03 Checks and Notes. Checks, demands for money, and notes of the
corporation shall be signed by officer(s) or other person(s) designated from
time to time by the board of directors.
9.04 Fiscal Year. The fiscal year of the corporation shall be fixed by
resolution of the board of directors.
9.05 Seal. The board of directors shall determine the type of seal which
may be necessary or appropriate for use by the corporation.
9.06 Resignation. A director, committee member, officer or agent may
resign by so stating at any meeting of the board of directors or by giving
written notice to the board of directors, the president or the secretary. The
resignation shall take effect at the time specified in the statement at the
board of directors meeting or in the written notice, or immediately if no time
is specified, but in no event may the effective time of such resignation be
prior to the time such statement is made or such notice is given. Unless it
specifies otherwise, a resignation shall be effective without being accepted.
9.07 Amendment of Bylaws.
(a) These bylaws may be altered, amended or repealed at any meeting
of the board of directors at which a quorum is present, by the affirmative
vote of a majority of the
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directors present at such meeting, provided notice of the proposed
alteration, amendment or repeal is contained in the notice of the meeting.
(b) These bylaws may also be altered, amended or repealed at any
meeting of the stockholders at which a quorum is present or represented,
by the affirmative vote of the holders of a majority of the capital stock
present or represented at the meeting and entitled to vote thereat,
provided notice of the proposed alteration, amendment or repeal is
contained in the notice of the meeting.
9.08 Construction. Whenever the context so requires, the masculine shall
include the feminine and neuter, and the singular shall include the plural, and
conversely. If any portion of these bylaws shall be invalid or inoperative,
then, so far as is reasonable and possible:
(a) The remainder of these bylaws shall be considered valid and
operative, and
(b) Effect shall be given to the intent manifested by the portion
held invalid or inoperative.
The undersigned, as secretary of the corporation, hereby certifies that
the foregoing bylaws were adopted by the board of directors of the corporation
as of December 13, 1990.
Phyllis Farragut
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Exhibit 3.98
GARETH STEVENS, INC.
ARTICLES OF AMENDMENT TO AND RESTATEMENT OF
AMENDED AND RESTATED ARTICLES OF INCORPORATION
The undersigned officers of Gareth Stevens, Inc. hereby execute these
Articles of Amendment (the "Amendment") and certify that:
1. The name of the corporation is GARETH STEVENS, INC., a Wisconsin
corporation, with its registered office in Milwaukee County, Wisconsin.
2. The Amended and Restated Articles of Incorporation are amended and
restated in their entirety as follows, which shall supersede and take the place
of the existing articles of incorporation and any amendments thereof:
ARTICLE I
Name
The name of the corporation shall be GARETH STEVENS, INC.
ARTICLE II
Period of Existence
The period of existence will be perpetual.
ARTICLE III
Purpose
The purpose shall be to engage in any lawful activity within the purposes
for which a corporation may be organized Chapter 180 of the Wisconsin Statutes.
<PAGE>
ARTICLE IV
Shares
4.1. Number of Shares and Classes. The aggregate number of shares which
the Corporation shall have authority to issue is 12,000,000 shares divided into
the following classes:
10,000,000 of the par value $.001 per share designated
as "Common Stock" and
2,000,000 of the par value $.l0 per share designated as
"Cumulative Preferred Stock."
Any and all such shares of Common Stock and Cumulative Preferred
Stock may be issued for such consideration, not less than the par value thereof,
as shall be fixed from time to time by the Board of Directors. Any and all such
shares so issued, the full consideration for which has been paid or delivered,
shall be deemed fully paid stock and shall not be liable to any further call or
assessment and the holders of such shares shall not be liable for any further
payment except as otherwise provided by applicable Wisconsin statutes. The
preferences, limitations and relative rights of such classes shall be as set
forth herein.
4.2. Directors' Authority to Establish Series of Cumulative Preferred
Stock; Establishment of Series A Cumulative Preferred Stock.
4.2.1. The Board of Directors is authorized to divide the Cumulative
Preferred Stock into series and fix and determine the relative rights and
preferences of each series. Each series shall be so designated by the Board of
Directors as to distinguish the shares thereof from the shares of all other
series. All shares of Cumulative Preferred Stock shall be identical except as to
the following relative rights and preferences, as to which the Board of
Directors may establish variations between different series not inconsistent
with the provisions of these Articles:
(a)The rate of dividend;
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(b)The price and the terms and conditions on which shares may
be redeemed;
(c)The amount payable upon shares in event of voluntary or
involuntary liquidation;
(d) Sinking fund provisions for the redemption or purchase of
shares;
(e) The terms and conditions on which shares may be converted
into Common Stock, if the shares of any series are issued with the privilege of
conversion; and
(f)The voting rights.
4.2.2. The 400,000 shares of Cumulative Preferred Stock issued and
outstanding as of the date hereof are hereby designated as Series A Cumulative
Preferred Stock, which series shall have the following relative rights and
preferences:
(a)The dividend rate shall be three cents ($.03) per annum per
share.
(b) (i) The Corporation has the option to redeem such shares at any
time after five (5) years from the date of the filing of these Amended and
Restated Articles of Incorporation with the Secretary of State of Wisconsin (the
"Filing Date") and prior to six (6) years from the Filing Date at a price per
share equal to the greater of (A) a percentage of the appraised "going concern"
value of the Corporation equal to the percentage of all outstanding Common Stock
that would be represented by a share of such Series A Cumulative Preferred Stock
being redeemed by the Corporation as if it were converted to Common Stock
immediately prior to the redemption (the "appraised value") or (B) the amount
payable upon liquidation with respect to such share as described in subsection
4.2.2(c), below.
(ii) Any holder of shares of Series A Cumulative Preferred
Stock has the option to require the Corporation to redeem such shares at any
time after five (5) years from the Filing Date and prior to six (6) years from
the Filing Date at a price per share equal to the appraised value.
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(iii) In the event any proposed redemption would violatee any
applicable federal or state law or any agreement to which the Company is a party
(A) such proposed redemption shall not be made unless and until such redemption
would no longer violate applicable law or such agreement and (B) the twelve (12)
month periods for redemptions provided in clauses (ii) and (ii), above, shall be
tolled until such proposed redemption can be made pursuant to part (A), above.
(iv) The appraised value shall be determined by an independent
qualified appraiser selected by the Corporation and agreed upon by the
shareholder(s) whose stock is being redeemed or, if not agreed, then the average
value of two separate appraisals, one performed by an independent qualified
appraiser selected by the Corporation, and one performed by an independent
qualified appraiser selected by such shareholder(s). The shareholder(s) shall
bear the cost of any second appraiser selected pursuant hereto. Neither the
determination of the appraised value of the Corporation nor the determination of
the redemption price for the Series A Cumulative Preferred Stock shall take into
account that the shares are a minority interest and may lack marketability.
(v) No less than forty-five (45) days before the date fixed
for redemption (the "Redemption Date") written notice (the "Redemption Notice")
shall be mailed, postage prepaid, to each holder of record of the Series A
Cumulative Preferred Stock which is to be redeemed, at its address shown on the
records of the Corporation, if redemption is being elected by the Corporation;
and to the Corporation at its registered office, if redemption is being elected
by such shareholders. The Redemption Notice shall contain the following
information:
(A) The number of shares of Series A Cumulative Preferred
Stock held by such holder which shall be redeemed by the Corporation, and the
total number of shares of Series A Cumulative Preferred Stock held by all
holders to be so redeemed; and
(B) The Redemption Date.
(vi) Within ten (10) days after delivery of the Redemption
Notice, the Corporation shall notify the
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shareholder(s) of the selected appraiser and the shareholder(s) shall respond
within five (5) days thereafter whether it approves the use of such appraiser or
will select its own appraiser. Written appraisal reports will be delivered to
all parties at least forty-eight (48) hours prior to the Redemption Date.
(vii) On or before the Redemption Date, each holder of shares
of Series A Cumulative Preferred Stock to be redeemed shall surrender the
certificate or certificates representing such shares to the Corporation at the
registered office of the Corporation on the Redemption Date, and the applicable
Redemption Price for such shares shall be paid to the order of the person whose
name appears on such certificate or certificates and each surrendered
certificate shall be canceled and retired.
(viii)From and after the Redemption Date, no shares of Series
A Cumulative Preferred Stock thereupon subject to redemption shall be entitled
to any further accrual of any dividends or to the conversion privileges set
forth herein.
(c) In the event of a voluntary or involuntary liquidation of
the Corporation, the holders of shares of Series A Cumulative Preferred Stock
shall be entitled to receive out of the assets of the Corporation available for
distribution to the shareholders an amount equal to One Dollar ($1.00) per
share, plus all accrued and unpaid dividends thereon.
(d) Subject to adjustment as hereafter provided, the holders
of shares of Series A cumulative Preferred Stock may convert each share into
1.7857625 shares of Common Stock at any time.
(i) In the event the Corporation shall make or issue, or fix a
record date for the determination of holders of Common Stock entitled to receive
a dividend or other distribution payable in shares of stock or other securities
of the Corporation or in assets (excluding cash dividends or distributions),
then and in each such event provision shall be made so that the holders of
Series A Cumulative Preferred Stock shall receive upon conversion thereof in
addition to the number of shares of Common Stock receivable thereupon, the
number of shares of stock or other securities or such other assets of the
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Corporation which such holders would have received had their Series A Cumulative
Preferred Stock been converted into Common Stock on the date of such event and
had such holders thereafter, during the period from the date of such event to
and including the Conversion Date (as that term is hereafter defined in
subsection 4.2.2(d)(iv)), retained such shares of stock or other securities or
such other assets receivable by such holders as aforesaid during such period,
giving application to all adjustments called for during such period under this
subsection 4.2.2(d) with respect to the rights of the holders of the Series A
Cumulative Preferred Stock.
(ii) If the Common Stock outstanding prior to the conversion
of the Series A Cumulative Preferred Stock shall be subdivided into a greater
number of shares of Common Stock or combined into a smaller number of shares of
Common Stock, then and in each such event the holders of the Series A Cumulative
Preferred Stock shall have the right thereafter to convert such shares into the
number of shares of Common Stock which would be held following such subdivision
or combination by a holder of the number of shares of Common Stock into which
such shares of Series A Cumulative Preferred Stock might have been converted
immediately prior to such subdivision or combination, all subject to further
adjustment as provided herein.
(iii) If the Common Stock issuable upon the conversion of the
Series A Cumulative Preferred Stock shall be changed into the same or different
number of shares of any class or classes of stock of the Corporation, whether by
reclassification or otherwise (other than a subdivision or combination of
shares, stock dividend, reorganization, merger, consolidation or sale of assets
provided for elsewhere in this subsection 4.2.2(d)), then and in each such event
the holders of the Series A Cumulative Preferred Stock shall have the right
thereafter to convert such shares into the kind and amount of shares of stock
and other securities and property receivable upon such reclassification or other
change by holders of the number of shares of common Stock into which such shares
of Series A Cumulative Preferred Stock might have been converted immediately
prior to such reclassification or change, all subject to further adjustment as
provided herein.
(iv) If at any time or from time to time
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there shall be a capital reorganization involving the Common Stock (other than a
subdivision, combination, reclassification or exchange of shares provided for
elsewhere in this subsection 4.2.2(d)) or a merger or consolidation of the
Corporation with or into another corporation, or the sale of all or
substantially all of the Corporation's properties and assets to any other
person, provision shall be made so that the holders of the Series A Cumulative
Preferred Stock shall thereafter be entitled to receive upon conversion of the
Series A Cumulative Preferred Stock, the number of shares of stock or other
securities or property of the Corporation, or of the successor corporation
resulting from such merger, consolidation or sale, to which the holders of
Common Stock issuable upon conversion would have been entitled on such capital
reorganization, merger, consolidation, or sale.
(v) To exercise its conversion privilege, a holder of Series A
Cumulative Preferred Stock shall surrender the certificate or certificates
representing the shares being converted to the Corporation at its principal
office, and shall give written notice to the Corporation at such office that
such holder elects to convert such shares. Such notice shall also state the name
or names (with address or addresses) in which the certificate or certificates
for shares of Common Stock issuable upon such conversion shall be issued. The
certificate or certificates for shares of Series A Cumulative Preferred Stock
surrendered for conversion shall be accompanied by proper assignment thereof to
the Corporation or in blank, The date when such written notice is received by
the Corporation, together with the certificate or certificates representing the
shares of Series A Cumulative Preferred Stock being converted, shall be the
"Conversion Date" As promptly as practicable after the Conversion Date, the
Corporation shall issue and shall deliver to the holder of the shares of Series
A Cumulative Preferred Stock being converted, or on its written order, such
certificate or certificates as it may request for the number of shares of Common
Stock issuable upon the conversion of such shares of Series A Cumulative
Preferred Stock in accordance with the provisions of this subsection 4.2.2(d)
and, except as hereafter provided, cash in the amount of all accrued and unpaid
dividends on such shares of Series A Cumulative Preferred Stock, whether or not
earned or declared, up to and including the Conversion Date.
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Notwithstanding the above, in the event any applicable federal or state law or
any agreement to which the Corporation is a party, prohibits the payment of
accrued and unpaid dividends at the time of conversion, payment of such
dividends shall be deferred until payment is allowed in accordance with such law
or agreement.
(vi) In the event some but not all of the shares of Series A
Cumulative Preferred Stock represented by a certificate or certificates
surrendered by a holder are converted, the Corporation shall execute and deliver
to or on the order of the holder, at the expense of the Corporation, a new
certificate representing the number of shares of Series A Cumulative Preferred
Stock which were not converted.
(vii) The Corporation shall at all times reserve out of its
authorized but unissued shares of Common Stock, solely for the purpose of
effecting the conversion of the shares of the Series A Cumulative Preferred
Stock, such number of its shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of the Series A
Cumulative Preferred Stock, and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect the conversion
of all then outstanding shares of the Series A Cumulative Preferred Stock, the
Corporation shall amend these Amended and Restated Articles of Incorporation to
increase its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purpose.
(e) The holders of shares of Series A Cumulative Preferred Stock
shall be entitled to such number of votes that are equal to the largest number
of whole shares of Common Stock into which such holder's shares could be
converted.
4.3. Dividends and Distributions.
4.3.1. The Cumulative Preferred Stock shall entitle the holder
thereof to receive when and as declared at any time by the Board of Directors
annual dividends on or before the last day of June of each year. Such dividends
shall be payable out of net profits of the Corporation or out of any surplus
applicable to the payment of such dividends. The dividends on the Cumulative
Preferred Stock shall be cumulative so that if at
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any time the full amount of dividends accrued and in arrears on the Cumulative
Preferred Stock shall not be paid, the deficiency shall be payable without
interest before any dividends (other than dividends paid in Common Stock) or
other distributions shall be made or set apart on the Common Stock. Dividends on
Cumulative Preferred Stock shall accrue on each share from the date on which
such share is issued. Whenever all dividends accrued and in arrears on the
Cumulative Preferred Stock shall have been declared and shall have been paid or
set apart, the Board of Directors may declare dividends on Common Stock out of
the remaining net profits of the Corporation or out of surplus applicable to the
payment of such dividends. Any dividend paid upon the Cumulative Preferred Stock
at the tine when any accrued dividends for any prior period are delinquent shall
be expressly declared and designated as a dividend in whole or partial payment
of the accrued dividend for the earliest period for which dividends are then
delinquent, and each shareholder to whom such payment is made shall be so
advised.
4.3.2. The rate of the dividends to be paid to holders of Cumulative
Preferred Stock of all series shall be as follows: With respect to Series A
Cumulative Preferred Stock at the rate provided for in subsection 4.2.2(a),
above; or with respect to series not yet established at a rate to be stated in
the resolution or resolutions of the Board of Directors providing for the
issuance thereof.
4.3.3. All dividends on Cumulative Preferred Stock shall be without
priority as between series, and shall be paid or set apart before any dividends
or other distributions shall be paid or set apart for Common Stock; provided,
however, that dividends may be declared and paid in Common Stock prior to
dividends on the Cumulative Preferred Stock being paid or set apart. Any
dividends paid upon the cumulative Preferred Stock in any amount less than full
cumulative dividends accrued and in arrears upon all Cumulative Preferred Stock
outstanding shall, if more than one series be outstanding, be distributed among
the different series in proportion to the aggregate amounts which would be
distributable to the Cumulative Preferred Stock of each series if full
cumulative dividends were declared and paid thereon.
4.3.4. In the event the proposed payment of any
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dividend, whether on Cumulative Preferred Stock or Common Stock, would violate
any applicable federal or state law, such proposed dividend payment shall not be
made unless and until such payment would no longer violate applicable law.
4.4. Liquidation Rights. In the event of any liquidation, dissolution or
winding-up of the Corporation, whether voluntary or involuntary, the holders of
all series of Cumulative Preferred Stock shall be entitled to receive out of the
assets of the Corporation in full the fixed voluntary liquidation or involuntary
liquidation amount thereof, whichever is applicable, plus accrued dividends
thereon, all as fixed or provided for in subsection 4.2.2(c), above, with
respect to the Series A Cumulative Preferred Stock or, with respect to series
not yet established, in the resolution or resolutions providing for the issuance
thereof, all before any amount shall be paid to the holders of Common Stock. (If
upon the voluntary or involuntary liquidation or windinq-up of the Corporation
the assets of the Corporation shall be insufficient to pay the holders of all
series of the Cumulative Preferred Stock the entire amounts to which they may be
entitled, the assets of the Corporation shall, if more than one series be
outstanding, be distributed among the different series in proportion to the
aggregate amounts which would be distributable to the Cumulative Preferred Stock
of each series if sufficient assets were available.) The holders of Cumulative
Preferred Stock shall not otherwise be entitled to participate in any
distribution of assets of the Corporation, which shall be divided or distributed
among the holders of Common Stock, and shall have no further rights of
conversion. Whenever the distribution provided for herein shall be paid in
property other than cash, the value of such distribution shall be the fair
market value of such property as determined in good faith by the Board of
Directors of the Corporation. No consolidation or merger of the Corporation with
or into another corporation or corporations and no sale by the Corporation of
all or substan tially all of its assets shall be deemed a liquidation or winding
up of the Corporation.
4.5. Voting Rights.
4.5.1. Except as hereinafter in this Section 4.5 expressly provided
and as provided by the Wisconsin Business Corporation Law, the holders of
Cumulative Preferred Stock shall,
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together with the holders of Common Stock (neither the Cumulative Preferred
Stock nor the Common Stock voting as a class) possess full voting rights for the
election of directors and for other purposes. Holders of Common Stock shall be
entitled to one (1) vote for each share held. Holders of Cumulative Preferred
Stock of all series shall be entitled to such number of votes per share as are
provided for in Section 4.2.2(e), above, with respect to the Series A Cumulative
Preferred Stock or, with respect to series not yet established as shall be
stated in the resolution or resolutions of the Board of Directors providing for
the issuance thereof.
4.5.2. So long as any shares of Cumulative Preferred Stock are
outstanding, the Corporation shall not, without the affirmative vote as provided
by law of the holders of at least two-thirds (2/3) of the outstanding shares of
Cumulative Preferred Stock, voting as a class,
(a) create or authorize any class of stock ranking either as
to the payment of dividends or distribution of assets prior to or on parity with
the Cumulative Preferred Stock or increase the number of authorized shares of
Cumulative Preferred Stock;
(b) change the preferences, limitations or relative rights
with respect to any series of the outstanding Cumulative Preferred Stock so as
to materially and adversely alter in any respect the rights of the holders
thereof.
4.6. Acquisition of Shares. The Corporation shall have the right to
purchase, take, receive or otherwise acquire its own shares in accordance with
applicable law regardless of the availability of unreserved and unrestricted
earned surplus and without earned surplus being restricted thereby. Except as
hereinafter expressly provided with respect to the Series A Cumulative Preferred
Stock, shares of Cumulative Preferred Stock so acquired, as well as the shares
of Cumulative Preferred Stock acquired upon redemption or conversion of
Cumulative Preferred Stock, shall become authorized and unissued shares of
Cumulative Preferred Stock which may be designated as shares of any series. No
share or shares of Series A Cumulative Preferred Stock acquired by the
Corporation by reason of redemption, purchase, conversion or otherwise shall be
reissued, and all such shares
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shall be canceled, retired and eliminated from the shares which the Corporation
shall be authorized to issue. The Corporation shall from time to time amend
these Articles to reduce the authorized number of shares of the Cumulative
Preferred Stock accordingly.
4.7. No Nonvoting Securities. The Corporation shall not authorize the
issuance of any nonvoting equity securities.
ARTICLE V
Preemptive Rights
Each holder of any stock of the Corporation shall have preemptive rights
to acquire, upon the same terms and conditions as such shares are proposed to be
acquired by others, unissued shares of Common Stock or securities convertible
into such shares or carrying a right to subscribe to or acquire such shares,
including, but not limited to, the right to acquire such shares or securities
issued to directors, officers or employees, or to acquire such shares or
securities issued for other than cash consideration, or to acquire treasury
shares. Each holder of Cumulative Preferred Stock shall be entitled to such
preemptive rights to the same extent as a holder of the number of shares of
Common Stock into which such shares of Cumulative Preferred Stock might have
been converted immediately prior to the exercise of such preemptive rights.
ARTICLE VI
Registered Office and Agent
The address of the registered office of the Corporation is 1555 North
RiverCenter Drive, Suite 201, Milwaukee, Wisconsin 53212, and the name of the
registered agent of the Corporation at such address is Gareth M. Stevens.
3. This Amendment and Restatement was approved by the United States
Bankruptcy Court, Eastern District of Wisconsin (the "Court") on November 30,
1992, pursuant to the Court's Order
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Confirming Plan (the "Order").
4. The Order was entered in the reorganization proceeding captioned In re
Gareth Stevens, Inc. Case No. 91-07849-CNC.
5. The Court has jurisdiction of the above-captioned proceeding pursuant
to 28 U.S.C. ss. 1334.
6. The effective date of this Amendment is the Confirmation Date (as such
term is defined in the Debtor's Plan of Reorganization confirmed pursuant to the
Court's Order) and this Amendment shall be filed as of such date.
______________________________________
Gareth M. Stevens, President
______________________________________
David C. Muller, Secretary
[Corporate Seal]
STATE OF WISCONSIN
SS
COUNTY OF MILWAUKEE
Personally appeared before me this 16th day of December, 1992, the
above-named Gareth M. Stevens and David M. Miller, to me known to be the
President and Secretary, respectively, of GARETH STEVENS, INC., who subscribed
their names to the foregoing instrument and acknowledged that they executed the
same for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
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__________________________________________
Notary Public, State of Wisconsin
my commission:___________________
This instrument was drafted by and should be returned to:
Kristin A. Roeper, Esq.
Godfrey & Kahn, S.C.
780 North Water Street
Milwaukee, Wisconsin 53202
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Exhibit 3.99
AMENDED AND RESTATED
BYLAWS
OF
GARETH STEVENS, INC.
(a Wisconsin corporation)
Adopted March 16, 1987
ARTICLE I
OFFICES
1.01. Principal and Business offices. The corporation may have such
principal and other business offices, either within or without the State of
Wisconsin, as the Board of Directors may designate or as the business of the
corporation may require from time to time.
1.02. Registered Office. The registered office of the corporation required
by the Wisconsin Business Corporation Law to be maintained in the State of
Wisconsin may be, but need not be, identical with the principal office in the
State of Wisconsin, and the address of the registered office may be changed from
time to time by the Board of Directors. The business office of the registered
agent of the corporation shall be identical to such registered office.
ARTICLE II
SHAREHOLDERS
2.01. Annual Meeting. The annual meeting of the shareholders shall be held
on the Monday of the first week in the month of September commencing in 1987, or
at such other time and date within thirty days before or after said date as may
be fixed by or under the authority of the Board of Directors, for the purpose of
electing directors and for the transaction of such other business as may come
before the meeting. If the day fixed for the annual meeting shall be a legal
holiday in the State of Wisconsin, such meeting shall be held on the next
succeeding business day. If the election of directors shall not be held on the
day designated herein, or fixed as herein provided, for any
<PAGE>
annual meeting of the shareholders, or at any adjournment thereof, the Board of
Directors shall cause the election to be held at a special meeting of the
shareholders as soon thereafter as conveniently may be.
2.02. Special Meeting - Special meetings of the shareholders, for any
purpose or Purposes, unless otherwise prescribed by statute, may be called by
the President or the Board of Directors or by the person designated in the
written request of the holders of not less than one-fourth of all shares of the
corporation entitled to vote at the meeting.
2.03. Place of Meeting. The Board of Directors may designate any place,
either within or without the State of Wisconsin, as the place of meeting for any
annual meeting or for any special meeting called by the Board of Directors. A
waiver of notice signed by all shareholders entitled to vote at a meeting may
designate any place, either within or without the State of Wisconsin, as the
place for the holding of such meeting. If no designation is made, or if a
special meeting be otherwise called, the place of meeting shall be the principal
business office of the corporation in the State of Wisconsin or such other
suitable place in the county of such principal office as may be designated by
the person calling such meeting, but any meeting may be adjourned to reconvene
at any place designated by vote of a majority of the shares represented thereat.
2.04. Notice of Meeting. Written notice stating the place, day and hour of
the meeting and, in case of a special meeting, the purpose or purposes for which
the meeting is called, shall be delivered not less than ten days (unless a
longer period is required by law or the articles of incorporation) nor more than
thirty days before the date of the meeting, either personally or by mail, by or
at the direction of the President, or the Secretary, or other officer or persons
calling the meeting, to each shareholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail, addressed to the shareholder at his address as it
appears on the stock record books of the corporation, with postage thereon
prepaid.
Whenever any notice is required to be given to any shareholder to whom
communication is made unlawful by any law of
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the United States, whenever enacted, or by any rule, regulation, proclamation or
executive order issued under any such law, the giving of such notice to such
shareholder shall not be required and there shall be no duty to apply to any
governmental authority or agency for a license or permit to give such notice to
such shareholder.
2.05. Closing of Transfer Books or Fixing of Record Date. For the purpose
of determining shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or shareholders entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other proper purpose, the Board of Directors may provide that the stock
transfer books shall be closed for a stated period but riot to exceed, in any
case, fifty days. If the stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a meeting of
shareholders, such books shall be closed for at least ten days immediately
preceding such meeting. In lieu of closing the stock transfer books, the Board
of Directors may fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not more than
seventy-five days and, in case of a meeting of shareholders, not less than ten
days prior to the date on which the particular action, requiring such
determination of shareholders, is to be taken. If the stock transfer books are
not closed and no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of a dividend, the close of business on the date on
which notice of the meeting is mailed or on the date on which the resolution of
the Board of Directors declaring such dividend is adopted,as the case may be,
shall be the record date for such determination of shareholders. When a
determination of shareholders entitled to vote at any meeting of shareholders
has been made as provided in this section, such determination shall be applied
to any adjournment thereof except where the determination has been made through
the closing of the stock transfer books and hill stated period of closing has
expired.
2.06. Voting Lists. The officer or agent having charge of the stock
transfer books for shares of the corporation shall, before each ,meeting of
shareholders, make a complete list of the
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shareholders entitled to vote at such meeting, or any adjournment thereof, with
the address of and the number of shares held by each, which list shall be
produced and kept open at the time and place of the meeting and shall be subject
to the inspection of any shareholder during the whole time of the meeting for
the purposes of the meeting. The original stock transfer books shall be prima
facie evidence as to who are the shareholders entitled to examine such list or
transfer books or to vote at any meeting of shareholders. Failure to comply with
the requirements of this section shall not affect the validity of any action
taken at such meeting.
2.07. Quorum. Except as otherwise provided in the articles of
incorporation, a majority of the shares entitled to vote, represented in person
or by proxy, shall constitute a quorum at a meeting of shareholders. If a quorum
is present, the affirmative vote of the majority of the shares represented at
the meeting and entitled to vote on the subject matter shall be the act of the
shareholders unless the vote of a greater number or voting by classes is
required by law or the articles of incorporation. Though less than a quorum of
the outstanding shares are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified.
2.08. Conduct of Meetings. The President, or in his absence, the Executive
Vice President, if there be one and he is present, or in their absence, a Vice
President in the order provided under Section 4.08, and in their absence, any
person chosen by the shareholders present shall call the meeting of the
shareholders to order and shall act as chairman of the meeting, and the
Secretary of the corporation shall act as secretary of all meetings of the
shareholders, but, in the absence of the Secretary, the presiding officer may
appoint any other person to act as secretary of the meeting.
2.09. Proxies. At all meetings of shareholders, a shareholder entitled to
vote may vote in person or by proxy appointed in writing by the shareholder or
by his duly authorized attorney in fact. Such proxy shall be filed with the
Secretary
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of the corporation before or at the time of the meeting. Unless otherwise
provided in the proxy, a proxy may be revoked at any time before it is voted,
either by written notice filed with the Secretary or the acting secretary of the
meeting or by oral notice given by the shareholder to the presiding officer
during the meeting. The presence of a shareholder who has filed his proxy shall
not of itself constitute a revocation. No proxy shall be valid after eleven
months from the date of its execution, unless otherwise provided in the proxy.
The Board of Directors shall have the power and authority to make rules
establishing presumptions as to the validity and sufficiency of proxies.
2.10. Voting of Shares. Each outstanding share shall be entitled to one
vote upon each matter submitted to a vote at a meeting of shareholders, except
to the extent that the voting rights of the shares of any class or classes are
enlarged, limited or denied by the articles of incorporation.
2.11. Voting of Shares by Certain Holders.
(a) Other Corporations. Shares standing in the name of another corporation
may be voted either in person or by proxy, by the president of such corporation
or any other officer appointed by such president. A proxy executed by any
principal officer of such other corporation or assistant thereto shall be
conclusive evidence of the signer's authority to act, in the absence of express
notice to this corporation, given in writing to the Secretary of this
corporation, of the designation of some other person by the board of directors
or the bylaws of such other corporation.
(b) Legal Representatives and Fiduciaries. Shares held by an
administrator, executor, guardian, conservator, trustee in bankruptcy, receiver,
or assignee for creditors may be voted by him, either in person or by proxy,
without a transfer of such shares into his name, provided that there is filed
with the Secretary before or at the time of meeting proper evidence of his
incumbency and the number of shares held. Shares standing in the name of a
fiduciary may be voted by him, either in person or by proxy. A proxy executed by
a fiduciary, shall be conclusive evidence of the signer's authority to act, in
the absence of express notice to this corporation, given in writing to the
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Secretary of this corporation, that such manner of voting is expressly
prohibited or otherwise directed by the document creating the fiduciary
relationship.
(c) Pledqees. A shareholder whose shares are pledged shall be entitled to
vote such shares until the shares have been transferred into the name of the
pledgee, and thereafter the pledgee shall be entitled to vote the shares so
transferred.
(d) Treasury Stock and Subsidiaries. Neither treasury shares, nor shares
held by another corporation if a majority of the shares entitled to vote for the
election of directors of such other corporation is held by this corporation,
shall be voted at any meeting or counted in determining the total number of
outstanding shares entitled to vote, but shares of its own issue held by this
corporation in a fiduciary capacity, or held by such other corporation in a
fiduciary capacity, may be voted and shall be counted in determining the total
number of outstanding shares entitled to vote.
(e) Minors. Shares held by a minor may be voted by such minor in person or
by proxy and no such vote shall be subject to disaffirmance or avoidance, unless
prior to such vote the Secretary of the corporation has received written notice
or has actual knowledge that such shareholder is a minor.
(f) Incompetents and Spendthrifts. Shares held by an incompetent or
spendthrift may be voted by such incompetent or spendthrift in person or by
proxy and no such vote shall be subject to disaffirmance or avoidance, unless
prior to such vote the Secretary of the corporation has actual knowledge that
such shareholder has been adjudicated an incompetent or spendthrift or actual
knowledge of filing of judicial proceedings for appointment of a guardian.
(g) Joint Tenants. Shares registered in the names of two or more
individuals who are named in the registration as joint tenants may be voted in
person or by proxy signed by any one or more of such individuals if either (I)
no other such individual or his legal representative is present and claims the
right to participate in the voting of such shares or prior to the vote files
with the Secretary of the corporation a contrary written voting authorization or
direction or written denial of
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authority of the individual present or signing the proxy proposed to be voted or
(ii) all such other individuals are deceased and the Secretary of the
corporation has no actual knowledge that the survivor has been adjudicated not
to be the successor to the interests of those deceased.
2.12. Waiver of Notice by Shareholders. Whenever any Notice whatever is
required to be given to any shareholder of the corporation under the articles of
incorporation or bylaws or any provision of law, a waiver thereof in writing,
signed at any time, whether before or after the time of meeting, by the
shareholder entitled to such notice, shall be deemed equivalent to the giving of
such notice; provided that such waiver in respect to any matter of which notice
is required under any provision of the Wisconsin Business Corporation Law, shall
contain the same information as would have been required to be included in such
notice, except the time and place of meeting.
2.13. Unanimous Consent without Meeting. Any action required or permitted
by the articles of incorporation or bylaws or any provision of law to be taken
at a meeting of the shareholders, may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all of the
shareholders entitled to vote with respect to the subject matter thereof.
ARTICLE III
BOARD OF DIRECTORS
3.01. General Powers and Number. The business and affairs of the
corporation shall be managed by its Board of Directors. The number of directors
of the corporation shall be three.
3.02. Tenure and Qualifications. Each director shall hold office until the
next annual meeting of shareholders and until his successor shall have been
elected, or until his prior death, resignation or removal. A director may be
removed from office by affirmative vote of a majority of the outstanding shares
entitled to vote for the election of such director, taken at a meeting of
shareholders called for that purpose. A director
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may resign at any time by filing his written resignation with the Secretary of
the corporation. Directors need not be residents of the State of Wisconsin or
shareholders of the corporation.
3.03. Regular Meetings. A regular meeting of , the Board of Directors
shall be held without other notice than this bylaw immediately after the annual
meeting of shareholders, and each adjourned session thereof. The place of such
regular meeting shall be the same as the place of the meeting of shareholders
which precedes it, or such other suitable place as may be announced at such
meeting of shareholders. The Board of Directors may provide, by resolution, the
time and place, either within or without the State of Wisconsin, for the holding
of additional regular meetings without other notice than such resolution.
3.04. Special Meetings. Special meetings of the Board of Directors may be
called by or at the request of the President, Secretary or two-thirds at the
directors. The President or Secretary calling any special meeting of The Board
of Directors may fix any place, either within or without the State of Wisconsin,
as the place for holding any special meeting of the Board of Directors called by
them, and if no other place is fixed the place of meeting shall be the principal
business office at the corporation in the State of Wisconsin.
3.05. Notice; Waiver. Notice of each meeting of the Board of Directors
(unless otherwise provided in or pursuant to Section 3.03) shall be given by
written notice delivered personally or mailed or given by telegram to each
director at his business address or at such other address as such director shall
have designated in writing filed with the Secretary, in each case not less than
five (5) days if by mail and not than two (2) days if by telegram or personal
delivery. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail so addressed, with postage thereon prepaid. If notice
be given by telegram, such notice shall be deemed to be delivered when the
telegram is delivered to the telegraph company. Whenever any notice whatever is
required to be given to any director of the corporation under the articles of
incorporation or bylaws or any provision of law, a waiver thereof in writing,
signed at any time, whether before or after the time of meeting, by the director
entitled to such notice, shall be deemed
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equivalent to the giving of such notice. The attendance of a director at a
meeting shall constitute a waiver of notice of such meeting, except where a
director attends a meeting and objects thereat to the transaction of any
business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the Board of Directors need be specified in the notice or waiver of notice of
such meeting.
3.06. Quorum. Except as otherwise provided by law or by the articles of
incorporation or these bylaws, two-thirds of the number of directors set forth
in Section 3.01 shall constitute a quorum for the transaction of business at any
meeting of the Board of Directors, but a majority of the directors present
(though less than such quorum) may adjourn the meeting from time to time without
further notice.
3.07. Manner of Acting. The act of the majority of the directors present
at a meeting at which a quorum is present shall be the act of the Board of
Directors, unless the act of a greater number is required by law or by the
articles of incorporation or these bylaws.
3.08. Conduct of meetings. The Chairman of-the Board, if there be one and
he is present, or the President, and in his absence the Executive Vice
President, or in his absence a Vice President in the order provided under
Section 4.08, and in their absence, any director chosen by the directors
present, shall call meetings of the Board of Directors to order and shall act as
chairman of the meeting. The Secretary of the corporation shall act as secretary
of all meetings of the Board of Directors, but in the absence of the Secretary,
the presiding officer may appoint any Assistant Secretary or any director or
other person present to act as secretary of the meeting.
3.09 Vacancies. Any vacancy occurring in the Board of Directors, including
a vacancy created by an increase in the number of directors, may be filled until
the next succeeding annual election by the affirmative vote of two-thirds of the
directors then in office, though less than a quorum of the Board of Directors;
provided, that in case of a vacancy created by the removal of a director by vote
of the shareholder, the shareholders shall have the right to fill such vacancy
at the
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same meeting or any adjournment thereof.
3.10 Compensation. The Board of Directors, by affirmative vote of a
majority of the directors then in office, and irrespective of any personal
interest or any of its members, may establish reasonable compensation of all
directors for services to the corporation as directors, officers or otherwise,
or may delegate such authority to an appropriate committee. The Board of
Directors also shall have authority to provide for or to delegate authority to
an appropriate committee to provide for reasonable pensions, disability or death
benefits, and other benefits or payments, to directors, officers and employees
and to their estates, families, dependents or beneficiaries on account of prior
services rendered by such directors, officers and employees to the corporation.
3.11. Presumption of Assent. A director of the corporation who is present
at a meeting of the Board of Directors or a committee thereof of which he is a
member at which action on any corporate matter is taken shall be presumed to
have assented to the action taken unless his dissent shall be entered in the
minutes of the meeting or unless he shall file his written dissent to such
action with the person acting as the secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered mail to the
secretary of the corporation immediately after the adjournment of the meeting.
Such right to dissent shall not apply to a director who voted in favor of such
action.
3.12. Committees. The Board of Directors by resolution adopted by the
affirmative vote of a majority of the number of directors set forth in Section
3.01 may designate one or more committees, each committee to consist of three-
or more directors elected by the Board of Directors, which to the extent
provided in said resolution as initially adopted, and as thereafter supplemented
or amended by further resolution adopted by a like vote, shall have and may
exercise, when the Board of Directors is not in session, the powers of the Board
of Directors in the management of the business and affairs of the corporation,
except action in respect to dividends to shareholders, election of the principal
officers or the filling of vacancies in the Board of Directors or committees
created pursuant to this section. The
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Board of Directors may elect one or more of its members as alternate members of
any such committee who may take the place of any absent member or members at any
meeting of such committee, upon request by the President or upon request by the
chairman of such meeting. Each such committee shall fix its own rules governing
the conduct of its activities and shall make such reports to the Board of
Directors of its activities as the Board of Directors may request.
3.13. Unanimous Consent: without Meeting. Any action required or permitted
by the articles of incorporation or bylaws or any provision of law to be taken
by the Board of Directors or Committee thereof at a meeting or by resolution may
be taken without a meeting if a consent in writing, setting forth the action so
taken, shall be signed by all of the directors or members of the committee then
in office.
ARTICLE IV
OFFICERS
4.01. Number. The principal officers of the corporation shall be a
President, one Vice President, a Secretary, and a Treasurer, each of whom shall
be elected by the Board of Directors. The election of a larger number of Vice
Presidents shall of itself constitute an amendment of the number of Vice
Presidents provided in the foregoing sentence. The Board of Directors may
designate one of the Vice Presidents as the Executive Vice President. Such other
officers and assistant officers as may be deemed necessary may be elected or
appointed by the Board of Directors. Any two or more offices may be held by the
same person, except the offices of President and Secretary and the offices of
President and Vice President.
4.02. Election and Term of office. The officers of the corporation to be
elected by the Board of Directors shall be elected annually by the Board of
Directors at the first meeting of the Board of Directors held after each annual
meeting of the shareholders. If the election of officers shall not be held at
such meeting, such election shall be held as soon thereafter as conveniently may
be. Each officer-shall hold office until his
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successor shall have been duly elected or until his prior death, resignation or
removal.
4.03. Removal. Any officer or agent may be removed by the Board of
Directors whenever in its judgement the best interests of the corporation will
be served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Election or appointment shall not of
itself create contract rights.
4.04. Vacancies. A vacancy in any principal office because of death,
resignation, removal, disqualification or otherwise, shall be filled by the
Board of Directors for the unexpired portion of the term.
4.05. Chairman of the Board. The Board of Directors may elect one of its
members the Chairman of the Board. The Chairman of the Board shall preside at
all meetings of the shareholders and directors at which lie is present. He shall
be ex officio a member of all standing committees and shall be Chairman of such
committees as is determined by the Board of Directors. He shall@ have such other
powers and duties as may from time to time be prescribed by the bylaws or by
resolution of the Board of Directors.
4.06. President. The President shall be the principal executive officer of
the corporation and, subject to the control of the Board of Directors, shall in
general supervise and control all of the business and affairs of the
corporation. He shall have authority, subject to such rules as may be prescribed
by the Board of Directors, to appoint such agents and employees of the
corporation as he shall deem necessary, to prescribe their powers, duties and
compensation, and to delegate authority to them. Such agents and employees shall
hold office at the discretion of the President. He shall have authority to sign,
execute and acknowledge, on behalf of the corporation, all deeds, mortgages,
bonds, stock certificates, contracts, leases, reports and all other documents or
instruments necessary or proper to be executed in the course of the
corporation's regular business, or which shall be authorized by resolution of
the Board of Directors; and, except as otherwise provided by law or the Board of
Directors, he may authorize any Vice President or other officer or agent of the
corporation to sign, execute and
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acknowledge such documents or instruments in his place and stead. In general he
shall perform all duties incident to the office of President and such other
duties as may be prescribed by the Board of Directors from time to time.
4.07. The Executive Vice President. The Executive Vice President, if one
be designated, shall assist the President in the discharge of supervisory,
managerial and executive duties and functions. In the absence of the President
or in the event of his death, inability or refusal to act, the Executive Vice
President shall perform the duties of the President and when so acting shall
have all the powers and duties of the President. He shall perform such other
duties as from time to time may be assigned to him by the board of Directors or
the President.
4.08. The Vice Presidents. In the absence of the President and the
Executive Vice President or in the event of their death, inability or refusal to
act, or in the event for any reason it shall be impracticable for them to act
personally, the Vice President (or in the event there be more than one Vice
President, the Vice Presidents in the order designated by the Board of
Directors, or in the absence of any designation, then in the order of their
election) shall perform the duties of the President, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
President. Any Vice President may sign, with the Secretary of Assistant
Secretary, certificates for shares of the corporation; and shall perform such
other duties and have such authority as from time to time may be delegated or
assigned to him by the President or by the Board of Directors. The execution of
any instrument of the corporation by any vice President shall be conclusive
evidence, as to third parties, of his authority to act in the stead of the
President. Vice Presidents may be designated as the Vice President of a
specified division, department or portion of the corporation's business.
4.09. The Secretary. The Secretary shall: (a) keep the minutes of the
meetings of the shareholders and of the Board of Directors in one or more books
provided for that purpose; (b) see that all notices are duly given in accordance
with the provisions of these bylaws or as required by law; (C)be custodian of
the corporate records and of the seal of the corporation and see that the seal
of the corporation is affixed to all documents the
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execution of which on behalf of the corporation under its seal is duly
authorized; (d) keep or arrange for the keeping of a register of the post office
address of each shareholder which shall be furnished to the Secretary by such
shareholder; (e) sign with the President, or a Vice President, certificates for
shares of the corporation, the issuance of which shall have been authorized by
resolution of the Board of Directors; (f) have general charge of the stock
transfer books of the corporation; and (9) in general perform all duties
incident to the office of Secretary and have such other duties and exercise such
authority as from time to time may be delegated or assigned to him by the
President or by the Board of Directors.
4.10. The Treasurer. The Treasurer shall: (a) have charge and custody of
and be responsible for all funds and securities of the corporation; (b) receive
and give receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the corporation in such
banks, trust companies or other depositories as shall be selected in accordance
with the provisions of Section 5.04; and (C) in general perform all of the
duties incident to the office of Treasurer and have such other duties and
exercise such other authority as from time to time may be delegated or assigned
to him by the President or by the Board of Directors. If required by the Board
of Directors, the Treasurer shall give a bond for the faithful discharge of his
duties in such sum and with such surety or sureties as the Board of Directors
shall determine.
4.11. Assistant Secretaries and Assistant Treasurers. There shall be such
number of Assistant Secretaries and Assistant treasurers as the Board of
Directors may from time to time authorize. The Assistant Secretaries may sign
with the President or a Vice President certificates for shares of the
corporation the issuance of which shall have been authorized by a Resolution of
the Board of Directors. The Assistant Treasurers shall respectively, if required
by the board of Directors, give bonds for the faithful discharge of their duties
in such sums and with such sureties as the Board of Directors shall determine.
The Assistant Secretaries and Assistant Treasurers, in general, shall perform
such duties and have such authority as shall from time to time be delegated or
assigned to them by the Secretary or the Treasurer, respectively, or by the
President or the Board of
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Directors.
4.12 Other Assistants and Acting Officers. The Board of Directors shall
have the power to appoint any person to act as assistant to any officer, or as
agent for the corporation in his stead, or to perform the duties of such officer
whenever for any reason it is impracticable for such officer to act personally,
and such assistant or acting officer or other agent so appointed by the Board of
Directors shall have the power to perform all the duties of the office to which
he is so appointed to be assistant, or as to which he is so appointed to act,
except as such power may be otherwise defined or restricted by the Board of
Directors.
4.13. Salaries. The salaries of the principal officers shall be fixed from
time to time by the Board of Directors or by a duly authorized committee
thereof, and no officer shall be prevented from receiving such salary by reason
of the fact that he is also a director of the corporation.
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS;
SPECIAL CORPORATE ACTS
5.01. Contracts. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute or deliver any
instrument in the name of and on behalf of the corporation, and such
authorization may be general or confined to specific instances. In the absence
of other designation, all deeds, mortgages and instruments of assignment or
pledge made by the corporation shall be executed in the name of the corporation
by the President or one of the Vice Presidents and by the Secretary, an
Assistant Secretary, the Treasurer or an Assistant Treasurer; the Secretary or
an Assistant Secretary, when necessary or required, shall affix the corporate
seal thereto; and when so executed no other party to such instrument or any
third party shall be required to make any inquiry into the authority of the
signing officer or officers.
5.02. Loans. No indebtedness for borrowed money shall be contracted on
behalf of the corporation and no evidences of such indebtedness shall be issued
in its name unless authorized by or under the authority of a resolution of the
Board of
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Directors. Such authorization may be @j@general or confined to specific
instances.
5.03.Checks, Drafts, etc. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the corporation, shall be signed by such officer or officers, agent or agents of
the corporation and in such manner as shall from time to time be determined by
or under the authority of a resolution of the Board of Directors.
5.04.Deposits. All funds of the corporation not otherwise employed shall
be deposited from time to time to the credit of the corporation in such banks,
trust companies or other depositories as may be selected by or under the
authority of a resolution of the Board of Directors.
5.05. Voting of Securities Owned by this Corporation. Subject always to
the specific directions of the Board of Directors, (a) any shares or other
securities issued by any other corporation and owned or controlled by this
corporation may be voted at any meeting of security holders of such other
corporation by the President of this corporation if he be present, or in his
absence by the Executive Vice President if there be one and he is present, or in
his absence by any Vice President of this corporation who may be present, and
(b) whenever, in the judgment of the President, or in his absence, the Executive
Vice President if there be one, or in his absence any Vice President, it is
desirable for this corporation to execute a proxy or written consent in respect
to any shares or other securities issued by any other corporation and owned by
this corporation, such proxy or consent shall be executed in the name of this
corporation by the President, the Executive Vice President, or one of the Vice
Presidents of this corporation, without necessity of any authorization by the
Board of Directors, affixation of corporate seal or countersignature or
attestation by another officer. Any person or persons designated in the manner
above stated as the proxy or proxies of this corporation shall have full right,
power and authority to vote the shares or other securities issued by such other
corporation and owned by this corporation the same as such shares or other
securities might be voted by this corporation.
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5.06. Contracts Between Corporation and Related Persons. Any contract or
other transaction between the corporation and one or more of its directors, or
between the corporation and any firm of which one or more of its directors are
members or employees, or in which he or they are interested, or between the
corporation and any corporation or association of which one or more of its
directors are shareholders, members, directors, officers or employees, or in
which he or they are interested, shall be valid for all purposes,
notwithstanding the presence of such director or directors at the meeting of the
Board of Directors of the corporation which acts upon, or in reference to, such
contract or transaction, and notwithstanding his or their participation in such
action, if the fact of such interest shall be disclosed or known to the Board of
Directors and the Board of Directors shall, nevertheless, authorize, approve and
ratify such contract or transaction by a vote of a majority of the directors
present, such interested director or directors to be counted in determining
whether a quorum is present, but not to be counted as voting upon the matter or
in calculating the majority of such quorum necessary to carry such vote. This
section shall not be construed to invalidate any contract or other transaction
which would otherwise be valid under the common and statutory law applicable
thereto.
ARTICLE VI
CERTIFICATE FOR SHARES AND THEIR TRANSFER
6.01. Certificates for Shares. Certificates representing shares of the
corporation shall be in such form, consistent with law, as shall be determined
by the Board of Directors. Such certificates shall be signed by the President,
the Executive Vice President, or a Vice President and by the Secretary or an
Assistant Secretary. All certificates for shares shall be consecutively numbered
or otherwise identified. The name and address of the person to whom the shares
represented thereby are issued, with the number of shares and date of issue,
shall be entered on the stock transfer books of the corporation. All certificate
surrendered to the corporation for transfer shall be canceled and no new
certificate shall be issued until the former certificate for a like number of
shares shall have been surrendered and canceled, except as provided in Section
6.06.
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6.02.Facsimile Signatures and Seal. The seal of the corporation on any
certificates for shares may be a facsimile. The signatures of the officers upon
a certificate may be facsimiles if the certificate is countersigned by a
transfer agent, or registered by a registrar, other than the corporation itself
or an employee of the corporation.
6.03. Signature by Former Officers. In case any officer, who has signed or
whose facsimile signature has been placed upon any certificate for shares, shall
have ceased to be such officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he were such officer at the
date of its issue.
6.04. Transfer of Shares. Prior to due presentment of a certificate for
shares for registration of transfer the corporation may treat the registered
owner of such shares as the person exclusively entitled to vote, to receive
notifications and otherwise to exercise all the rights and power of an owner.
Where a certificate for shares is presented to the corporation with a request to
register for transfer, the corporation shall not be liable to the owner or any
other person suffering loss as a result of such registration of transfer if (a)
there were on or with the certificate the necessary endorsements, and (b) the
corporation had no duty to inquire into adverse claims or has discharged any
such duty. The corporation may require reasonable assurance that said
endorsements are genuine and effective and in compliance with such other
regulations as may be prescribed under the authority of the Board of Directors.
6.05. Restrictions on Transfer. The face or reverse side of each
certificate representing shares shall bear a conspicuous notation of any
restriction imposed by the corporation upon the transfer of such shares.
6.06. Lost, Destroyed or Stolen Certificates. Where the owner claims that
his certificate for shares has been lost, destroyed or wrongfully taken, a new
certificate shall be issued in place thereof if the owner (a) so requests before
the corporation has notice that such shares have been acquired by a bona fide
purchaser, and (b) files with the corporation a sufficient indemnity bond, and
(c) satisfies such other reasonable requirements as the Board of Directors may
prescribe.
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6.07.Consideration for Shares. The shares of the corporation may be issued
for such consideration as shall be fixed from time to time by the Board of
Directors, provided that any shares having a par value shall not be issued for a
consideration less than the par value thereof. The consideration to be paid for
shares may be paid in whole or in part, in money, in other property, tangible or
intangible, or in labor or services actually performed for the corporation. When
payment of the consideration for which shares are to be issued shall have been
received by the corporation, such shares shall be deemed to be fully paid and
nonassessable by the corporation. No certificate shall be issued for any share
until such share is fully paid.
6.08. Stock Regulations. The Board of Directors shall have the power and
authority to make all such further rules and regulations not inconsistent with
the statutes of the State of Wisconsin as it may deem expedient concerning the
issue, transfer and registration of certificates representing shares of the
corporation.
6.09. Indemnification. The corporation shall indemnify any director or
officer, or former director or officer of the corporation, or any person who may
have served at its request as a director or officer of another corporation in
which it owns shares of capital stock, or of which it is " creditor, against
unreasonable expenses, including attorneys' fees, actually and necessarily
incurred by him in connection with the defense of any civil, criminal or
administrative action, suit or proceeding in which he is made a party or with
which he is threatened by reason of being or having been or because of any act
as such director or officer, within the course of his duties or employment,
except in relation to matters as to which he shall be adjudged in such action,
suit or proceeding to be liable for negligence or misconduct in the performance
of his duties. The corporation may also reimburse any director or officer for
the reasonable costs of settlement of any such action, suit or proceeding, if it
shall be found by a majority of a committee composed of the directors not
involved in the matter in controversy (whether or not a quorum) that it was to
the interests of the corporation that such settlement to made and that such
director or officer was not guilty of negligence or misconduct. The right of
indemnification herein provided shall extend to the estate, executor,
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administrator, guardian and conservator of any deceased or former director or
officer or person who himself would have been entitled to indemnification. Such
rights of indemnification and reimbursement shall not be deemed exclusive of any
other rights to which such director or officer may be entitled under any
statute, agreement, vote of shareholders, or otherwise.
ARTICLE VII
SEAL
7.01. The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the corporation
and the-state of incorporation and the words, "Corporate Seal."
ARTICLE VIII
AMENDMENTS
8.01. By Shareholders. These bylaws may be altered, amended or repealed
and new bylaws may be adopted by the shareholders by affirmative vote of not
less than a majority of the shares present or represented at any annual or
special meeting of the shareholders at which a quorum is in attendance.
8.02. By Directors. These bylaws may also be altered, amended or repealed
and new bylaws may be adopted by the Board of Directors by affirmative vote of
two-thirds of the number of directors present at any meeting at which a quorum
is in attendance; but no bylaw adopted by the shareholders shall be amended or
repealed by the Board of Directors if the bylaw so adopted so provides.
8.03. Implied Amendments. Any action taken or authorized by the
shareholders or by the Board of Directors, which would be inconsistent with the
bylaws then in effect but is taken or authorized by affirmative vote of not less
than the number of shares or the number of directors required to amend the
bylaws so that the bylaws would be consistent with such action, shall be given
the same effect as though the bylaws had been
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temporarily amended or suspended so far, but only so far, as is necessary to
permit the specific action so taken or authorized.
ARTICLE IX
FISCAL YEAR
9.01. The fiscal year of the corporation shall begin on July 1.
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CONSENT RESOLUTION
GARETH STEVENS, INC.
The undersigned, being the sole shareholder of Gareth Stevens, Inc., a
Wisconsin corporation, does, pursuant to the provisions of ss. 180.91 of
Wisconsin Statutes, hereby Consent to and adopt the following resolutions:
RESOLVED, that Article 3, Section 3.01 of the Amended and Restated Bylaws,
dated March 16, 1987 is hereby amended to read as follows:
Section 3.01. General Powers and Number. The business and affairs of the
corporation shall be managed by its Board of Directors. The number of
directors of the corporation shall be at all times no less than one and no
more than five. The number of directors of the corporation shall be as set
forth at a shareholders' meeting or upon consent of the shareholders.
RESOLVED, that the following person is hereby elected as the sole director
of the corporation:
Gareth Stevens
DATED at Milwaukee, Wisconsin, this 6th day of August, 1987.
Gareth Stevens, Sole Shareholder
<PAGE>
CONSENT RESOLUTION
GARETH STEVENS, INC.
The undersigned, being the shareholders of Gareth Stevens, a Wisconsin
corporation, do, pursuant to the provisions of ss.180.995, Wis. Stats., hereby
consent to and adopt the following resolution:
RESOLVED, that Article G, Section 6 .09 of the Amended and Restated
Bylaws, dated March 16, 1987 is hereby amended to read as follows:
6.09. Liability of Directors and Officers. No person shall be liable to
the corporation for any loss or damage suffered by on account of any action
taken or omitted to be taken by him as a director or officer of the corporation,
or of any other corporation which he serves as a director or officer at the
request of the corporation, in good faith, if such person (a) exercised and used
the same degree of care and skill as a prudent man would have exercised or used
under the circumstances in the conduct of his own affairs, or (b) took or
omitted to take such action in reliance upon advice of counsel for the
corporation or upon statements made or information furnished by officers or
employees of the corporation which he had reasonable grounds to believe to be
true. The foregoing shall not be exclusive of other rights and defenses to which
he may be entitled as matter of law.
<PAGE>
6.10. Indemnity of Officers and Directors. Every person who is or was a
director or officer of the corporation, and any person who may have served at
its request as a director or officer of another corporation in which it owns
shares of capital stock or of which it is a creditor shall be indemnified by the
corporation against all damages, costs, fees, and attorney fees asserted against
or incurred by him in connection with any claim, action, suit, arbitration, or
other proceeding to which he is made or threatened to be made a party by reason
of his being or having been director or officer. This shall not apply to matters
in which recovery shall be had against him by reason of his having been adjudged
to have been guilty of fraud, self-dealing, or willful misconduct in the
performance of his duty as officer or director. This indemnity shall include
reimbursement of expenses incurred and paid in settling any such claim, action,
suit or proceeding. The termination of a proceeding by judgment, order,
settlement, conviction, or upon a plea of guilty or no contest or its equivalent
shall not create a presumption that such director or officer is guilty of fraud,
self-dealing or willful misconduct in the performance of his duties if such
director or officer was acting in good faith in what he considered to be the
best interests of the corporation and with no reasonable cause to believe that
the action was illegal.
<PAGE>
The right of indemnification herein provided shall extend to the estate,
executor, administrator, guardian and conservator of any deceased or former
director or officer or person who himself would have been entitled to
indemnification.
Dated at Milwaukee, Wisconsin this 17th day of September, 1990 .
Gareth Stevens
VENTURE INVESTORS OF WISCONSIN
BY:
Roger H. Ganser
<PAGE>
Exhibit 3.100
CERTIFICATE OF INCORPORATION
OF
TELEVISION EDUCATION NETWORK INCORPORATED
1. The name of the corporation is TELEVISION EDUCATION NETWORK
INCORPORATED.
2. The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County
of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
3. The nature of the business or purposes to be conducted or
promoted is to engage in any lawful act or activity for which corporations may
be organized under the General Corporation Law of Delaware.
4. The total number of shares of stock which the corporation shall
have authority to issue is 150,000 shares of common stock, with a par value of
one dollar ($1.00)each.
5. The name and mailing address of the incorporator is as follows:
NAME MAILING ADDRESS
---- ---------------
Leslie Weiss 805 Third Avenue
New York, New York 10022
6. In furtherance and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized to make, alter or repeal
the by-laws of the corporation.
7. Elections of directors need not be by written ballot unless the
by-laws of the corporation shall so provide.
<PAGE>
8. Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this corporation under the provisions of Section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this corporation.
9. The corporation reserves the right to amend, alter, change or
repeal any provision contained in this certificate of incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
10. No Director of this corporation shall be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (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) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the Director derived an improper
personal benefit.
<PAGE>
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for
the purpose of forming a corporation pursuant to the General Corporation Law of
the State of Delaware, do make this certificate, hereby declaring and affirming,
under penalties of perjury, that this is my act and deed and the facts herein
stated are true, and accordingly have hereunto set my hand this 6th day of May,
1987.
Leslie Weiss
Incorporator
4530k
<PAGE>
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
OF
TELEVISION EDUCATION NETWORK INCORPORATED
It is hereby certified that:
1. The name of the corporation (hereinafter called the
"Corporation") is TELEVISION EDUCATION NETWORK INCORPORATED.
2. The Certificate of Incorporation of the Corporation is hereby
amended by striking out Article 4 thereof and by substituting in lieu of said
Article 4 the following new Article:
"4. The total number of shares of stock which the
Corporation shall have authority to issue is 150,000
shares of common stock, with a par value of one dollar
($1.00) each, of which 90,000 shares shall be designated
as Class A common stock and 60,000 shares shall be
designated as Class B common stock.
a. The Class A shares shall be unrestricted with respect to
voting power, dividends rights, and liquidation
preference. Each holder of such shares shall be entitled
at every meeting of ting of shareholders to one (1) vote
for every share of Class A common stock standing in his
name on the records of the Corporation. Each holder of
such shares shall be entitled to full dividend
participation on a prorata basis, each share equaling
one (1) share in determining such prorata portion. Upon
liquidation, each
<PAGE>
holder of such shares shall be entitled to full
participation in liquidation proceeds on a prorata
basis, each share equaling one (1) share in determining
such prorata portion.
b. The Class B shares shall be restricted with respect to
voting power, dividend participation, and liquidation
preference. Such shares shall accrue voting, dividend,
and liquidation rights identical to those of the Class A
shares ratably over a four year period from the date of
issuance by the Corporation in accordance with the
following schedule:
(i) During the first full calendar year after the date
the Class B shares have been issued by the
Corporation ("Year 1"), each holder of Class B
shares shall be entitled at every meeting of
shareholders, to one (1) vote for every four
(4)shares of Class B common stock standing in his
name on the records of the Corporation. Such
shares shall also be limited with respect to
dividend and liquidation rights during Year 1 with
four (4) shares of Class B common equaling one (1)
Class A share for purposes of determining each
holder's prorata portion of dividend and/or
liquidation proceeds.
(ii) During the second full calendar year after the
date the Class B shares have been issued by the
Corporation ("Year 2"), each holder of such shares
shall be entitled at every meeting of
shareholders, to one (1) vote for every two (2)
shares of Class B common stock standing in his
name on the records of the Corporation. Such
shares shall also be limited with respect to
dividend and liquidation rights during Year 2,
with two (2) shares of Class B common stock
equaling one (1) Class A share for
<PAGE>
purposes of determining each holder's prorata
portion of dividend and/or liquidation proceeds.
(iii) During the third full calendar year after the date
the Class B shares have been issued by the
Corporation ("Year 3") each holder of such shares
shall be entitled at every meeting of
shareholders, to one (1) vote for every one and
one-third (1 1/3) share of Class B common stock
standing in his name on the records of the
Corporation. Such shares shall also be limited
with respect to dividend and liquidation rights
during Year 3, with one and one- third (1 1/3)
share of Class B common equaling one (1) Class A
share for purposes of determining each holder's
prorata portion of dividend and/or liquidation
proceeds.
(iv) During the fourth full calendar year after the
date the Class B shares have been issued by the
Corporation ("Year 4") and thereafter, such shares
shall have accrued full rights with respect to
voting, dividend participation and liquidation
proceeds. Each holder of such shares shall be
entitled at every meeting of shareholders, to one
(1) vote for every one (1) share of Class B common
stock standing in his name on the records of the
Corporation. Each holder of such shares shall be
entitled to full participation on a prorata basis
in dividends and liquidation proceeds, each share
equaling one (1) share in determining such prorata
portion."
3. The amendment of the Certificate of Incorporation herein
certified has been duly adopted in accordance with the provisions of Sections
228 and 242 of the General Corporation
<PAGE>
Law of the State of Delaware.
Signed and attested to on December 16, 1988.
Frederick J. Albe, President
ATTEST:
Jeffrey L. Jacobs, Assistant Secretary
<PAGE>
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
TELEVISION EDUCATION NETWORK INCORPORATED
Pursuant to the provisions of Section 242 of the General Corporation Law
of Delaware, the undersigned corporation adopts the following Certificate of
Amendment to its Certificate of Incorporation:
ARTICLE I
The name of the corporation is Television Education Network Incorporated
(the "Corporation").
ARTICLE II
The following amendments to the Certificate of Incorporation are adopted
by the sole shareholder of the Corporation:
1. The title of the Certificate of Incorporation is hereby amended to be and
read in its entirety as follows:
"CERTIFICATE OF INCORPORATION
OF
IDTN LEASING CORP."
2. Article One of the Certificate of Incorporation is hereby amended to be
and read in its entirety as follows:
ARTICLE ONE
The name of the corporation is IDTN LEASING CORP. (the
"Corporation")."
ARTICLE III
These amendments were adopted by the sole shareholder of the Corporation
on July 20, 1993.
<PAGE>
ARTICLE IV
The total number of outstanding shares of stock of the Corporation, all of
which are entitled to vote on these amendments, is 8000 shares of Class A Common
Stock, par value $1.00 per share, and 1000 shares of Class B Common Stock, par
value $1.00 per share.
ARTICLE V
The number of shares voted for such amendment was 8000 shares of Class A
Common Stock and 1000 shares of Class B Common Stock and the number of shares of
either class voted against such amendment was 0.
Dated July 20, 1993
TELEVISION EDUCATION NETWORK
INCORPORATED
By:_______________________________
Phyllis Farragut, Secretary
<PAGE>
Exhibit 3.101
BY - LAWS
OF
TELEVISION EDUCATION NETWORK INC.
(A Delaware Corporation)
ARTICLE I
STOCKHOLDERS
1. CERTIFICATES REPRESENTING STOCK. Every holder of stock in the
corporation shall be entitled to have a certificate signed by, or in the name
of, the corporation by the Chairman or Vice-Chairman of the Board of Directors
if any, or by the President or a Vice-President and by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary for each share of
stock owned by him in the corporation. Any and all signatures on any such
certificate may be facsimiles. In case any officer, transfer agent, or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent, or registrar before such
certificate is used, it may be issued by the corporation with the same effect as
if he were such officer, transfer agent, or registrar at the date of issue.
Whenever the corporation shall be authorized to issue more than one
class of stock or more than one series of any class of stock, and whenever the
corporation shall issue any shares of its stock as partly paid stock, the
certificates representing shares of any such class or series or of any such
partly paid stock shall set forth thereon the statements prescribed by the
General Corporation Law. Any restrictions on the transfer or registration or
transfer of any shares of stock of any class or series shall be noted
conspicuously on the certificate representing such shares.
The corporation may issue a new certificate of stock in place of any
certificate theretofore issued by it, alleged to have been lost, stolen, or
destroyed, and the Board of Directors may require the owner of any lost, stolen,
or destroyed certificate, or his legal representative, to give the corporation a
bond sufficient to indemnify the corporation against any claim that may be made
against it on account of the alleged loss,
<PAGE>
theft, or destruction of any such certificate or the issuance of any such new
certificate.
2. FRACTIONAL SHARE INTERESTS. The corporation may, but shall not be
required to, issue fractions of a share. If the corporation does not issue
fractions of a share, it shall (1) arrange for the disposition of fractional
interests by those entitled thereto, (2) pay in cash the fair value of fractions
of a share as of the time when those entitled to receive such fractions are
determined, or (3) issue scrip or warrants in registered or bearer form which
shall entitle the holder to receive a certificate for a full share upon the
surrender of such scrip or warrants aggregating a full share, A certificate for
a fractional share shall, but scrip or warrants shall not unless otherwise
provided therein, entitle the holder to exercise voting rights, to receive
dividends thereon, and to participate in any of the assets of the corporation in
the event of liquidation. The Board of Directors may cause scrip or warrants to
be issued subject to the conditions that they shall become void if not exchanged
for certificates representing full shares before a specified date, or subject to
the conditions that the shares for which scrip or warrants are exchangeable may
be sold by the corporation and the proceeds thereof distributed to the holders
of scrip or warrants, or subject to any other conditions which the Board of
Directors may impose.
3. STOCK TRANSFERS. Upon compliance with provisions restricting the
transfer or registration of transfer of shares of stock, if any, transfers or
registration of transfers of shares of stock of the corporation shall be made
only on the stock ledger of the corporation by the registered holder thereof, or
by his attorney thereunto authorized by power of attorney duly executed and
filed with the Secretary of the corporation or with a transfer agent or a
registrar, if any, and on surrender of the certificate or certificates for such
shares of stock properly endorsed and the payment of all taxes due thereon.
4. RECORD DATE FOR STOCKHOLDERS. For the purpose of determining the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or the allotment of any rights, or entitled to
2
<PAGE>
exercise any rights in respect of any change, conversion, or exchange of stock
or for the purpose of any other lawful action, the directors may fix, in
advance, a record date, which shall not be more than sixty days or less than ten
days before the date of such meeting, nor more than sixty days prior to any
other action. If no record date is fixed, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next
preceding the day on which meeting is held; the record date for determining
stockholders entitled to express consent to corporate action in writing without
a meeting, when no prior action by the Board of Directors is necessary, shall be
the day on which the first written consent is expressed; and the record date for
determining stockholders for any other purpose shall be at the close of business
on the day on which the Board of Directors adopts the resolution relating
thereto. A determination of stockholders of record entitled to notice of or to
vote at any meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
5. MEANING OF CERTAIN TERMS. As used herein in respect of the right to
notice of a meeting of stockholders or a waiver thereof or to participate or
vote thereat or to consent or dissent in writing in lieu of a meeting, as the
case may be, the term "share" or "shares" or "share of stock" or "shares of
stock" or "stockholder" or "stockholders" refers to an outstanding share or
shares of stock and to a holder or holders of record of outstanding shares of
stock when the corporation is authorized to issue only one class of shares of
stock, and said reference is also intended to include any outstanding share or
shares of stock and any holder of holders of record of outstanding shares of
stock of any class upon which or upon whom the certificate of incorporation
confers such rights where there are two or more classes or series of shares of
stock or upon which or upon whom the General Corporation Law confers such rights
notwithstanding that the certificate of incorporation may provide for more than
one class or series of shares of stock, one or more of which are limited or
denied such rights thereunder; provided, however, that no such right shall vest
in the event of an increase or a decrease in the authorized number of shares of
stock of any class
3
<PAGE>
or series which is otherwise denied voting rights under the provisions of the
certificate of incorporation.
6. STOCKHOLDER MEETINGS.
- TIME. The annual meeting shall be held on the date and at the time
fixed, from time to time, by the directors, provided, that the first annual
meeting shall be held on a date within thirteen months after the organization of
the corporation, and each successive annual meeting shall be held on a date
within thirteen months after the date of the preceding annual meeting. Special
meetings shall be held on the dates and at the times fixed by the directors.
- PLACE. Annual meetings and special meetings shall be held at such
place, within or without the State of Delaware, as the directors may, from time
to time fix. Whenever the directors shall fail to fix such place, the meeting
shall be held at the registered office of the corporation in the State of
Delaware.
- CALL. Annual meetings and special meetings may be called by the
directors or by any officer instructed by the directors to call the meeting.
- NOTICE OR WAIVER OF NOTICE. Written notice of all meetings shall be
given, stating the place, date, and hour of the meeting and stating the place
within the city or other municipality or community at which the list of
stockholders of the corporation may be examined. The notice of an annual meeting
shall state that the meeting is called for the election of directors and for the
transaction of other business which may properly come before the meeting, and
shall, (if any other action which could be taken at a special meeting is to be
taken at such annual meeting) state the purpose or purposes. The notice of a
special meeting shall in all instances state the purpose or purposes for which
the meeting is called. The notice of any meeting shall also include, or be
accompanied by, any additional statements, information, or documents prescribed
by the General Corporation Law. Except as otherwise provided by the General
Corporation Law, a copy of the notice of any meeting shall be given, personally
or by mail, not less than ten days nor more than sixty days before the date of
the meeting, unless the lapse
4
<PAGE>
of the prescribed period of time shall have been waived, and directed to each
stockholder at his record address or at such other address which he may have
furnished by request in writing to the Secretary of the corporation. Notice by
mail shall be deemed to be given when deposited, with postage thereon prepaid,
in the United States mail. If a meeting is adjourned to another time, not more
than thirty days hence, and/or to another place, and if an announcement of the
adjourned time and/or place is made at the meeting, it shall not be necessary to
give notice of the adjourned meeting unless the directors, after adjournment,
fix a new record date for the adjourned meeting. Notice need not be given to any
stockholder who submits a written waiver of notice signed by him before or after
the time stated therein. Attendance of a stockholder at a meeting of
stockholders shall constitute a waiver of notice of such meeting, except when
the stockholder attends the meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened. Neither the business to be transacted at,
nor the purpose of, any regular or special meeting of the stockholders need be
specified in any written waiver of notice.
- STOCKHOLDER LIST. The officer who has charge of the stock ledger of
the corporation shall prepare and make, at least ten days before every meeting
of stockholders, a complete list of the stockholders, arranged in alphabetical
order, and showing the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten days prior to the meeting,
either at a place within the city or other municipality or community where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present. The stock ledger shall be the only evidence as to who are the
stockholders entitled to examine the stock ledger, the list required by this
section or the books of the corporation, or to vote at any meeting of
stockholders.
5
<PAGE>
- CONDUCT OF MEETING. Meetings of the stockholders shall be presided
over by one of the following officers in the order of seniority and if present
and acting - the Chairman of the Board, if any, the Vice-Chairman of the Board,
if any, the President, a Vice-President, or, if none of the foregoing is in
office and present and acting, by a chairman to be chosen by the stockholders.
The Secretary of the corporation, or in his absence, an Assistant Secretary,
shall act as secretary of every meeting, but if neither the Secretary nor an
Assistant Secretary is present the Chairman of the meeting shall appoint a
secretary of the meeting.
- PROXY REPRESENTATION. Every stockholder may authorize another person
or persons to act for him by proxy in all matters in which a stockholder is
entitled to participate, whether by waiving notice of any meeting, voting or
participating at a meeting, or expressing consent or dissent without a meeting.
Every proxy must be signed by the stockholder or by his attorney-in-fact. No
proxy shall be voted or acted upon after three years from its date unless such
proxy provides for a longer period. A duly executed proxy shall be irrevocable
if it states that it is irrevocable and, if, and only as long as, it is coupled
with an interest sufficient in law to support an irrevocable power. A proxy may
be made irrevocable regardless of whether the interest with which it is coupled
is an interest in the stock itself or an interest in the corporation generally.
- INSPECTORS. The directors, in advance of any meeting, may, but need
not, appoint one or more inspectors of election to act at the meeting or any
adjournment thereof. If an inspector or inspectors are not appointed, the person
presiding at the meeting may, but need not, appoint one or more inspectors. In
case any person who may be appointed as an inspector fails to appear or act, the
vacancy may be filled by appointment made by the directors in advance of the
meeting or at the meeting by the person presiding thereat. Each inspector, if
any, before entering upon the discharge of his duties, shall take and sign an
oath faithfully to execute the duties of inspector at such meeting with strict
impartiality and according to the best of his ability. The inspectors, if any,
shall determine the number of shares of stock outstanding and the voting power
of each, the shares of stock represented at the meeting, the existence of a
quorum, the validity and effect of proxies, and shall receive
6
<PAGE>
votes, ballots or consents, hear and determine all challenges and questions
arising in connection with the right to vote, count and tabulate all votes,
ballots or consents, determine the result, and do such acts as are proper to
conduct the election or vote with fairness to all stockholders. On request of
the person presiding at the meeting, the inspector or inspectors, if any, shall
make a report in writing of any challenge, question or matter determined by him
or them and execute a certificate of any fact found by him or them.
- QUORUM. The holders of a majority of the outstanding shares of stock
shall constitute a quorum at a meeting of stockholders for the transaction of
any business. The stockholders present may adjourn the meeting despite the
absence of a quorum.
- VOTING. Each share of stock shall entitle the holder thereof to one
vote. In the election of directors, a plurality of the votes cast shall elect.
Any other action shall be authorized by a majority of the votes cast except
where the General Corporation Law prescribes a different percentage of votes
and/or a different exercise of voting power. In the election of directors, and
for any other action, voting need not be by ballot.
7. STOCKHOLDER ACTION WITHOUT MEETINGS. Any action required by the General
Corporation Law to be taken at any annual or special meeting of stockholders, or
any action which may be taken at any annual or special meeting of stockholders,
may be taken without a meeting, without prior notice and without a vote, if a
consent in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted. Prompt notice of the
taking of the corporate action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not consented in writing.
7
<PAGE>
ARTICLE II
DIRECTORS
1. FUNCTIONS AND DEFINITION. The business and affairs of the corporation
shall be managed by the Board of Directors of the corporation. The Board of
Directors shall have authority to fix the compensation of the members thereof.
The use of the phrase "whole board" herein refers to the total number of
directors which the corporation would have if there were no vacancies.
2. QUALIFICATIONS AND NUMBER. A director need not be a stockholder, a
citizen of the United States, or a resident of the State of Delaware. The number
of directors constituting the whole board shall be at least one. Subject to the
foregoing limitation and except for the first Board of Directors, such number
may be fixed from time to time by action of the stockholders or of the
directors. The number of directors shall be one, but may be increased or
decreased by action of the stockholders or of the directors.
3. ELECTION AND TERM. The first Board of Directors, unless the members
thereof shall have been named in the certificate of incorporation, shall be
elected by the incorporator or incorporators and shall hold office until the
first annual meeting of stockholders and until their successors are elected and
qualified or until their earlier resignation or removal. Any director may resign
at any time upon written notice to the corporation. Thereafter, directors who
are elected at an annual meeting of stockholders, and directors who are elected
in the interim to fill vacancies and newly created directorships, shall hold
office until the next annual meeting of stockholders and until their successors
are elected and qualified or until their earlier resignation or removal. In the
interim between annual meetings of stockholders or of special meetings of
stockholders called for the election of directors and/or for the removal of one
or more directors and for the filling of any vacancy in that connection, newly
created directorships and any vacancies in the Board of Directors, including
vacancies resulting from the removal of directors for cause or without cause,
may be filled by the vote of a majority of the remaining directors then in
office, although less than a quorum, or by the sole
8
<PAGE>
remaining director.
4. MEETINGS.
- TIME. Meetings shall be held at such time as the Board shall fix,
except that the first meeting of a newly elected Board shall be held as soon
after its election as the directors may conveniently assemble.
- PLACE. Meetings shall be held at such place within or without the
state of Delaware as shall be fixed by the Board.
- CALL. No call shall be required for regular meetings for which the
time and place have been fixed. Special meetings may be called by or at the
direction of the Chairman of the Board, if any, the Vice-Chairman of the Board,
if any, of the President, or of a majority of the directors in office.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. No notice shall be required
for regular meetings for which the time and place have been fixed. Written,
oral, or any other mode of notice of the time and place shall be given for
special meetings in sufficient time for the convenient assembly of the directors
thereat. Notice need not be given to any director or to any member of a
committee of directors who submits a written waiver of notice signed by him
before or after the time stated therein. Attendance of any such person at a
meeting shall constitute a waiver of notice of such-meeting, except when he
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened. Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the directors need be specified in any
written waiver of notice.
9
<PAGE>
- QUORUM AND ACTION. A majority of the whole Board shall constitute a
quorum except when a vacancy or vacancies prevents such majority, whereupon a
majority of the directors in office shall constitute a quorum, provided, that
such majority shall constitute at least one-third of the whole Board. A majority
of the directors present, whether or not a quorum is present, may adjourn a
meeting to another time and place. Except as herein otherwise provided, and
except as otherwise provided by the General Corporation Law, the vote of the
majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board, The quorum and voting provisions herein stated
shall not be construed as conflicting with any provisions of the General
Corporation Law and these By-laws which govern a meeting of directors held to
fill vacancies and newly created directorships in the Board or action of
disinterested directors.
- CHAIRMAN OF THE MEETING. The Chairman of the Board, if any and if
present and acting, shall preside at all meetings. otherwise, the Vice-Chairman
of the Board, if any and if present and acting, or the President, if present and
acting, or any other director chosen by the Board, shall preside.
5. REMOVAL OF DIRECTORS. Any or all of the directors may be removed for
cause or without cause by the stockholders.
6. COMMITTEES. Whenever its number consists of three or more, the Board of
Directors may, by resolution passed by a majority of the whole Board, designate
one or more committees, each committee to consist of two or more of the
directors of the corporation. The Board may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. In the absence or disqualification of
any member of any such committee or committees, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or disqualified
member. Any such committee, to the extent provided in the resolution of the
Board, shall have and may exercise the powers and authority of the Board of
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Directors in the management of the business and affairs of the corporation with
the exception of any authority the delegation of which is prohibited by Section
141 of the General Corporation Law, and may authorize the seal of the
corporation to be affixed to all papers which may require it.
7. INFORMAL ACTION. Any member or members of the Board of Directors or of
any committee designated by the Board, may participate in a meeting of the
Board, or any such committee, as the case may be, by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other. Any action required or
permitted to be taken at any meeting of the Board of Directors or any committee
thereof may be taken without a meeting if all members of the Board or committee,
as the case may be, consent thereto in writing, and the writing or writings are
filed with the minutes of proceedings of the Board or committee.
ARTICLE III
OFFICERS
1. DESIGNATION. The officers of the corporation shall consist of a
President, a Secretary, a Treasurer, and, if deemed necessary, expedient, or
desirable by the Board of Directors, a Chairman of the Board, a Vice-Chairman of
the Board, an Executive Vice-President, one or more other Vice-Presidents, one
or more Assistant Secretaries, one or more Assistant Treasurers, and such other
officers with such titles as the resolution or instrument choosing them shall
designate.
2. QUALIFICATION. Except as may otherwise be provided in the resolution or
instrument choosing him, no officer other than the Chairman of the Board, if
any, and the Vice Chairman of the Board, if any, need be a director.
Any number of offices may be held by the same person as the
directors may determine, except that no person may hold the offices of President
and Secretary simultaneously.
3. TERM OF OFFICE. Unless otherwise provided in the resolution or
instrument choosing him, each officer shall be
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chosen for a term which shall continue until the meeting of the Board of
Directors following the next annual meeting of stockholders and until his
successor shall have been chosen and qualified.
Any officer may be removed, with or without cause by the Board of
Directors; and any subordinate or junior officer not chosen by the Board of
Directors, but chosen under duly constituted authority conferred by the Board of
Directors, may be removed, with or without cause, by the officer or officers who
chose him.
Any vacancy in any office may be filled by the Board of Directors. A
vacancy in any junior or subordinate office not filled by the Board of Directors
may be filled by the officer or officers duly vested with the authority to
choose the person to fill such office.
4. CHOOSING OFFICERS. The Board of Directors shall choose the President, the
Secretary, the Treasurer, the Chairman of the Board, if any, the Vice-Chairman
of the Board, if any, and Executive Vice-President, if any, one or more
additional vice-Presidents, if any, and such other officers as may be designated
by them, and may confer upon any executive officer or officers, authority to
choose junior or subordinate officers.
5. DUTIES AND AUTHORITY. In addition to those duties that may from time to
time be delegated to them by the Board of Directors, the officers of the
corporation shall have the following duties:
- CHAIRMAN OF THE BOARD. The Chairman of the Board shall preside at
all meetings of the stockholders and of the Board of Directors at which he is
present, shall be ex-officio a member of all committees formed by the Board of
Directors, shall be an active participant in the management of the business,
shall have authority to do anything the President may, and shall have such other
duties and powers as the Board of Directors may prescribe.
- PRESIDENT. The President shall be the chief executive officer of
the corporation, shall with the Chairman of the Board have general and active
management of the business of the corporation, shall see that all orders and
resolutions of the
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Board of Directors are carried into effect, and, in the absence or non-election
of the Chairman of the Board, shall preside at all meetings of the stockholders
and the Board of Directors at which he is present if he is also a director. The
President also shall execute bonds, mortgages, and other contracts requiring a
seal under the seal of the corporation, except where required or permitted by
law to be otherwise signed and executed and except where the signing and
execution thereof shall be delegated expressly by the Board of Directors to some
other officer or agent of the corporation, and shall have such other powers and
duties as the Board of Directors may prescribe.
- VICE-PRESIDENT. The Vice-President or Vice-Presidents, if any,
shall have such duties and powers as the Board of Directors or the President may
prescribe. In the absence of the President or in the event of his inability or
refusal to act, the Vice-President, if any, or if there be more than one, the
Vice-Presidents, in the order designated by the Board of Directors, or, in the
absence of such designation, then in the order of their election, shall perform
the duties and exercise the powers of the President.
- SECRETARIES AND ASSISTANT SECRETARIES. The Secretary shall record
the proceedings of all meetings of the stockholders and all meetings of the
Board of Directors in books to be kept for that purpose, shall perform like
duties for the standing committees when required, and shall give, or cause to be
given, calls and/or notices if all meetings of the stockholders and meetings of
the board of Directors in accordance with these Bylaws. The Secretary also shall
have custody of the corporate seal and attest thereto when authorized by the
Board of Directors or the President, and shall have such other duties and powers
as the Board of Directors may prescribe.
The Assistant Secretary, if any, or if there be more than one, the
Assistant Secretaries, in the order designated by the Board of Directors, or, if
there be no such designation, then in order of their election, shall, in the
absence of the Secretary or in the event of his inability or refusal to act,
perform the duties and exercise the powers of the Secretary and shall have such
other duties and powers as the Board of Directors may prescribe.
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In the absence of the Secretary or an Assistant Secretary, at a
meeting of the stockholders or the board of directors, an acting Secretary shall
be chosen by the stockholders or directors, as the case may be, to exercise the
duties of the Secretary at such meeting.
In the absence of the Secretary or an Assistant Secretary, or in the
event of the inability or refusal of the Secretary or any Assistant Secretary to
give, or cause to be given, any call and/or notice required by law or these
by-laws, any such call and/or notice may be given by any person so directed by
the Board of Directors, the President or stockholders upon whose requisition the
meeting is called in accordance with these By-laws.
- TREASURER AND ASSISTANT TREASURER. The Treasurer shall have the
custody of the corporate funds and securities, shall keep full and accurate
accounts of receipts and disbursements in books belonging to the corporation and
shall deposit all moneys and other valuable effects in the name and to the
credit of the corporation in such depositories as may be designated by the Board
of Directors. The Treasurer shall also disburse the funds of the corporation as
may be ordered by the Board of Directors, taking proper vouchers for such
disbursements, shall render to the Board of Directors, when the Board of
Directors so requires, an account of all his transactions as Treasurer and of
the financial condition of the corporation, and shall have such other duties and
powers as the Board of Directors may prescribe. If required by the Board of
Directors, the Treasurer shall give the corporation a bond, which shall be
renewed every six years, in such sum and with such surety or sureties as shall
be satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the corporation.
The Assistant Treasurer, if any, or if there be more than one, the
Assistant Treasurers in the order designated by the Board of Directors, or, in
the absence of such designation, then in the order of their election, shall, in
the absence of the Treasurer or in the event of his inability or refusal to act,
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perform the duties and exercise the powers of the Treasurer and shall have other
duties and powers as the Board of Directors may prescribe.
- OTHER OFFICERS. Any other officer shall have such powers and duties
as the Board of Directors may prescribe.
6. RESOLUTIONS AND INSTRUMENTS - EFFECT. The Secretary of the corporation
shall keep, or cause to be kept, with the By-laws of the corporation a copy of
every resolution or instrument designating and choosing officers and prescribing
their qualifications, tenure, authority, duties, compensation, and other
appropriate incidents and attributes of office; and each such resolution or
instrument shall be deemed to be a component part of these By-laws.
ARTICLE IV
INDEMNIFICATION
1. NON-DERIVATIVE PROCEEDINGS. The corporation shall 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 of 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 or officer of
the corporation, or is or was serving at the request of the corporation as a
director or officer of another corporation, partnership, joint venture, trust 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. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contenders or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with
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respect to any criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful.
2. DERIVATIVE PROCEEDINGS. The corporation shall 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 he is or was a director or
officer of the corporation, or is or was serving at the request of the
corporation as a director or officer, of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and 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 or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duties to the
corporation unless and only to the extent that the Court of Chancery or 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, such person is fairly and reasonably entitled to indemnification
for such expenses which the Court of Chancery or such other court shall deem
proper.
3. AMOUNT OF INDEMNIFICATION. To the extent that a director or officer of
the corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections 1 or 2, or in the defense of
any claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
4. DETERMINATION TO INDEMNIFY. Any indemnification under Sections 1 or 2
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in Sections 1 and 2. Such determination
shall be made (1) by the board of
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directors by the affirmative vote of all directors not parties to such action,
suit or proceeding, or (2) if not obtainable, or, even if obtainable the
disinterested directors so direct(s), by independent legal counsel in a written
opinion, or (3) by the stockholders.
5. ADVANCE PAYMENT. Expenses incurred in defending a civil or criminal
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding as authorized by the Board
of Directors in the specific case upon receipt of an undertaking by or on behalf
of a director, officer, employee or agent to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the
corporation as authorized in this section or otherwise pursuant to the laws of
Delaware.
6. NON-EXCLUSIVENESS OF BY-LAW. The indemnification provided by this
article shall not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any statute, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office. Any indemnification, whether required under this by-law or permitted by
statute or otherwise, shall continue as to a person who has ceased to be a
director, officer or employee and shall inure to the benefit of the heirs,
executors and administrators of such a person.
7. INDEMNIFICATION INSURANCE. The corporation shall have power to purchase
and maintain insurance on behalf of any person who 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, partnership, joint venture, trust or other enterprise against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the corporation would have the
power to indemnify him against such liability under the provisions of this
article.
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ARTICLE V
GENERAL PROVISIONS
1. DIVIDENDS. Dividends upon the capital stock of the corporation may be
declared by the Board of Directors in any regular or special meeting, pursuant
to law. Dividends may be paid in cash, in property, or in shares of capital
stock. Before payment of any dividend, there may be set aside out of any funds
of the corporation available for dividends such sum or sums as the directors
from time to time, in their absolute discretion, think proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the corporation, or for such other purpose as the
directors shall think conducive to the interest of the corporation, and the
directors may modify or abolish any such reserve in the manner in which it was
created.
2. CHECKS. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as
the Board of Directors may from time to time designate.
3. FISCAL YEAR. The fiscal year of the corporation shall be fixed by a
resolution of the Board of Directors.
4. SEAL. The corporate seal shall have inscribed thereon the name of the
corporation, the year of its organization and the words "Corporate Seal
Delaware." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
ARTICLE VI
AMENDMENTS
These By-laws may be amended at any proper meeting of the stockholders or of
the Board of Directors.
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Exhibit 3.102
RESTATED CERTIFICATE OF INCORPORATION
OF
INDUSTRIAL TRAINING SYSTEMS CORP.
To: The Secretary of State State of New Jersey
Pursuant to the provisions of Section 14A:9-5 of the New Jersey Business
Corporation Act, the undersigned corporation hereby executes the following
Restated Certificate of Incorporation:
FIRST: The name of the corporation is INDUSTRIAL TRAINING SYSTEMS CORP.
SECOND: The location of the corporation's registered office in this State
is 20 West Stow Road, Marlton, New Jersey 08053. The name of the registered
agent thereon and in charge thereof, upon whom process against this corporation
may be served, is George E. Willis.
THIRD: The purposes for which the corporation is formed are:
(a) To engage, without limitation, in any activity within the
purposes for which corporations may be organized under the New Jersey Business
Corporation Act and any amendments thereto.
FOURTH: The aggregate number of shares which the corporation shall have
authority to issue is 7,000,000 itemized by classes and par value of shares as
follows:
Per Value
Class No. of Shares Per share
----- ------------- ---------
Common 5,000,000 $.Ol
Preferred 2,000,000 $1.00
<PAGE>
The relative rights, preferences and limitations of the shares of
each class are as follows:
Preferred. The Board of Directors is authorized to adopt at any time, or
from time to time, amendments to the Certificate of Incorporation in respect of
any unissued and/or treasury shares of preferred stock, and thereby to fix or
change the division of shares of the preferred stock into classes and/or into
series within any class or classes, and the determination of the relative
rights, preferences and limitations of the shares of any class or series. The
authority of the Board with respect to each class or series of preferred stock
shall include, but not be limited to, determination of the following:
(a) The number of shares constituting that class or series and the
distinctive designation of that class or series;
(b) The dividend rate on the shares of that class or series, whether
dividends shall be cumulative, and, if so, from which dates or dates;
(c) Whether that class or series shall have voting rights, in addition to
any voting rights provided by Law, and, if so, the terms of such voting rights;
(d) Whether that class or series shall have conversion privileges and, if
so, the terms and conditions of such conversion, including provision for
adjustment of the conversion rate in such events as the Board of Directors shall
determine;
(e) Whether or not shares of that class or series shall be redeemable,
including the date or dates upon or after which they shall be redeemable, and
the amount per share payable in
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case of redemption, which amount may vary under different conditions;
(f) The rights of the shares of that class or series in the event of
voluntary or involuntary liquidation, dissolution or winding up of the
corporation; and
(g) Any other relative rights, preferences and limitations of that class
or series as may be permitted or required by Law.
Common. Each share of common stock shall be entitled to one vote on all
matters submitted to a vote of stockholders. The common stockholders shall be
entitled to such dividends as may be declared by the Board of Directors from
time to time, provided that required dividends, if any, on the preferred stock
have been paid or provided for. In the event of the liquidation, dissolution, or
winding up, whether voluntary or involuntary, of the corporation, the assets and
funds of the corporation available for distribution to stockholders, and
remaining after the payment to holders of preferred stock of the amounts to
which they are entitled, shall be divided and paid to the holders of the common
stock according to their respective shares.
FIFTH: (a) The number of directors which shall constitute the whole Board
of Directors shall be not less than three nor more than fifteen. The exact
number of directors within such maximum and minimum shall be determined by
resolution duly adopted by the Board of Directors by a majority vote of the
entire Board. No decrease in the number of directors shall shorten the term of
any incumbent directors.
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(b) The Board of Directors shall be divided into three classes, as nearly
equal in number as the then total number of directors constituting the whole
Board permits. At the annual meeting of stockholders in 1986, directors of the
first class shall be elected to hold office for a term expiring at the next
succeeding annual meeting, directors of the second class shall be elected to
hold office for a term expiring at the second succeeding annual meeting and
directors of the third class shall be elected to hold office for a term expiring
at the third succeeding annual meeting. At each annual meeting of stockholders
following such initial classification and election, the number of directors
equal to the number of the class whose terms expire at the time of such meeting
shall be elected to hold office until the third succeeding annual meeting of
stockholders. Each director shall hold office until his successor is elected and
qualified, or until his earlier resignation or removal.
(c) Newly elected directorships resulting from any increase in the
authorized number of directors and any vacancies in the Board of Directors
resulting from death, resignation, retirement, disqualification, removal from
office or other cause may be filled only by a majority vote of the entire Board,
and directors so chosen shall hold office for a term expiring at the annual
meeting of stockholders at which the term of the class to which they have been
elected expires.
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(d) Any directors elected pursuant to any special voting rights of one or
more series of Preferred Stock shall be excluded from, and for no purpose be
counted in, the scope and operation of the foregoing provisions of this Article
Fifth.
SIXTH: The number of directors constituting the current Board of Directors
of the corporation is four. The name and addresses of the directors are as
follows:
NAME ADDRESS
---- -------
Jack A. Cowan, Jr. 20 West Stow Road
Marlton, New Jersey 08053
John M. Evans 20 West Stow Road
Marlton, New Jersey 08053
Velda T. Cowan 20 West Stow Road
Marlton, New Jersey 08053
Sherry D. Evans 20 West Stow Road
Marlton, New Jersey 08053
SEVENTH: The duration of the corporation is perpetual.
EIGHTH: Unless otherwise required by Law, no action required to be taken
or which may be taken at any annual or special meeting of stockholders of the
Corporation may be taken without a meeting, and the power of stockholders to
consent in writing, without a meeting, to the taking of any action is
specifically denied.
NINTH: 1.(A) In addition to any affirmative vote required by Law or this
certificate or incorporation, and except as otherwise expressly provided in
Paragraph 2 of this Article Ninth:
<PAGE>
(I) any merger or consolidation of the Corporation or any Subsidiary (as
hereinafter defined) with (a) any Interested Stockholder (as hereinafter
defined) or (b) any other corporation (whether or not itself an Interested
Stockholder) which is, or after such merger or consolidation would be, an
Affiliate (as hereinafter defined) of an Interested Stockholder; or
(ii) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions), to or with any
Interested Stockholder or any Affiliate of any Interested Stockholder, of any
assets of the Corporation or any Subsidiary having an aggregate Fair Market
Value (as hereinafter defined) of $1,000,000 or more; or
(iii) the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of transactions) of any securities of the
Corporation or any Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities or other property
(or a combination thereof) having an aggregate Fair Market Value of $1,000,000
or more; or
(iv) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of an Interested
Stockholder or any Affiliate of any Interested Stockholder; or
(v) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or consolidation
of the Corporation with any of its Subsidiaries or any other transaction
(whether or not with or into or otherwise involving an Interested Stockholder)
which has the effect, directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or convertible securities
of the Corporation or any Subsidiary which is directly or indirectly owned by
any Interested Stockholder or any Affiliate of any Interested Stockholder; shall
require the affirmative vote of the holders of at least eighty percent (80%) of
the then outstanding shares of each class of the capital stock of the
Corporation (the "Voting Stock"). Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that a lesser
percentage may be specified, by Law or in any agreement with any national
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securities exchange or otherwise. Notwithstanding any other provision of this
certificate of incorporation to the contrary, for purposes of this Article
Ninth, each share of the Voting Stock shall have one vote.
(B) The term "Business Combination" as used in this Article Ninth shall
mean any transaction which is referred to in any one or more of clauses (I)
through (v) of sub-paragraph (A) of this paragraph 1.
2. The provisions of paragraph 1 of this Article Ninth shall not be
applicable to any particular Business Combination, and such Business Combination
shall require only such affirmative vote as is required byLaww and any other
provision of this certificate of incorporation, if all of the conditions
specified in either of the following sub-paragraphs (A) and (B) are met:
(A) The Business Combination shall have been approved by a majority of the
Continuing Directors (as hereinafter defined); provided, however, that such
approval shall only be effective if obtained at a meeting at which a Continuing
Director Quorum (as hereinafter defined) is present.
(B) All of the following conditions shall have been met:
(i) The aggregate amount of (x) cash and (y) Fair Market Value as of
the date of the consummation of the Business Combination of consideration
other than cash, to be received per share by holders of each class of the
Corporation's capital stock in such Business Combination shall be at least
equal to the highest amount determined under sub-clauses (a), (b)and (c)
below:
(a) (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting
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dealers' fees) paid by the Interested Stockholder for any share of
class acquired by it (1) within the two-year period immediately
prior to the first public announcement of the proposal of the
Business Combination (the "Annoucement Date") or (2) in the
transaction in which it became an Interested Stockholder, whichever
is higher;
(b) the Fair Market Value per share of such class on the
Announcement Date or on the Date on which the Interested Stockholder
became an Interested Stockholder (such latter date is referred to in
this Article Ninth as the "Determination Date"), whichever is
higher; and
(c) (if applicable) the highest preferential amount per share
to which the holders of shares of such class would be entitled in
the event of any voluntary or involuntary liquidation, dissolution
or winding up of the affairs of the Corporation, regardless of
whether the Business Combination to be consummated constitutes such
an event.
(ii) The consideration to be received by holders of a particular
class of outstanding Voting Stock shall be in cash or in the same form as
the Interested Stockholder has previously paid for shares such class
Voting Stock. If the Interested Stockholder has paid for shares of any
class of Voting Stock with varying forms of consideration , the form of
consideration for such class of Voting Stock shall be either cash or the
form used to acquire the largest number of shares of such class of Voting
Stock previously acquired by it. if the Interested Shareholder shall not
have previously acquired shares of a particular class, the form of
consideration to be received by holders of such class shall be cash.
(iii) After such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder shall not have received the
benefit, directly (except proportionately as a stockholder),of any loans,
advances, guarantees, pledges or other financial assistance or any tax
credits or other tax advantages provided by the Corporation, whether in
anticipation of or in connection with such Business Combination or
otherwise.
(iv) A proxy or information statement describing the proposed
Business Combination and complying with the requirements of the Securities
Exchange Act of 1934 and the rules and regulations thereunder (or any
subsequent provisions replacing such Act, rules or regulations) shall be
mailed to public stockholders of the Corporation at least 30 days prior to
the consummation of such Business Combination (whether or not such proxy
or information statement is required to be mailed pursuant to such Act or
subsequent provisions).
<PAGE>
3. For the purposes of this Article Ninth: (A) The term "person" shall
mean any individual, firm, corporation, or other entity.
(B) The term "Interested Stockholder" shall mean any person (other than
the Corporation or any Subsidiary and other than any profit-sharing, employee
stock ownership or other employee benefit plan of the Corporation or any
Subsidiary or any trustee of or fiduciary with respect to any such plan when
acting in such capacity) who or which:
(i) is the beneficial owner (as hereinafter defined) of more than ten
percent (10%) of the Voting Stock; or
(ii) is an Affiliate (as hereinafter defined) of the Corporation and at
any time within the two-year period immediately prior to the date in question
was the beneficial owner of the ten percent (10%) or more of the Voting Stock;
or
(iii) is an assignee of or has otherwise succeeded to any shares of Voting
Stock which were at any time within the two-year period immediately prior to the
date in question beneficially owned by any Interested Stockholder, if such
assignment or succession shall have occurred in the course of a transaction or
series of transactions not involving a public offering within the meaning of the
Securities Act of 1933; provided, that a person shall be an Interested
Stockholder only if it first came within this definition subsequent to June 30,
1986.
(c) A person shall be a "beneficial owner" of any Voting Stock:
(i) which such person or any of its Affiliates or Associates (as
hereinafter defined) beneficially owns, directly or indirectly; or
(ii) which such person or any of its Affiliates or Associates has,
directly or indirectly (a) the right to acquire (whether such right is
exercisable immediately or
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only after the passage of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (b) the right to vote pursuant to any
agreement, arrangement or understanding; or
(iii) which are beneficially owned, directly or indirectly, by any other
person with which such person or any of its Affiliates or Associates has any
agreement, arrangement or understanding for the purpose of acquiring'. holding,
voting or disposing of any shares of Voting Stock.
(D) For the purposes of determining whether a person is an Interested
Stockholder pursuant to sub-paragraph (B) of this paragraph 3, the number of
shares of Voting Stock deemed to be outstanding shall include shares deemed
owned through application of subparagraph (c) of this paragraph 3 but shall not
include any other shares of Voting Stock which may be issuable pursuant to any
agreement, arrangement or understanding or upon exercise of conversion rights,
warrants or options, or otherwise.
(E) The terms "Affiliate" or "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in effect on June 30,
1986.
(F) The term "Subsidiary" means any corporation of which a majority of any
class of equity security is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Interested
Stockholder set forth in subparagraph (B) of this paragraph 3, the term
"Subsidiary" shall mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the Corporation.
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(G) The term "Continuing Director" means any member of the Board of
Directors of the Corporation who is unaffiliated with the Interested Stockholder
and was a member of the Board prior to the time that the Interested Stockholder
became an Interested Stockholder and is recommended or elected to succeed a
Continuing Director by a majority of Continuing Directors, provided that such
recommendation or election shall only be effective if made at a meeting at which
a Continuing Director Quorum is present.
(H) The term "Continuing Director Quorum" means three Continuing Directors
capable of exercising the powers conferred upon them under the provisions of the
certificate of incorporation or By-Laws of the Corporation or by Law.
(I) The term "Fair Market Value" means: (I) in the case of stock, the
highest closing sale price during the 30-day period immediately preceding the
date in question of a share of such stock on the principal United States
securities exchange registered under the Securities Exchange Act of 1934 on
which such stock is listed, or, if such stock is not listed on any such
exchange, the highest closing bid quotation with respect to a share of such
stock during the 30-day period preceding the date in question on the National
Association of Securities Dealers, Inc. Automated Quotations System or any
system then in use, or if no such quotations are available, the fair market
value on the date in question of a share of such stock as determined by the
Board in good faith; and (ii) in the case of property other than cash or stock,
the fair market value of such property on the date
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in question as determined in good faith by a majority of Continuing Directors,
provided that such determination shall only be effective if made at a meeting at
which a Continuing Director Quorum is present.
(J) In the event of any Business Combination in which the Corporation
survives, the phrase "other consideration to be received" as used in sub-
paragraphs (B)(I) and (ii) of paragraph 2 of this Article Ninth shall include
the shares of Common Stock and/or the shares of any other class of voting Stock
retained by the holders of such shares.
4. The Board of Directors shall have discretion to interpret the meaning
of the provisions of this Article Ninth, and their applicability with respect to
various factual situations, and the determinations of the Board in such regard
shall be conclusive and binding.
5. Nothing contained in this Article Ninth shall be construed to relieve
any Interested Stockholder from any fiduciary obligation imposed by law.
6. Notwithstanding any other provisions of this certificate of
incorporation or the by-laws of the Corporation (and notwithstanding the fact
that a lesser percentage may be specified by Law, this certificate of
incorporation or the by-laws of the Corporation), the affirmative vote of the
holders of eighty percent (8o%) or more of the outstanding shares of each class
of Voting Stock shall be required to amend or repeal, or adopt any provisions
inconsistent with, this Article Ninth.
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TENTH: Notwithstanding any other provisions of this certificate of
incorporation or the by-laws of the Corporation (and notwithstanding the fact
that some lesser percentage may be specified by Law, this certificate of
incorporation or the by-laws of the Corporation), the affirmative vote of the
holders of seventy percent (70%) or more of the outstanding shares of capital
stock of the Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend, alter,
change or repeal this Article TENTH, or Article FIFTH or Article EIGHTH of this
certificate of incorporation.
IN WITNESS WHEREOF, the corporation has executed this document on the
eighth day of July, 1986.
INDUSTRIAL TRAINING SYSTEMS CORP.
By
JOHN M. EVANS
President
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Exhibit 3.103
BY-LAWS OF INDUSTRIAL TRAINING SYSTEMS CORP.
AS ADOPTED JULY 8, 1986
ARTICLE I
OFFICES
Section 1. The registered office shall be located at 20 West Stow Road,
Marlton, New Jersey 08053, unless otherwise established by a vote of a majority
of the board of directors in office and a statement of change is filed in the
manner provided by statute.
Section 2. The corporation may also have offices at such other places both
within and without the State of New Jersey as the board of directors may from
time to time determine or the business of the corporation may require.
ARTICLE II
ANNUAL MEETING OF SHAREHOLDERS
Section 1. The annual meeting of shareholders for the election of
directors shall be held at the registered office of the corporation or at such
other place within or without the State of New Jersey as shall be stated in the
notice of meeting or in a duly executed waiver of notice thereof.
Section 2. Annual meetings of shareholders shall be held at such time, at
such place and on such business day during the thirty-five day period commencing
the tenth of November of each year, beginning in 1987, as shall be fixed from
time to time by the board of directors and stated in the notice of meeting, at
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which annual meeting the shareholders shall elect by a plurality vote persons to
fill the positions of those directors whose terms expire at such time and
transact such other business as may properly be brought before the meeting.
Section 3. written notice of the annual meeting stating the time, place,
and purpose or purposes of the meeting shall be given not less than ten nor more
than sixty days before the date of the meeting, either personally or by mail, to
each shareholder of record entitled to vote at such meeting.
ARTICLE III
SPECIAL MEETINGS OF SHAREHOLDERS
Section 1. Special meetings of shareholders for any purpose may be held at
such time and place within or without the State of New Jersey as shall be stated
in the notice of the meeting or in a duly executed waiver of notice thereof.
Section 2. Special meetings of the shareholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the certificate of
incorporation, may be called by the Chairman of the Board, the president, the
board of directors, or the holders of not less than a majority of all the shares
entitled to vote at the meeting.
Section 3. written notice of a special meeting stating the time and place
of the meeting and the purpose or purposes for which the meeting is called shall
be given not less than ten nor more than sixty days before the date of the
meeting, either
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personally or by mail, by or at the direction of the Chairman of the Board, the
president, the secretary, or the officer or persons calling the meeting, to each
shareholder of record entitled to vote at such meeting.
ARTICLE IV
QUORUM AND VOTING OF STOCK
Section 1. The holders of a majority of the shares of stock issued and
outstanding and entitled to vote, represented in person or by proxy, shall
constitute a quorum at all meetings of the shareholders for the transaction of
business except as otherwise provided by statute or by the certificate of
incorporation. If, however, such quorum shall not be present or represented at
any meeting of the shareholders, the shareholders present in person or
represented by proxy shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present or represented. At such adjourned meeting at which a quorum shall be
present or represented any business may be transacted which might have been
transacted at the meeting as originally called.
Section 2. If a quorum is present, the affirmative vote of a majority of
the shares of stock represented at the meeting shall be the act of the
shareholders unless the vote of a greater number of shares of stock is required
by law or the certificate of incorporation.
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Section 3. (a) Each outstanding share of stock, having voting power, shall
be entitled to one vote on each matter submitted to a vote at a meeting of
shareholders, unless otherwise provided in the certificate of incorporation. A
shareholder may vote either in person or by proxy executed in writing by the
shareholder or by his agent.
(b) In all elections for directors every shareholder entitled to vote
shall have the right to vote, in person or by proxy, the number of shares of
stock owned by him, for as many persons as there are directors to be elected and
for whose election he has a right to vote.
Section 4. Unless otherwise required by law, no action required to be
taken or which may be taken at any annual or special meeting of stockholders of
the Corporation may be taken without a meeting, and the power of stockholders to
consent in writing, without a meeting, to the taking of any action is
specifically denied.
ARTICLE V
DIRECTORS
Section 1. (a) The number of directors which shall constitute the whole
Board of Directors shall be not less than three nor more than fifteen. The exact
number of directors within such maximum and minimum shall be determined by
resolution duly adopted by the Board of Directors by a majority vote of the
whole Board. No decrease in the number of directors shall shorten the term of
any incumbent director.
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(b) The Board of Directors shall be divided into three classes, as nearly
equal in number as the then total number of directors constituting the whole
Board permits. At the annual meeting of stockholders in 1986, directors of the
first class shall be elected to hold office for a term expiring at the next
succeeding annual meeting, directors of the second class shall be elected to
hold office for a term expiring at the second succeeding annual meeting and
directors of the third class shall be elected to hold office for a term expiring
at the third succeeding annual meeting. At each annual meeting of stockholders
following such initial classification and election, directors in numbers equal
to the number of the class whose terms expire at the time of such meeting shall
be elected to hold office until the third succeeding annual meeting of
stockholders. Each director shall hold office until his successor is elected and
qualified, or until his earlier resignation or removal.
(c) Any directors elected pursuant to any special voting rights of one or
more series of Preferred Stock shall be excluded from, and for no purpose be
counted in, the scope and operation of the foregoing provisions of this Section
1 or of Section 3 or Section 4 of this Article V.
(d) Directors need not be residents of the State of NeA Jersey nor
shareholders of the Corporation.
Section 2. Any director or member of a committee may resign at any time.
Such resignation shall be made in writing and shall take effect at the time
specified therein or, if no time be
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specified, at the time of its receipt by the Chairman of the Board, the
president or the secretary. The acceptance of a resignation shall not be
necessary to make it effective.
Section 3. Newly created directorships resulting from any increase in the
authorized number of directors and any vacancies in the Board of Directors
resulting from death, resignation, retirement, disqualification, removal from
office or other cause may be filled only by a majority vote of the whole Board,
and directors so chosen shall hold office for a term expiring at the annual
meeting of stockholders at which the term of the class to which they had been
elected expires.
Section 4. The business affairs of the corporation shall be managed by its
board of directors which may exercise all such powers of the corporation and do
all such lawful acts and things as are not by statute or by the certificate of
incorporation or by these by-laws directed or required to be exercised or done
by the shareholders.
Section 5. The directors may keep the books and records of the
corporation, except such as are required by law to be kept within the state,
outside of the State of New Jersey, at such place or places as they may from
time to time determine.
Section 6. The board of directors, by the affirmative vote of a majority
of the directors then in office, and irrespective of any personal interest of
any of its members, shall have authority to establish reasonable compensation of
all directors for services to the corporation as directors, officers or
otherwise.
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ARTICLE VI
MEETINGS OF THE BOARD OF DIRECTORS
Section 1. Meetings of the board of directors, regular or special, may
beheld either within or without the State of New Jersey.
Section 2. The first meeting of each newly elected board of directors
shall be held following the annual meeting and no notice of such meeting shall
be necessary to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present. In the event of the failure of the
shareholders to fix the time or place of such first meeting of the newly elected
board of directors, or in the event such meeting is not held at the time and
place so fixed by the shareholders, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the board of directors, or as shall be fixed by the consent
in writing of all the directors.
Section 3. Regular meetings of the board of directors may be held upon
such notice, or without notice, and at such time and at such place as shall from
time to time be determined by the board.
Section 4. Special meetings of the board of directors shall be held
whenever called by the Chairman of the Board or the president, and special
meetings shall be called by the Chairman of the Board, the president or the
secretary on the written request of two directors. Notice of each such meeting
shall be given to each director by telephone or in writing at least 24 hours (in
the case of notice by telephone) or 48 hours (in the
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case of notice by telegram) or five days (in the case of notice by mail) before
the time at which the meeting is to be held. Each such notice shall state the
time and place of the meeting to be so held. Notice need not be given to any
director who signs a waiver of notice, whether before or after the meeting.
Section 5. Any or all directors may participate in a meeting of the board
or a committee of the board by means of conference telephone or any means of
communication by which all persons participating in the meeting are able to hear
each other.
Section 6. (a) Attendance of a director any meeting shall constitute a
waiver of notice of such meeting, except where a director attends for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened.
(b) Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the board of directors need be specified in the
notice or waiver of notice of such meeting.
Section 7. (a) A majority of the entire board, or of any committee
thereof, shall constitute a quorum for the transaction of business unless a
greater or lesser number is required by statute or by the certificate of
incorporation, except that when the entire board or a committee thereof consists
of one director, then one director shall constitute a quorum. The act of a
majority of the directors present at any meeting at which a quorum is present
shall be the act of the board of directors or of the committee, unless the act
of a greater or lesser number is required by statute or by the certificate of
incorporation.
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(b) If a quorum shall not be present at any meeting of directors, the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Section 8. Unless otherwise provided by the certificate of incorporation,
any action required to be taken at a meeting of the board, or any committee
thereof, shall be deemed the action of the board of directors or of a committee
thereof, if all directors or committee members, as the case may be, execute
either before or after the action is taken, a written consent thereto, and the
consent is filed with the records of the corporation.
ARTICLE VII
COMMITTEES OF THE BOARD
Section 1. (a) The board of directors may, by resolution adopted by a
majority of the entire board, alter or eliminate the committees of the board
described in Section 2 below or designate one or more other committees, each
committee to consist of one or more directors. Any such committee, to the extent
provided in such resolution or these by-laws, shall have and exercise all of the
authority of the board of directors in the management of the corporation, except
as otherwise required by law. Such committee or committees shall have such name
or names as may be determined from time to time by resolution adopted by the
board of directors. The board of directors may, by resolution adopted by a
majority of the entire board, fill any vacancy in any such
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committee, appoint one or more directors to serve as alternate members of any
such committee, to act in the absence or disability of members of any such
committee with all the powers of such absent or disabled members, abolish any
such committee at its pleasure, and remove any director from membership on such
committee at any time, with or without cause.
(b) Each committee of the board of directors formed pursuant to this
section shall keep regular minutes of its meetings and actions taken at a
meeting of any such committee shall be reported to the board at its next next
meeting following such committee meeting; except that, when the meeting of the
board is held within 2 days after the committee meeting, such report shall, if
not made at the first meeting, be made to the board at its second meeting
following such committee meeting unless otherwise required by law to be earlier
reported.
Section 2. The present standing committees of the board are as follows:
Audit Committee. The Audit Committee shall be composed of two members of the
Board as may from time to time be chosen by the Board of Directors, none of whom
shall be an employee of the Company. The Audit Committee shall have the
authority and responsibility to (a) hire one or more firms of independent public
accountants to audit the Company's books, records and financial statements and
to review the Company's systems of accounting (including its system of internal
controls); (b) discuss with such independent public accountants the results of
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such audit and review; (c) periodically conduct independent reviews of the
Company's systems of accounting (including its system of internal control); and
(d) periodically make reports to the Board with respect to its findings.
Executive Conunittee. The Executive Committee of the Board of Directors
shall be composed of members of the Board as may from time to time be chosen by
the Board of Directors. The Executive Committee shall have and exercise all the
authority of the Board of Directors except that it shall not (a) make, alter or
repeal any by-law of the Company, (b) elect or appoint any Director or remove
any officer or Director of the Company, (c) submit to the Company's shareholders
any action that requires shareholder approval, or (d) amend or repeal any
resolution theretofore adopted by the Board of Directors which by its terms is
amendable or repealable only by the Board of Directors. The Executive Committee
specifically shall have the authority from time to time to determine the
compensation payable to the officers and key employees of the Company and its
subsidiaries and to recommend to the Board additions, deletions and alterations
with respect to the various employee benefit plans and other fringe benefits
provided by the Company, except that no member of the Committee shall take part
in any decision pertaining to his compensation or benefits in his capacity as an
officer or employee of the Company.
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ARTICLE VIII
NOTICES
Section 1. Whenever, under the provisions of any statute or of the
certificate of incorporation or of these by-laws, notice is required to be given
to any director or shareholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or shareholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also be given in accordance with Section 4 of Article VI
hereof.
Section 2. Whenever any notice whatsoever is required to be given under
the provisions of any statute or under the provisions of the certificate of
incorporation or these by-laws, a waiver thereof in writing signed by the person
or persons entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice.
ARTICLE IX
OFFICERS
Section 1. The officers of the corporation shall be chosen by the board of
directors and shall be a Chairman of the Board, a president, an executive vice
president, a secretary and a treasurer. The board of directors may also choose
one or more vice-Presidents and one or more assistant secretaries and assistant
treasurers.
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Section 2. The board of directors at its first meeting after each annual
meeting of shareholders shall choose a Chairman of the Board, a president, an
executive vice president, a secretary, and a treasurer, none of whom need be a
member of the board except for the Chairman of the Board.
Section 3. The board of directors may appoint such other officers and
agents as it shall deem necessary who shall hold their offices and for such
terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the board of directors.
Section 4. The salaries of all officers and agents of the corporation
shall be fixed by the board of directors.
Section 5. Each officer of the corporation shall hold office until his
successor is chosen and qualifies, except in the event of his death, resignation
or removal. Any officer elected or appointed by the board of directors may be
removed at any time by the affirmative note of a majority of the board of
directors. Any vacancy occurring in any office of the corporation shall be
filled by the board of directors. Any two or more offices, other than those of
president and secretary, may be held by the same person.
THE CHAIRMAN OF THE BOARD
Section 6. The Chairman of the Board shall preside at all meetings of the
board of directors and shareholders, if present thereat, may appoint between
meetings of the board ad hoc committees to the board, which appointments shall
be subject to the approval of the board at its next meeting, may make
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recommendations to the board with respect to the membership of the committees to
the board, and shall exercise such other powers and perform such other duties as
shall be assigned to him from time to time by the board.
THE PRESIDENT
Section 7. (a) The president shall, unless otherwise provided by the board
of directors, be the chief executive officer of the corporation. In the absence
of the Chairman of the Board he shall preside at all meetings of the board of
directors and shareholders if present thereat. As chief executive officer, he
shall have general supervision over the affairs of the corporation, subject to
the policies and directives of the board of directors, and shall supervise and
direct all officers and employees of the corporation, but may delegate in his
discretion any of his powers to any officer or such other executives as he may
designate. The president shall also be the chief operating officer of the
corporation and shall have general supervision over and control of the
operations and activities of the corporation, subject to the supervision and
control of the board of directors and the chief executive officer, and shall
have general supervision and direction of all operating officers and employees
of the corporation, but may delegate in his discretion any of his powers as
chief operating officer to any vice president or such other executives as he may
designate. The president shall have such other duties as from time to time may
be assigned to him by the board of directors.
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(b) Notwithstanding the foregoing, the board of directors may appoint a
vice president of the corporation as the corporation's chief operating officer,
in which event such vice president shall have the power, authority and
responsibilities prescribed for the chief operating officer in this Section 7.
Section 8. Either the Chairman of the Board or the president shall execute
bonds, mortgages and other contracts requiring a seal, under the seal of the
corporation, except where required or permitted by law to be otherwise signed
and executed and except where the signing and execution thereof shall be
expressly delegated by the board of directors to some other officer or agent of
the corporation.
THE VICE-PRESIDENTS
Section 9. The executive vice president, or if there shall be other
additional vice presidents, the vice-presidents in the order determined by the
board of directors, shall, in the absence or disability of the president,
perform the duties and exercise the powers of the president and shall perform
such other duties and have such other powers as the board of directors, the
Chairman of the Board or the president may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARIES
Section 10. The secretary shall attend all meetings of the board of
directors and all meetings of the shareholders and record all the proceedings of
the meetings of the corporation and of the board of directors in a book to be
kept for that
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purpose and shall perform like duties for the standing committees when required.
He shall give, or cause to be given, notice of all meetings of the shareholders
and special meetings of the board of directors, and shall perform such other
duties as may be prescribed by the board of directors, the Chairman of the Board
or the president, under whose several supervision he shall be. He shall have
custody of the corporate seal of the corporation and he, or an assistant
secretary, shall have authority to affix the same to any instrument requiring it
and when so affixed, it may be attested by his signature or by the signature of
such assistant secretary. The board of directors may give general authority to
any other officer to affix the seal of the corporation and to attest the
affixing by his signature.
Section 11. The assistant secretary, or if there shall be more than one,
the assistant secretaries in the order determined by the board of directors,
shall, in the absence or disability of the secretary, perform the duties and
exercise the powers of the secretary and shall perform such other duties and
have such other powers as the board of directors may from time to time
prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 12. The treasurer shall have custody of the corporate funds and
securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the board of directors.
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Section 13. He shall disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the Chairman of the Board, the president and
the board of directors, at its regular meetings, or when the board of directors
so requires, an account of all his transactions as treasurer and of the
financial condition of the corporation.
Section 14. If required by the board of directors, he shall give the
corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the board of directors for the faithful performance of the
duties of his office and for the restoration to the corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the corporation.
Section 15. The assistant treasurer, or, if there shall be more than one,
the assistant treasurers in the order determined by the board of directors,
shall, in the absence or disability of the treasurer, perform the duties and
exercise the powers of the treasurer and shall perform such other duties and
have such other powers as the board of directors may from time to time
prescribe.
ARTICLE X
INDEMNIFICATION
Section 1. Indemnification: The corporation shall indemnify, in the manner
and to the full extent permitted by the New Jersey Business Corporation Act, as
amended, any "corporate
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agent" of the corporation (as such term is defined in Section 14A:3-5 of the New
Jersey Business Corporation Act) who was or is a party to, or is threatened to
be made a party to, any "proceeding" (as such term is defined in said Section
14A:3-5), whether or not by or in the right of the corporation, by reason of the
fact that such person is or was a corporate agent of the corporation. Where
required by law, the indemnification provided for herein shall be made only as
authorized in the specific case upon a determination that indemnification of the
corporate agent is proper in the circumstances. The corporation may, to the full
extent permitted by law, purchase and maintain insurance on behalf of any such
person against any liability which may be asserted against him. To the full
extent permitted by law, the indemnification provided herein shall include
"expenses" (as such term is defined in said Section 14A:3-5), and, in the manner
provided by law, any such expenses may be paid by the corporation in advance of
the final disposition of such proceeding. The indemnification provided herein
shall not be deemed to limit the right of the corporation to indemnify any other
person for any such expenses, nor shall it be deemed exclusive of any other
rights to which any person seeking indemnification from the corporation may be
entitled under any agreement, vote of shareholders or directors or otherwise,
both as to action in his official capacity and as to action in another capacity
while holding such office.
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ARTICLE XI
CERTIFICATES FOR SHARES
Section 1. (a) The shares of the corporation shall be represented by
certificates signed by the Chairman of the Board, the president or a
vice-president and by the treasurer or an assistant treasurer, or the secretary
or an assistant secretary of the corporation, and may be sealed with the seal of
the corporation or a facsimile thereof.
(b) When the corporation is authorized to issue shares of more than one
class there shall be set forth upon the face or back of the certificate, or the
certificate shall have a statement that the corporation will furnish to any
shareholder upon request and without charge, a full statement of the
designations, preferences, limitations and relative rights of the shares of each
class authorized to be issued and, if the corporation is authorized to issue any
preferred or special class in series, the variations in the relative rights and
preferences between the shares of each such series so far as the same have been
fixed and determined and the authority of the board of directors to fix and
determine the relative rights and preferences of subsequent series.
Section 2. The signatures of the officers of the corporation upon a
certificate may be facsimiles if the certificate is countersigned by a transfer
agent, or registered by a registrar, other than the corporation itself or an
employee of the corporation. In case any officer who has signed or whose
facsimile signature has been placed upon such certificate shall
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have ceased to be such officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he were such officer at the
date of its issue.
LOST CERTIFICATES
Section 3. The board of directors may direct a new certificate to be
issued in place of any certificate theretofore issued by the corporation alleged
to have been lost or destroyed. When authorizing such issue of a new
certificate, the board of directors, in its discretion and as a condition
precedent to the issuance thereof, may prescribe such terms and conditions as it
deems expedient, and may require such bonds or indemnities as it deems adequate,
to protect the corporation from any claim that may be made against it with
respect to any such certificate alleged to have been lost or destroyed.
TRANSFER OF SHARES
Section 4. Upon surrender to the corporation or the transfer agent of the
corporation of a certificate representing shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, a new
certificate shall be issued to the person entitled thereto, and the old
certificate canceled and the transaction recorded upon the books of the
corporation.
RECORD DATES FOR DETERMINING SHAREHOLDERS
Section 5. For the purpose of determining shareholders entitled to notice
of or to vote at any meeting of shareholders or any adjournment thereof or
entitled to receive payment of any dividend or allotment of any right, or in
order to make a
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determination of shareholders for any other proper purpose, the board shall
chose in advance a date as the record date for such determination of
shareholders. Any such record date shall in any case be not more than sixty days
nor less than ten days prior to the date on which the particular action,
requiring such determination of shareholders, is to be taken. If no record date
is fixed, the record date for a shareholder's meeting shall be the close of
business on the day next preceding the day on which notice is given, or, if no
notice is given, the day next preceding the day on which the meeting is held and
the record date for determining shareholders for any other purpose shall be at
the close of business on the day on which the resolution of the board relating
thereto is adopted. When a determination of shareholders' meeting has been made
as provided in this section, such determination shall apply to any adjournment
thereof unless the board fixes a new record date for the adjourned meeting.
REGISTERED SHAREHOLDERS
Section 6. The corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends, and to vote such as owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of New
Jersey.
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<PAGE>
LIST OF SHAREHOLDERS
Section 7. The officer or agent having charge of the transfer books for
shares shall make and certify a complete list of the shareholders entitled to
vote at a shareholders' meeting, or adjournment thereof, arranged in
alphabetical order within each class, series, or group of shareholders
maintained by the corporation for convenience of reference, with the address of
and the number of shares held by each shareholder, which list shall be produced
and kept open at the time and place of the meeting and shall be subject to the
inspection of any shareholder during the whole time of the meeting. Such list
shall be prima facie evidence as to who are the shareholders entitled to examine
such list or to vote at any meeting or the shareholders.
ARTICLE XII
DIVIDENDS
Section 1. Subject to the provisions of the certificate of incorporation
relating thereto, if any, dividends may be declared by the board of directors at
any regular or special meeting pursuant to law. Dividends may be paid in cash,
in its bonds, in its own shares or other property including the shares or bonds
of other corporations subject to any provisions of law and of the certificate of
incorporation.
Section 2. Before payment of any dividend, there may be set aside out of
any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve fund to meet
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contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the corporation, or for such other purpose as the directors shall
think conducive to the interest of the corporation, and the directors may modify
or abolish any such reserve in the manner in which it was created.
CHECKS
Section 3. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as
the board of directors may from time to time designate.
FISCAL YEAR
Section 4. The fiscal year of the corporation shall begin on the first day
of July in each year, unless otherwise fixed by resolution of the board of
directors.
SEAL
Section 5. The corporate seal shall have inscribed thereon the name of the
corporation, the year of its organization and the words "Corporate Seal, New
Jersey". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or in any manner reproduced.
ARTICLE XIII
AMENDMENTS
Section 1. These by-laws may be altered, amended or repealed or new by-
laws be adopted by the affirmative vote of a majority of the board of directors
at any regular or special meeting of the board, subject to any provision in the
certificate of
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incorporation reserving to the shareholders the power to adopt, amend, or reseal
by-laws, but by-laws made by the board may be altered or repealed and new
by-laws made by the shareholders. The shareholders may prescribe that any by-law
made by them shall not be altered or repealed by the board.
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Exhibit 3.104
FILED
In the Office of
the Secretary of
the State of Texas
ARTICLES OF INCORPORATION DEC 23 1988
OF
LAW ENFORCEMENT TELEVISION NETWORK, INC.
The undersigned, a natural person of the age of eighteen (18) years or
more, acting as incorporator of a corporation under the Texas Business
Corporation Act, does hereby adopt the following Articles of Incorporation for
the corporation:
ARTICLE ONE
The name of the corporation is Law Enforcement Television Network, Inc.
(the "Corporation").
ARTICLE TWO
The period of its duration is perpetual.
ARTICLE THREE
The purpose for which the Corporation is organized is the transaction of
any or all lawful business for which corporations may be incorporated under the
Texas Business Corporation Act.
ARTICLE FOUR
The enumeration herein of any specific powers shall not be held to limit
or restrict in any manner the exercise by the Corporation of the general powers
conferred upon corporations by the laws of the State of Texas.
<PAGE>
ARTICLE FIVE
The aggregate number of shares that the Corporation shall have authority
to issue is one hundred thousand (100, 000) . All of these shares shall be of
the par value of one cent ($.Ol) per share, shall be of the same class, and
shall be designated as "Common Stock."
ARTICLE SIX
No holder of any shares of any class of stock of the Corporation shall, as
such holder, have any preemptive or preferential right to receive, purchase, or
subscribe to (a) any unissued or treasury shares of any class of stock, whether
now or hereafter authorized, of the Corporation, (b) any obligations, evidences
of indebtedness, or other securities of the Corporation convertible into or
exchangeable for, or carrying or accompanied by any rights to receive, purchase,
or subscribe to, any unissued or treasury shares, (c) any right of subscription
to or to receive, or any warrant or option for the purchase of, any unissued or
treasury shares, or (d) any other securities that may be issued or sold by the
Corporation.
ARTICLE SEVEN
Cumulative voting for the election of directors shall not be permitted.
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<PAGE>
ARTICLE EIGHT
The Corporation will not commence business until it has received for the
issuance of its shares consideration of the value of One Thousand Dollars
($1,000.00) consisting of money, labor done, or property actually received.
ARTICLE NINE
The Corporation shall have the power to purchase, directly or indirectly,
its own shares to the extent of the aggregate of unrestricted capital surplus
available therefor and unrestricted reduction surplus available therefor,
without submitting the purchase to a vote of shareholders.
ARTICLE TEN
Notwithstanding any provisions of the Texas Business Corporation Act now or
hereafter in force requiring for the approval of any action the affirmative vote
of two-thirds, or any other percentage greater than a majority, of the
outstanding shares entitled by law to vote thereon or of the outstanding shares
of a class or series entitled by law to vote separately as a class or series
thereon, such action may, to the extent permitted by law, be authorized and
taken by the affirmative vote of the holders of a majority of the outstanding
shares, or the outstanding shares of a class or series, as applicable. Except as
provided in the
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<PAGE>
preceding sentence or as otherwise required by law, the vote of the holders of a
majority of the shares entitled to vote and represented in person or by proxy at
any shareholders' meeting at which a quorum is present shall be the act of the
shareholders' meeting.
ARTICLE ELEVEN
The street address of the Corporation's initial registered office is 1303
Marsh Lane, Carrollton, Texas 75006, and the name of its initial registered
agent at such address is Carl Westcott.
ARTICLE TWELVE
The number of directors constituting the initial Board of Directors is one
(1), and the name and address of the person who will serve as director until the
first annual meeting of the shareholders or until his successors are elected and
qualified are as follows:
Name Address
- ---- -------
Carl Westcott 1303 Marsh Lane
Carrollton, TX 75006
ARTICLE THIRTEEN
The name and address of the incorporator are as follows:
Name Address
---- -------
Jack E. Jacobsen 2200 Ross Avenue
Suite 2200
Dallas, Texas 75201-6776
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<PAGE>
IN WITNESS WHEREOF, I have hereunto set my hand this 22 day of December,
1988.
Jack E. Jacobsen
STATE OF TEXAS ss.
COUNTY OF DALLAS ss.
I, Deborah E. Gardner, a Notary Public, do hereby certify that
on this 22nd day of December, 1988, personally appeared Jack E. Jacobsen, who
being by me first duly sworn, declared that he is the person who signed the
foregoing document as incorporator, and that the statements contained therein
are true.
Notarial Seal: Deborah E. Gardner
Notary Public in and for the
State of Texas
Deborah E. Gardner
Notary Public State of Texas
Mu Commission Expires 11/16/91
<PAGE>
Exhibit 3.105
BYLAWS OF
LAW ENFORCEMENT TELEVISION NETWORK, INC.
ss. ss. ss. ss. ss.
ARTICLE I
OFFICES
Section 1. Registered office and Agent. The registered office of the
corporation shall be 1303 Marsh Lane, Carrollton, Texas 75006. The name of its
registered agent at such address is Carl Westcott.
Section 2. other offices. The Corporation, in addition to its registered
office, may have offices and places of business at such places, both within and
without the State of Texas, as the Board of Directors may from time to time
determine or the business of the Corporation may require.
ARTICLE II
SHAREHOLDERS' MEETINGS
Section 1. Annual Meeting. An annual meeting of the shareholders shall be
held at such time as the Board of Directors may decide, at which meeting they
shall elect a Board of Directors and transact such other business as may
properly be brought before the meeting.
Section 2. Special Meetings. Special meetings of the shareholders, for any
purpose or purposes, unless otherwise prescribed by statute, the Articles of
Incorporation, or these Bylaws, may be called by the Chairman of the Board, the
President, the Board of Directors, or the holders of not less than one-tenth in
number of all the shares entitled to vote at the meetings.
Section 3. Place of Meetings. Meetings of shareholders shall be held at
such places, within or without the State of Texas, as may from time to time be
fixed by the Board of Directors or as shall be specified or fixed in the
respective notices or waivers of notice thereof.
Section 4. Voting List. The officer or agent having charge of the stock
transfer books for shares of the Corporation shall make, at least ten days
before each meeting of shareholders, a complete list of the shareholders
entitled to vote at the meeting or any adjournment thereof, arranged in
alphabetical order with the address of each and the number of shares held by
each, which list,
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for a period of ten days prior to the meeting, shall be kept on file at the
registered office of the Corporation and shall be subject to inspection by any
shareholder at any time during usual business hours. The list also shall be
produced and kept open at the time and place of the meeting and shall be subject
to the inspection of any shareholder during the entire time of the meeting.
Section 5. Notice of Meetings. Written or printed notice stating the
place, day, and hour of each meeting of the shareholders and, in case of a
special meeting, the purpose or purposes for which the meeting is called shall
be delivered not less than ten nor more than fifty days before the date of the
meeting, either personally or by mail, by or at the direction of the President,
the Secretary, or the body, officer, or person calling the meeting, to each
shareholder of record entitled to vote at the meeting. A mailed notice shall be
deemed to be delivered when deposited in the United States mails addressed to
the shareholder at the shareholder's address as it appears on the stock transfer
books of the Corporation, with postage thereon prepaid. Any notice of a
shareholders I meeting shall be placed in the minute book of the Corporation.
Section 6. Ouorum of Shareholders. The holders of a majority of the shares
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall be requisite and shall constitute a quorum at each
meeting of shareholders for the transaction of business except as otherwise
provided by statute or the Articles of Incorporation. If, however, a quorum
shall not be present or represented at any meeting of the shareholders, the
shareholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be present or
represented. At any adjourned meeting at which a quorum shall be present or
represented, any business may be transacted that might have been transacted at
the meeting as originally notified. When a quorum is present at any meeting, the
vote of the holders of a majority of the shares entitled to vote and present in
person or represented by proxy shall be the act of the shareholders' meeting,
unless the vote of a greater number is required by statute, the Articles of
Incorporation, or these Bylaws, in which case the vote of the greater number
shall be requisite to constitute the act of the meeting. The shareholders
present or represented at a duly organized meeting and entitled to vote thereat
may continue to transact business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum.
Section 7. Voting of Shares. Each outstanding share, regardless of class,
shall be entitled to one vote on each matter submitted to a vote at a meeting of
shareholders, except as and to
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<PAGE>
the extent otherwise provided by statute or the Articles of Incorporation. At
any meeting of the shareholders every shareholder having the right to vote shall
be entitled to vote either in person or by proxy executed in writing by the
shareholder or by his duly authorized attorney-in-fact. No proxy shall be valid
after eleven months from the date of its execution unless otherwise provided in
the proxy. Each proxy shall be revocable unless expressly provided therein to be
irrevocable or unless otherwise made irrevocable by law. Each proxy shall be
filed with the Secretary of the Corporation prior to or at the time of the
meeting. Any vote may be taken viva voce or by show of hands unless someone
entitled to vote objects, in which case written ballots shall be used.
Section 8. Action without Meeting. Any action required by statute to be
taken at a meeting of the shareholders, or any action that may be taken at a
meeting of the shareholders, may be taken without a meeting if a consent, in
writing and setting forth the action taken, shall be signed by all the
shareholders entitled to vote with respect to the subject matter thereof, and
this consent shall have the same force and effect as a unanimous vote of the
shareholders. Any signed consent, or a signed copy thereof, shall be placed in
the minute book of the Corporation.
Section 9. Telephone Meetings. Shareholders may participate in and hold a
meeting of shareholders by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
Section shall constitute presence in person at the meeting, except where a
person participates in the meeting for the express purpose of objecting to the
transaction of any business on the grounds that the meeting is not lawfully
called or convened.
ARTICLE III
BOARD OF DIRECTORS
Section 1. Management of the Corporation. The business and affairs of the
Corporation shall be managed by its Board of Directors, which may exercise all
such powers of the Corporation and do all such lawful acts and things that, by
statute, the Articles of Incorporation, or these Bylaws, are not directed or
required to be exercised or done by the shareholders.
Section 2. Number and Qualifications. The Board of Directors shall consist
of one or more directors. The number of directors shall be fixed from time to
time by resolution of the Board of Directors. The number of directors may be
increased or decreased from time to time by the Board of Directors, except that
no decrease shall have the effect of shortening the term of any
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<PAGE>
incumbent director. Any directorship to be filled by reason of any increase in
the number of directors may be filled by election at any annual meeting or at a
special meeting of shareholders called for that purpose, or may be filled by the
Board of Directors for a term of office continuing only until the next election
of one or more directors by the shareholders, provided that the Board of
Directors may not fill more than two directorships during the period between any
two successive annual meetings of shareholders. Directors are not required to be
shareholders of the Corporation or residents of the State of Texas.
Section 3. Election and Term of office. At each annual meeting of
shareholders the shareholders shall elect directors to hold office until the
next succeeding annual meeting. At each election, the persons receiving the
greatest number of votes shall be the directors. Each director elected shall
hold office for the term for which he is elected and until his successor shall
have been elected and qualified or until his earlier death, resignation,
retirement, disqualification, or removal.
Section 4. Removal. Any director may be removed either with or without
cause at any special or annual meeting of shareholders, by the affirmative vote
of a majority in number of shares of the shareholders present in person or by
proxy at the meeting and entitled to vote for the election of the director if
notice of intention to act upon this matter shall have been given in the notice
calling the meeting.
Section 5. Vacancies. Any vacancy occurring in the Board of Directors may
be filled by election at an annual or special meeting of shareholders called for
that purpose or by an affirmative vote of a majority of the remaining directors
though less than a quorum of the Board of Directors. A director elected to fill
a vacancy shall be elected for the unexpired term of his predecessor in office.
Section 6. Place of Meetings. Meetings of the Board of Directors, annual,
regular, or special, may be held either within or without the State of Texas.
Section 7. Annual Meetings. The first meeting of each newly elected Board
of Directors shall be held for the purpose of organization and the transaction
of any other business, without notice immediately following the annual meeting
of shareholders, and at the same place, unless the time or place shall be
changed by unanimous consent of the directors then elected and serving.
Section 8. Regular Meetings. Regular meetings of the Board of Directors,
of which no notice shall be necessary, shall be held at such times and places as
may be f ixed from time to time by resolution adopted by the Board of Directors
and communicated to
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<PAGE>
all directors. Except as otherwise provided by statute, the Articles of
Incorporation, or these Bylaws, any and all business may be transacted at
any regular meeting.
Section 9. Special meetings. Special meetings of the Board of Directors
may be called by the chairman of the Board, the President, or the Secretary on
twenty-four hours notice to each director, either personally, by mail, or by
telegram. Except as otherwise may be expressly provided by statute, the Articles
of Incorporation, or these Bylaws, neither the the business to be transacted at
nor the purpose of any meeting of the Board of Directors need be specified in
the notice or waiver of notice of the meeting.
Section 10. Quorum and manner of Acting. At all meetings of the Board of
Directors the presence of a majority of the number of directors fixed by these
Bylaws shall be necessary and sufficient to constitute a quorum for the
transaction of business except as otherwise provided by statute, the Articles of
Incorporation, or these Bylaws. The act of a majority of the directors present
at a meeting at which a quorum is present shall be the act of the Board of
Directors unless the act of a greater number is required by statute, the
Articles of Incorporation, or these Bylaws, in which case the act of the greater
number shall be requisite to constitute the act of the Board of Directors. If a
quorum shall not be present at any meeting of directors, the directors present
thereat may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present. At any adjourned
meeting any business may be transacted that might have been transacted at the
meeting as originally convened.
Section 11. Action without a Meeting. Any action required or permitted to
be taken at a meeting of the Board of Directors may be taken without a meeting
if a consent, in writing and setting forth the action taken, is signed by all
members of the Board of Directors, and the consent shall have the same force and
effect as a unanimous vote at a meeting. Any signed consent, or a signed copy
thereof, shall be placed in the minute book of the Corporation.
Section 12. Directors' Compensation. The Board of Directors shall have
authority to determine, from time to time, the amount of compensation, if any,
that shall be paid to its members for their services as directors. The Board
also shall have the power, in its discretion, to provide for and to pay to
directors rendering services to the Corporation not ordinarily rendered by
directors special compensation appropriate to the value of their services, as
determined by the Board of Directors from time to time. Nothing herein contained
shall be construed to preclude any director from serving the Corporation in any
other capacity and receiving
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<PAGE>
compensation therefor.
Section 13. Procedure. The Board of Directors shall keep regular minutes
of its proceedings. The minutes shall be placed in the minute book of the
Corporation.
ARTICLE IV
NOTICES
Section 1. Manner of Giving Notice. Whenever, as provided by statute, the
Articles of Incorporation, or these Bylaws, notice is required to be given to
any director or shareholder and no provision is made as to how the notice shall
be given, the notice requirement shall not be construed to mean personal notice,
and notice may be given in writing by mail, postage prepaid, addressed to the
director or shareholder at his address as it appears on the records of the
Corporation or, in the case of a shareholder, the stock transfer books of the
Corporation. Any notice required or permitted to be given by mail shall be
deemed to be delivered at the time when the notice shall be deposited in the
United States mails as aforesaid.
Section 2. Waiver of Notice. Whenever any notice is required to be given
to any shareholder or director of the Corporation by statute, the Articles of
Incorporation, or these Bylaws, a waiver thereof in writing signed by the person
or persons entitled to notice, whether before or after the time stated therein,
shall be deemed equivalent to the giving of notice.
ARTICLE V
EXECUTIVE COMMITTEE
Section 1. Constitution and Powers. The Board of Directors, by resolution
adopted by the affirmative vote of a majority of the entire Board of Directors,
may designate two or more directors to constitute an Executive Committee, which
Executive Committee shall have and may exercise, upon delegation from the Board
of Directors, all the authority and powers of the Board of Directors to conduct
the business and affairs of the Corporation, even though the authority and
powers are herein provided or directed to be exercised by a designated officer
of the Corporation, provided that the foregoing shall not be construed as
authorizing action by the Executive Committee with respect to any action that by
statute, the Articles of Incorporation, or these Bylaws is required to be taken
by vote of a specified proportion of the number of directors fixed by these
Bylaws, or any other action required or specified by the Texas Business
Corporation Act, other applicable law, these Bylaws, or the Articles of
Incorporation to be taken by the Board of Directors. So far as practicable,
members of the Executive
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<PAGE>
Committee shall be appointed by the Board of Directors at its first meeting
after each annual meeting of shareholders and, unless sooner discharged by the
affirmative vote of a majority of the entire Board of Directors, shall hold
office until their respective successors are appointed and qualified, or until
their earlier respective removals, deaths, resignations, retirements, or
disqualifications.
Section 2. Meetings. Regular meetings of the Executive Committee, of which
no notice shall be necessary, shall be held at such times and places as may be
fixed from time to time by resolution adopted by the affirmative vote of a
majority of the entire Executive Committee and communicated to all the members
thereof. Special meetings of the Executive Committee may be called by the
Chairman of the Board, the President, or any member thereof at any time on
twenty-four hours notice to each member, either personally, by mail, or by
telegram. Except as otherwise may be expressly provided by statute, the Articles
of Incorporation, or these Bylaws, neither the business to be transacted at nor
the purpose of any meeting of the Executive Committee need be specified in the
notice or waiver of notice of the meeting. A majority of the Executive Committee
shall constitute a quorum for the transaction of business, and the act of a
majority of those present at any meeting at which a quorum is present shall be
the act of the Executive Committee.
Section 3. Records. The Executive Committee shall keep a record of its
acts and proceedings and shall report the same, from time to time, to the Board
of Directors. The Secretary of the Corporation, or, in his absence, an Assistant
Secretary, shall act as secretary of the Executive Committee or the Executive
Committee, in its discretion, may appoint its own secretary.
Section 4. Vacancies. Any vacancy in the Executive Committee may be filled
by the affirmative vote of a majority of the entire Board of Directors.
ARTICLE VI
OTHER COMMITTEES OF THE BOARD OF DIRECTORS
Section 1. Other Committees. The Board of Directors, by resolution adopted
by the affirmative vote of a majority of the entire Board of Directors, may
designate two or more directors to constitute another committee or committees
for any purpose. Any such other committee or committees, however, shall have and
may exercise only the power of recommending action to the Board of Directors and
the Executive Committee and of carrying out and implementing any instructions or
any policies, plans, and programs theretofore approved, authorized, and adopted
by the Board of Directors or the Executive Committee.
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ARTICLE VII
OFFICERS, EMPLOYEES, AND AGENTS: POWERS AND DUTIES
Section 1. Elected officers. The elected officers of the Corporation shall
be a Chairman of the Board (if the Board of Directors shall determine the
election of a Chairman of the Board to be appropriate), a President, one or more
vice Presidents as may be determined to be appropriate from time to time by the
Board (and, in the case of each Vice President, with such descriptive title, if
any, as the Board of Directors shall deem appropriate), a Secretary and a
Treasurer. The Chairman of the Board, if any, shall be a member of the Board of
Directors. No other elected off icer of the Corporation need be a member of the
Board of Directors.
Section 2. Election. So far as is practicable, all elected officers shall
be elected by the Board of Directors at its first meeting after each annual
meeting of shareholders.
Section 3. Appointive Officers. The Board of Directors also may appoint
one or more Assistant Secretaries and Assistant Treasurers, and such other
officers and assistant officers and agents (none of whom need be a member of the
Board of Directors) as it shall from time to time deem necessary, who will
exercise such powers and perform such duties as shall be set forth in these
Bylaws or determined from time to time by the Board of Directors or the
Executive Committee.
Section 4. Two or More Offices. Any two or more offices may be held by the
same person.
Section 5. Compensation. The compensation of all officers of the
Corporation shall be fixed from time to time by the Board of Directors or the
Executive Committee. The Board of Directors or the Executive Committee may from
time to time delegate to the President the authority to fix the compensation of
any or all the other officers of the Corporation.
Section 6. Term of Office; Removal; Filling of Vacancies. Each elected
officer of the Corporation shall hold office until his successor is chosen and
qualified in his stead, or until his earlier death, resignation, retirement,
disqualification, or removal from office. Each appointive officer shall hold
office at the pleasure of the Board of Directors without the necessity of
periodic reappointment. Any officer or agent elected or appointed by the Board
of Directors may be removed at any time by the Board of Directors whenever, in
its judgment, the best interests of the Corporation will be served thereby, but
such removal shall be without prejudice to the contract rights, if any, of the
person so
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<PAGE>
removed. Election or appointment of an officer or agent will not of itself
create contract rights. If the office of any officer becomes vacant for any
reason, the vacancy may be filled by the Board of Directors.
Section 7. Chairman of the Board. The Chairman of the Board, if a person
is elected to this office by the Board of Directors, shall be the chief
executive officer of the Corporation and shall preside when present at all
meetings of the shareholders and of the Board of Directors. He shall have
general authority to execute bonds, deeds, and contracts in the name of the
Corporation and to affix the corporate seal thereto; to sign stock certificates;
to cause the employment or appointment of such employees and agents of the
Corporation as the proper conduct of operations may require and to fix their
compensation, subject to the provisions of these Bylaws; to remove or suspend
any employee or agent who shall have been employed or appointed under his
authority or under authority of an officer subordinate to him; to suspend for
cause, pending final action by the authority that shall have elected or
appointed him any officer subordinate to the Chairman of the Board; and, in
general, to exercise all powers usually appertaining to the office of the chief
executive officer of a corporation, except as otherwise provided by statute, the
Articles of Incorporation, or these Bylaws. He shall advise, counsel, and direct
the President and other officers of the Corporation, and shall exercise such
powers and perform such duties as shall be assigned to or required of him from
time to time by the Board of Directors or the Executive committee.
Section 8. President. The President shall be the chief operating officer
of the Corporation and, subject to the provisions of these Bylaws, shall have
general and active control of the day to day affairs of the Corporation. If the
Board of Directors has not elected a person to the office of Chairman of the
Board, the President also shall be the chief executive officer of the
Corporation and exercise all the powers and discharge all the duties of the
Chairman of the Board. As between the Corporation and third parties, any action
taken by the President in the performance of the duties of the Chairman of the
Board shall be conclusive evidence that there is no Chairman of the Board. In
the absence of the Chairman of the Board, or if a Chairman of the Board shall
not have been elected or be serving, the President shall preside when present at
meetings of the shareholders and the Board of Directors. In the absence or
disability of the President, his duties shall be performed and his powers may be
exercised by the Vice Presidents, if any, in order of their seniority, unless
otherwise determined by the Chairman of the Board, the President, the Board of
Directors, or the Executive Committee.
Section 9. Vice Presidents. Each Vice President, if any, shall have such
titles as may be prescribed by the Board of
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<PAGE>
Directors, and generally shall assist the President and have such powers and
perform such duties and services as from time to time shall be prescribed or
delegated to him by the President, the Board of Directors, or the Executive
Committee.
Section 10. Treasurer. The Treasurer shall have the care and custody of
all monies, funds, and securities of the Corporation; shall deposit or cause to
be deposited all corporate funds in and with such depositories as the Board of
Directors or the Executive Committee shall from time to time direct or as shall
be selected in accordance with a procedure established by the Board of Directors
or the Executive Committee; shall advise upon all terms of credit granted by the
Corporation; and shall be responsible for the collection of all its accounts and
shall cause to be kept full and accurate accounts of all receipts and
disbursements of the Corporation. The Treasurer shall have the power to endorse
for deposit, collection, or otherwise all checks, drafts, notes, bills of
exchange, or other commercial papers payable to the Corporation, and to give
proper receipts or discharges for all payments to the Corporation. The Treasurer
generally shall perform all the duties usually appertaining to the office of
treasurer of a corporation. In the absence or disability of the Treasurer his
duties shall be performed and his powers may be exercised by the Assistant
Treasurers, if any, in the order of their seniority, unless otherwise determined
by the Treasurer, the Chairman of the Board, the President, the Board of
Directors, or the Executive Committee. If required by the Board of Directors,
the Treasurer and any Assistant Treasurers shall give the Corporation a bond in
such form, in such sum, and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of their offices.
Section 11. Assistant Treasurers. Each Assistant Treasurer, if any,
generally shall assist the Treasurer and shall have such powers and perform such
duties and services as shall from time to time be prescribed or delegated to him
by the Treasurer, the Chairman of the Board, the President, the Board of
Directors, or the Executive Committee.
Section 12. Secretary. The Secretary shall see that notice is given of all
meetings of the shareholders and special meetings of the Board of Directors and
shall keep and attest true records of all proceedings at all meetings of the
shareholders and the Board of Directors. The Secretary shall have charge of the
corporate seal and have authority to attest any and all instruments or writings
to which the same may be affixed. The Secretary shall keep and account for all
books, documents, papers, and records of the Corporation except those for which
some other officer or agent is properly accountable. The Secretary shall have
authority to sign stock certificates and generally shall perform all the duties
usually appertaining to the office of secretary of a corporation.
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<PAGE>
In the absence or disability of the Secretary, his duties shall be performed and
his powers may be exercised by the Assistant Secretaries, if any, in the order
of their seniority, unless otherwise determined by the Secretary, the Chairman
of the Board, the President, the Board of Directors, or the Executive Committee.
Section 13. Assistant Secretaries. Each Assistant Secretary, if any,
generally shall assist the Secretary and shall have such powers and perform such
duties and services as shall from time to time be prescribed or delegated to him
by the Secretary, the Chairman of the Board, the President, the Board of
Directors, or the Executive Committee.
Section 14. Additional Powers and Duties. In addition to the foregoing
specifically enumerated duties, services, and powers, the several elected and
appointive officers of the Corporation shall perform such other duties and
services and exercise such further powers as may be provided by statute, the
Articles of Incorporation, or these Bylaws, or as the Board of Directors or the
Executive Committee may from time to time determine, or as may be assigned to
them by any competent superior officer.
ARTICLE VIII
STOCK AND TRANSFER OF STOCK
Section 1. Certificates Representing Shares. Certificates in such form as
may be determined by the Board of Directors and as shall conform to the
requirements of the statutes, the Articles of Incorporation, and these Bylaws
shall be delivered representing all shares to which shareholders are entitled.
The certif icates shall be numbered consecutively and shall be entered in the
books of the Corporation as they are issued. Each certificate shall state on the
face thereof that the Corporation is organized under the laws of Texas, the
holder's name, the number and class of shares that the certificate represents,
the par value of the shares or a statement that the shares are without par
value, and such other matters as may be required by law. Each certificate shall
be signed by the President or a Vice President and the Secretary or an Assistant
Secretary, and may be sealed with the seal of the Corporation or a facsimile
thereof. If any certificate is countersigned by a transfer agent or registered
by a registrar, either of which is other than the Corporation or an employee of
the Corporation, the signature of the Corporation's officer may be facsimile.
Section 2. Lost Certificates. The Board of Directors, the Executive
Committee, the President, or such other officer or officers of the Corporation
as the Board of Directors may from time to time designate, in its or his
discretion, may direct a new certificate or certificates representing shares to
be issued in
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<PAGE>
place of any certificate or certificates theretofore issued by the Corporation
alleged to have been lost, stolen, or destroyed upon the making of an affidavit
of that fact by the person claiming the certificate or certificates to be lost,
stolen, or destroyed. When authorizing the issuance of a new certificate or
certificates, the Board of Directors, the Executive Committee, the President, or
such other officer or officers, in its or his or their discretion and as a
condition precedent to the issuance thereof, may require the owner of the
alleged lost, stolen, or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it or he shall require
and/or give the Corporation a bond in such form, in such sum, and with such
surety or sureties as it or he may direct as indemnity against any claim that
may be made against the Corporation with respect to the certificate or
certificates alleged to have been lost, stolen, or destroyed.
Section 3. Transfers of Shares. Shares of stock shall be transferable only
on the books of the Corporation by the holder thereof in person or by his duly
authorized attorney. Upon surrender to the Corporation or the transfer agent of
the Corporation of a certificate representing shares, duly endorsed or
accompanied by proper evidence of succession, assignment, or authority to
transfer, with all required stock transfer tax stamps affixed thereto and
canceled or accompanied by sufficient funds to pay these taxes, it shall be the
duty of the Corporation or the transfer agent of the Corporation to issue a new
certificate to the person entitled thereto, cancel the old certificate, and
record the transaction upon its books.
Section 4. Registered Shareholders. The Corporation shall be entitled to
treat the holder of record of any share or shares of stock as the holder in fact
thereof and, accordingly, shall not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person,
regardless of whether it shall have express or other notice thereof, except as
otherwise provided by law.
Section 5. Preemptive Rights. No shareholder or other person shall have
any preemptive rights whatsoever.
ARTICLE IX
MISCELLANEOUS
Section 1. Dividends. Dividends upon the outstanding shares of the
Corporation, except as provided by statute and the Articles of Incorporation,
may be declared by the Board of Directors at any annual, regular, or special
meeting. Dividends may be declared and paid in cash, in property, in shares of
the corporation, or in any combination thereof. The declaration and payment of
dividends
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<PAGE>
shall be at the discretion of the Board of Directors.
Section 2. Reserves. The Board of Directors, from time to time by
resolution, may create out of the earned surplus of the Corporation such reserve
or reserves as the directors in their discretion think proper to provide for
contingencies, to equalize dividends, to repair or maintain any property of the
Corporation, or for such other purpose as the directors shall think beneficial
to the Corporation, and the directors may modify or abolish this reserve in the
manner in which it was created.
Section 3. Signature of Negotiable Instruments. All bills, notes, checks,
or other instruments for the payment of money shall be signed or countersigned
by such officer, officers, agent, or agents and in such manner as are permitted
by these Bylaws or in such manner as, from time to time, may be prescribed by
resolution, whether general or special, of the Board of Directors or the
Executive Committee.
Section 4. Fiscal Year. The fiscal year of the Corporation shall be
determined by the Board of Directors from time to time.
Section 5. Seal. The Corporation's seal shall be in such form as shall be
adopted and approved from time to time by the Board of Directors. The seal may
be used by causing it, or a facsimile thereof, to be impressed, affixed,
imprinted, or in any manner reproduced.
Section 6. Closing of Transfer Books and Fixing Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other proper purpose, the Board of Directors may provide that the stock
transfer books of the Corporation shall be closed for a stated period not to
exceed, in any case, fifty days. If the stock transfer books shall be closed for
the purpose of determining shareholders entitled to notice of or to vote at a
meeting of shareholders, the books shall be closed at least ten days immediately
preceding the meeting. In lieu of closing the stock transfer books, the Board of
Directors may fix in advance a date as the record date for the determination of
shareholders, the date in any case to be not more than fifty days and, in case
of a meeting of shareholders, not less than ten days prior to the date on which
the particular action requiring the determination of shareholders is to be
taken. If the stock transfer books are not closed and no record date is fixed
for the determination of shareholders entitled to notice of or to vote at a
meeting of shareholders, or of shareholders entitled to receive payment of a
dividend, the date on which notice of the meeting is mailed or the date on which
the resolution of the Board of Directors declaring the dividend is adopted, as
the case may
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<PAGE>
be, shall be the record date for the determination of shareholders. when a
determination of shareholders entitled to vote at any meeting has been made as
provided in this Section, the determination shall apply to any adjournment
thereof except when the determination has been made through the closing of stock
transfer books and the stated period of closing has expired.
Section 7. Surety Bon s. Such officers and agents of the corporation, if
any, as the Chairman of the Board or the Board of Directors may direct, from
time to time, shall be bonded for the faithful performance of their duties and
for the restoration to the corporation, in case of their death, resignation,
retirement, disqualification, or removal from office, of all books, papers,
vouchers, money, and other property of whatever kind in their possession or
under their control belonging to the Corporation, in such amounts and by such
surety companies as the Chairman of the Board, the Board of Directors, or the
Executive Committee may determine. The premiums on the bonds shall be paid by
the Corporation, and the bonds so furnished shall be in the custody of the
Secretary.
ARTICLE X
AMENDMENTS
Section 1. Amendments. These Bylaws may be altered, amended, or repealed,
or new Bylaws may be adopted at any meeting of the Board of Directors at which a
quorum is present, provided notice of the proposed alteration, amendment,
repeal, or adoption is contained in the notice of the meeting.
I, Margaret C. Shouse, hereby certify that I am the duly elected and
qualified Secretary of Law Enforcement Television Network, Inc., and that the
foregoing is a true and correct copy of the Bylaws of Law Enforcement Television
Network, Inc., adopted at the organizational meeting of the Board of Directors
of the Corporation held on the day of December, 1988.
IN WITNESS WHEREOF, I have hereunto affixed my name as Secretary as of
this day of December, 1988.
Margaret C. Shouse, Secretary
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<PAGE>
Exhibit 3.106
ARTICLES OF INCORPORATION
OF
ELLEN LOCKERT & ASSOCIATES, INC.
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned, being over the
age of eighteen years, hereby adopts the following Articles of Incorporation,
for the purpose of forming a corporation under the Washington business
corporation act (Title 23A, Revised Code of Washington).
ARTICLE 1. NAME
The name of this corporation is Ellen Lockert Associates, Inc.
ARTICLE II. DURATION
The existence of this corporation shall be perpetual.
ARTICLE Ill. PURPOSES
This corporation is organized for the purposes of transacting any and all
lawful business for which corporations may be incorporated under Title 23A of
the Revised Code of Washington, as amended.
ARTICLE IV. CAPITAL STOCK
This corporation shall have authority to issue 1,000 shares of a single
class of common stock.
<PAGE>
ARTICLE V. REGISTERED OFFICE AND AGENT
1. The address of the initial registered office of the corporation is 1019
Northeast South Beach Drive, Bainbridge Island, WA 98110.
2. The name of the initial registered agent of the corporation at such
address is Ellen A. Lockert. The written consent of said person to serve as
registered agent is attached to these Articles.
ARTICLE VI. INITIAL DIRECTORS
The initial directors of this corporation shall be one in number, and her
name and address is as follows:
Name Address
---- -------
Ellen A. Lockert 1019 Northeast South Beach Drive
Bainbridge Island, WA 98110
Said director shall serve until the first annual meeting of shareholders
or until the election and qualification of her successors.
ARTICLE VII. ELECTION OF DIRECTORS
At each election of directors, each shareholder entitled to vote at such
election, shall have the right to vote, in person or by proxy, the number of
shares of stock held by him or her for as many persons as there are directors to
be elected. No cumulative voting for directors shall be permitted.
<PAGE>
ARTICLE VIII. AMENDMENT
This corporation reserves the right to amend or repeal any provision
contained in these Articles of Incorporation in any manner now or hereafter
permitted by statute. All rights of stockholders of the corporation and all
powers of directors of the corporation are granted subject to this reservation.
ARTICLE IX. INCORPORATOR
The name and address of the incorporator is as follows:
Name Address
---- -------
Ellen A. Lockert 1019 Northeast South Beach Drive
Bainbridge Island, WA 98110
DATED this 17th day of April 1987.
Ellen A. Lockert
<PAGE>
ARTICLES OF AMENDMENT
OF
ELLEN LOCKERT & ASSOCIATES, INC.
Pursuant to the provisions of RCW 23A.16 of the Washington Business
Corporation Act, the following Articles of Amendment to Articles of
Incorporation are herewith submitted for filing:
1. The name of record of the corporation is Ellen Lockert Associates, Inc.
2. The amendment to the Articles of Incorporation as adopted is as
follows:
ARTICLE I
NAME
The name of this corporation shall be Lockert-Jackson and Associates, Inc.
1. The Articles of Amendment were adopted on May 19th,1989, by resolution
of the Board of Directors and Shareholders.
2. The number of shares of the corporation outstanding at the time of such
adoption was 950, each of which was entitled to vote. All 950 shares were voted
in favor of the amendment and no shares against the amendment.
3. No exchange, reclassification or cancellation of issued shares is to be
effected.
<PAGE>
IN WITNESS WHEREOF the corporation has caused these Amended Articles of
Incorporation to be executed in duplicate on this 19th day of May, 1989.
ELLEN A. LOCKERT, President
<PAGE>
ARTICLES OF AMENDMENT
Pursuant to RCW 23B.10.060 of the Washington Business Corporation Act, the
undersigned corporation hereby submits the following amendment to the
corporation's Articles of Incorporation.
1. The name of the corporation is Lockert-Jackson and Associates, Inc.
2. The text of the amendment as adopted is as follows:
The Articles of Incorporation of the corporation are hereby amended by
inserting after the end of ARTICLE IX a new ARTICLE X as follows:
ARTICLE X. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 10.1 Right to Indemnification. Each person who was, or is
threatened to be made a party to or is otherwise involved (including, without
limitation, as a witness) in any actual or threatened action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that he or she is or was a director or officer of the corporation
or, while a director or officer, he or she is or was serving at the request of
the corporation as a director, trustee, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether the basis of
such proceeding is alleged action in an official capacity as a director,
trustee, officer, employee or agent or in any other capacity while serving as a
director, trustee, officer, employee or agent, shall be indemnified and held
harmless by the corporation, to the full extent permitted by applicable law as
then in effect, against all expense, liability and loss (including attorney's
fees, judgments, fines, ERISA, excise taxes or penalties and amounts to be paid
in settlement) actually and reasonably incurred or suffered by such person in
connection therewith, and such indemnification shall continue as to a person who
has ceased to be a director, trustee, officer, employee or agent and shall inure
to the benefit of his or her heirs, executors and administrators; provided,
however, that except as provided in Section 10.2 of this Article with respect to
proceedings seeking
<PAGE>
to enforce rights to indemnification, the corporation shall indemnify any such
person seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the board of directors of the corporation. The right to
indemnification conferred in this Section 10.1 shall be a contract right and
shall include the right to be paid by the corporation the expenses incurred in
defending any such proceeding in advance of its final disposition; provided,
however, that the payment of such expenses in advance of the final disposition
of a proceeding shall be made only upon delivery to the corporation of an
undertaking, by or on behalf of such director or officer, to repay all amounts
so advanced if it shall ultimately be determined that such director or officer
is not entitled to be indemnified under this Section I or otherwise.
Section 10.2 Right of Claimant to Bring Suit. If a claim under Section
10.1 of this Article is not paid in full by the corporation within sixty (60)
days after a written claim has been received by the corporation, except in the
case of a claim for expenses incurred in defending a proceeding in advance of
its final disposition, in which case the applicable period shall be twenty (20)
days, the claimant may at any time thereafter bring suit against the corporation
to recover the unpaid amount of the claim and, to the extent successful in whole
or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. The claimant shall be presumed to be entitled to
indemnification under this Article upon submission of a written claim (and, in
an action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition, where the required undertaking
has been tendered to the corporation), and thereafter the corporation shall have
the burden of proof to overcome the presumption that the claimant is not so
entitled. Neither the failure of the corporation (including its board of
directors, independent legal counsel or its shareholders) to have made a
determination prior to the commencement of such action that indemnification of
or reimbursement or advancement of expenses to the claimant is proper in the
circumstances nor an actual determination by the corporation (including its
board of directors, independent legal counsel or its shareholders) that the
claimant is not entitled to indemnification or to the reimbursement or
advancement of expenses shall be a defense to the action or create a presumption
that the claimant is not so entitled.
<PAGE>
Section 10.3 Nonexclusivity of Rights. The right to indemnification and
the payment of expenses incurred in defending a proceeding in advance of its
final disposition conferred in this Article shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
provision of the Articles of Incorporation, Bylaws, agreement, vote of
shareholders or disinterested directors or otherwise.
Section 10.4 Insurance, Contracts and Funding. The corporation may
maintain insurance, at its expense, to protect itself and any director, trustee,
officer, employee or agent of the corporation or another corporation,
partnership, joint venture, trust or other enterprise against any expense,
liability or loss, whether or not the corporation would have the power to
indemnify such person against such expense, liability or loss under the
Washington Business Corporation Act. The corporation may, without further
shareholder action, enter into contracts with any director or officer of the
corporation in furtherance of the provisions of this Article and may create a
trust fund, grant a security interest or use other means (including, without
limitation, a letter of credit) to ensure the payment of such amounts as may be
necessary to effect indemnification as provided in this Article.
Section 10.5 Indemnification of Employees and Agents of the Corporation.
The corporation may, by action of its board of directors from time to time,
provide indemnification and pay expenses in advance of the final disposition of
a proceeding to employees and agents of the corporation with the same scope and
effect as the provisions of this Article with respect to the indemnification and
advancement of expenses of directors and officers of the corporation or pursuant
to rights granted pursuant to, or provided by, the Washington Business
Corporation Act or otherwise.
3. The date of adoption of such amendment was March 1995.
4. The amendment was adopted by duly approved shareholder action in
accordance with the provisions of RCW 23B.10.030 and RCW 23B.10.040.
5. These Articles will be effective upon filing.
DATED: March 23rd, 1995.
<PAGE>
LOCKERT-JACKSON AND ASSOCIATES, INC.
By:
Ellen A. Lockert, President
<PAGE>
Exhibit 3.107
BYLAWS
OF
ELLEN LOCKERT & ASSOCIATES, INC.
ARTICLE I. OFFICES
The corporation shall maintain a registered office in the State of
Washington, and may maintain such other offices within or without the State of
Washington as the Board of Directors may designate from time to time.
ARTICLE II. SHAREHOLDERS' MEETINGS
1. Meeting Place. All meetings of the shareholders shall be held either at
the registered office of the corporation in Washington or at such other place
within or without Washington as the Board of Directors shall designate. The
place at which any shareholders' meeting is to be held shall be specified in the
notice of such meeting.
2. Annual Meeting Time. The annual meeting of the shareholders for the
election of directors and for the transaction of such other business as may
properly come before the meeting shall be held at 10:00 a.m. on the first Monday
of April each year, if not a legal holiday, or, if a legal holiday, then on the
next business day following, at the same hour. The time and place at which any
annual meeting of the shareholders shall be held may be changed by resolution of
the Board of Directors, provided that notification of such change shall meet the
notice requirements of Article II.5.
3. Annual Meeting--Order of Business. At the annual meeting of
shareholders, the order of business shall be as follows:
(a) Calling the meeting to order.
(b) Proof of notice of meeting (or filing waiver).
(C) Reading of minutes of last annual meeting.
(d) Reports of officers.
(e) Reports of committees.
<PAGE>
(f) Election of directors.
(g) Miscellaneous business.
4. Special Meetings. Special meetings of the shareholders may be called at
any time by the Board of Directors or by the holders of not less than one-tenth
of all shares entitled to vote at the meeting.
5. Notice. Written notice stating the place, day and hour of any
shareholders' meeting and, in the case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered not less than ten
(10) nor more than sixty (60) days before the date of the meeting, either
personally or by mail, by or at the direction of the president, the secretary,
or the officer or persons calling the meeting, to each shareholder of record
entitled to vote at such meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail, addressed to the shareholder
at his or her address as it appears on the stock transfer books of the
corporation, with postage thereon prepaid.
6. Waiver of Notice. Any notice of a shareholders' meeting required to be
given under the provisions of these bylaws, this corporation's articles of
incorporation or applicable Washington law may be waived either (a) in writing,
signed by the person or persons entitled to such notice, whether before or after
the time stated therein, or (b) by attendance of such shareholder, either in
person or by proxy (unless such attendance is for the express purpose of
objecting to the transaction of any business because the meeting has not
lawfully been called or convened), at such
7. Voting Record. At least ten (10) but not more than before each meeting
of shareholders, a of the shareholders entitled to vote at such adjournment
thereof, shall be made, arranged order, with the address of and number of shares
held by each, which record shall be kept on file at the registered office of the
corporation until such meeting. The record shall be kept open at the time and
place of such meeting for the inspection of any shareholder.
2
<PAGE>
8. Closing of Transfer Books and Fixing Record Date. For the purpose of
determining shareholders entitled to notice of or to vote at any meeting of
shareholders, or any adjournment thereof, or entitled to receive payment of any
dividend, the Board of Directors may provide that the stock transfer books shall
be closed for a stated period not to exceed sixty (60) days nor be less than ten
(10) days preceding such meeting. In lieu of closing the stock transfer books,
the Board of Directors may fix in advance a record date for any such
determination of shareholders, such date to be not more than sixty (60) days
and, in case of a meeting of shareholders, not less than ten (10) days prior to
the date on which the particular action requiring such determination of
shareholders is to be taken.
9. Quorum. A quorum at any annual or special meeting of shareholders shall
consist of shareholders representing, either in person or by proxy, a majority
of the outstanding capital stock of the corporation entitled to vote at such
meeting. If a quorum is not present at a meeting, a majority of the shares
represented at any shareholders' meeting may adjourn the meeting from time to
time to another place, at which time, if a quorum is present, any business may
be transacted which might have been transacted at the meeting as originally
scheduled. Notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment is taken.
The shareholders present at a duly organized meeting may continue to transact
business until adjournment, not withstanding the withdrawal of enough
shareholders to leave less than a quorum.
10. Action Without a Meeting. Any action required or permitted to be taken
at a shareholders' meeting may be taken without a meeting if a written consent
setting forth the action so taken is signed by all shareholders entitled to vote
with respect to the subject matter thereof. Any such consent shall be inserted
in the minute book as if it were the minutes of a shareholders' meeting.
11. Action by Telephone Conference. Any or all shareholders may
participate in a meeting of the shareholders by means of a conference telephone
or similar communications equipment by means of which all persons participating
in the meeting can hear each other at the same time, and the participation by
such means shall
3
<PAGE>
constitute presence in person at the meeting.
12. Proxies. At all shareholders' meetings a shareholder may vote by proxy
executed in writing by the shareholder or by his attorney in fact. Such proxy
shall be filed with the Secretary of the corporation before or at the time of
the meeting. Unless otherwise provided in the proxy, a proxy shall be invalid
after eleven (11) months from the date of its execution.
13. Record Address. It shall be the duty of each shareholder to keep on
file with the Secretary his or her proper address. Any notice required to be
served upon such shareholder may be given by delivering or mailing such notice
to the most recent address on file, and any notice sent to such address (even if
nondeliverable or returned by the postal authorities for lack of address) shall
be deemed sufficient if any shareholder shall fail or neglect to furnish his
address to the Secretary.
14. Ratification of Certain Transactions. Any contract, transaction, or
act of the corporation or of the Board of Directors or of any officers of the
corporation which shall be ratified by a majority vote of the shares of the
corporation present at any annual meeting or any special meeting called for such
purpose, at which a quorum is present, shall, insofar as permitted by law, be as
valid and as binding as though ratified by every shareholder of the corporation.
ARTICLE III. CAPITAL STOCK
1. Certificates. Certificates of stock shall be issued in numerical order,
and each shareholder shall be entitled to a certificate signed by the President,
or a Vice President, and the Secretary or an Assistant Secretary, and may be
sealed with the seal of the corporation or a facsimile thereof. The signatures
of such officers may be facsimiles if the certificate is manually signed on
behalf of a transfer agent, or registered by a registrar, other than the
corporation itself or an employee of the corporation. If an officer who has
signed or whose facsimile signature has been placed upon such certificate ceases
to be such officer before the certificate is issued, it may be issued by the
corporation with the same effect as if the person were an officer on the date of
issue.
4
<PAGE>
Each certificate of stock shall state:
(a) That the corporation is organized under the laws of this state;
(b) The name of the person to whom issued;
(c) The number and class of shares and the designation of the
series, if any, which such certificate represents; and
(d) The par value of each share represented by such certificate, or
a statement that such shares are without par value.
2. Transfer of Shares. Shares of stock may be transferred by delivery of
the certificates therefor, accompanied either by an assignment in writing on the
back of the certificate or by a written power of attorney to sell, assign, and
transfer the same, signed by the record holder of the certificate. No shares of
stock shall be transferred on the books of the corporation until the outstanding
certificate therefor has been surrendered to the corporation, except as provided
in the next section.
3. Lost or Destroyed Certificates. In case of loss, mutilation or
destruction of any certificate of stock, another may be issued in its place upon
proof of such loss, mutilation or destruction and upon the giving of a
satisfactory bond of indemnity to the corporation. A new certificate may be
issued without requiring any bond when, in the judgment of the Board of
Directors, it is proper to do so.
4. Record Owners. The corporation shall be entitled to treat record
shareholders as the holders in fact of the stock standing in their respective
names, and the corporation, therefore, shall not be bound to recognize any
equitable or other claim to or interest in any share on the part of any other
person, whether or not it shall have express or other notice thereof.
5. Fractional Shares or Scrip. The corporation may: (a) issue fractions of
a share which shall entitle the holder to exercise voting rights, to receive
dividends thereon, and to participate in any of the assets of the corporation in
the event
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of liquidation; (b) arrange for the disposition of fractional interests by those
entitled thereto; (c) pay in cash the fair value of fractions of a share as of
the time when those entitled to receive such shares are determined; or (d) issue
scrip in registered or bearer form which shall entitle the holder to receive a
certificate for a full share upon the surrender of such scrip aggregating a full
share.
ARTICLE IV. BOARD OF DIRECTORS
1. Number and Powers. The business, affairs and property of the
corporation shall be managed by a Board consisting of such number of directors
as may be determined from time to time by the Board. No decrease in the number
of directors shall have the effect of shortening the term of any incumbent
director.
2. Election; Term of Office. The directors shall be elected by the
shareholders at each annual shareholders' meeting, to hold office until the next
annual shareholders' meeting and until their respective successors are elected
and qualified; provided, that if for any reason such annual meeting shall not be
held or if at any such meeting a new Board of Directors shall not be elected,
the old directors shall continue to hold office until their successors shall
have been elected and qualified at the next annual meeting or at a special
meeting called for that purpose.
3. Vacancies. Vacancies in the Board of Directors, whether caused by
resignation, death, or otherwise, may be filled by a majority of the remaining
directors attending any meeting of the Board of Directors (even though less than
a quorum is present) if notice shall have been given to all of the remaining
directors that such vacancy would be filled at the meeting. A director thus
elected to fill any vacancy shall hold office for the unexpired term of his
predecessor and until his successor is elected and qualified. Any directorship
to be filled by reason of an increase in the number of directors shall be filled
by election at an annual meeting of shareholders or at a special meeting of
shareholders called for that purpose.
4. Annual Meetings. The first meeting of each newly elected Board of
Directors shall be known as the annual meeting thereof
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and shall be held immediately after the annual shareholders' meeting or any
special shareholders' meeting at which a Board of Directors is elected. Said
meeting shall be held at the same place as such shareholders' meeting unless
some other place shall be specified by resolution of the shareholders.
5. Other Regular Meetings. Regular meetings of the Board of Directors
shall be held at such place and on such day and at such hour as shall from time
to time be fixed by resolution of the Board.
6. Special Meetings. Special meetings of the Board of Directors may be
held at any place or at any time, whenever called by the President or any two
directors.
7. Notice of Meetings. No notice of the annual meeting of the Board of
Directors shall be required. Written notice of the time and place of all
meetings of the Board of Directors, other than the annual meetings, shall be
given by the Secretary or by the person or one of the persons calling the
meeting, by personal delivery or mail or telegram, at least three (3) days prior
to the day upon which the meeting is to be held; provided, that no notice of any
regular meeting need be given if the time and place thereof shall have been
fixed by resolution of the Board of Directors and a copy of such resolution has
been mailed to every director at least three (3) days before the first meeting
held pursuant to the resolution. Neither the business to be transacted at nor
the purpose of any meeting of the Board of Directors need be specified in the
notice or waiver of notice of any meeting.
8. Waiver of Notice. Attendance of a director at a meeting shall
constitute a waiver of notice of such meeting, except where a director attends
for the express purpose of objecting to the transaction of any business because
the meeting is not lawfully called or convened. A waiver of notice signed by the
director or directors, whether before or after the time stated for the meeting,
shall be equivalent to the giving of notice.
9. Designation of Committees. Subject to the restrictions set forth in the
Washington business corporation act, the Board of Directors may, by resolution
adopted by a majority of the full Board of Directors, designate from among its
members an executive
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committee and one or more other committees each of which, to the extent provided
in such resolution, shall have and may exercise all the authority of the Board
of Directors.
10. Action Without a Meeting. Any action required or permitted to be taken
at a meeting of the Board of Directors may be taken without a meeting if a
written consent setting forth the action to be taken is signed by each of the
directors. Any such written consent shall be inserted in the minute book as if
it were the minutes of a Board of Directors' meeting.
11. Meeting by Telephone Conference. Any or all directors may participate
in a meeting of the Board of Directors or any committee thereof by means of a
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other at the same time, and
the participation by such means shall constitute presence in person at a
meeting.
12. Registering Dissent. A director of the corporation who is present at a
meeting of its Board of Directors at which action on any matter is taken shall
be presumed to have assented to the action unless his dissent shall be entered
in the minutes of the meeting, or unless he shall file his written dissent to
such action with the person acting as the secretary of the meeting before the
adjournment thereof, or shall forward such dissent be registered mail to the
secretary of the corporation immediately after the adjournment of the meeting. A
director who voted in favor of such action shall not be entitled to dissent.
13. Duties of Directors. A director shall perform his duties as a
director, including his duties as a member of any committee of the Board on
which he may serve, in good faith, in a manner he reasonably believes to be in
the best interests of the corporation, and with such care as an ordinarily
prudent person in a like position would use under similar circumstances. In
performing his duties, a director shall be entitled to rely on information,
opinions, reports, or statements, including financial statements or other
financial data, in each case prepared or presented by:
(a) One or more officers or employees of the corporation whom the
director reasonably believes to be reliable and
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competent in the matters presented;
(b) Counsel, public accountants, or other persons as to matters
which the director reasonably believes to be within such persons' professional
or expert competence; or
(c) A committee of the Board upon which he does not serve, duly
designated in accordance with a provision of the Articles of Incorporation or
the Bylaws, as to matters within its designated authority, which committee the
director reasonably believes to merit confidence;
but he shall not be considered to be acting in good faith if he has knowledge
concerning the matter in question that would cause such reliance to be
unwarranted. A person who so performs his duties shall have no liability by
reason of being or having been a director of the corporation.
14. Removal of Directors. At a meeting of shareholders called expressly
for that purpose, the entire Board of' Directors, or any member thereof, may be
removed by a vote of the holders of a majority of shares then entitled to vote
at an election of such directors. If less than the entire Board of Directors is
to be removed, no one of the directors may be removed if the votes cast against
his removal would be sufficient to elect him if then cumulatively voted at an
election of the entire Board of Directors or if there be classes of directors,
at an election of the class of directors of which he is a part.
15. Remuneration. By resolution of the Board of Directors, the directors
may be paid their expenses of attendance at each meeting of the Board of
Directors and may be paid a fixed sum for attendance at each meeting of the
Board of Directors or a stated salary as director. No such payment shall
preclude any director from serving the corporation in any other capacity and
receiving compensation therefor.
16. Loans. No loans shall be made by the corporation to the directors,
unless first approved by the holders of two-thirds of the voting shares. No
loans shall be made by the corporation secured by its own shares.
17. Actions Requiring Unanimous Approval. Without the
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unanimous approval of the Board of Directors, the corporation shall not:
(a) Issue any shares of its capital stock;
(b) Make any distribution of assets, by means of dividend,
redemption, or otherwise, to any shareholder of the corporation;
(c) Loan any of its funds to any officer or director of the
corporation;
(d) Establish the level of compensation to be paid to any of its
officers or directors; or
(e) Amend these Bylaws.
ARTICLE V. OFFICERS
1. Designations. The officers of the corporation shall be a President, one
or more Vice Presidents, a Secretary, and a Treasurer, all of whom shall be
elected by the Board of Directors at the annual meeting thereof, to hold office
for the term of one year; provided, that if for any reason such annual meeting
of the directors shall not be held or if at any such meeting officers shall not
be elected, the old officers shall continue to hold office until their
successors have been duly elected.
2. Multiple Offices. Any two or more offices may be held by the same
person, except that the same person shall not hold the offices of President and
Secretary; provided, however, that when all of the issued and outstanding stock
of the corporation is owned of record by one shareholder, one person may hold
all or any combination of offices.
3. President. The President shall be the principal executive officer of
the corporation and, subject to the Board's control, shall supervise and control
all of the business and affairs of the corporation. When present, he shall
preside over all shareholders' meetings and over all Board of Directors'
meetings, if a Chairman of the Board has not been appointed or is not present.
With the Secretary or other officer of the corporation authorized by the Board,
he may sign certificates for shares of
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the corporation, deeds, mortgages, bonds, contracts, or other instruments that
the Board has authorized to be executed, except when the signing and execution
thereof has been expressly delegated by the Board of Directors or by these
Bylaws to some other officer or agent of the corporation or is required by law
to be otherwise signed or executed by some other officer or in some other
manner. In general, the President shall perform all duties incident to the
office of President and such other duties as may be prescribed by the Board from
time to time.
4. Vice Presidents. In the absence of the President or in the event of his
death, inability or refusal to act, the Vice President (or in the event of more
than one Vice President, the Vice President who was first elected to such
office) shall perform the duties of the President, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
President. Vice Presidents shall perform such other duties as from time to time
may be assigned to them by the President or by the Board.
5. Secretary. The Secretary shall: (a) keep the minutes of shareholders'
and Board meetings in one or more books provided for that purpose; (b) see that
all notices are duly given in accordance with the provisions of these Bylaws or
as required by law; (c) be custodian of the corporate records and of the seal of
the corporation (if any) and see that the seal of the corporation is affixed to
all documents, the execution of which on behalf of the corporation under its
seal is duly authorized; (d) keep a register of the post office address of each
shareholder as furnished to the Secretary by each shareholder; (e) sign with the
President, or a Vice President certificates for shares of the corporation, the
issuance of which has been authorized by resolution of the Board; (f) have
general charge of the stock transfer books of the corporation; and (g) in
general perform all duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him by the President or by the
Board.
6. Treasurer. The Treasurer shall have charge and custody of and be
responsible for all funds and securities of the corporation; receive and give
receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the corporation in such
banks, trust
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companies or other depositories as shall be selected by the Board of Directors,
and in general perform all of the duties incident to the office of Treasurer and
such other duties as from time to time may be assigned to him by the President
or by the Board.
7. Additional Officers. The Board of Directors may appoint such other
officers and agents as it shall deem necessary or expedient, including a
Chairman of the Board, who shall preside over meetings of the Board of
Directors, and one or more assistant secretaries or treasurers to act in the
absence of the Secretary or Treasurer, any of whom shall hold their offices for
such terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the Board.
8. Removal. Any officer elected by the Board of Directors may be removed
at any time, with or without cause, by the affirmative vote of a majority of the
whole Board of Directors. Vacancies in any office arising from any cause shall
be filled by the Board of Directors.
9. Bonds. If required by the Board, any officer shall give the corporation
a bond in a sum and with one or more sureties satisfactory to the Board, for the
faithful performance of the duties of his office, and for the restoration to the
corporation, in case of his death, resignation, retirement or removal from
office, of all book, papers, vouchers, money and other property of whatever kind
in his possession or under his control belonging to the corporation.
10. Vacancies. Vacancies in any office arising from any cause may be
filled by the Board of Directors at any regular or special meeting of the Board.
11. Compensation. The salaries of all officers of the corporation shall be
fixed by the Board of Directors.
12. Loans. No loans shall be made by the corporation to any officer,
unless first approved by the holders of two-thirds of the voting shares.
ARTICLE VI. NOTICES
1. Method of Notice. Whenever the provisions of these Bylaws
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require notice to be given to any director or shareholder, personal delivery
shall constitute notice, but these Bylaws shall not be construed to require such
personal delivery. Such notice may be given in writing by depositing the same in
the United States mail in a postpaid envelope addressed to such director or
shareholder at his or her address as the same appears on the stock transfer
books of the corporation, and the time when the same shall be mailed shall be
deemed to be the time of the delivery of such notice. if notice be given to a
director by telegram, such notice shall be deemed to be delivered when the
telegram is delivered to the telegraph company.
2. Waiver of Notice. A written waiver of any notice by a shareholder or
director, whether signed before or after the time stated in said waiver for
holding a meeting, shall be deemed equivalent to any notice required to be given
to any director or shareholder under these Bylaws or the Articles of
Incorporation or the Washington Business Corporation Act.
ARTICLE VI
Distributions and Finance
1. Distributions. The Board of Directors may authorize a distribution of
money or other property to the corporation's shareholders in the form of a
dividend or a purchase, redemption or other acquisition of the corporation's
shares; provided that no distribution may be made if, after giving it effect,
either:
(a) The corporation would not be able to pay its debts as they
become due in the usual course of business; or
(b) The corporation's total assets would be less than the sum of its
total liabilities plus the amount which would be needed to satisfy any
shareholder's preferential rights in liquidation if the corporation is in the
process of liquidation at the time of the authorization of the distribution.
The stock transfer books may be closed for the making of distributions
during such periods of not exceeding fifty (50) days, as from time to time may
be fixed by the Board of Directors. The Board of Directors, however, without
closing the
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books of the corporation, may authorize distributions to only the holders of
record at the close of business, on any business day not more than fifty (50)
days prior to the date on which distribution is made.
2. Measure of Effect of Distribution. For purposes of determining whether
a distribution may be authorized by the Board of Directors and paid by the
corporation under Article VI, paragraph 1 of these bylaws, the effect of
distribution is measured.
(a) In the case of a distribution by purchase, redemption or other
acquisition if the corporation's shares, as of the earlier of (I) the date on
which the money or other property is transferred to the shareholders or the date
on which the debt is incurred by the corporation; or (ii) the date on which the
shareholder ceases to be a shareholder with respect to the acquired shares; and
(b) In any other case (I) as of the date on which the distribution
is authorized, if payment occurred within one hundred twenty (120) days
thereafter; or (ii) the date of payment if such date occurs more than one
hundred twenty (120) days after the date of authorization.
3. Reserves. Before making any distribution, there may be set aside out of
the sum available to the corporation for distribution such sum or sums as the
directors from time to time in their absolute discretion deem expedient as a
reserve fund to meet contingencies, or for equalizing distributions, or for
maintaining any property of the corporation, or for any other purpose. Any sum
in any year which is not distributed in that year shall be deemed to have been
thus set aside until otherwise disposed of by the Board of Directors.
4. Depositories. The moneys of the corporation shall be deposited in the
name of the corporation in such bank or banks or trust company or trust
companies as the Board of Directors shall designate, and shall be drawn out only
by check or other order for payment of money signed by such persons and in such
manner as may be determined by resolution of the Board of Directors.
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ARTICLE VII. SEAL
The corporation may, but shall not be required to, have a seal. The seal
of the corporation, if any, shall be in the form of a circle and shall contain
the name of the corporation and the year of incorporation.
ARTICLE VIII. INDEMNIFICATION
1. Definitions. As used in this Article
(a) "Director" means any person who is or was a director of the
corporation and any person who, while a director of the corporation, is or was
serving at the request of the corporation as a director, officer, partner,
trustee, employee, or agent of another foreign or domestic corporation,
partnership, joint venture, trust, other enterprise, or employee benefit plan.
(b) "Corporation" includes any domestic or foreign predecessor
entity of the corporation in a merger, consolidation, or other transaction in
which the predecessor's existence ceased upon consummation of such transaction.
(C) "Expenses" includes attorneys' fees.
(d) "Official capacity" means: (I) when used with respect to a
director, the office of director in the corporation, and (ii) when used with
respect to a person other than a director as contemplated in subsection 10 of
this Article, the elective or appointive office in the corporation held by the
officer or the employment or agency relationship undertaken by the employee or
agent in behalf of the corporation, but in each case does not include service
for any other foreign or domestic corporation or any partnership, joint venture,
trust, other enterprise, or employee benefit plan.
(e) "Party" includes a person who was, is, or is threatened to be,
made a named defendant or respondent in a proceeding.
(f) "Proceeding" means any threatened, pending, or completed action,
suit, or proceeding whether civil, criminal,
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administrative, or investigative.
2. Broad Indemnification. The corporation shall indemnify any person made
a party to any proceeding (other than a proceeding referred to in subsection 3
of this Article)by reason of the fact that he is or was a director against
judgments, penalties, fines, settlements and reasonable expenses actually
incurred by him in connection with such proceeding if:
(a) He conducted himself in good faith, and: (I) in the case of
conduct in his own official capacity with the corporation he reasonably believed
his conduct to be in the corporation's best interests, or (ii) in all other
cases, he reasonably believed his conduct to be at least not opposed to the
corporation's best interests; and
(b) In the case of any criminal proceeding, he had no reasonable
cause to believe his conduct was unlawful.
The termination of any proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contenders or its equivalent, shall not, of
itself be determinative that the person did not meet the requisite standard of
conduct set forth in this subsection.
3. Derivative Actions. The corporation shall indemnify any person made a
party to any proceeding by or in the right of the corporation by reason of the
fact that he is or was a director against reasonable expenses actually incurred
by him in connection with such proceeding if he conducted himself in good faith,
and:
(a) In the case of conduct in his official capacity with the
corporation, he reasonably believed his conduct to be in its best interests; or
(b) In all other cases, he reasonably believed his conduct to be at
least not opposed to its best interests; provided, that no indemnification shall
be made pursuant to this subsection in respect of any proceeding in which such
person shall have been adjudged to be liable to the corporation.
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4. Prohibited Indemnification. A director shall not be indemnified under
subsection 2 or 3 of this Article in respect of any proceeding charging improper
personal benefit to him, whether or not involving action in his official
capacity, in which he shall have been adjudged to be liable on the basis that
personal benefit was improperly received by him.
5. Expenses of Defense. Unless otherwise limited by the Articles of
Incorporation, a director who has been wholly successful, on the merits or
otherwise, in the defense of any proceeding referred to in subsection 2 or 3 of
this Article shall be indemnified against reasonable expenses incurred by him in
connection with the proceeding.
6. Authorization Required. No indemnification under subsection 2 or 3 of
this Article shall be made by the corporation unless authorized in the specific
case after a determination that indemnification of the director is permissible
in the circumstances because he has met the standard of conduct set forth in the
applicable subsection. Such determination shall be made:
(a) By the Board of Directors by a majority vote of a quorum
consisting of directors not at the time parties to such proceeding; or
(b) If such a quorum cannot be obtained, then by a majority vote of
a committee of the Board, duly designated to act in the matter by a majority
vote of the full Board (in which designation directors who are parties may
participate), consisting solely of two or more directors not at the time parties
to such proceeding; or
(C) In a written opinion by legal counsel other than an attorney,or
a firm having associated with it an attorney, who has been retained by or who
has performed services within the past three years for the corporation or any
party to be indemnified, selected by the Board of Directors or a committee
thereof by vote as set forth in (a) or (b) of this subsection, or if the
requisite quorum of the full Board cannot be obtained therefor and such
committee cannot be established, by a majority vote of the full Board (in which
selection directors who are parties may participate); or
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(d) By the shareholders.
Authorization of indemnification and determination as to reasonableness of
expenses shall be made in the same manner as the determination that
indemnification is permissible, except that if the determination that
indemnification is permissible is made by such legal counsel, authorization of
indemnification and determination as to reasonableness of expenses shall be made
in a manner specified in (c) of this subsection for the selection of such
counsel. Shares held by directors who are parties in the proceeding shall not be
voted on the subject matter under this subsection.
7. Reimbursement Before Final Disposition. Reasonable expenses incurred by
a director who is party to a proceeding may be paid or reimbursed by the
corporation in advance of the final disposition of such proceeding:
(a) After a determination, made in the manner specified by
subsection 6 of this Article that the information then known to those making the
determination (without undertaking further investigation for purposes thereof)
does not establish that indemnification would not be permissible under
subsection 2 or 3 of this Article; and
(b) Upon receipt by the corporation of:
(I) A written affirmation by the director of his good faith
belief that he has met the standard of conduct necessary for indemnification by
the corporation as authorized in this Article; and
(ii) A written undertaking by or on behalf of the director to
repay such amount if it shall ultimately be determined that he has not met such
standard of conduct.
The undertaking required by (b)(ii) of this subsection shall be an
unlimited general obligation of the director but need not be secured and may be
accepted without reference to financial ability to make the repayment. Payments
under this subsection may be authorized in the manner specified in subsection 6
of this Article.
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8. Controlling Provision. No provision for the corporation to indemnify a
director who is made a party to a proceeding, whether contained in the Articles
of Incorporation, these Bylaws, a resolution of shareholders or directors, an
agreement, or otherwise (except as contemplated by subsection 11 of this
Article), shall be valid unless consistent with this Article, or to the extent
that indemnity hereunder is limited by the Articles of Incorporation, consistent
therewith. Nothing contained in this Article shall limit the corporation's
ability to reimburse expenses incurred by a director in connection with his
appearance as a witness in a proceeding at a time when he has not been made a
named defendant or respondent in the proceeding.
9.Employee Benefit Plans. For purposes of this Article,the corporation
shall be deemed to have requested a director to serve an employee benefit plan
where the performance by him of his duties to the corporation also imposes
duties on, or otherwise involves services by, him to the plan or participants or
beneficiaries of the plan; excise taxes assessed on a director with respect to
an employee benefit plan pursuant to applicable law shall be deemed "fines"; and
action taken or omitted by him with respect to an employee benefit plan in the
performance of his duties for a purpose reasonably believed by him to be in the
interest of the participants and benficiaries of the plan shall be deemed to be
for a purpose which is not opposed to the best interests of the corporation.
10. Officers, Employees and Agents. Unless otherwise limited by the
Articles of Incorporation:
(a) An officer of the corporation shall be indemnified as and to the
extent provided in subsection 5 of this Article for a director and shall be
entitled to seek indemnification pursuant to subsection 5 of this Article to the
same extent as a director;
(b) The corporation shall provide indemnification, including
advances of expenses, to an officer, employee, or agent of the corporation to
the same extent that it may indemnify directors pursuant to this Article except
that subsection 12 of this Article shall not apply to any person other than a
director; and
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(c) The corporation, in addition, shall have the power to indemnify
an officer who is not a director, as well as employees and agents of the
corporation who are not directors, to such further extent, consistent with law,
as may be provided by the Articles of Incorporation, these Bylaws, general or
specific action of the Board of Directors, or contract.
11. Insurance. The corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee,
or agent of the corporation or is or was serving at the request of the
corporation as an officer, employee or agent of another corporation,
partnership, joint venture, trust, other enterprise, or employee benefit plan
against any liability asserted against him and incurred by him in any such
capacity or arising out of his status as such, whether or not the corporation
would have the power to indemnify him against such liability under the
provisions of this Article.
12. Reports to Shareholders. Any indemnification of a director in
accordance with this Article, including any payment or reimbursement of
expenses, shall be reported to the shareholders with the notice of the next
shareholders meeting or prior thereto in a written report containing a brief
description of the proceedings involving the director being indemnified and the
nature and extent of such indemnification.
ARTICLE IX. BOOKS AND RECORDS
The corporation shall keep correct and complete books and records of
account and shall keep minutes of the proceedings of its shareholders and Board
of Directors; and shall keep at its registered office or principal place of
business, or at the office of its transfer agent or registrar, a record of its
shareholders, giving the names and addresses of all shareholders and the number
and class of the shares held by each. Any books, records, and minutes may be in
written form or any other form capable of being converted into written form
within a reasonable time.
ARTICLE X. AMENDMENT OF BYLAWS
Unless provided to the contrary in the Articles of Incorporation, these
Bylaws may be amended or repealed and new
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Bylaws adopted by the unanimous vote of the corporation's Board of Directors at
any regular or special meeting.
ADOPTED by resolution of the corporation's Board of Directors on April 17,
1987.
Secretary
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Exhibit 3.108
ARTICLES OF INCORPORATION
OF
STRAIGHT DOWN, INC.
Name
One: The name of the corporation is: Straight Down, Inc.
Purpose
Two: The purpose of the corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of California other than the banking business, the trust company business,
or the practice of a profession permitted to be incorporated by the California
Corporations Code.
Agent for Service
Three: The name and address in the State of California of the
corporation's initial agent for service of process are: Dennis Steers, 1414
Santa Rosa Street, San Luis Obispo, California, 93401.
Authorized Shares
Four: The total number of shares which the corporation is authorized to
issue is one hundred (100) shares.
<PAGE>
Close Corporation Election
Five: This corporation is a close corporation. All of the corporation's
issued shares of all classes shall be held of record by not more than (10)
persons.
Dated: August 2, 1982
Jon Mark Hastings
Dated: August 2, 1982
Dennis Grant Steers
Dated: August 2, 1982
Wallace F. Rodgers
The undersigned declare that they are the persons who have executed these
Articles of Incorporation and hereby declare that this instrument is the act and
deed of the undersigned.
Dated: August 2, 1982
Jon Mark Hastings
Dated: August 2, 1982
Dennis Grant Steers
Dated: August 2, 1982
Wallace F. Rodgers
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Exhibit 3.109
AGREEMENT OF SHAREHOLDERS
OF
STRAIGHT DOWN, INC.
A California Corporation
The Shareholders Agreement is entered into and effective as of the date of
its execution by Jon Mark Hastings, Dennis Grant Steers and Wallace P. Rodgers,
the Shareholders.
WHEREAS, the Shareholders are all of the shareholders of Straight Down,
Inc., a close corporation, and desire to enter into a shareholders agreement to
provide for the management of the business, division of profits, distribution of
assets upon liquidation, and certain other matters; and
WHEREAS, the Shareholders believe it to be important to provide for
substantial restrictions on the transfer of shares, to provide for the
participation of each of the Shareholders in the business and affairs of the
Corporation, and to make other provisions with respect to the Corporation and
the relations of the Shareholders to it and among themselves, all as set forth
herein:
NOW, THEREFORE, in consideration of the agreements herein
<PAGE>
contained, the Shareholders agree as follows:
1. Management and Control.
(a) Board of Directors. During the term of this Agreement, the Board
of Directors of the Corporation shall consist of the Shareholders of the
Corporation, and annual or other elections of directors are hereby waived. The
Corporation shall be managed and controlled in accordance with this Agreement.
Neither the
Board nor the Shareholders shall be required to hold annual, regular or
special meetings, and any action or decision made by the Board or the
Shareholders may be evidenced by any writing executed by the requisite number of
Shareholders, or otherwise as the Shareholders may agree. Each Shareholder, as a
member of the Board, however, agrees as such to consent to or vote in favor of
such resolutions as may be required by persons with whom the Corporation may
have business dealings to evidence corporate approvals or authorizations. Any
Shareholder may authorize any other Shareholder to represent or act as proxy for
the former at any meeting according to written instructions, general or
specific,of the authorizing Shareholder.
2
<PAGE>
(b) Books, Records and Reports. The Shareholders shall cause the
Corporation to maintain the books, records and other documents required by
Section 1500 of the California General Corporation Law (the "Law").
Notwithstanding any waiver thereof,the Shareholders shall cause the Corporation
to furnish to the Shareholders an annual report referred to in Section 1501(a)
of the Law, which report need not be audited unless written request that such
report be audited is made by at least two Shareholders not less than sixty days
prior to the end of the year covered by the report.
(c) Shareholder Meetings. There shall be no regular meetings of the
Shareholders, but a special meeting may be called at any time in accordance with
Section 600(d) of the Law.
(d) Supermajority Requirement. All actions of substance shall
require the prior approval (by vote, or by written or oral consent) of the
Shareholders entitled to exercise not less than sixty-seven percent (67%) of the
voting power of the Corporation. "Actions of substance" are understood to
include all but the minor decisions of day-to-day business operations. Any
authority to take actions of substance may be delegated by like approval. It is
hereby recognized that this provision
3
<PAGE>
gives effective veto power to Jon Mark Hastings and Dennis Grant Steers.
(e) There shall be two officers of the Corporation: Dennis Grant
Steers shall be President and Chief Executive Officer; Jon Mark Hastings shall
be Vice-President and Treasurer (Chief Financial Officer). The Shareholders may,
as an action of substance,change the number of officers of the Corporation or
change the identities of the officers. Any such change shall be evidenced by a
written resolution of the Shareholders, which shall be attached to the
Shareholders Agreement on file with the Corporation.
(f) The Shareholders agree that there shall be no Bylaws of the
Corporation. This Corporation is managed and controlled in accordance with this
Agreement, and it is hereby recognized that no useful purpose would be served by
having Bylaws of the Corporation in addition to this Agreement.
(g) The Shareholders may, as an action of substance, agree to cause
the Corporation to hire employees. The Shareholders may further agree to set
salaries for the Officers of the Corporation and to cause the Corporation to pay
such salaries as an expense of the
4
<PAGE>
Corporation.
2. Distributions.
(a) Determination of Net Profit or Loss. For the purposes of this
Agreement, the net profit or loss of the Corporation for any accounting period
shall be its gross income less the Corporation's expenses during such period,
determined on a cash basis in accordance with generally accepted accounting
principles. Gross income shall include, but shall not be limited to, amounts
received upon or in respect of investments of the Corporation, gains realized
upon the sale or disposition of any proportionate any other income received by
the Corporation. Expenses shall include, but shall not be limited to, the
expenses of conducting the business, salaries, interest on any loans or
borrowings by the Corporation, taxes and assessments assessed to the Corporation
or levied upon its properties and payable by it, depreciation of and losses on
the Corporation's property (using such method of depreciation as the
Shareholders deem appropriate), bad debts and contingencies for which reserves
should properly be established and any and all other expenses incidental to the
conduct of the business of the Corporation.
5
<PAGE>
(b) Regular Distributions of Net Profits. Unless the Shareholders shall
determine in good faith that the Corporation reasonably needs to retain the same
to meet its obligations or to maintain a sound financial condition in light of
its reasonable financial needs, and subject to the requirements of Sections 500
and 501 of the Law, the net profits of the Corporation for each fiscal year
shall be distributed to the Shareholders not later than thirty days after the
end of each such period in the same percentage as that percentage of the
outstanding shares of the Corporation held by each Shareholder. The Shareholders
may agree, as an action of substance, to distribute certain amounts as a draw to
any Shareholder as a credit against that Shareholder's percentage of net profits
next due. Any such amounts shall be subtracted from a Shareholder's distributive
share as above described, and until then shall be deemed a debt of the
Shareholder to the Corporation.
3. Dissolution.
(a) Restrictions on Voluntary Dissolution. The prior approval of the
Shareholders, as an action of substance, shall be required for the voluntary
dissolution of the Corporation under Chapter 19 of the Law, and each of the
Shareholders
6
<PAGE>
hereby waives any right to the taking of such action by the approval,consent, or
vote of a lesser percentage.
(b) Procedure During Winding-Up; Distributions to Shareholders. Upon
commencement of proceedings for dissolution of the Corporation, the Corporation
shall cease to carry on business except as necessary to wind up its business and
distribute its assets. Upon dissolution, the assets of the Corporation shall be
applied as follows and in the following order of priority:
(i) The expenses of dissolution and of the liquidation of assets and
the debts and liabilities of the Corporation, other than debts owing to a
Shareholder, shall be paid first or provided for in accordance with law;
(ii) The principal of and accrued and unpaid interest on
indebtedness, if any, to a Shareholder shall next be paid in full. If the assets
of the Corporation shall be inadequate to pay all such amounts in full, all
accrued but unpaid interest thereon shall be first paid in full or in proportion
to such unpaid interest depending on the available assets, and thereafter the
principal amounts, unless by the terms of any such indebtedness it is
subordinate to any other
7
<PAGE>
indebtedness to a Shareholder, in which case payment shall be made in accordance
with the subordination provisions of such indebtedness;
(iii) The balance, if any, of the assets of the Corporation shall
be distributed to the Shareholders in proportion to the number of shares held by
each.
4. Consideration for Shares.
Shares of the Corporation may be issued only for such consideration as
is determined from time to time by the Shareholders as an action of substance.
5. Restriction on Transfer of Shares.
Except as otherwise provided in this Paragraph 5, no shares of the
Corporation shall be sold or otherwise disposed of by any Shareholder until
after written notice of such intended sale or disposition shall have been
delivered to the Corporation, and until thirty days have expired subsequent to a
final determination of a price per share for such shares, all as hereinafter
provided
In the event any Shareholder proposes to sell or otherwise dispose of all
or any part of such Shareholder's shares, such Shareholder shall sign and
deliver to the Corporation a written notice stating such Shareholder's desire
8
<PAGE>
to sell and dispose of the designated number of shares. Such Shareholder and the
Corporation shall then fix a price per share computed by determining the fair
market value of the net assets of the Corporation excluding "goodwill") on the
date of such notice, and multiplying the resulting figure by a fraction, the
numerator of which shall be one and the denominator of which shall be the number
of shares of the capital stock of the Corporation issued and outstanding as of
the date of such notice. in the event that the Shareholder and the Corporation
cannot agree on the price per share, computed as above, the Shareholder and the
Corporation shall each appoint an independent arbitrator. If either the
Shareholder or the Corporation fails to appoint an arbitrator, the arbitrator
appointee by the other shall have the power to act alone. The arbitrators thus
selected shall determine the price per share computed as above, and their
decision shall be final and conclusive upon the parties. In the event the two
arbitrators cannot agree on the price per share, the two arbitrators shall
appoint a third arbitrator, who shall receive the advice and counsel of the two
previous arbitrators, but the decision of the third arbitrator acting alone, as
to the price per share computed as above, shall be final, binding, and
9
<PAGE>
conclusive upon the parties.
The Corporation shall have the prior option and right to purchase all or
any part of such shares for a period of sixty days after the final determination
of the price per share at the price thus determined. In the event the
Corporation does not exercise its option within the sixty day period with
respect to all the shares, each remaining Shareholder of the Corporation shall
have an option for a period of fifteen days next succeeding the expiration of
such sixty day period to purchase pro rata to the number of shares owned by such
Shareholder the shares remaining for sale at the price per share determined as
above. In the event options have not been exercised with respect to all of the
shares specified in the written notice pursuant to the options granted to the
Corporation and to the Shareholders as above set forth,Shareholders who exercise
their option within said fifteen day period shall have an additional option for
a period of five days next succeeding the expiration of such fifteen day period
to purchase all or any part of the balance of such shares at the price per share
determined as above. In the event there are two or more Shareholders who
exercise the last mentioned option for a total number of shares in excess of
10
<PAGE>
the number available, the shares available for such option shall be allocated to
such Shareholders pro rata to the number of shares owned by each Shareholder.
If the Corporation and the remaining Shareholders do not exercise their
options to purchase all the shares set forth in the written notice, then the
Shareholder giving such written notice may sell all the remaining shares the
subject of that notice to third parties at the price per share determined as
above, not later than thirty days after the expiration of the last option. This
is subject, however, to the limitation of ten Shareholders for this Corporation,
a close corporation. Any attempted intervivos transfer which would violate this
requirement is void, and the Shareholders hereby agree to operate under said
restriction at all times and in all circumstances. If the selling Shareholder
wishes to sell or otherwise dispose of any such shares at a price per share less
than determined as above,or upon terms more favorable than previously offered to
the Corporation and the remaining Shareholders, as a condition precedent thereto
such shares must first have been offered to the Corporation and the remaining
Shareholders on the same terms and conditions in accordance with the procedures
and time periods hereinabove set forth.
11
<PAGE>
The provisions of Paragraph 5 shall be applicable to all sales or other
dispositions of shares of the Corporation except (I) any transfer of shares to
the spouse, issue, or other heirs of a Shareholder upon the death of such
Shareholder, and (ii) any change in the respective interests in shares solely
between or among persons who beneficially hold shares as community
property,joint tenants, or tenants in common. Any transferee of shares of the
Corporation shall hold such shares subject to all the provisions of this
Paragraph 5, as well as subject to the other paragraphs and provisions of this
Agreement, and shall make no transfers other than as provided herein.
6. Legend.
Each certificate representing shares in this Corporation shall bear the
following legend:
"This Corporation is a close corporation. The number of holders
of record of its shares cannot exceed ten. Any attempted inter vivos
transfer which would violate this requirement is void. Refer to
Articles, Bylaws, and any Agreement on file with the Secretary of the
Corporation for further restrictions. The shares represented by this
certificate are subject to
12
<PAGE>
additional transfer and other restrictions by a Shareholders Agreement
dated August 17, 1982, and are subject to a lien to secure any
indebtedness of the Shareholder to the Corporation."
7. Miscellaneous Provisions.
(a) Governing Law. This Agreement shall be governed and interpreted by and
construed in accordance with the laws of the State of California.
(b) Captions. The captions to the sections, sub-sections, and paragraphs in
this Agreement are inserted for convenience only and shall not affect the
construction or interpretation hereof.
(c) Successors. Anything in this Agreement to the contrary notwithstanding,
any transferee, successor, or assign, whether voluntary, by operation of law, or
otherwise, of the shares of the Corporation shall be subject to and bound by the
terms and conditions of this Agreement as fully as though such person was a
signatory hereto.
(d) Severability. If any term, provision, covenant, or condition of this
Agreement is held by a Court of competent jurisdiction to be invalid, void, or
unenforceable, it shall he deemed severed from the rest of this Agreement, which
shall
13
<PAGE>
remain in full force and effect and shall in no way be affected, impaired or
invalidated.
(e) Time. Time is of the essence of this Agreement.
(f) Filing of Agreement. A copy of this Agreement, as amended from time to
time, shall be filed with the Secretary of the Corporation for inspection by any
prospective purchaser of shares.
(g) Amendment. This Agreement may be amended only by a writing signed by
all holders of record of shares as of the date of said amendment.
(h) Fiscal Year. The fiscal year of the Corporation shall be the calendar
year.
14
<PAGE>
IN WITNESS WHEREOF, the parties hereto have signed this Agreement this
Seventeenth Day of August, Nineteen Hundred and Eighty Two.
Dennis Grant Steers
Jon Mark Hastings
Wallace F. Rodgers
The undersigned spouse of Wallace F. Rodgers hereby consents to his
execution of the foregoing Agreement, acknowledges that the Corporation is a
business interest that is subject to his sole management and control, agrees to
be bound by the terms of this Agreement and hereby irrevocably appoints him as
the agent the undersigned for purposes of executing and performing any actions
directly or indirectly relating to the Corporation and the foregoing Agreement
without further signature or consent or notice to the undersigned.
Dated: August 17, 1982
Lorie R. Rodgers
15
<PAGE>
Exhibit 3.110
CERTIFICATE OF INCORPORATION
OF
AUTOMOTIVE SATELLITE TELEVISION NETWORK, INC.
FIRST: The name of the corporation is Automotive Satellite Television
Network, Inc. (hereinafter the "Corporation").
SECOND: The address of the registered office of the Corporation in the
State of Delaware is 1209 Orange Street, County of New Castle, Wilmington,
Delaware 19801. The name of its registered agent at that address is The
Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware as set forth in Title 8 of the Delaware Code (the
"GCL").
FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is One Thousand (1,000) shares of Common Stock, each
having a par value of $.10.
FIFTH: The name and mailing address of the sole incorporator are as
follows:
Name Address
---- -------
Jack E. Jacobsen First RepublicBank Center
3600 Tower II
Dallas, Texas 75201
SIXTH: The name and mailing address of the person who is to serve as the
sole director until the first annual meeting of the stockholders or until his
successor is elected and qualified are as follows:
Name Address
---- -------
Carl Westcott 1303 Marsh Pane
Carrollton, Texas 75006
SEVENTH: The following provisions are inserted for the management of the
business and the conduct of the affairs of the Corporation and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
1. The business and affairs of the Corporation shall be managed by or
under the direction of the Board of Directors.
<PAGE>
2. The directors shall have concurrent power with the stockholders to
make, alter, amend, change, add to or repeal the By-Laws of the
Corporation.
3. The number of directors of the Corporation shall be as from time to
time fixed by, or in the manner provided in, the By-Laws of the
Corporation. Election of directors need not be by written ballot
unless the By-Laws so provide.
4. To the full extent permitted by the GCL as the same exists or may
hereafter be amended, a director of the Corporation shall not be
liable to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director. No repeal, amendment or
modification of this provision, whether direct or indirect, shall
eliminate or reduce its effect with respect to any act or omission of
a director of the Corporation occurring prior to such repeal,
amendment or modification.
5. In addition to the powers and authority hereinbefore or by statute
expressly conferred upon them, the directors are hereby empowered to
exercise all such powers and do all such acts and things as may be
exercised or done by the Corporation, subject, nevertheless, to the
provisions of the GCL, this Certificate of Incorporation, and any
By-Laws adopted by the stockholders; provided, however, that no
By-Laws hereafter adopted by the stockholders shall invalidate any
prior act of the directors which would have been valid if such By-Laws
had not been adopted.
EIGHTH: Meetings of stockholders may be held within or without the State of
Delaware as the Corporations By-Laws may provide. The books of the Corporation
may be kept (subject to any provision contained in the GCL) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the By-Laws of the Corporation.
NINTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of the GCL or on the application of trustees in
dissolution or of any receiver or receivers appointed for this Corporation under
the provisions of Section 279 of the GCL, order a meeting of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three-fourths in value of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of
<PAGE>
this Corporation, as the case may be, agree to any compromise or arrangement and
to any reorganization of this Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders of this Corporation, as the case may be,
and also on this Corporation.
TENTH: The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation in the manner now
or hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
ELEVENTH: (a) Power to Indemnify in Actions, Suits or Proceedings other
Than Those by or in the Rights of the Corporation. Subject to Paragraph (C) of
this Article Eleventh, the Corporation shall 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 or officer of the Corporation,
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust 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. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contenders or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which 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
reasonable cause to believe that his conduct was unlawful.
(b) Power to Indemnify in Actions, Suits, or Proceedings by or in the
Right of the Corporation. Subject to Paragraph (C) of this Article Eleventh, the
Corporation shall 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 he is or was a director or officer of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or
<PAGE>
settlement of such action or suit 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; except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
Corporation unless and only to the extent that the Court of Chancery or 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, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
(c) Authorization of Indemnification. Any indemnification under this
Article Eleventh (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of the director or officer is proper in the circumstances
because he has met the applicable standard of conduct set forth in Paragraph (a)
or (b) of this Article Eleventh, as the case may be. Such determination shall be
made (I) by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding, or (ii) if
such a quorum is not obtainable, or, even if obtainable, a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or (iii) by the stockholders. To the extent, however, that a director
or officer has been successful on the merits or otherwise in defense of any
action, suit or proceeding described above, or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith, without
the necessity of authorization in the specific case.
(d) Good Faith Defined. For purposes of any determination under
Paragraph (C) of this Article Eleventh, a person shall be deemed to have acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation, or, with respect to any criminal action
or proceeding, to have had no reasonable cause to believe his conduct was
unlawful, if his action is based on the records or books of account of the
Corporation or another enterprise, or on information supplied to him by the
officers of the Corporation or another enterprise in the course of their duties,
or on the advice of legal counsel for the Corporation or another enterprise or
on information or records given or reports made to the Corporation or another
enterprise by an independent certified public accountant or by an appraiser or
other expert selected with reasonable care by the Corporation or another
enterprise. The term "another enterprise" as used in this Paragraph (d) shall
mean any other corporation or any partnership, joint venture, trust or other
enterprise of which such person is or was serving
<PAGE>
at the request of the Corporation as a director, officer, employee or agent. The
provisions of this Paragraph (d) shall not be deemed to be exclusive or to limit
in any way the circumstances in which a person may be deemed to have met the
applicable standard of conduct set forth in Paragraph (a) or (b) of this Article
Eleventh, as the case may be.
(e) Indemnification by a Court. Notwithstanding any contrary
determination in the specific case under Paragraph (C) of this Article Eleventh,
and notwithstanding the absence of any determination thereunder, any director or
officer may apply to any court of competent jurisdiction in the State of
Delaware for indemnification to the extent otherwise permissible under
Paragraphs (a) or (b) of this Article Eleventh. The basis of such
indemnification by a court shall be a determination by such court that
indemnification of the director or officer is proper in the circumstances
because he has met the applicable standards of conduct set forth in Paragraphs
(a) or (b) of this Article Eleventh, as the case may be. Notice of any
application for indemnification pursuant to this Paragraph (e) shall be given to
the Corporation promptly upon the filing of such application.
(f) Expenses Payable in Advance. Expenses incurred in defending a
civil or criminal action, suit or proceeding may be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such director or officer to repay such
amount unless it shall ultimately be determined that he is entitled to be
indemnified by the Corporation as authorized in this Article Eleventh.
(g) Nonexclusivity and Survival of Indemnification. The
indemnification and advancement of expenses provided by, or granted pursuant to,
this Article Eleventh shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement of expenses may be entitled under
any By-Law, agreement, vote of stockholders or disinterested directors or
pursuant to the direction (howsoever embodied) of any court of competent
jurisdiction or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, it being the policy of the
Corporation that indemnification to the persons specified in Paragraphs (a) and
(b) of this Article Eleventh shall be made to the fullest extent permitted by
law. The provisions of this Article Eleventh shall not be deemed to preclude the
indemnification of any person who is not specified in Paragraphs (a) or (b) of
this Article Eleventh, but whom the Corporation has the power or obligation to
indemnify under the provisions of the GCL, or otherwise. The indemnification and
advancement of expenses provided by, or granted pursuant to, this Article
Eleventh shall, unless otherwise provided when authorized or ratified, continue
as to a person who has ceased to be a director or officer and shall inure to the
benefit of the heirs, executors and administrators of such person.
<PAGE>
(h) Indemnification of Employees and Agents of the Corporation. The
Corporation may, to the extent authorized from time to time by the Board of
Directors, grant rights to indemnification and to the advancement of expenses to
any employee or agent of the Corporation to the fullest extent of the provisions
of this Article Eleventh with respect to the indemnification and advancement of
expenses of directors or officers of the Corporation.
(i) Insurance. The Corporation may purchase and maintain insurance on
behalf of any person who 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, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power or the obligation to
indemnify him against such liability under the provisions of this Article
Eleventh.
(j) Meaning of "Corporation" for Purposes of Article Eleventh. For
purposes of this Article Eleventh, references to 'the Corporation" shall
include, in addition to the resulting Corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers and employees or agents, so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under the provisions of this Article Eleventh with respect to the
resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.
I, the undersigned, being the sole incorporator hereinbefore named for
the purpose of forming a corporation pursuant to the GCL, do make this
Certificate, hereby declaring and certifying that this is my act and deed and
the facts herein stated are true, and accordingly have hereunto set my hand this
day of June, 1988.
-----------------
Jack E. Jacobsen
Sole Incorporator
<PAGE>
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
AUTOMOTIVE SATELLITE TELEVISION NETWORK. INC.
Pursuant to Section 242 of the General Corporation Law of Delaware, the
undersigned corporation adopts the following Certificate of Amendment to its
Certificate of Incorporation:
ARTICLE I
The nine of the Corporation is AUTOMOTIVE SATELLITE TELEVISION NETWORK,
INC.
ARTICLE II
The original Certificate of Incorporation of the Corporation was filed with
the Secretary of State of the State of Delaware on June 23, 1988.
ARTICLE III
This Certificate of Amendment to the Certificate of Incorporation has been
duly adopted in accordance with Sections 242 of the General Corporation Law of
the State of Delaware.
ARTICLE IV
The following amendments to the Certificate of Incorporation are hereby
adopted:
1. The title of Certificate of Incorporation is hereby amended in its
entirety to read as follows:
CERTIFICATE OF INCORPORATION
OF
TEL-A-TRAIN, INC.
2. Article First of the Certificate of Incorporation is amended in its
entirety to read as follows:
The name of the corporation is Tel-A-Train,Inc. (hereinafter the
"Corporation").
ARTICLE V
These amendments were adopted by the sole stockholder of the Corporation as
of December 6, 1993.
<PAGE>
ARTICLE VI
The total number of outstanding shares of stock of the Corporation, all of
which are entitled to vote on these amendments is 100 shares of Common Stock, $.
1,0 par value per share.
ARTICLE VII
The number of shares voted for such amendments was 100 and the number of
shares voted against such amendments was 0.
IN WITNESS WHEREOF, This instrument has been executed for and on behalf and
in the name of the Corporation by its officers thereunto duly authorized on
December 6, 1993.
AUTOMOTIVE SATELLITE TELEVISION
NETWORK, INC.
By:
Title: President
ATTEST:
By:
Title: Secretary
<PAGE>
Exhibit 3.111
BY-LAWS
OF
AUTOMOTIVE SATELLITE TELEVISION NETWORK, INC.
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the Corporation
shall be in the City of Wilmington, County of New Castle, State of Delaware.
Section 2. Other Offices. The Corporation also may have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. Meetings of the stockholders for the
election of directors or for any other purpose shall be held at such time and
place, either within or without the State of Delaware, as shall be designated
from time to time by the Board of Directors and stated in the notice of the
meeting or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. The annual meetings of stockholders shall
be held on such date and at such time as shall be designated from time to time
by the Board of Directors and stated in the notice of the meeting, at which
meetings the stock holders shall elect by a plurality vote a Board of Directors,
and transact such other business as may properly be brought before the meeting.
Written notice of the annual meeting stating the place, date, and hour of the
meeting shall be given to each stockholder entitled to vote at such meeting not
less than ten nor more than sixty days before the date of the meeting.
Section 3. Special Meetings. Unless otherwise prescribed by law or by
the Certificate of Incorporation, special meetings of stockholders, for any
purpose or purposes, may be called by either (a) the Chairman of the Board, if
there be one, or (b) the President, and shall be called by any such officer or
the Secretary at the request in writing of a majority
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of the Board of Directors. Such request shall state the purpose or purposes of
the proposed meeting. Written notice of a special meeting stating the place,
date, and hour of the meeting and the purpose or purposes for which the meeting
is called shall be given not less than ten nor more than sixty days before the
date of the meeting to each stockholder entitled to vote at such meeting.
Section 4. Quorum. Except as otherwise provided by law or by the
Certificate of Incorporation, the holders of a majority of the capital stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business. If, however, such quorum shall not
be present or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy, shall have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted that might have been transacted at the meeting as
originally noticed. If the adjournment is for more than thirty days, or if
after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder entitled to
vote at the meeting.
Section 5. Voting. Unless otherwise required by law, the Certificate
of Incorporation, or these By-Laws, any question brought before any meeting of
stockholders shall be decided by the vote of the holders of a majority of the
stock represented and entitled to vote thereat. Each holder of Common Stock
represented at a meeting of stockholders shall be entitled to cast one vote for
each share of the Common Stock entitled to vote thereat held by such
stockholder. Such votes may be cast in person or by proxy but no proxy shall be
voted on or after three years from its date, unless such proxy provides for a
longer period. The Board of Directors, in its discretion, or the officer of the
Corporation presiding at a meeting of stockholders, in his discretion, may
require that any votes cast at such meeting shall be cast by written ballot.
Section 6. List of Stockholders Entitled to Vote. The officer of the
Corporation who has charge of the stock ledger of the Corporation shall prepare
and make, at least ten days before every meeting of stockholders, a complete
list of the stock holders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder of the Corporation who is
present.
ARTICLE III
DIRECTORS
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Section 1. Number and Election of Directors. The Board of Directors
shall consist of not less than one member, the exact number of which shall
initially be fixed by the Incorporator and thereafter from time to time by the
Board of Directors. Except as provided in Section 2 of this Article, directors
shall be elected by a plurality of the votes cast at annual meetings of
stockholders, and each director so elected shall hold office until the next
annual meeting and until his successor is duly elected and qualified, or until
his earlier resignation or removal. Any director may resign at any time upon
written notice to the Corporation. Directors need not be stockholders.
Section 2. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, though less than a quorum, or by
a sole remaining director, and the directors so chosen shall hold office until
the next annual election and until their successors are duly elected and
qualified, or until their earlier resignation or removal.
Section 3. Duties and Powers. The business of the Corporation shall be
managed by or under the direction of the Board of Directors, which may exercise
all such powers of the Corporation and do all such lawful acts and things as are
not by statute or by the Certificate of Incorporation or by these bylaws
directed or required to be exercised or done by the stockholders.
Section 4. Meetings. The Board of Directors of the Corporation may
hold meetings, both regular and special, either within or without the State of
Delaware. Regular meetings of the Board of Directors may be held without notice
at such time and at such place as may from time to time be determined by the
Board of Directors. Special meetings of the Board of Directors may be called by
the Chairman, if there be one, the President, or any director. Notice thereof
stating the place, date, and hour of the meeting shall be given to each director
either by mail or by telephone or telegram on twenty-four hours notice, or on
such shorter notice as the person or persons calling such meeting may deem
necessary or appropriate in the circumstances.
Section 5. Quorum. Except as may be otherwise specifically provided by
law, the Certificate of Incorporation, or these By-Laws, at all meetings of the
Board of Directors, a majority of the entire Board of Directors shall constitute
a quorum for the transaction of business and the act of a majority of the
directors present at any meeting at which there is a quorum shall be the act of
the Board of Directors. If a quorum shall not be present at any meeting of the
Board of Directors, the directors present thereat may adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum shall be present.
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Section 6. Actions of Board. Unless otherwise provided by the
Certificate of Incorporation or these By-Laws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if all the members of the Board of Directors or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board of Directors or
committee.
Section 7. Meetings by Means of Conference Telephone. Unless otherwise
provided by the Certificate of Incorporation or these By-Laws, members of the
Board of Directors of the Corporation, or any committee designated by the Board
of Directors, may participate in a meeting of the Board of Directors or such
committee by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this Section 7 shall
constitute presence in person at such meeting.
Section 8. Compensation. The directors may be paid their expenses, if
any, of attendance at each meeting of the Board of Directors and may be paid a
fixed sum for attendance at each meeting of the Board of Directors or a stated
annual fee as director. No such payment shall preclude any director from serving
the Corporation in any other capacity and receiving compensation therefor.
Members of special or standing committees may be allowed like compensation for
attending committee meetings.
Section 9. Interested Directors. No contract or transaction between
the Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof that
authorizes the contract or transaction, or solely because his or their votes are
counted for such purpose, if (a) the material facts as to his or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of
Directors or committee in good faith authorizes the contract or transaction by
the affirmative votes of a majority of the disinterested directors, even though
the disinterested directors be less than a quorum; or (b) the material facts as
to his or their relationship or interest and as to the contract or transaction
are disclosed or are known to the stockholders entitled to vote thereon, and the
contract or transaction is specifically approved in good faith by vote of the
stockholders; or (c) the contract or transaction is fair as to the Corporation
as of the time it is authorized, approved, or
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ratified, by the Board of Directors, a committee thereof, or the stockholders.
Common or interested directors may be counted in determining the presence of a
quorum at a meeting of the Board of Directors or of a committee that authorizes
the contract or transaction.
Section 10. Executive Committee. (a) The Board of Directors may, by
resolution or resolutions passed by a majority of the whole board, designate
from the directors an Executive Committee, which shall consist of two or more
members. The number of members shall be determined from time to time by
resolution passed by a majority of the whole Board of Directors. The Board of
Directors shall designate for such committee a chairman, who shall continue as
such during the pleasure of the Board of Directors. Members of the Executive
Committee shall be appointed by the Board of Directors upon establishment of the
Executive Committee and thereafter at its first meeting after each annual
meeting of stockholders and, unless sooner discharged by resolution passed by a
majority of the whole Board of Directors, shall hold office until their
respective successors are appointed and qualified or until their earlier
respective deaths or resignations. Upon establishment of the Executive
Committee, any vacancy in the Executive Committee may be filled by resolution
passed by a majority of the whole Board of Directors.
(b) Regular meetings of the Executive Committee may be held without
notice at such time and place as shall be determined from time to time by the
Committee and communicated to all of the members thereof.
(c) Special meetings of the Executive Committee may be called by the
chairman of the Executive Committee or any two members thereof at any time on
twenty-four hours' notice to each member, either personally or by mail or
telegram.
(d) Unless otherwise restricted by statute, the Certificate of
Incorporation, or these By-Laws, any action required or permitted to be taken at
any meeting of the Executive Committee may be taken without a meeting if a
written consent thereto is signed by all members and such written consent is
filed with the minutes of the proceedings of the Committee.
(e) Unless otherwise restricted by statute, the Certificate of
Incorporation, or these By-Laws, members of the Executive Committee may
participate in a meeting of such Committee by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting pursuant to
this Section shall constitute presence in person at such meeting.
(f) A majority of the total number of members of the
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Executive Committee then serving shall constitute a quorum for the transaction
of business, and the act of a majority of the total number of members of the
Executive Committee then serving shall be the act of the Executive Committee.
The members of the Executive Committee shall act only as a committee, and the
individual members shall have no power as such.
(g) The Executive Committee shall keep regular minutes of its
meetings. The Secretary of the Corporation, or in his absence, an assistant
secretary, shall act as secretary of the Executive Committee or the Committee
may, in its discretion, appoint its own secretary. The Executive Committee shall
report its acts and proceedings to the Board of Directors.
(h) The Executive Committee shall have and may exercise all the powers
and authority of the Board of Directors in the management of the business and
affairs of the Corporation, including the same authority to have complete and
unrestricted access to the Corporation's books, records, internal memoranda,
accounts, and all other documents relating to the Corporation or its personnel,
access to the offices and other premises owned or leased by the Corporation, and
access to the Corporation's officers and employees, and may authorize the seal
of the Corporation to be affixed to all papers that may require it; provided,
however, in no event shall the Executive Committee have any power or authority
in reference to (I) amending the Certificate of Incorporation; (ii) adopting an
agreement of merger or consolidation; (iii) recommending to the stockholders the
sale, lease or exchange of all or substantially all of the Corporation's
property and assets; (iv) recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution; (v) amending the By-Laws of the
Corporation; or (vi) unless specifically so authorized by resolution passed by a
majority of the whole Board of Directors, declaring a dividend authorizing the
issuance of stock or adopting a certificate of ownership and merger pursuant to
the Delaware General Corporation Law.
Section 11. Other Committees. The Board of Directors may, by
resolution or resolutions passed by a majority of the whole Board of Directors,
designate one or more committees other than the Executive Committee, each
committee to consist of one or more of the directors of the Corporation, which,
to the extent provided in such resolution or resolutions, shall have and may
exercise the powers of the Board of Directors in the management of the business
and affairs of the Corporation and may authorize the seal of the Corporation to
be affixed to all papers which may require it, subject to the same limitations
set forth in Article III, Section 10 of these By-Laws. Such committee or
committees shall have such name or names and conduct its business in such areas
and under such rules and regulations as may be determined from time to time by
resolution passed by a majority of the whole
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Board of Directors. Each such committee shall keep regular minutes of its
meetings and report the same to the Board of Directors when required.
ARTICLE IV
OFFICERS
Section 1. General. The officers of the Corporation shall be chosen by
the Board of Directors and shall include a President, a Secretary, and a
Treasurer. The Board of Directors, in its discretion, also may choose a Chairman
of the Board of Directors, one or more Vice-Presidents, a General Counsel,
Assistant Secretaries, Assistant Treasurers, and other officers. Any number of
offices may be held by the same person, unless otherwise prohibited by law, the
Certificate of Incorporation, or these By-Laws. The officers of the Corporation
need not be stockholders of the Corporation nor, except in the case of the
Chairman and Vice Chairman of the Board of Directors, need such officers be
directors of the Corporation.
Section 2. Election. The Board of Directors at its first meeting held
after each annual meeting of stockholders shall elect the officers of the
Corporation, who shall hold their offices with such powers and perform such
duties as shall be determined from time to time by the Board of Directors; and
all officers of the Corporation shall hold office until their successors are
chosen and qualified, or until their earlier resignation or removal. Any
officer elected by the Board of Directors may be removed at any time by the
affirmative vote of a majority of the Board of Directors. Any vacancy occurring
in any office of the Corporation shall be filled by the Board of Directors. The
salaries of all officers of the Corporation shall be fixed by the Board of
Directors.
Section 3. Chairman of the Board of Directors. The Chairman of the
Board of Directors shall preside at all meetings of the stockholders and of the
Board of Directors. He shall see that all orders and resolutions of the Board of
Directors are carried into effect. Except where by law the signature of the
President is required, the Chairman of the Board of Directors shall possess the
same power as the President to sign all contracts, certificates, and other
instruments of the Corporation that may be authorized by the Board of Directors.
During the absence or disability of the President, the Chairman of the Board of
Directors shall exercise all the powers and discharge all the duties of the
President. The Chairman of the Board of Directors also shall perform such other
duties and may exercise such other powers as from time to time may be assigned
to him by these Bylaws or by the Board of Directors.
Section 4. President. The President shall, subject to
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the control of the Board of Directors and the Chairman or, if there be
one, Vice Chairman of the Board of Directors, be the Chief Executive Officer of
the Corporation and shall have general supervision of the business operations of
the Corporation. He may execute all bonds, mortgages, contracts, and other
instruments of the Corporation requiring a seal, under the seal of the
Corporation, except where required or permitted by law to be otherwise signed
and executed and except that the other officers of the Corporation may sign and
execute documents when so authorized by these By-Laws, the Board of Directors or
the President. In the absence or disability of the Chairman and Vice Chairman of
the Board of Directors, or if there be none, the President shall preside at all
meetings of the stockholders and the Board of Directors. The President shall
also perform such other duties and may exercise such other powers as from time
to time may be assigned to him by these By-Laws or by the Board of Directors.
Section 5. Vice-Presidents. At the request of the President or in his
absence or in the event of his inability or refusal to act (and if there be no
Chairman of the Board of Directors), the Vice-President or the Vice-Presidents
if there is more than one (in the order and with such titles designated by the
Board of Directors), shall perform the duties of the President, and, when so
acting, shall have all the powers of and be so subject to all the restrictions
upon the President. Each Vice-president shall perform such other duties and
have such other powers as the Board of Directors from time to time may
prescribe. If there be no Chairman of the Board of Directors and no Vice-
president, the Board of Directors shall designate the officer of the Corporation
who, in the absence of the President or in the event of the inability or refusal
of the President to act, shall perform the duties of the President, and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the President.
Section 6. Secretary. The Secretary shall attend all meetings of the
Board of Directors and all meetings of stockholders kept for that purpose. The
Secretary also shall perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice of all meetings
of the stockholders and special meetings of the Board of Directors, and
shall perform such other duties as may be prescribed by the Board of Directors
or Chairman of the Board, under whose supervision he shall be. If the Secretary
shall be unable or refuse to cause to be given notice of all meetings of the
stockholders and special meetings of the Board of Directors, and if there be no
Assistant Secretary, then either the Board of Directors or the Chairman of the
Board may choose another officer to cause such notice to be given. The Secretary
shall have custody of the seal of the Corporation and the Secretary or any
Assistant Secretary, if there be one, shall have authority to affix the same to
any instrument requiring it and when so
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affixed, it may be attested by the signature of the Secretary or by the
signature of any such Assistant Secretary. The Board of Directors may give
general authority to any other officer to affix the seal of the Corporation and
to attest the affixing by his signature. The Secretary shall see that all books,
reports, statements, certificates, and other documents and records required by
law to be kept or filed are properly kept or filed, as the case may be.
Section 7. Treasurer. The Treasurer shall have custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the Chairman of the Board of Directors, the
Vice Chairman of the Board of Directors, the President, and the Board of
Directors, at its regular meetings, or when the Board of Directors so requires,
an account of all his transactions as Treasurer and of the financial condition
of the Corporation. If required by the Board of Directors, the Treasurer shall
give the Corporation a bond in such sum and with such surety or sureties as
shall be satisfactory to the Board of Directors for the faithful performance of
the duties of his office and for the restoration to the Corporation, in case of
his death, resignation, retirement, or removal from office, of all books,
papers, vouchers, money, and other property of whatever kind in his possession
or under his control belonging to the Corporation.
Section 8. Assistant Secretaries. Except as may be otherwise provided
in these By-Laws, Assistant Secretaries, if there be any, shall perform such
duties and have such powers as from time to time may be assigned to them by the
Board of Directors, the Chairman of the Board of Directors, the President, any
Vice-President, or the Secretary, and in the absence of the Secretary or in the
event of his disability or refusal to act, shall perform the duties of the
Secretary, and when so acting, shall have all the powers of and be subject to
all the restrictions upon the Secretary.
Section 9. Assistant Treasurers. Assistant Treasurers, if there be
any, shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the Chairman of the Board of
Directors, the President, any Vice-President, or the Treasurer, and in the
absence of the Treasurer or in the event of his disability or refusal to act,
shall perform the duties of the Treasurer, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the Treasurer. If
required by the Board of
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Directors, an Assistant Treasurer shall give the Corporation a bond in such sum
and with such surety or sureties as shall be satisfactory to the Board of
Directors for the faithful performance of the duties of his office and for the
restoration to the Corporation, in case of his death, resignation, retirement,
or removal from office, of all books, papers, vouchers, money, and other
property of whatever kind in his possession or under his control belonging to
the Corporation.
Section 10. General Counsel. A General Counsel for the Corporation may
be appointed annually by the Board of Directors, at a level or rate of
compensation to be set by the Board of Directors. The Board of Directors, in its
discretion, may appoint an individual lawyer or law firm as General Counsel of
the Corporation. If a law firm should be selected, then one member thereof shall
be designated as the particular lawyer in such firm whose personal services are
contemplated.
Section 11. Other Officers. Such other officers as the Board of
Directors may choose shall perform such duties and have such powers as from time
to time may be assigned to them by the Board of Directors. The Board of
Directors may delegate to any other officer of the Corporation the power to
choose such other officers and to prescribe their respective duties and powers.
ARTICLE V
STOCK
Section 1. Form of Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate signed, in the name of the
Corporation (a) by the Chairman of the Board of Directors, the President, or a
Vice-President and (b) by the Treasurer or an Assistant Treasurer, or the
Secretary or an Assistant Secretary of the Corporation, certifying the number of
shares owned by him in the Corporation.
Section 2. Signatures. Where a certificate is countersigned by (a) a
transfer agent other than the Corporation or its employee or (b) a registrar
other than the Corporation or its employee, any other signature on the
certificate may be a facsimile. In case any officer, transfer agent, or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent, or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent, or registrar at the date
of issue.
Section 3. Lost Certificates. The Board of Directors may direct a new
certificate to be issued in place of any certificate theretofore issued by the
Corporation alleged to have been lost, stolen, or destroyed, upon the making of
an affidavit of
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that fact by the person claiming the certificate of stock to be lost, stolen, or
destroyed. When authorizing such issue of a new certificate, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, (a) require the owner of such lost, stolen, or destroyed certificate,
or his legal representative, to advertise the same in such manner as the Board
of Directors shall require and/or to give the Corporation a bond in such sum as
it may direct as indemnity against any claim that may be made against the
Corporation with respect to the certificate alleged to have been lost, stolen,
or destroyed or the issuance of such new certificate and (b) fulfill such other
conditions as may be reasonably necessary for the protection of the Corporation.
Section 4. Transfers. Stock of the Corporation shall be transferable
in the manner prescribed by law and in these Bylaws. Transfers of stock shall be
made on the books of the Corporation only by the person named in the certificate
or by his attorney lawfully constituted in writing and upon the surrender of the
certificate therefor, which shall be canceled before a new certificate shall be
issued.
Section 5. Record Date. In order that the Corporation may determine
the stockholders entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or entitled to express consent to corporate action
in writing without a meeting, or entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion, or exchange of stock, or for the
purpose of any other lawful action, the Board of Directors may fix, in advance,
a record date, which shall not be more than sixty days nor less than ten days
before the date of such meeting, nor more than sixty days prior to any other
action. A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
Section 6. Beneficial Owners. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends and to vote as such owner and to hold liable for
calls and assessments, a person registered on its books as the owner of shares,
and shall not be bound to recognize any equitable or other claim to or interest
in such share or shares on the part of any other person, whether or not it shall
have express or other notice thereof, except as otherwise provided by law.
ARTICLE VI
NOTICES
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Section 1. Notices. Whenever written notice is required by law, the
Certificate of Incorporation or these Bylaws to be given to any director, member
of a committee, or stockholder, such notice may be given by mail, addressed to
such director, member of a committee, or stockholder, at his address as it
appears on the records of the Corporation, with postage thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail. Written notice may also be given personally
or by telegram, telex or cable.
Section 2. Waivers of Notice. Whenever any notice is required by law,
the Certificate of Incorporation, or these Bylaws to be given to any director,
member of a committee, or stockholder, a waiver thereof in writing, signed by
the person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation, if
any, may be declared by the Board of Directors at any regular or special meeting
and may be paid in cash, in property, or in shares of the capital stock. Before
payment of any dividend, there may be set aside out of any funds of the
Corporation available for dividends such sum or sums as the Board of Directors
from time to time, in its absolute discretion, deems proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for repairing
or maintaining any property of the Corporation, or for any proper purpose, and
the Board of Directors may modify or abolish any such reserve.
Section 2. Disbursements. All checks or demands for money and notes of
the Corporation shall be signed by such officer or officers or such other person
or persons as the Board of Directors may from time to time designate.
Section 3. Fiscal Year. The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.
Section 4. Corporate Seal. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its organization, and the words
"Corporate Seal, Delaware". The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced or otherwise.
Section 5. Shares of Other Corporations. The Chairman
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of the Board, or in his absence the President, or in the absence of both, any
Vice Chairman of the Board or Vice President, is authorized to vote, represent,
and exercise on behalf of the Corporation all rights incident to any and all
shares of any other corporation, bank, banking association, or other entity
standing in the name of the Corporation. The authority herein granted to said
officer to vote or represent on behalf of the Corporation any and all shares
held by the Corporation in any other corporation, bank, banking association, or
other entity may be exercised either by said officer in person or by any person
authorized so to do by proxy or power of attorney duly executed by said officer.
Notwithstanding the above, however, the Board, in its discretion, may designate
by resolution any additional person to vote or represent said shares of other
corporations, banks, banking associations, and other entities.
ARTICLE VIII
AMENDMENTS
Section 1. These By-Laws may be altered, amended, or repealed, in
whole or in part, or new By-Laws may be adopted by the stockholders or by the
Board of Directors at a regular or special meeting thereof; provided, however,
that if such action shall be taken at a regular meeting, notice of such
alteration, amendment, repeal, or adoption of new By-Laws shall be contained in
the notice of such meeting of stockholders or Board of Directors, as the case
may be. All such amendments must be approved by either thee holders of a
majority of the outstanding capital stock entitled to vote thereon or by a
majority of the entire Board of Directors then in office.
Section 2. Entire Board of Directors. As used in this Article VIII and
in these By-Laws generally, the term "entire Board of Directors" means the total
number of directors that the Corporation would have if there were no vacancies.
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Exhibit 3.112
ARTICLES OF INCORPORATION
OF
TI-IN ACQUISITION CORP.
ARTICLE I
The name of the corporation is TI-IN Acquisition Corp.
ARTICLE II
The period of its duration is perpetual.
ARTICLE III
The corporation is organized for the purpose of engaging in any lawful act,
activity and/or business for which corporations may be organized under the Texas
Business Corporation Act.
ARTICLE IV
The aggregate number of shares which the corporation shall have the
authority to issue is 1,000 shares of Common Stock, par value $.01 per share.
ARTICLE V
No holder of any shares of any class of the corporation's authorized
shares, or any other class of stock of the corporation hereafter authorized,
shall, as such holder, have any preemptive or preferential right to receive,
purchase, or subscribe to (a) any unissued or treasury shares of any class of
stock of the corporation (whether now or hereafter authorized), (b) any
obligations, evidences of indebtedness, or other securities of the corporation
convertible into or exchangeable for, or carrying or accompanied by any rights
to receive, purchase, or subscribe to, any such unissued or treasury shares, (c)
any right of subscription to or to receive, or any warrant or option for the
purchase of, any of the foregoing securities, or (d) any other securities that
may be issued or sold by the corporation.
ARTICLE VI
The corporation will not commence business until it has received for the
issuance of its shares consideration of the value
<PAGE>
of $1,000.00, consisting of money, labor done or property actually received.
ARTICLE VII
The address of the registered office of the corporation is 1303 Marsh Lane,
Carrollton, Texas 75006, and the name of its initial registered agent at such
address is Jack T. Smith.
ARTICLE VIII
The name and address of the incorporator are as follows:
NAME ADDRESS
Robert J. Johnston 4500 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201
ARTICLE IX
The number of directors constituting the Board of Directors of this
corporation on the date hereof is two (2), and the names and addresses of the
persons who are to serve as directors until the next annual meeting of the
shareholders, or until their successors are elected and qualified, are as
follows:
NAME ADDRESS
Jack T. Smith 1303 Marsh Lane
Carrollton, Texas 75006
Phyllis Farragut 1303 Marsh Lane
Carrollton, Texas 75006
ARTICLE X
The corporation shall indemnify persons for whom indemnification is
permitted by Article 2.02-1 of the Texas
-2-
<PAGE>
Business Corporation Act, and such indemnification shall be made to the fullest
extent permitted thereby.
ARTICLE XI
To the fullest extent permitted by law, directors and former directors of
the corporation shall not be liable to the corporation or its shareholders for
monetary damages for an act or omission in the director's capacity as a
director. No amendment of this Article XI shall adversely affect any right or
protection of a director that exists at the time of such amendment, modification
or repeal.
ARTICLE XII
The right to accumulate votes in the election of directors and/or
cumulative voting by any shareholder is hereby expressly denied.
ARTICLE XIII
Any action required by the Texas Business Corporation Act, or other
applicable laws, or any action which may be taken without a meeting, may be
taken without a meeting, without prior notice, and without a vote, if a consent
or consents in writing, setting forth the action so taken, shall be signed by
the holder or holders of shares having not less than the minimum number of votes
that would be necessary to take such action at a meeting at which the holders of
all shares entitled to vote on the action were present and voted.
The undersigned, the incorporator of this corporation, has signed these
Articles of Incorporation on this th day of March, 1993.
________________________________
Robert J. Johnston
-3-
<PAGE>
BYLAWS
OF
TI-INACQUISITION CORP.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1: OFFICES....................................................... 1
1.01 REGISTERED OFFICE AND AGENT................................... 1
1.02 OTHER OFFICES................................................. 1
ARTICLE 2: SHAREHOLDERS.................................................. 1
2.01 PLACE OF MEETINGS............................................. 1
2.02 ANNUAL MEETINGS............................................... 1
2.03 VOTING LIST................................................... 1
2.04 SPECIAL MEETINGS.............................................. 1
2.05 NOTICE OF MEETINGS............................................ 2
2.06 QUORUM........................................................ 2
2.07 VOTE REQUIRED................................................. 2
2.08 METHOD OF VOTING.............................................. 2
2.09 RECORD DATE; CLOSING TRANSFER BOOKS........................... 3
2.10 ORDER OF BUSINESS AT MEETINGS................................. 3
ARTICLE 3: DIRECTORS..................................................... 3
3.01 MANAGEMENT.................................................... 3
3.02 NUMBER; QUALIFICATION; ELECTION; TERM......................... 3
3.03 CHANGE IN NUMBER.............................................. 4
3.04 REMOVAL....................................................... 4
3.05 VACANCIES..................................................... 4
3.06 ELECTION OF DIRECTORS......................................... 4
3.07 PLACE OF MEETINGS............................................. 4
3.08 FIRST MEETINGS................................................ 5
3.09 REGULAR MEETINGS.............................................. 5
3.10 SPECIAL MEETINGS.............................................. 5
3.11 QUORUM; MAJORITY VOTE......................................... 5
3.12 COMPENSATION.................................................... 5
3.13 PROCEDURE....................................................... 5
3.14 INTERESTED DIRECTORS AND OFFICERS............................... 5
3.15 PRESUMPTION OF ASSENT........................................... 6
ARTICLE 4: COMMITTEES.................................................... 6
4.01 DESIGNATION..................................................... 6
4.02 NUMBER; QUALIFICATION; TERM..................................... 7
4.03 AUTHORITY....................................................... 7
4.04 CHANGE IN NUMBER................................................ 8
4.05 REMOVAL......................................................... 8
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<PAGE>
Page
4.06 VACANCIES....................................................... 8
4.07 MEETINGS........................................................ 8
4.08 QUORUM; MAJORITY VOTE........................................... 8
4.09 COMPENSATION.................................................... 8
4.10 PROCEDURE....................................................... 8
4.11 RESPONSIBILITY.................................................. 8
ARTICLE 5: PROVISIONS RELATING TO MEETINGS............................... 8
5.01 NOTICE OF MEETINGS.............................................. 9
5.02 WAIVER OF NOTICE................................................ 9
5.03 TELEPHONE AND SIMILAR MEETINGS.................................. 9
5.04 ACTION WITHOUT MEETING.......................................... 9
ARTICLE 6: OFFICERS AND AGENTS........................................... 10
6.01 NUMBER; QUALIFICATION; ELECTION; TERM........................... 10
6.02 REMOVAL......................................................... 10
6.03 VACANCIES....................................................... 10
6.04 AUTHORITY....................................................... 10
6.05 COMPENSATION.................................................... 10
6.07 PRESIDENT....................................................... 11
6.08 VICE PRESIDENTS................................................. 11
6.09 SECRETARY....................................................... 11
6.10 ASSISTANT SECRETARIES........................................... 12
6.11 TREASURER....................................................... 12
6.12 ASSISTANT TREASURERS............................................ 12
ARTICLE 7: CERTIFICATES AND SHAREHOLDERS................................. 12
7.01 CERTIFICATED AND UNCERTIFICATED SHARES.......................... 12
7.02 CERTIFICATES FOR CERTIFICATED SHARES............................ 13
7.03 ISSUANCE........................................................ 13
7.04 PAYMENT FOR SHARES.............................................. 13
7.05 SUBSCRIPTIONS................................................... 13
7.06 LOST, STOLEN OR DESTROYED CERTIFICATES.......................... 14
7.07 TRANSFER OF SHARES.............................................. 14
7.08 REGISTERED OWNER................................................ 14
ARTICLE 8: INDEMNIFICATION................................................ 14
8.01 INDEMNIFICATION................................................. 14
ARTICLE 9: GENERAL PROVISIONS............................................ 14
9.01 DISTRIBUTIONS AND SHARE DIVIDENDS............................... 14
ii
<PAGE>
Page
9.02 BOOKS AND RECORDS............................................... 15
9.03 CHECKS AND NOTES................................................ 15
9.04 FISCAL YEAR..................................................... 15
9.05 SEAL............................................................ 15
9.06 RESIGNATION..................................................... 15
9.07 AMENDMENT OF BYLAWS............................................. 15
9.08 CONSTRUCTION.................................................... 16
iii
<PAGE>
BYLAWS
OF
TI-IN ACQUISITION CORP.
ARTICLE 1: OFFICES
1.01 REGISTERED OFFICE AND AGENT. The registered office and registered
agent of the corporation shall be as designated from time to time by the
appropriate filing by the corporation in the office of the Secretary of State of
the State of Texas.
1.02 OTHER OFFICES. The corporation may also have offices at other
places in or out of the State of Texas as the board of directors may determine
or as the business of the corporation may require.
ARTICLE 2: SHAREHOLDERS
2.01 PLACE OF MEETINGS. Meetings of shareholders shall be held at the
time and place, in or out of the State of Texas, as stated in any notice of a
meeting or in a waiver of such notice.
2.02 ANNUAL MEETINGS. Annual meetings of the shareholders shall be held at
a time, day and month to be selected by the corporation's board of directors.
At an annual meeting, the shareholders shall elect directors and transact such
other business as may properly be brought before the meeting.
2.03 VOTING LIST. At least ten (10) days before each meeting of
shareholders, a complete list of shareholders entitled to vote at the meeting,
arranged in alphabetical order, with the address of each and the number of
voting shares held by each, shall be prepared by the officer or agent having
charge of the stock transfer books. The list, for a period of ten (10) days
prior to the meeting, shall be kept on file at the registered office or
principal place of business of the corporation and shall be subject to
inspection by any shareholder at any time during usual business hours. The list
shall also be produced and kept open at the time and place of the meeting, and
shall be subject to the inspection of any shareholder during the whole time of
the meeting.
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2.04 SPECIAL MEETINGS. Special meetings of the shareholders, unless
otherwise prescribed by statute, the articles of incorporation, or these bylaws,
may be called by the president, the board of directors, or the holders of not
less than the percentage of all the shares entitled to vote at the meeting as
required by law to call such a meeting. Business transacted at a special
meeting shall be confined to the purpose or purposes stated in the notice of
such meeting.
2.05 NOTICE OF MEETINGS. Written or printed notice stating the place,
day and hour of a meeting and, in case of a special meeting, the purpose or
purposes for which such meeting is called, shall be delivered not less than ten
(10) nor more than sixty (60) days before the date of the meeting, either
personally or by mail, by or at the direction of the president, the secretary,
or the officer or person calling the meeting, to each shareholder entitled to
vote at the meeting. If mailed, such notice shall be deemed to be delivered
when deposited in the United States mail addressed to the shareholder at his
address as it appears on the stock transfer records of the corporation, with
postage thereon prepaid.
2.06 QUORUM. Unless otherwise provided for in the articles of
incorporation, the holders of a majority of the shares issued and outstanding
and entitled to vote at a meeting of the shareholders, present in person or
represented by proxy, shall be the requisite number of such shareholders and
shall constitute a quorum for the transaction of business. Unless otherwise
provided in the articles of incorporation or these bylaws, once a quorum is
present at a meeting of shareholders, the shareholders represented in person or
by proxy at the meeting may conduct such business as may be properly brought
before the meeting until it is adjourned, and the subsequent withdrawal from the
meeting of any shareholder or the refusal of any shareholder represented in
person or by proxy to vote shall not affect the presence of a quorum at the
meeting. Unless otherwise provided in the articles of incorporation or these
bylaws, the shareholders represented in person or by proxy at a meeting of
shareholders at which a quorum is not present may adjourn such meeting until
such time and to such place as may be determined by a vote of the holders of a
majority of the shares represented in person or by proxy at such meeting.
2.07 VOTE REQUIRED. With respect to any matter, other than the election
of directors or a matter for which the affirmative vote of the holders of a
specified portion of the shares entitled to vote is required by statute, the
affirmative vote of the holders of a majority of the shares entitled
2
<PAGE>
to vote on any such matter and represented in person or by proxy at a meeting of
shareholders at which a quorum is present shall be the act of the shareholders.
2.08 METHOD OF VOTING. Except as otherwise provided in the articles of
incorporation, each outstanding share, regardless of class, shall be entitled
to one vote on each matter submitted to a vote at a meeting of shareholders.
At any meeting of the shareholders, any shareholder having the right to vote may
vote either in person or by proxy executed in writing by the shareholder. A
telegram, telex cablegram, or similar transmission by the shareholder, or a
photographic, photostatic, facsimile, or similar reproduction of a writing
executed by the shareholder, shall be treated as an execution in writing. No
proxy shall be valid after eleven (11) months from the date of its execution,
unless otherwise provided in such proxy. Each proxy shall be revocable unless
the proxy form conspicuously states that the proxy is irrevocable and the proxy
is coupled with an interest as provided by applicable law. Each proxy shall be
filed with the secretary of the corporation prior to or at the time of the
meeting. Voting for directors shall be in accordance with Section 3.06 of these
bylaws. Any vote may be taken by voice or by show of hands unless someone
entitled to vote objects, in which case written ballots shall be used.
2.09 RECORD DATE; CLOSING TRANSFER BOOKS. The board of directors may
fix in advance a record date for the purpose of determining shareholders
entitled to notice of, or to vote at, a meeting of the shareholders or any
reconvening thereof, or entitled to receive a distribution by the corporation or
a share dividend, or in order to make a determination of shareholders for any
other proper purpose, the record date to be not less than ten (10) nor more than
sixty (60) days prior to the meeting; or the board of directors may close the
stock transfer records for such purpose for a period of not less than ten (10)
nor more than sixty (60) days prior to such meeting. In the absence of any
action by the board of directors, the date upon which the notice of the meeting
is mailed, or the date on which the resolution of the board of directors
declaring such distribution or share dividend is declared, shall be the record
date.
2.10 ORDER OF BUSINESS AT MEETINGS. The order of business at all
meetings of shareholders shall be as determined by the chairman
3
<PAGE>
of the meeting, but the order of business to be followed at any meeting, other
than a special meeting, at which a quorum is present may be changed by a
majority of the votes cast at such meeting by the shareholders present in person
or represented by proxy and entitled to vote at the meeting. With respect to
special meetings, only business within the purpose or purposes described in the
notice of the special meeting may be conducted at a special meeting of the
shareholders.
ARTICLE 3: DIRECTORS
3.01 MANAGEMENT. The business and affairs of the corporation shall be
managed under the direction of the board of directors[who may exercise all such
powers of the corporation and do all such lawful acts and things as are not (by
statute or by the articles of incorporation or by these bylaws) directed or
required to be exercised or done by the shareholders.
3.02 NUMBER; QUALIFICATION; ELECTION; TERM. The board of directors
shall consist of not less than one (1) nor more than [ ] directors,
and within that maximum and minimum shall be such number as shall be from time
to time specified by resolution of the board of directors; provided, however, no
director's term shall be shortened by reason of a resolution reducing the number
of directors; and further provided that the number of directors constituting the
initial board of directors shall be as provided in the articles of incorporation
and shall remain at such number unless and until changed by resolution of the
board of directors. The directors shall be elected at the annual meeting of the
shareholders, except as provided in Sections 3.03 and 3.05 hereof. Each
director elected shall hold office until his successor shall be elected and
shall qualify.
3.03 CHANGE IN NUMBER. The number of directors may be increased or
decreased from time to time by amendment to these bylaws but no decrease shall
have the effect of shortening the term of any incumbent director. Any
directorship to be filled by reason of an increase in the number of directors
may be filled by the board of directors for a term of office continuing only
until the election of one or more directors by the shareholders or may be filled
by election at an annual meeting or at a special meeting of shareholders called
for that purpose; provided, however, the board of directors may fill no more
than two such directorships during
4
<PAGE>
the period between any two annual meetings of shareholders. Notwithstanding the
provisions of this Section 3.03 to the contrary, whenever the holders of any
class or series of shares are entitled to elect one or more directors by the
provisions of the articles of incorporation, any vacancies in such directorships
and any newly created directorships of such class or series to be filled by
reason of an increase in the number of such directors may be filled by the
affirmative vote of a majority of the directors elected by such class or series
then in office or by a sole remaining director so elected, or by the vote of
the holders of the outstanding shares of such class or series, and such
directorships shall not in any case be filled by the vote of the remaining
directors or the holders of the outstanding shares as a whole unless otherwise
provided in the articles of incorporation.
3.04 REMOVAL. Any director may be removed either for or without cause at
any special or annual meeting of shareholders, by the affirmative vote of a
majority in number of shares of the shareholders present, in person or by
proxy, at such meeting and entitled to vote for the election of such director
if notice of intention to act upon such matter shall have been given in the
notice calling such meeting.
3.05 VACANCIES. Subject to the provisions of Section 3.03 and 3.04, any
vacancy occurring in the board of directors (by death, resignation, removal or
otherwise) may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the board of directors. A director
elected to fill a vacancy shall be elected for the unexpired term of his
predecessor in office.
3.06 ELECTION OF DIRECTORS. Unless otherwise provided in the articles
of incorporation, directors shall be elected by a plurality of the votes cast by
the holders of shares entitled to vote in the election of directors at a meeting
of shareholders at which a quorum is present.
3.07 PLACE OF MEETINGS. Meetings of the board of directors, regular or
special, may be held in or out of the State of Texas.
3.08 FIRST MEETINGS. The first meeting of a newly elected board of
directors shall be held without further notice immediately following the annual
meeting of shareholders, and at the same
5
<PAGE>
place, unless by unanimous consent of the directors then elected and serving,
the time or place is changed.
3.09 REGULAR MEETINGS. Regular meetings of the board of directors may
be held without notice at such time and place as shall from time to time be
determined by the board.
3.10 SPECIAL MEETINGS. Special meetings of the board of directors may
be called by the chairman of the board or president on five (5) days' notice to
each director, either personally, by mail, telegram or telefax. Special
meetings shall be called by the president or secretary in like manner and on
like notice upon the written request of two directors. Except as otherwise
expressly provided by statute, the articles of incorporation, or these bylaws,
neither the business to be transacted at, nor the purpose of, any special
meeting need be specified in a notice or waiver of notice.
3.11 QUORUM; MAJORITY VOTE. At meetings of the board of directors a
majority of the number of directors fixed by these bylaws (less any unfilled
vacancies) shall constitute a quorum for the transaction of business. The act
of a majority of the directors present at a meeting at which a quorum is present
shall be the act of the board of directors, except as otherwise specifically
provided by statute, the articles of incorporation, or these bylaws. If a
quorum is not present at a meeting of the board of directors, the directors
present may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum is present.
3.12 COMPENSATION. By resolution of the board of directors, the
directors may be paid their expenses, if any, of attendance at each meeting of
the board of directors and may be paid a fixed sum for attendance at each
meeting of the board of directors or a stated salary as director. No such
payment shall preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
3.13 PROCEDURE. At meetings of the board of directors, business shall
be transacted in such order as the board of directors may determine. The board
of directors shall keep regular minutes of its proceedings. The minutes shall
be placed in the minute book of the corporation.
6
<PAGE>
3.14 INTERESTED DIRECTORS AND OFFICERS.
(a) VALIDITY. If Subsection (b) of this Section is satisfied,
no contract or other transaction between the corporation and any of its
directors or officers or any corporation, partnership, association, or
other organization in which any of them have a financial interest or is
otherwise directly or indirectly interested, shall be void or voidable
solely because of this relationship or because of the presence of the
director or officer at the meeting authorizing the contract or transaction,
or his participation or vote in the meeting or authorization.
(b) DISCLOSURE, APPROVAL; FAIRNESS. Subsection (a) shall apply
only if:
(i) the material facts of the relationship or interest of
each such director or officer are known or disclosed:
(A) to the board of directors or applicable committee
thereof and it nevertheless in good faith authorizes the
contract or transaction by a majority of the disinterested
directors present, even though such disinterested directors
be less than a quorum; or
(B) to the shareholders at a meeting of the
shareholders and they nevertheless in good faith approve the
contract or transaction by a majority of the shares present;
or
(ii) the contract or transaction is fair to the corporation
as of the time it is authorized or ratified by the board of
directors, the applicable committee thereof or the shareholders.
(c) NON-EXCLUSIVE. This provision shall not be construed to
invalidate a contract or transaction which would be valid in the absence of
this provision.
3.15 PRESUMPTION OF ASSENT. A director of the corporation who is
present at any meeting of the board of directors or applicable committee thereof
at which action on any matter is taken shall be
7
<PAGE>
presumed to have assented to the action unless his dissent shall be entered in
the minutes of the meeting or unless he shall file his written dissent to such
action with the person acting as secretary of the meeting before the adjournment
thereof or shall forward any dissent by certified or registered mail to the
secretary of the corporation immediately after the adjournment of the meeting.
Such right to dissent shall not apply to a director who voted in favor of such
action.
ARTICLE 4: COMMITTEES
4.01 DESIGNATION. The board of directors may, by resolution adopted by
a majority of the whole board, designate one or more committees.
4.02 NUMBER; QUALIFICATION; TERM. Each committee shall consist of one
or more directors and may have one or more alternative members who may, subject
to any limitations imposed by the board of directors, replace absent or
disqualified members at any meeting of that committee. Each committee member
shall serve as such until the earliest of (a) the expiration of his term as
director, (b) his resignation as a committee member or director, or (c) his
removal as a committee member or director.
4.03 AUTHORITY. Each committee, to the extent provided in the
resolution establishing such committee, shall have and may exercise any or all
of the authority of the board of directors in the management of the business and
affairs of the corporation. However, no committee shall have the authority of
the board in reference to:
(a) amending the articles of incorporation, except that a
committee may, to the extent provided in the resolution designating the
committees or in the articles of incorporation or the bylaws, exercise the
authority vested in it in accordance with Article 2.13 of the Texas
Business Corporations Act;
(b) approving a plan of merger or share exchange;
(c) recommending to the shareholders the sale, lease or exchange
of all or substantially all of the property and
8
<PAGE>
assets of the corporation otherwise than in the usual and regular course of
its business;
(d) recommending to the shareholders a voluntary dissolution of
the corporation or a revocation thereof;
(e) amending, altering, or repealing these bylaws or adopting
new bylaws;
(f) filling vacancies in or removing members of the board of
directors or of any committee appointed by the board of directors;
(g) filling any directorship to be filled by reason of an
increase in the number of directors;
(h) electing or removing officers or members of any committee;
(i) fixing the compensation of any committee member;
(j) altering or repealing any resolution of the board of
directors which by its terms provides that it shall not be so amendable or
repealable;
(k) declaring a distribution;
(l) issuing shares of the corporation; or
(m) proposing a reduction of the stated capital of the
corporation.
4.04 CHANGE IN NUMBER. The number of members of any committee may be
increased or decreased from time to time by resolution adopted by a majority of
the whole board of directors.
4.05 REMOVAL. Any member of a committee may be removed by the
affirmative vote of a majority of the whole board of directors, whenever in its
judgment the best interests of the corporation will be served thereby.
4.06 VACANCIES. A vacancy occurring in a committee (by death,
resignation, removal or otherwise) may be filled by the board of
9
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directors in the manner provided for original designations in Section 4.01
hereof.
4.07 MEETINGS. The time, place and notice (if any) of committee
meetings shall be determined by the committee.
4.08 QUORUM; MAJORITY VOTE. At meetings of any committee, a majority of
the number of members designated by the board of directors shall constitute a
quorum for the transaction of business. The act of a majority of the members
present at any meeting at which a quorum is present shall be the act of the
committee, except as otherwise specifically provided by statute, the articles
of incorporation or these bylaws. If a quorum is not present at a meeting of
any committee, the members present may adjourn the meeting from time to time,
without notice other than an announcement at the meeting, until a quorum is
present.
4.09 COMPENSATION. By resolution of the board of directors, the members
of any committee may be paid their expenses, if any, of attendance at each
meeting of the committee and may be paid a fixed sum for attendance at each
meeting of the committee or a stated salary as a committee member. No such
payment shall preclude any committee member from serving the corporation in any
other capacity and receiving compensation therefor.
4.10 PROCEDURE. Each committee shall keep regular minutes of its
proceedings and report the same to the board of directors when required. The
minutes of the proceedings of each committee shall be placed in the minute book
of the corporation.
4.11 RESPONSIBILITY. The designation of any committee and the
delegation of authority to it shall not operate to relieve the board of
directors, or any member thereof, of any responsibility imposed upon it or him
by law.
ARTICLE 5: PROVISIONS RELATING TO MEETINGS
5.01 NOTICE OF MEETINGS. Whenever by statute, the articles of
incorporation, these bylaws or otherwise, notice is required to be given to a
director, committee member or shareholder, and no provision is made as to how
the notice shall be given, it shall not be construed to mean personal notice,
but any such notice may be given: (a) in writing, by mail, postage prepaid,
addressed to the
10
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director, committee member or shareholder at the address appearing on the books
of the corporation; or (b) in any other method permitted by law. Any notice
required or permitted to be given by mail shall be deemed given at the time when
the same is thus deposited in the United States mails.
5.02 WAIVER OF NOTICE. Whenever by statute, the articles of
incorporation, these bylaws or otherwise, notice is required to be given to a
director, committee member or shareholder, a waiver thereof in writing signed by
the person or persons entitled to such notice, whether before or after the time
stated in such notice, shall be equivalent to the giving of such notice.
Attendance at a meeting shall constitute a waiver of notice of such meeting,
except where a person attends for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
5.03 TELEPHONE AND SIMILAR MEETINGS. Shareholders, directors or
committee members may participate in and hold a meeting by means of a conference
telephone or similar communications equipment by means of which persons
participating in the meeting can hear each other. Participation in such a
meeting shall constitute presence in person at such meeting, except where a
person participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
5.04 ACTION WITHOUT MEETING. Any action which may be taken, or is
required by law, the articles of incorporation or these bylaws to be taken, at a
meeting of shareholders, directors or any committee members may be taken without
notice and without a meeting if a consent in writing, setting forth the action
so taken, shall be signed by (a) in the case of shareholders, either (i) all of
the shareholders entitled to vote with respect to such action, or (ii) if the
articles of incorporation so provide, by the holder or holders of shares having
not less than the minimum number of votes that would be necessary to take such
action at a meeting at which the holders of all shares entitled to vote on the
action were present and voted, and (b) in the case of directors or committee
members, all of such members of the board of directors or committee, as the case
may be, entitled to vote with respect to the subject matter thereof. Such
consent shall have the same force and effect, as of the date stated therein, as
a unanimous vote of such shareholders, directors or committee members, as the
case may be,
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and may be stated as such in any document filed with the Secretary of State of
Texas or in any certificate or other document delivered to any person. The
consent may be in one or more counterparts so long as each shareholder, director
or committee member signs one of the counterparts. The signed consent shall be
placed in the minute book of the corporation.
ARTICLE 6: OFFICERS AND AGENTS
6.01 NUMBER; QUALIFICATION; ELECTION; TERM.
(a) The corporation shall have: (i) a president and a
secretary; and (ii) such other officers (including a chairman of the board,
one or more vice presidents and a treasurer) and such assistant officers
and agents as the board of directors may, from time to time, deem
necessary.
(b) Officers named in Subsection 6.01(a)(i) shall be elected by
the board of directors on the expiration of an officer's term or whenever a
vacancy exists. Officers and agents named in Subsection 6.01(a)(ii) may
be elected by the board at any meeting.
(c) Any two or more offices may be held by the same person.
6.02 REMOVAL. Any officer or agent may be removed by the board of
directors whenever in its judgment the best interest of the corporation will be
served thereby. Such removal shall be without prejudice to the contract rights,
if any, of the person so removed. Election or appointment of an officer or
agent shall not of itself create contract rights.
6.03 VACANCIES. Any vacancy occurring in any office of the corporation
(by death, resignation, removal or otherwise) may be filled by the board of
directors.
12
<PAGE>
6.04 AUTHORITY. Officers and agents shall have such authority and
perform such duties in the management of the corporation as are provided in
these bylaws or as may be determined, from time to time, by resolution of the
board of directors not inconsistent with these bylaws.
6.05 COMPENSATION. The compensation of officers and agents shall be
fixed from time to time by the board of directors; provided, that the board of
directors may delegate to any one or more officers the authority to fix such
compensation.
6.06 CHAIRMAN OF THE BOARD. The chairman of the board of directors, if
there shall be such an officer, shall, if present, preside at all meetings of
the board of directors and exercise and perform such other powers and duties as
may be from time to time assigned to him by the board of directors or prescribed
by the bylaws.
6.07 PRESIDENT. Unless and to the extent that such powers and duties
are expressly delegated to a chairman of the board by the board of directors,
the president shall be the chief executive officer of the corporation and,
subject to the supervision of the board of directors, shall have general
management and control of the business and affairs of the corporation in the
ordinary course of its business with all such powers with respect to such
general management and control as may be reasonably incident to such
responsibilities, including, but not limited to, the power to employ, discharge,
or suspend employees and agents of the corporation, to fix the compensation of
employees and agents, and to suspend, with or without cause, any officer of the
corporation pending final action by the board of directors with respect to
continued suspension, removal, or reinstatement of such officer. Except as
otherwise expressly delegated to the chairman of the board, the president shall
preside at all meetings of the shareholders and board of directors.
6.08 VICE PRESIDENTS. The vice presidents in the order of their
seniority, unless otherwise determined by the board of directors, shall, in the
absence or disability of the president, perform the duties and have the
authority and exercise the powers of the president. They shall perform such
other duties and have such other authority and powers as the board of directors
may from time to time prescribe or as the president may from time to time
delegate.
13
<PAGE>
6.09 SECRETARY.
(a) The secretary shall attend all meetings of the board of
directors and all meetings of the shareholders and record all votes,
actions and the minutes of all proceedings in a book to be kept for that
purpose and shall perform like duties for the executive and other
committees when required.
(b) He shall give, or cause to be given, notice of all meetings
of the shareholders and special meetings of the board of directors.
(c) He shall keep in safe custody the seal of the corporation
and, when authorized by the board of directors or the executive committee,
affix the same to any instrument requiring it. When so affixed, it shall
be attested by his signature or by the signature of the treasurer or an
assistant secretary.
(d) He shall be under the supervision of the president. He
shall perform such other duties and have such other authority and powers as
the board of directors may from time to time prescribe or as the president
may from time to time delegate.
6.10 ASSISTANT SECRETARIES. The assistant secretaries in the order of
their seniority, unless otherwise determined by the board of directors, shall,
in the absence or disability of the secretary, perform the duties and have the
authority and exercise the powers of the secretary. They shall perform such
other duties and have such other powers as the board of directors may from time
to time prescribe or as the president may from time to time delegate.
6.11 TREASURER.
(a) The treasurer shall have the custody of the corporate funds
and securities, shall keep full and accurate accounts of receipts and
disbursements of the corporation, and shall deposit all funds and other
valuables in the name and to the credit of the corporation in depositories
designated by the board of directors.
14
<PAGE>
(b) He shall disburse the funds of the corporation as ordered by
the board of directors, and prepare financial statements as they direct.
(c) If required by the board of directors, he shall give the
corporation a bond (in such form, in such sum, and with such surety or
sureties as shall be satisfactory to the board) for the faithful
performance of the duties of his office and for the restoration to the
corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
corporation.
(d) He shall perform such other duties and have such other
authority and powers as the board of directors may from time to time
prescribe or as the president may from time to time delegate.
6.12 ASSISTANT TREASURERS. The assistant treasurers in the order of
their seniority, unless otherwise determined by the board of directors, shall,
in the absence or disability of the treasurer, perform the duties and have the
authority and exercise the powers of the treasurer. They shall perform such
other duties and have such other powers as the board of directors may from time
to time prescribe or the president may from time to time delegate.
ARTICLE 7: CERTIFICATES AND SHAREHOLDERS
7.01 CERTIFICATED AND UNCERTIFICATED SHARES. The shares of the
corporation may be either certificated shares or uncertificated shares. As used
herein, the term "certificated shares" means shares represented by instruments
in bearer or registered form, and the term "uncertificated shares" means shares
not represented by instruments and the transfers of which are registered upon
books maintained for that purpose by or on behalf of the corporation.
7.02 CERTIFICATES FOR CERTIFICATED SHARES. The certificates
representing certificated shares of stock of the corporation shall be in such
form as shall be approved by the board of directors in conformity with law. The
certificates shall be consecutively numbered, shall be entered as they are
issued in the books of the corporation or in the records of the corporation's
designated
15
<PAGE>
transfer agent, if any, and shall state upon the face thereof: (a) that the
corporation is organized under the laws of the State of Texas; (b) the name of
the person to whom issued; (c) the number and class of shares and the
designation of the series, if any, which such certificate represents; (d) the
par value of each share represented by such certificate, or a statement that the
shares are without par value; and (e) such other matters as may be required by
law. The certificates shall be signed by the chairman of the board, president
or any vice president, and by the secretary, an assistant secretary or any other
officer and may be sealed with the seal of the corporation or a facsimile
thereof. If any certificate is countersigned by a transfer agent or registered
by a registrar, either of which is other than the corporation itself or an
employee of the corporation, the signatures of the foregoing officers may be a
facsimile.
7.03 ISSUANCE. Shares (both treasury and authorized but unissued) may
be issued for such consideration (not less than par value) and to such persons
as the board of directors may determine from time to time. Shares may not be
issued until the full amount of the consideration, fixed as provided by law, has
been paid. After the issuance of uncertificated shares, the corporation or the
transfer agent of the corporation shall send to the registered owner of such
uncertificated shares a written notice containing the information required to be
stated on certificates representing shares of stock as set forth in Section 7.02
above and such additional information as may be required by Section 8.408 of the
Texas Uniform Commercial Code as currently in effect and as the same may be
amended from time to time hereafter.
7.04 PAYMENT FOR SHARES.
(a) KIND. The consideration for the issuance of shares shall
consist of money paid, labor done (including services actually performed
for the corporation) or property (tangible or intangible) actually
received. Neither promissory notes nor the promise of future services
shall constitute payment or part payment for the issuance of shares.
(b) VALUATION. In the absence of fraud in the transaction, the
judgment of the board of directors as to the value of consideration
received shall be conclusive.
16
<PAGE>
7.05 SUBSCRIPTIONS. Unless otherwise provided in the subscription
agreement, subscriptions for shares, whether made before or after organization
of the corporation, shall be paid in full at such time or in such installments
and at such times as shall be determined by the board of directors. Any call
made by the board of directors for payment on subscriptions shall be uniform as
to all shares of the same class or as to all shares of the same series, as the
case may be. In case of default in the payment on any installment or call when
payment is due, the corporation may proceed to collect the amount due in the
same manner as any debt due to the corporation.
7.06 LOST, STOLEN OR DESTROYED CERTIFICATES. The corporation shall
issue a new certificate in place of any certificate for shares previously issued
if the registered owner of the certificate:
(a) CLAIM. Makes proof in affidavit form that it has been lost,
destroyed or wrongfully taken; and
(b) TIMELY REQUEST. Requests the issuance of a new certificate
before the corporation has notice that the certificate has been acquired by
a purchaser for value in good faith and without notice of an adverse claim;
and
(c) BOND. Gives a bond in such form, and with such surety or
sureties, with fixed or open penalty, as the corporation may direct, to
indemnify the corporation (and its transfer agent and registrar, if any)
against any claim that may be made on account of the alleged loss,
destruction or theft of the certificate; and
(d) OTHER REQUIREMENTS. Satisfies any other reasonable
requirements imposed by the corporation.
7.07 TRANSFER OF SHARES. Shares of stock and other securities of the
corporation shall be transferable in accordance with the provisions of Chapter 8
- - Investment Securities - of the Texas Business and Commerce Code.
7.08 REGISTERED OWNER. The corporation may regard the person in whose
name any shares issued by the corporation are registered in the corporation's
share transfer records at any particular time as the owner of these shares at
that time for purposes of voting
17
<PAGE>
those shares, receiving distributions thereon or notices in respect thereof,
transferring those shares, exercising rights of dissent with respect to those
shares or for any other matters related to the shares.
ARTICLE 8: INDEMNIFICATION
8.01 INDEMNIFICATION. The corporation shall indemnify any officer or
director to the fullest extent permitted by law.
ARTICLE 9: GENERAL PROVISIONS
9.01 DISTRIBUTIONS AND SHARE DIVIDENDS.
(a) DECLARATION AND PAYMENT. Subject to statute and the
articles of incorporation, distributions and share dividends may be
declared by the board of directors at any regular or special meeting, and
paid by the corporation.
(b) RECORD DATE. The board of directors may fix in advance a
record date for the purpose of determining shareholders entitled to receive
payment of any dividend, the record date to be not more than sixty (60)
days prior to the payment date of such dividend, or the board of directors
may close the stock transfer books for such purpose for a period of not
more than sixty (60) days prior to the payment date of such dividend. In
the absence of any action by the board of directors, the date upon which
the board of directors adopts the resolution declaring the dividend shall
be the record date.
9.02 BOOKS AND RECORDS. The corporation shall keep correct and complete
books and records of account, shall keep minutes of the proceedings of its
shareholders and board of directors, and shall keep at its registered office or
principal place of business, or at the office of its transfer agent or
registrar, a record of its shareholders, giving the names and addresses of all
shareholders and the number and class of the shares held by each.
9.03 CHECKS AND NOTES. Checks, demands for money, and notes of the
corporation shall be signed by officer(s) or other person(s) designated from
time to time by the board of directors.
18
<PAGE>
9.04 FISCAL YEAR. The fiscal year of the corporation shall be fixed by
resolution of the board of directors.
9.05 SEAL. The board of directors shall determine the type of seal
which may be necessary or appropriate for use by the corporation.
9.06 RESIGNATION. A director, committee member, officer or agent may
resign by so stating at any meeting of the board of directors or by giving
written notice to the board of directors, the president or the secretary. The
resignation shall take effect at the time specified in the statement at the
board of directors meeting or in the written notice, or immediately if no time
is specified, but in no event may the effective time of such resignation be
prior to the time such statement is made or such notice is given. Unless it
specifies otherwise, a resignation shall be effective without being accepted.
9.07 AMENDMENT OF BYLAWS.
(a) These bylaws may be altered, amended or repealed at any
meeting of the board of directors at which a quorum is present, by the
affirmative vote of a majority of the directors present at such meeting,
provided notice of the proposed alteration, amendment or repeal is
contained in the notice of the meeting.
(b) These bylaws may also be altered, amended or repealed at any
meeting of the shareholders at which a quorum is present or represented, by
the affirmative vote of the holders of a majority of the shares present or
represented at the meeting and entitled to vote thereat, provided notice of
the proposed alteration, amendment or repeal is contained in the notice of
the meeting.
9.08 CONSTRUCTION. Whenever the context so requires, the masculine
shall include the feminine and neuter, and the singular shall include the
plural, and conversely. If any portion of these bylaws shall be invalid or
inoperative, then, so far as is reasonable and possible:
(a) The remainder of these bylaws shall be considered valid and
operative, and
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<PAGE>
(b) Effect shall be given to the intent manifested by the
portion held invalid or inoperative.
The undersigned, as secretary of the corporation, hereby certifies that the
foregoing bylaws were adopted by the board of directors of the corporation as of
March 31, 1993.
___________________________________
Phyllis Farragut
20
<PAGE>
Exhibit 3.114
ARTICLES OF INCORPORATION
OF
AUTOMOTIVE SATELLITE TELEVISION NETWORK, INC.
The undersigned, a natural person of the age of eighteen (18) years or
more, acting as incorporator of a corporation under the Texas Business
Corporation Act, does hereby adopt the following Articles of Incorporation for
such corporation.
ARTICLE ONE
The name of the corporation (hereinafter called the "Corporation") is
Automotive Satellite Television Network, Inc.
ARTICLE TWO
The period of its duration is perpetual.
ARTICLE THREE
The purpose for which the Corporation is organized is: The transaction of
any or all lawful business for which corporations may be incorporated under the
Texas Business Corporation Act.
ARTICLE FOUR
The enumeration herein of any specific powers shall not be held to limit
or restrict in any manner the exercise by the
<PAGE>
Corporation of the general powers conferred upon corporations by the laws of the
State of Texas.
ARTICLE FIVE
The aggregate number of shares which the Corporation shall have authority
to issue is Five Million (5,000,000). All of such shares shall be of the par
value of One Cent ($.Ol) per share, shall be of the same class and shall be
designated as "Common Stock."
ARTICLE SIX
No holder of any shares of any class of stock of the Corporation shall, as
such holder, have any preemptive or preferential right to receive, purchase or
subscribe to (a) any unissued or treasury shares of any class of stock (whether
now or hereafter authorized) of the Corporation, (b) any obligations, evidences
of indebtedness or other securities of the Corporation convertible into or
exchangeable for, or carrying or accompanied by any rights to receive, purchase
or subscribe to, any such unissued or treasury shares, (c)any right of
subscription to or to receive, or any warrant or option for the purchase of, any
thereof, or (d) any other securities that may be issued or sold by the
Corporation, other than such (if any) as the Board of Directors of the
Corporation, in its sole and absolute discretion, may determine from time to
time.
<PAGE>
ARTICLE SEVEN
Cumulative voting for the election of directors shall not be permitted.
ARTICLE EIGHT
The Corporation will not commence business until it has received for the
issuance of its shares consideration of the value of One Thousand Dollars
($1,000) consisting of money, labor done or property actually received.
ARTICLE NINE
The Corporation shall have the power to purchase, directly or indirectly,
its own shares to the extent of the aggregate of unrestricted capital surplus
available therefor and unrestricted reduction surplus available therefor,
without submitting such purchase to a vote of shareholders.
ARTICLE TEN
Notwithstanding any provisions of the Texas Business Corporation Act now
or hereafter in force requiring for the approval of any action, the affirmative
vote of two-thirds, or any other percentage greater than a majority, of the
outstanding shares entitled by law to vote thereon or of the outstanding shares
of a class or series entitled by law to vote separately as a class or series
thereon, such action may, to the extent permitted by law, be authorized and
taken by the affirmative vote
<PAGE>
of the holders of a majority of such outstanding shares, or such outstanding
shares of a class or series, as applicable.
ARTICLE ELEVEN
The street address of the Corporation's initial registered office is 16200
Dallas Parkway, Suite 120, Dallas, Texas 75248 and the name of its initial
registered agent at such address is Carl Westcott.
ARTICLE TWELVE
The number of directors constituting the initial Board of Directors is one
(1), and the name and address of the person who is to serve as director until
the first annual meeting of the shareholders or until his successor(s) is (are)
elected and qualified is:
Name Address
---- -------
Carl Westcott 16200 Dallas Parkway Suite 120
Dallas, Texas 75248
ARTICLE THIRTEEN
The name and address of the incorporator is:
Name Address
---- -------
Karen C. Rowland 4200 Republic Bank Dallas Tower Dallas,
Texas 75201
IN WITNESS WHEREOF, I have hereunto set my hand this day of May, 1986.
Karen C. Rowland
<PAGE>
THE STATE OF TEXAS
COUNTY OF DALLAS
I, Julia M. Martin, a Notary Public, do hereby certify that on this 13th
day of May 1 1985, personally appeared, Karen C. Rowland, who being by me first
duly sworn, declared that she is the person who signed the foregoing document as
incorporator, and that the statements contained therein are true.
Notary Public in and for Dallas
County, Texas
My Commission Expires:
<PAGE>
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
AUTOMOTIVE SATELLITE TELEVISION NETWORK, INC.
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act, the undersigned corporation adopts the following Articles of
Amendment to its Articles of Incorporation.
ARTICLE ONE
The name of the corporation is AUTOMOTIVE SATELLITE TELEVISION NETWORK,
INC. (the "Corporation").
ARTICLE TWO
The following amendment to the Articles of Incorporation was adopted by
the shareholders of the Corporation on October 21, 1987:
There shall be added to the Articles of Incorporation of the Corporation a
new Article THIRTEEN, which Article shall read in its entirety as follows:
"ARTICLE THIRTEEN
To the full extent permitted by the corporation laws of the State of
Texas, as the same may be amended from time to time, a director of the
Corporation shall not be liable to the Corporation or its shareholders for
monetary damages for an act or omission in the director's capacity as a
director. No repeal, amendment or modification of this provision, whether direct
or indirect, shall eliminate or reduce its effect with respect to any act or
omission of rt director of the Corporation occurring prior to such repeal,
amendment or modification."
ARTICLE THREE
The number of shares of the Corporation outstanding at the time of such
adoption was 4,228,571 shares of capital stock, $.Ol par value, and the number
of shares entitled to vote thereon was 4,228,571.
<PAGE>
ARTICLE FOUR
The number of shares voted for such amendment was 3,648,571, and the number
of shares voted against such amendment was 0.
Dated: October 26,1987
AUTOMOTIVE SATELLITE TELEVISION
NETWORK, INC.
By:____________________________________
Margaret Shouse, Secretary
<PAGE>
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
AUTOMOTIVE SATELLITE TELEVISION NETWORK, INC.
Pursuant to the provisions of Articles 4.01 through 4.05 of the Texas
Business Corporation Act, the undersigned corporation adopts the following
Articles of Amendment to its Articles of Incorporation;
ARTICLE I
The name of the corporation is Automotive Satellite Television Network,
Inc. (the "Corporation").
ARTICLE II
The following amendments to the Articles of Incorporation are adopted by
the Shareholders of the Corporation:
1. The title of the Articles of Incorporation is hereby amended so as to be
and read in its entirety as follows:
"ARTICLES OF INCORPORATION
OF
WESTCOTT COMMUNICATIONS, INC."
2. Article One of the Articles of Incorporation is hereby amended so as to be
and read in its entirety as follows:
"ARTICLE ONE
The name of the corporation is WESTCOTT COMMUNICATIONS, INC. (the
"Corporation"). It
ARTICLE III
These amendments were adopted by the shareholders of the Corporation on
June 22, 1988.
<PAGE>
ARTICLE IV
The total number of outstanding shares of stock of the Cor poration, all
of which are entitled to vote on these amendments, is 4,190,959 shares of Common
Stock, par value $.Ol per share.
ARTICLE V
The number of shares voted for such amendment was 2,459,620, and the
number of shares voted against such amendment was 0.
Dated: July 18, 1988
AUTOMOTIVE SATELLITE TELEVISION
NETWORK, INC.
By:________________________________
Margaret C.Shouse, Secretary
<PAGE>
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
WESTCOTT COMMUNICATIONS, INC.
Pursuant to the terms of Article 4.01 through 4.05 of the Texas Business
Corporation Act, the undersigned, corporation adopts the following Articles of
Amendment to its Articles of Incorporation:
ARTICLE ONE
The name of the corporation is Westcott Communications, Inc. (the
"Corporation").
ARTICLE TWO
The following amendment to the Articles of Incorporation was adopted by
the Shareholders of the Corporation on May 25, 1989:
Article Five of the Articles of Incorporation is hereby amended so as to
be and read in its entirety as follows:
"ARTICLE FIVE
The aggregate number of shares that the Corporation has authority to
issue is twenty million (20,000,000) of the par value of one cent ($.Ol) per
share, of which one million (1,000,000) shares shall be Preferred Stock and
nineteen million (19,000,000) shares shall be Common Stock.
A. Preferred Stock
The Preferred Stock may be issued in one or more series. The Board
of Directors is authorized, from time to time, to issue the
Preferred Stock as one series or divide the Preferred Stock into
different series, to designate each series, to fix and determine for
each series any one or more of the following relative rights and
preferences, and to issue shares of any series then or previously
designated, fixed and determined:
(a) The rate of dividend;
<PAGE>
(b) The price at and terms and conditions upon which shares may be
redeemed;
(c) The amount payable upon shares in the event of involuntary or
voluntary liquidation;
(d) Sinking fund provisions (if any) for the redemption or purchase
of shares;
(e) The terms and conditions on which shares may be converted, if
issued with such privilege; and
(f) Voting rights (including the number of votes per share, the
matters on which shares can vote, and the contingencies which make
the voting rights effective).
Shares of Preferred Stock shall have the preferences and relative rights set
forth as follows:
(I) Dividends. The Preferred Stock shall be entitled to receive,
when and as declared by the Board of Directors, out of funds legally
available therefor, dividends at the rate and at the times fixed by the
Board of Directors in establishing the series. No dividends shall be
declared or paid on Common Stock and no Common Stock shall be purchased by
the Corporation unless full dividends on outstanding Preferred Stock for
all past dividend periods and for the current dividend period have been
declared and paid.
(ii) Liquidation-Preference. In the event of dissolution,
liquidation or winding up of the Corporation (whether voluntary or
involuntary) and before any distribution to the holders of Common Stock,
the holders of each series of Preferred Stock then outstanding shall be
entitled to receive the amount fixed by the Board of Directors in
establishing such series before any amounts are distributed to holders of
Common Stock.
(iii) Redemption. All or any part of any one or more series of
Preferred Stock may be redeemed in accordance with the terms and
conditions fixed by the Board of Directors in establishing the series of
such Preferred Stock.
<PAGE>
(iv) Voting. Except as fixed or provided by the Board of Directors
in establishing a series of Preferred Stock and except as otherwise
expressly provided by law, the Preferred Stock shall vote on all matters
with the common Stock.
B. Common Stock
1. Voting. Each holder of Common Stock shall be entitled to one vote
for each share of Common Stock held on all matters as to which
holders of Common stock shall be entitled to vote.
2. Other Rights. Each share of Common Stock issued and outstanding
shall be identical in all respects one with the other, and no
dividends shall be paid on any shares of Common Stock unless the
same dividend is paid on all shares of Common Stock outstanding at
the time of such payment. Except for and subject to those rights
expressly granted to the holders of the Preferred Stock or except as
may be provided by the laws of the State of Texas, the holders of
Common Stock shall have exclusively all other rights of stockholders
including, but not by way of limitation, (a) the right to receive
dividends, when and as declared by the Board of Directors out of
assets legally available therefor, and (b) in the event of any
distribution of assets upon liquidation, dissolution or winding up
of the Corporation or otherwise, the right to receive ratably and
equally all the assets and funds of the Corporation remaining after
the payment to the holders of the Preferred Stock of the specific
amounts which they are entitled to receive upon such liquidation,
dissolution or winding up of the Corporation as herein provided."
ARTICLE THREE
Upon the filing by the Secretary of State of Texas of these Articles of
Amendment, (a) the aggregate number of shares that the Corporation shall have
authority to issue shall be twenty million (20,000,000) of the par value one
cent ($.Ol) per share, of which one million (1,000,000) shares are Preferred
Stock and nineteen million (19,000,000) shares are Common Stock, and (b) every
two (2) issued and outstanding shares, and every two (2) treasury shares, of
Common Stock, par value one cent ($.Ol) per
<PAGE>
share, shall be changed and converted into and become three (3) shares of Common
Stock, par value one cent ($.Ol) per share, and accordingly, the 4,192,459
shares of Common Stock, par value one cent ($.Ol) per share outstanding
immediately before the filing of these Articles of Amendment, shall be changed
and converted into and become 6,288,688 shares of Common Stock, par value one
cent ($.Ol) per share, and the 42,112 treasury shares of Common Stock, par value
one cent ($.Ol) per share, shall be changed and converted into and become 63,168
shares of Common Stock, par value one cent ($.Ol) per share. The fractional
shares that are created by this conversion shall not be issued by the
Corporation, but shall instead be purchased by the Corporation from the holders
thereof at a price of eight dollars ($8.00) per share.
ARTICLE FOUR
Upon the filing by the Secretary of State of Texas of these Articles
of Amendment, each outstanding certificate issued prior to such filing
evidencing a number of shares of Common Stock of the Corporation shall be deemed
to represent one and one-half (1- 1/2)times the number of shares stated on the
face of such certificate. Provided, however, that no certificate shall represent
fractional shares, but shall be rounded down to the nearest whole number of
shares.
ARTICLE FIVE
Upon the filing by the Secretary of State of Texas of these Articles of
Amendment, the aggregate stated value of the Corporation shall be increased, and
the surplus of the Corporation shall be reduced, in the amount of $21,173.00 in
accordance with the increase in the aggregate par value of the issued and
outstanding shares of Common Stock, par value one cent ($.Ol) per share, upon
the change and conversion of issued and outstanding shares of Common Stock
issued by this Amendment.
ARTICLE SIX
The total number of outstanding shares of stock of the Corporation, all
of which are entitled to vote on this amendment, is 4,192,459 shares of Common
Stock, par value $.Ol per share.
<PAGE>
ARTICLE SEVEN
The number of shares voted for such amendment was 2,639,388 and the
number of shares voted against such amendment was 0.
Dated: 5/25, 1989
WESTCOTT COMMUNICATIONS, INC.
President
<PAGE>
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
WESTCOTT COMMUNICATIONS, INC.
Pursuant to the provisions of Articles 4.01 through 4.05 of the Texas
Business Corporation Act, the undersigned corporation adopts the following
Articles of Amendment to its Articles of Incorporation:
ARTICLE I
The name of the corporation is Westcott Communications, Inc. (the
"Corporation").
ARTICLE II
The following amendment to the Articles of Incorporation was adopted by
the shareholders of the Corporation:
The first paragraph of Article Five of the Corporations Articles of
Incorporation is hereby amended to read in its entirety as follows:
"ARTICLE FIVE
The aggregate number of shares that the Corporation has authority to issue
is Thirty Million (30,000,000) of the par value of one rent ($,Ol) per share, of
which one million (1,000,000) shares shall be Preferred Stock and twenty-nine
million (29,000,000) shares shall be Common Stock.
ARTICLE III
The amendment was adopted by the shareholders of the Corporation on May
18, 1993.
<PAGE>
ARTICLE IV
The total number of outstanding shares of stock of the Corporation, all of
which are entitled to vote on this amendment, is 8,306,653 shares of Common
Stock, par value $.Ol per share.
ARTICLE V
The number of shares voted for such amendment was 4,275,518 and the number
of shares voted against such amendment was 149,240.
Dated: May 20, 1993
WESTCOTT COMMUNICATIONS, INC.
By:________________________________
Phyllis Foraged, Secretary
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Exhibit 3.115
BYLAWS OF
AUTOMOTIVE SATELLITE TELEVISION NETWORK, INC.*
ARTICLE I.
OFFICES
Section 1. Registered Office and Agency. The registered office of the
Corporation shall be 1626-0 Dallas Parkway, Suite 120, Dallas, Texas 75248. The
name of its registered agent at such address is Carl Westcott. ** Amended
January 4, 1990.
Section 2. Other Offices. The Corporation may have, in addition to its
registered office, offices and places of business at such places, both within
and without the State of Texas, as the Board of Directors may from time to time
determine or the business of the Corporation may require.
ARTICLE II.
SHAREHOLDERS MEETINGS
Section 1. Annual Meeting. An annual meeting of the shareholders shall be
held at such time as the Board of Directors may decide, at which they shall
elect a Board of Directors and transact such other business as may properly be
brought before the meeting.
Section 2. Special Meetings. Special meetings of the shareholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the Articles
of Incorporation or by these Bylaws, may be called by the Chairman of the Board,
the President, the Board of Directors, or the holders of not less than one-tenth
in number of all the shares entitled to vote at the meetings.
Section 3. Place of Meetings. Meetings of shareholders shall be held at
such places, within or without the State of Texas, as may from time to time be
fixed by the Board of Directors or as shall be specified or fixed in the
respective notices or waivers of notice thereof.
Section 4. Voting List. The officer or agent having charge of the stock
transfer books for shares of the Corporation shall
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make, at least ten (10) days before each meeting of shareholders, a complete
list of the shareholders entitled to vote at such meeting or any adjournment
thereof arranged in alphabetical order, with the address of and the number of
shares held by each, which list, for a period of ten (10) days prior to such
meeting, shall be kept on file at the registered office of the Corporation and
shall be subject to inspection by any shareholder at any time during usual
business hours. Such list shall also be produced and kept open at the time and
place of the meeting and shall be subject to the inspection of any shareholder
during the whole time of the meeting.
Section 5. Notice of Meetings. Written or printed notice stating the place,
day and hour of each meeting of the shareholders and, in case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
delivered not less than ten (10) nor more than fifty (50) days before the date
of the meeting, either personally or by mail, by or at the direction of the
President, the Secretary, or the body, officer or person calling the meeting, to
each shareholder of record entitled to vote at the meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the United States Mail
addressed to the shareholder at his address as it appears on the stock transfer
books of the Corporation, with postage thereon prepaid.
Section 6. Quorum of Shareholders. The holders of a majority of the shares
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall be requisite and shall constitute a quorum at each
meeting of shareholders for the transaction of business except as otherwise
provided by statute or by the Articles of Incorporation. If, however, such
quorum shall not be present or represented at any meeting of the shareholders,
the shareholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be present or
represented. At any such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified. When a quorum is present at any meeting, the
vote of the holders of a majority of the shares entitled to vote and present in
person or represented by proxy shall be the
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act of the shareholders' meeting, unless the vote of a greater number is
required by statute, the Articles of Incorporation or these Bylaws, in which
case the vote of such greater number shall be requisite to constitute the act of
the meeting. The shareholders present or represented at a duly organized meeting
and entitled to vote thereat may continue to transact business until
adjournment, notwithstanding the withdrawal of enough shareholders to leave less
than a quorum.
Section 7. Voting of Shares. Each outstanding share, regardless of class,
shall be entitled to one vote on each matter submitted to a vote at a meeting of
shareholders, except as and to the extent otherwise provided by statute or the
Articles of Incorporation. At any meeting of the shareholders every shareholder
having the right to vote shall be entitled to vote either in person or by proxy
executed in writing by such shareholder or by his duly authorized
attorney-in-fact. No proxy shall be valid after eleven (11) months from the date
of its execution unless otherwise provided in the proxy. Each proxy shall be
revocable unless expressly provided therein to be irrevocable and unless
otherwise made irrevocable by law. Each proxy shall be filed with the Secretary
of the Corporation prior to or at the time of the meeting. Any vote may be taken
viva voce or by show of hands unless someone entitled to vote objects, in which
case written ballots shall be used.
Section 8. Action without Meeting. Any action required by statute to be
taken at a meeting of the shareholders, or any action which may be taken at a
meeting of the shareholders, may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all of the
shareholders entitled to vote with respect to the subject matter thereof and
such consent shall have the same force and effect as a unanimous vote of the
shareholders. Any such signed consent, or a signed copy thereof, shall be placed
in the minute book of the Corporation.
Section 9. Telephone Meetings. Shareholders may participate in and hold a
meeting of shareholders by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
section shall constitute presence in person at such meeting, except where a
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person participates in the meeting for the express purpose of objecting to the
transaction of any business on the grounds that the meeting is not lawfully
called or convened.
ARTICLE III.
BOARD OF DIRECTORS
Section 1. Management of the Corporation. The business and affairs of the
Corporation shall be managed by its Board of Directors, which may exercise all
such powers of the Corporation and do all such lawful acts and things as are not
by statute or by the Articles of Incorporation or by these Bylaws directed or
required to be exercised or done by the shareholders.
Section 2. Number and Qualifications. The Board of Directors shall consist
of one or more directors. The number of directors shall be fixed from time to
time by resolution of the Board of Directors. The number of directors may be
increased or decreased from time to time by the Board of Directors, except that
no decrease shall have the effect of shortening the term of any incumbent
director. Any directorship to be filled by reason of any increase in the number
of directors may be filled by election at any annual meeting or at a special
meeting of shareholders called for that purpose or may be filled by the Board of
Directors for a term of office continuing only until the next election of one or
more directors by the shareholders; provided that the Board of Directors may not
fill more than two such directorships during the period between any two
successive annual meetings of shareholders. None of the directors need be
shareholders of the Corporation or residents of the State of Texas.
Section 3. Election and Term of Office. At each annual meeting of
shareholders the shareholders shall elect directors to hold office until the
next succeeding annual meeting. At each election, the persons receiving the
greatest number of votes shall be the directors. Each director elected shall
hold office for the term for which he is elected and until his successor shall
have been elected and shall have qualified or until his earlier death,
resignation, retirement, disqualification or removal.
Section 4. Removal. Any director may be removed either for
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or without cause to any special or annual meeting of shareholders, by the
affirmative vote of a majority in number of shares of the shareholders present
in person or by proxy at such meeting and entitled to vote for the election of
such director if notice of intention to act upon such matter shall have been
given in the notice calling such meeting.
Section 5. Vacancies. Any vacancy occurring in the Board of Directors may
be filled by election at an annual or special meeting of shareholders called for
that purpose or by an affirmative vote of a majority of the remaining directors
though less than a quorum of the board of directors. A director elected to fill
a vacancy shall be elected for the unexpired term of his predecessor in office.
Section 6. Place of Meetings. Meetings of the Board of Directors, annual,
regular or special, may be held either within or without the State of Texas.
Section 7. Annual Meetings. The first meeting of each newly elected Board
shall be held for the purpose of organization and the transaction of any other
business without notice immediately following the annual meeting of
shareholders, and at the same place, unless by unanimous consent of the
directors then elected and serving such time or place shall be changed.
Section 8. Regular Meetings. Regular meetings of the Board of Directors,
of which no notice shall be necessary, shall be held at such times and places as
may be fixed from time to time by resolution adopted by the Board and
communicated to all directors. Except as otherwise provided by statute, the
Articles of Incorporation or these Bylaws, any and all business may be
transacted at any regular meeting.
Section 9. Special Meetings. Special meetings of the Board of Directors
may be called by the Chairman of the Board, the President or the Secretary on
twenty-four (24) hours notice to each director, either personally or by mail or
by telegram. Except as may be otherwise expressly provided by statute or by the
Articles of Incorporation or by these Bylaws, neither the business to be
transacted at, nor the purpose of, any meeting of the Board of Directors need be
specified in the notice or waiver of notice of such meeting.
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Section 10. Quorum and Manner of Acting. At all meetings of the Board of
Directors the presence of a majority of the number of directors fixed by these
Bylaws shall be necessary and sufficient to constitute a quorum for the
transaction of business except as otherwise provided by statute, the Articles of
Incorporation or these Bylaws. The act of a majority of the directors present at
a meeting at which a quorum is present shall be the act of the Board of
Directors unless the act of a greater number is required by statute, the
Articles of Incorporation or these Bylaws, in which case the act of such greater
number shall be requisite to constitute the act of the Board. If a quorum shall
not be present at any meeting of directors, the directors present thereat may
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present. At any such adjourned meeting any
business may be transacted which might have been transacted at the meeting as
originally convened.
Section 11. Action without a Meeting. Any action required or permitted to
be taken at a meeting of the Board of Directors may be taken without a meeting
if a consent in writing, setting forth the action so taken, is signed by all
members of the Board of Directors, and such consent shall have the same force
and effect as a unanimous vote at a meeting. Any such signed consent, or a
signed copy thereof, shall be placed in the minute book of the Corporation.
Section 12. Directors' Compensation. The Board of Directors shall have
authority to determine , time to time, the amount of compensation, if any, which
shall be paid to its members for their services as directors. The Board shall
also have power in its discretion to provide for and to pay to directors
rendering services to the Corporation not ordinarily rendered by directors as
such, special compensation appropriate to the value of such services as
determined by the Board from time to time. Nothing herein contained shall be
construed to preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor.
Section 13. Procedure. The Board of Directors shall keep regular minutes of
its proceedings. The minutes shall be placed in the minute book of the
Corporation.
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Section 14. Mandatory Indemnification and Advancement of Directors and
officers.*** Adopted January 4, 1990.
ARTICLE IV.
NOTICES
Section 1 Manner of Giving Notice. Whenever, under the provisions of the
statutes or of the Articles of Incorporation or of these Bylaws, notice is
required to be given to any director or shareholder and no provision is made as
to how such notice shall be given, it shall not be construed to mean personal
notice, but any such notice may be given in writing by mail, postage prepaid,
addressed to such director or shareholder at his address as it appears on the
records or (in the case of a shareholder) the stock transfer books of the
Corporation. Any notice required or permitted to be given by mail shall be
deemed to be delivered at the time when the same shall be deposited in the
United States mails as aforesaid.
Section 2. Waiver of Notice. Whenever any notice is required to be given to
any shareholder or director of the Corporation under the provisions of the
statutes or of the Articles of Incorporation or of these Bylaws, a waiver
thereof in writing signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
giving of such notice.
ARTICLE V.
EXECUTIVE COMMITTEE
Section 1. Constitution and Powers. The Board of Directors, by resolution
adopted by affirmative vote of a majority of the entire board, may designate two
(2) or more directors to constitute an Executive Committee, which Executive
Committee shall have and may exercise, when the Board is not in session, all of
the authority and powers of the Board of Directors in the business and affairs
of the Corporation, even though such authority and powers be herein provided or
directed to be exercised by a designated officer of the Corporation; provided
that the foregoing shall not be construed as authorizing action by the Executive
Committee with respect to any action which by
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statute, the Articles of Incorporation or these Bylaws is required to be taken
by vote of a specified proportion of the number of directors fixed by these
Bylaws, or any other action required or specified by the Texas Business
Corporation Act or other applicable law or by these Bylaws or by the Articles of
Incorporation to be taken by the Board of Directors, as such. So far as
practicable, members of the Executive Committee shall be appointed by the Board
of Directors at its first meeting after each annual meeting of shareholders and,
unless sooner discharged by affirmative vote of a majority of the entire Board,
shall hold office until their respective successors are appointed and qualify or
until their earlier respective removals, deaths, resignations, retirements, or
disqualifications.
Section 2. Meetings. Regular meetings of the Executive Committee, of which
no notice shall be necessary, shall be held at such times and places as may be
fixed from time to time by resolution adopted by affirmative vote of a majority
of the whole Committee and communicated to all of the members thereof. Special
meetings of the Executive Committee may be called by the Chairman of the Board,
the President or any member thereof at any time on twenty-four (24) hours'
notice to each member, either personally or by mail or telegram. Except as may
be otherwise expressly provided by statute or by the Articles of Incorporation
or by these Bylaws, neither the business to be transacted at, nor the purpose
of, any meeting of the Executive Committee need be specified in the notice or
waiver of notice of such meeting. A majority of the Executive Committee shall
constitute a quorum for the transaction of business, and the act of a majority
of those present at any meeting at which a quorum is present shall be the act of
the Executive Committee.
Section 3. Records. The Executive Committee shall keep a record of its acts
and proceedings and shall report the same, from time to time, to the Board of
Directors. The Secretary of the Corporation, or, in his absence, an Assistant
Secretary, shall act as secretary of the Executive Committee or the Committee
may, in its discretion, appoint its own secretary.
Section 4. Vacancies. Any vacancy in the Executive Committee may be filled
by affirmative vote of a majority of the entire Board.
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ARTICLE VI.
OTHER COMMITTEES OF THE BOARD
Section 1. Other Committees. The Board of Directors may, by resolution
adopted by affirmative vote of a majority of the entire Board, designate two or
more directors to constitute another committee or committees for any purpose;
provided, that any such other committee or committees shall have and may
exercise only the power. of recommending action to the Board of Directors and
the Executive Committee and of carrying out and implementing any instructions or
any policies, plans and programs theretofore approved, authorized and adopted by
the Board of Directors or the Executive Committee.**** Amended on January 4,
1990.
ARTICLE VII.
OFFICERS, EMPLOYEES AND AGENTS: POWERS AND DUTIES
Section 1. Elected Officers. The elected officers of the Corporation shall
be a Chairman of the Board (if the Board of Directors shall determine the
election of such officer to be appropriate), a President, one or more Vice
Presidents as may be determined from time to time by the Board (and, in the case
of each such Vice President, with such descriptive title, if any, as the Board
of Directors shall deem appropriate), a Secretary, and a Treasurer. The Chairman
of the Board, if any, shall be a member of the Board of Directors. No other
elected officer of the Corporation need be a member of the Board of Directors.
Section 2. Election. So far as is practicable, all elected officers shall
be elected by the Board of Directors at its first meeting after each annual
meeting of shareholders.
Section 3. Appointive Officers. The Board of Directors may also appoint one
or more Assistant Secretaries and Assistant Treasurers and such other officers
and assistant officers and agents (none of whom need be a member of the Board)
as it shall from time to time deem necessary, who will exercise such powers and
perform such duties as shall be set forth in these Bylaws or determined from
time to time by the Board of Directors or the Executive Committee.
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Section 4. Two or More Offices. Any two (2) or more offices may be held by
the same person.
Section 5. Compensation. The compensation of all officers of the
Corporation shall be fixed from time to time by the Board of Directors or the
Executive Committee. The Board of Directors or the Executive Committee may from
time to time delegate to the President the authority to fix the compensation of
any or all of the other officers of the Corporation.
Section 6. Term of Office; Removal; Filling of Vacancies. Each elected
officer of the Corporation shall hold office until his successor is chosen and
qualified in his stead or until his earlier death, resignation, retirement,
disqualification or removal from office. Each appointive officer shall hold
office at the pleasure of the Board of Directors without the necessity of
periodic reappointment. Any officer or agent elected or appointed by the Board
of Directors may be removed at any time by the Board of Directors whenever in
its judgment the best interests of the Corporation will be served thereby, but
such removal shall be without prejudice to the contract rights, if any, of the
person so removed. Election or appointment of an officer or agent will not of
itself create contract rights. If the office of any officer becomes vacant for
any reason, the vacancy may be filled by the Board of Directors.
Section 7. Chairman of the Board. The Chairman of the Board, if a person is
elected to such office by the Board of Directors shall preside when present at
all meetings of the shareholders and of the Board of Directors. He shall advise
and counsel the President and other officers of the Corporation and shall
exercise such powers and perform such duties as shall be assigned to or required
of him from time to time by the Board of Directors or the Executive Committee.
Section 8. President. The President shall be the chief executive officer of
the Corporation and, subject to the provisions of these Bylaws, shall have
general supervision of the affairs of the Corporation and shall have general and
active control of all its business. In the absence of the Chairman of the Board
or if such officer shall not have been elected or be serving, the President
shall preside when present at meetings of the shareholders and the Board of
Directors. He shall have
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general authority to execute bonds, deeds and contracts in the name of the
Corporation and to affix the corporate seal thereto; to sign stock certificates;
to cause the employment or appointment of such employees and agents of the
Corporation as the proper conduct or operations may require and to fix their
compensation, subject too the provisions of these Bylaws; to remove or suspend
any employee or agent who shall have been employed or appointed under his
authority or under authority of an officer subordinate to him; to suspend for
cause, pending final action by the authority which shall have elected or
appointed him, any officer subordinate to the President; and in general to
exercise all the powers usually appertaining to the office of president of a
corporation, except as otherwise provided by statute, the Articles of
Incorporation or these Bylaws. In the absence or disability of the President,
his duties shall be performed and his powers may be exercised by the Vice
Presidents in order of their seniority, unless otherwise determined by the
Chairman of the Board, the President, the Board of Directors or the Executive
Committee.
Section 9. Vice Presidents. Each Vice President shall have such titles as
may be prescribed by the Board of Directors, and shall generally assist the
President and shall have such powers and perform such duties and services as
shall from time to time be prescribed or delegated to him by the President, the
Board of Directors or the Executive Committee.
Section 10. Treasurer. The Treasurer shall have the care and custody of all
monies, funds and securities of the Corporation; shall deposit or cause to be
deposited all such funds in and with such depositories as the Board of Directors
or the Executive Committee shall from time to time direct or as shall be
selected in accordance with procedure established by the Board or the Executive
Committee; shall advise upon all terms of credit granted by the Corporation; and
shall be responsible for the collection of all its accounts and shall cause to
be kept full and accurate accounts of all receipts and disbursements of the
Corporation. He shall have the power to endorse for deposit or collection or
otherwise all checks, drafts, notes, bills of exchange or other commercial
papers payable to the Corporation and to give proper receipts or discharges for
all payments to the Corporation. The Treasurer shall generally perform all the
duties usually appertaining to the office of treasurer of a
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corporation. In the absence or disability of the Treasurer his duties shall be
performed and his powers may be exercised by the Assistant Treasurers in the
order of their seniority, unless otherwise determined by the Treasurer, the
Chairman of the Board, the President, the Board of Directors or the Executive
Committee. if required by the Board of Directors, he shall give the Corporation
a bond in such form, in such sum, and with such surety or sureties as shall be
satisfactory to the Board for the faithful performance of the duties of his
office.
Section 11. Assistant Treasurers. Each Assistant Treasurer shall generally
assist the Treasurer and shall have such powers and perform such duties and
services as shall from time to time be prescribed or delegated to him by the
Treasurer, the Chairman of the Board, the President, the Board of Directors, or
the Executive Committee.
Section 12. Secretary. The Secretary shall see that notice is given of all
meetings of the shareholders and special meetings of the Board of directors and
shall keep and attest true records of all proceedings at all meetings of the
shareholders and the Board. He shall have charge of the corporate seal and have
authority to attest any and all instruments or writings to which the same may be
affixed. He shall keep and account for all books, documents, papers and records
of the Corporation except those for which some other officer or agent is
properly accountable. He shall have authority to sign stock certificates and
shall generally perform all the duties usually appertaining to the office of
secretary of a corporation. In the absence or disability of the Secretary, his
duties shall be performed and his powers may be exercised by the Assistant
Secretaries in the order of their seniority, unless otherwise determined by the
Secretary, the Chairman of the Board, the President, the Board of Directors or
the Executive Committee.
Section 13. Assistant Secretaries. Each Assistant Secretary shall generally
assist the Secretary and shall have such powers and perform such duties and
services as shall from time to time be prescribed or delegated to him by the
Secretary, the Chairman of the Board, the President, the Board of Directors or
the Executive Committee.
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Section 14. Additional Powers and Duties. In addition to the foregoing
especially enumerated duties, services and powers, the several elected and
appointive officers of the Corporation shall perform such other duties and
services and exercise such further powers as may be provided by statute, the
Articles of Incorporation or these Bylaws or as the Board of Directors or the
Executive Committee may from time to time determine or as may be assigned to
them by any competent superior officer.
ARTICLE VIII.
STOCK AND TRANSFER OF STOCK
Section 1. Certificates Representing Shares. Certificates in such form as
may be determined by the Board of Directors and as shall conform to the
requirements of the statutes, the Articles of Incorporation and these Bylaws
shall be delivered representing all shares to which shareholders are entitled.
Such certificates shall be consecutively numbered and shall be entered in the
books of the Corporation as they are issued. Each certificate shall state on the
face thereof that the Corporation is organized under the laws of Texas, the
holder's name, the number and class of shares which such certificate represents,
the par value of such shares or a statement that such shares are without par
value, and such other matters as may be required by law. Each certificate shall
be signed by the President or a Vice President and the Secretary or an Assistant
Secretary and may be sealed with the seal of the Corporation or a facsimile
thereof. If any certificate is countersigned by a transfer agent or registered
by a registrar, either of which is other than the Corporation or an employee of
the Corporation, the signature of any such officer may be facsimile.
Section 2. Lost Certificates. The Board of Directors, the Executive
Committee, the President, or such other officer or officers of the Corporation
as the Board of Directors may from time to time designate, in its or his
discretion may direct a new certificate or certificates representing shares to
be issued in place of any certificate or certificates theretofore issued by the
Corporation alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate or certificates
to be lost, stolen or destroyed. When authorizing such issue of a new
certificate or
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certificates, the Board of Directors, the Executive Committee, the President, or
such other officer or officers, in its or his or their discretion and as a
condition precedent to the issuance thereof, may require the owner of such lost,
stolen or destroyed certificate or certificates, or his legal representative, to
advertise the same in such manner as it or he shall require and/or give the
Corporation a bond in such form, in such sum, and with such surety or sureties
as it or he may direct as indemnity against any claim that may be made against
the Corporation with respect to the certificate or certificates alleged to have
been lost, stolen or destroyed.
Section 3. Transfers of Shares. Shares of stock shall be transferable only
on the books of the Corporation by the holder thereof in person or by his duly
authorized attorney. Upon surrender to the Corporation or the transfer agent of
the Corporation of a certificate representing shares, duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, with all required stock transfer tax stamps affixed thereto and
canceled or accompanied by sufficient funds to pay such taxes, it shall be the
duty of the Corporation or the transfer agent of the Corporation to issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
Section 4.Registered Shareholders. The Corporation shall be entitled to
treat the holder of record of any share or shares of stock as the holder in fact
thereof and, accordingly, shall not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by Law.
ARTICLE IX.
MISCELLANEOUS
Section 1. Dividends. Dividends upon the outstanding shares of the
Corporation, subject to the provisions of the statutes and of the Articles of
Incorporation, may be declared by the Board of Directors at any annual, regular
or special meeting. Dividends may be declared and paid in cash, in property, or
in shares of the Corporation, or in any combination thereof. The declaration
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and payment shall be at the discretion of the Board of Directors.
Section 2. Reserves. There may be created from time to time by resolution
of he Board of Directors, out of the earned surplus of the Corporation, such
reserve or reserves as the directors in their discretion think proper to provide
for contingencies, or to equalize dividends, or to repair or maintain any
property of the Corporation, or for such other purpose as the directors shall
think beneficial to the Corporation, and the directors may modify or abolish any
such reserve in the manner in which it was created.
Section 3. Signature of Negotiable Instruments. All bills, notes, checks or
other instruments for the payment of money shall be signed or countersigned by
such officer, officers, agent or agents and in such manner as are permitted by
these Bylaws or in such manner as, from time to time, may be prescribed by
resolution (whether general or special) of the Board of Directors or the
Executive Committee.
Section 4. Fiscal Year. The fiscal year of the Corporation shall be
determined by the Board of Directors from time to time.
Section 5. Seal. The Corporation's seal shall be in such form as shall be
adopted and approved from time to time by the Board of Directors. The seal may
be used by causing it, or a facsimile thereof, to be impressed, affixed,
imprinted or in any manner reproduced.
Section 6. Closing of Transfer Books and Fixing Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other proper purpose, the Board of Directors may provide that the stock
transfer books of the Corporation shall be closed for a stated period but not to
exceed, in any case, fifty (50) days. If the stock transfer books shall be
closed for the purpose of determining shareholders entitled to notice of or to
vote at a meeting of shareholders, such books shall be closed at least ten (10)
days immediately preceding such meeting. In lieu of closing the stock transfer
books, the Board of Directors may fix in advance a date as the record date for
any such determination of
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shareholders, such date in any case to be not more than fifty (50) days and, in
case of a meeting of shareholders, not less than ten (10) days prior to the date
on which the particular action,requiring such determination of shareholders is
to be taken. If the stock transfer books are not closed and no record date is
fixed for the determination of shareholders entitled to notice of or to vote at
a meeting of shareholders, or shareholders entitled to receive payment of a
dividend, the date on which notice of the meeting is mailed or the date on which
the resolution of the Board of Directors declaring such dividend is adopted, as
the case may be, shall be the record date for such determination of
shareholders. When a determination of shareholders entitled to vote at any
meeting has been made as provided in this section, such determination shall
apply to any adjournment thereof except where the determination has been made
through the closing of stock transfer books and the stated period of closing has
expired.
Section 7. Surety Bonds. Such officers and agents of the Corporation (if
any) as the Chairman of the Board or the Board of Directors may direct, from
time to time, shall be bonded for the faithful performance of their duties and
for the restoration to the Corporation, in case of their death, resignation,
retirement, disqualification or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in their possession or under
their control belonging to the Corporation, in such amounts and by such surety
companies as the Chairman of the Board, the Board of Directors, or the Executive
Committee may determine. The premiums on such bonds shall be paid by the
Corporation, and the bonds so furnished shall be in the custody of the
Secretary.
ARTICLE X.
AMENDMENTS
Section 1. These Bylaws may be altered, amended or repealed or new Bylaws
may be adopted at any meeting of the Board of Directors at which a quorum is
present, provided notice of the proposed alteration, amendment or repeal or
adoption be contained in the notice of such meeting.
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<PAGE>
I, Ron Gardner, hereby certify that I am the duly elected and qualified
Secretary of Automotive Satellite Television Network, Inc., and that the
foregoing is a true and correct copy of the Bylaws of Automotive Satellite
Television Network, Inc., adopted by unanimous consent of the Board of Directors
of the Corporation as of the 19th day of May, 1986.
In Witness Whereof, I have hereunto affixed my name as Secretary as of this
19th day of May, 1986.
Ron Gardner
17
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BYLAW AMENDMENTS/CHANGES
* The name of the Corporation was changed to Westcott Communications, Inc.,
effective as of July 25, 1988.
** Article I, Section 1 is amended to read in its entirety as follows:
Section 1. Registered Office and Agent. The registered office of the
Corporation shall be 1303 Marsh Lane, Carrollton, Texas 75006. The name of its
registered agent as such address is Carl Westcott.
*** A new Section 14, Article III is added which Section 14 reads in its
entirety as follows:
Section 14. Mandatory Indemnification and Advancement of Expenses for
Directors and Officers. The Corporation shall indemnify any person who was, is,
or is threatened to be made a named defendant or respondent in a proceeding (as
hereinafter defined) because the person (i) is or was a director or officer of
the Corporation or (ii) while a director or officer of the Corporation, is or
was serving at the request of the Corporation as a director, officer, partner,
venturer, proprietor, trustee, employee, agent, or similar functionary of
another foreign or domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan, or other enterprise, to the
fullest extent that a corporation may grant indemnification to a director under
the Texas Business Corporation Act, as the same exists or may hereafter be
amended. Such right shall be a contract right and as such shall run to the
benefit of any director or officer who is elected and accepts the position of
director or officer of the Corporation or elects to continue to serve as a
director or officer of the Corporation while this Section 14 is in effect. Any
repeal or amendment of this Section 14 shall be prospective only and shall not
limit the rights of any such director or officer or the obligations of the
Corporation with respect to any claim arising from or related to the services of
such director or officer in any of the foregoing capacities prior to any such
repeal or amendment of this Section 14. Such right shall include the right to be
paid or reimbursed by the Corporation for expenses incurred in defending any
such proceeding in advance of its final disposition to the maximum
<PAGE>
extent permitted under the Texas Business Corporation Act, as the same exists or
may hereafter be amended. If a claim for indemnification or advancement of
expenses hereunder is not paid in full by the Corporation within 90 days after a
written claim has been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim, and if successful in whole or in part, the claimant shall be entitled
to be paid also the expenses of prosecuting such claim. it shall be a defense to
any such action that such indemnification or advancement of costs of defense are
not permitted under the Texas Business Corporation Act, but the burden of
proving such defense shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors or any committee thereof, special
legal counsel, or shareholders) to have made its determination prior to the
commencement of such action that indemnification of, or advancement of costs of
defense to, the claimant is permissible in the circumstances nor an actual
determination by the Corporation (including its Board of Directors or any
committee thereof, special legal counsel, or shareholders) that such
indemnification or advancement is not permissible, shall be a defense to the
action or create a presumption that such indemnification or advancement is not
permissible. In the event of the death of any person having a right of
indemnification under the foregoing provisions, such right shall inure to the
benefit of his heirs, executors, administrators, and personal representatives.
The rights conferred above shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, bylaw, resolution of
shareholders or directors, agreement, or otherwise.
The Corporation may additionally indemnify any person covered by the grant
of mandatory indemnification contained above to such further extent as is
permitted by law and may indemnify any other person to the fullest extent
permitted by law.
To the extent permitted by then applicable law, the grant of mandatory
indemnification to any person pursuant to this Section 14 shall extend to
proceedings involving the negligence of such person.
As used herein, the term "proceeding" means any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative,
arbitrative, or investigative, any appeal in such an action, suit, or
proceeding, and any inquiry or
<PAGE>
investigation that could lead to such an action, suit, or proceeding.
**** Article VI, Section 1 is amended to read in its entirety as follows:
Section 1. Other Committees. The Board of Directors may, by resolution
adopted by affirmative vote of a majority of the entire Board, designate two or
more directors to constitute another committee or committees for any purpose;
provided, that any such other committee or committees shall have and may
exercise all authority of the Board of Directors and the Executive Committee in
carrying out and implementing any instructions or any policies, plans and
programs theretofore approved, authorized and adopted by the Board of Directors
or the Executive Committee.
<PAGE>
AMENDMENT OF BYLAWS
OF WESTCOTT COMMUNICATIONS, INC.
AUGUST 3,1993
RESOLVED, that Section 6 of the Bylaws of the Corporation be amended to
read in its entirety as follows:
Section 6. Quorum of Shareholders.
The holders of a majority of the shares issued and outstanding and entitled
to vote thereat, present in person or represented by proxy, shall be
requisite and shall constitute a quorum at each meeting of shareholders for
the transaction of business except as otherwise provided by statute or by
the Articles of Incorporation. If, however, such quorum shall not be
present or represented at any meeting of the shareholders, the shareholders
entitled to vote thereat, present in person or represented by proxy, shall
have power to adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum shall be present or
represented. At any such adjourned meeting at which a quorum shall be
present or represented, any business may be transacted which might have
been transacted at the meeting as originally notified. With respect to any
matter other than the election of directors, the vote of the holders of a
majority of the shares entitled to vote on, and voted for or against, that
matter at a meeting of shareholders at which a quorum is present shall be
the act of the shareholders'meeting, unless the vote of a greater number is
required by statute, the Articles of Incorporation or these Bylaws, in
which case the vote of such greater number shall be requisite to constitute
the act of the meeting. The shareholders present or represented at a duly
organized meeting and entitled to vote thereat may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum.
FURTHER RESOLVED, that the President, any Vice-President, and the Secretary
of the Corporation (the "Proper Officers") are each hereby authorized,
empowered, and directed to execute and deliver, for and on behalf and in the
name of the Corporation, the Amendment, together with any other instruments and
documents as any such officer may deem necessary, appropriate, or in the
<PAGE>
best interest of the Corporation;
FURTHER RESOLVED, that the Proper Officers are, and each hereby is,
authorized, empowered, and directed to make such modifications to, additions to,
deletions from, or changes to the Amendment as such officer may deem necessary
or appropriate or in the best interest of the Company; that execution and
delivery of the Amendment by such officer shall be conclusive evidence of his
approval thereof, and such changes, additions, deletions, or modifications shall
be deemed authorized by the Board of Directors of the Company pursuant to the
terms hereof;
FURTHER RESOLVED, that the Proper Officers of the Company are authorized to
sign, execute, certify to, verity, acknowledge, deliver, accept, and record any
and all such additional agreements, certificates, documents, reports, and
schedules, and to take, or cause to be taken, any and all such action, in the
name and on behalf of the Company, which shall be required to effect the
Amendment, without limitation to the transaction listed above, or which the
Proper Officers of the Company deem necessary or appropriate or in the best
interest of the Company in order to effect the foregoing resolutions, and such
officer's signature, or such actions taken by such officer, shall be conclusive
evidence that such officer did deem same to be necessary or appropriate and in
the best interest of the Company in order to effect such purposes; and
FINALLY RESOLVED, that each and every action taken by the Proper Officers
of the Corporation prior to the date of the adoption of the foregoing
resolutions which would have been authorized by the foregoing resolutions but
for the fact that such actions were taken prior to such date, be, and each
hereby is, ratified, approved, confirmed, and adopted.
Phyllis Farragut, Secretary
<PAGE>
AMENDMENT TO
BYLAWS OF WESTCOTT COMMUNICATIONS,INC.
1. Section 4 of Article III of the Bylaws of Westcott Communications, Inc.
(the "Corporation") is hereby amended to read in its entirety as follows:
Section 4. Removal. Any director may be removed for cause at any
special or annual meeting of shareholders, by the affirmative vote of the
holders of a majority of the outstanding shares entitled by law to vote thereon
if notice of intention to act upon such matter shall have been given in the
notice calling such meeting. No director may be removed without cause.
2. Article X of the Bylaws of the Corporation is hereby amended by adding a
new Section 2 to such Article X to read in its entirety as follows:
Section 2. The shareholders of the Corporation may only alter, amend
or repeal these Bylaws or adopt new Bylaws if such alteration, amendment, repeal
or adoption is approved by the affirmative vote of a majority of the outstanding
shares entitled by law to vote thereon.
___________________________
January 9, 1996 Phyllis Farragut, Secretary
<PAGE>
Exhibit 3.116
ARTICLES OF INCORPORATION
OF
WESTCOTT COMMUNICATIONS MICHIGAN
I, the undersigned, a natural person of the age of eighteen years or
more, acting as the incorporator for the purpose of forming a corporation
(hereinafter referred to as the "Corporation") for profit pursuant to the
provisions of the Business Corporation Act of the State of Michigan, Act 284, P.
A. 1972, do hereby adopt the following Articles of Incorporation for the
Corporation.
FIRST: The name of the corporation is Westcott Communications
Michigan, Inc.
SECOND: The purposes for which the Corporation is organized is to
engage in any activity within the purposes for which corporations may be
organized under the Business Corporation Act.
THIRD: The aggregate number of shares which the Corporation shall have
authority to issue is 1,000, par value $.Ol per share, designated Common Stock.
Each share of such common stock shall have identical rights and privileges in
every respect.
FOURTH: No holder of any shares of capital stock of the Corporation,
whether now or hereafter authorized, shall, as such holder, have any preemptive
or preferential right to receive, purchase, or subscribe to (a) any unissued or
treasury shares of any class of stock (whether now or hereafter authorized) of
the Corporation, (b) any obligations, evidences of indebtedness, or other
securities of the Corporation convertible into or exchangeable for, or carrying
or accompanied by any rights to receive, purchase, or subscribe to, any such
unissued or treasury shares, (c) any right of subscription to or to receive, or
any warrant or option for the purchase of, any of the foregoing securities,or
(d) any other securities that may be issued or
<PAGE>
sold by the Corporation
FIFTH: The street and mailing address of the initial registered office
of the Corporation in the State of Michigan is 501 South Capitol Avenue, c/o The
Prentice-Hall Corporation System, Inc., City of Lansing 48933, County of Ingham,
and the name of the initial resident agent of the Corporation at such address is
The Prentice-Hall Corporation System, Inc.
SIXTH: The name and the address of the incorporator of the Corporation
are as follows:
NAME ADDRESS
---- -------
David B. Hollander 900 Jackson Street
100 Founders Square
Dallas, Texas 74202-4499
SEVENTH: The duration of the Corporation shall be perpetual.
EIGHTH: Any action required or permitted by the Business Corporation
Act to be taken at an annual or special meeting of shareholders may be taken
without a meeting, without prior notice and without a vote, if consents in
writing, setting forth the action so taken, are signed by the holders of
outstanding shares having not less than the minimum number of notes that would
be necessary to authorize or take the action at a meeting at which all shares
entitled to vote on the action were present and voted.
NINTH: The personal liability of the directors of the Corporation is
eliminated to the fullest extent permitted by the provisions of Section 209(c)of
the Business Corporation Act, as the same may be amended and supplemented.
TENTH: The Corporation shall, to the fullest extent permitted by
Section 261 and Sections 561 to 569, inclusive, of the Business Corporation Act,
as the same may be amended and supplemented, indemnify any and all persons whom
it shall have
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power to indemnify under said sections from and against any and all of the
expenses, liabilities, or other matters referred to or covered by said sections,
and the indemnification provided for herein shall not be deemed exclusive of any
other rights to which those indemnified 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 such office, and shall continue as to a person who has ceased to be a
director, officer, employee, or agent and shall inure to the benefit of the
heirs, executors, and administrators of such a person. In the event that these
Articles of Incorporation or any amendment thereof shall delegate to a
shareholder or shareholders or a person or persons any part or all of the
management of the Corporation pursuant to the provisions of Section 463 of the
Business corporation Act, any such shareholder or shareholders or any such
person or persons shall be entitled to the same right of indemnification as a
director of the Corporation.
ELEVENTH: Cumulative voting for the election of directors is expressly
denied and prohibited.
IN WITNESS WHEREOF, I have hereunto set my hand this 13th day of
September, 1990.
David B. Hollander, Incorporator
3
<PAGE>
Exhibit 3.117
BY-LAWS
OF
WESTCOTT COMMUNICATIONS MICHIGAN, INC.
A Michigan Corporation
PREAMBLE
These by-laws are subject to, and governed by, the Michigan Business
Corporation Act and the articles of incorporation of Westcott Communications
Michigan, Inc., a Michigan corporation (the "Corporation") In the event of a
direct conflict between the provisions of these by-laws and the mandatory
provisions of the Michigan Business Corporation Act or the provisions of the of
the articles of incorporation of the Corporation, such provisions of the
Michigan Business Corporation Act or the certificate of incorporation of the
Corporation, as the case may be, will be controlling.
ARTICLE ONE: OFFICES
1.1. Registered Office and Agent. The registered office and registered
agent of the Corporation shall be as designated from time to time by the
appropriate filing by the Corporation in the office of the Secretary of State of
the State of Michigan.
1.2. Other offices. The Corporation may also have offices at such other
places, both within and without the State of Michigan, as the board of directors
may from time to time determine or as the business of the Corporation may
require.
ARTICLE TWO: MEETINGS OF STOCKHOLDERS
2.1. Annual Meeting. An annual meeting of stockholders of the Corporation
shall be held each calendar year on such date and at such time as shall be
designated from time to time by the board of directors and stated in the notice
of the meeting or in a duly executed waiver of notice of such meeting. At such
meeting, the stockholders shall elect directors and transact such other business
as may properly be brought before the meeting.
<PAGE>
2.2. Special Meeting. A special meeting of the stockholders may be called
at any time by the Chairman of the Board, the President, the board of directors,
and shall be called by the President or the Secretary at the request in writing
of the stockholders of record of not less than ten percent of all shares
entitled to vote at such meeting or as otherwise provided by the certificate of
incorporation of the Corporation. A special meeting shall be held on such date
and at such time as shall be designated by the person(s) calling the meeting and
stated in the notice of the meeting or in a duly executed waiver of notice of
such meeting. only such business shall be transacted at a special meeting as may
be stated or indicated in the notice of such meeting or in a duly executed
waiver of notice of such meeting.
2.3 Place of Meetings. An annual meeting of stockholders may be held at any
place within or without the State of Michigan designated by the board of
directors. A special meeting of stockholders may be held at any place within or
Without the State of Michigan designated in the notice of the meeting or a duly
executed waiver of notice of such meeting. Meetings of stockholders shall be
held at the principal office of the Corporation unless another place is
designated for meetings in the manner provided herein.
2.4. Notice. written or printed notice stating the place, day, and time of
each meeting of the stockholders and, in case of a special meeting, the purpose
or purposes for which the meeting is called shall be delivered not less than ten
nor more than 60 days before the date of the meeting, either personally or by
mail, by or at the direction of the President, the Secretary, or the officer or
person(s) calling the meeting, to each stockholder of record entitled to vote at
such meeting. If such notice is to be sent by mail, it shall be directed to such
stockholder at his address as it appears on the records of the Corporation,
unless he shall have filed with the Secretary of the Corporation a written
request that notices to him be mailed to some other address, in which case it
shall be directed to him at such other address. Notice of any meeting of
stockholders shall not be required to be given to any stockholder who shall
attend such meeting in person or by proxy and shall not, at the beginning of
such meeting, object to the transaction of any business because the meeting is
not lawfully called or convened, or who shall,
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either before or after the meeting, submit a signed waiver of notice, in person
or by proxy.
2.5. Voting List At least ten days before each meeting of stockholders, the
Secretary or other officer of the Corporation who has charge of the
Corporation's stock ledger, either directly or through another officer appointed
by him or through a transfer agent appointed by the board of directors, shall
prepare a complete list of stockholders entitled to vote thereat, arranged in
alphabetical order and showing the address of each stockholder and number of
shares registered in the name of each stockholder. For a period of ten days
prior to such meeting, such list shall be kept on file at a place within the
city where the meeting is to be held, which place shall be specified in the
notice of meeting or a duly executed waiver of notice of such meeting or, if not
so specified, at the place where the meeting is to be held and shall be open to
examination by any stockholder during ordinary business hours. Such list shall
be produced at such meeting and kept at the meeting at all times during such
meeting and may be inspected by any stockholder who is present.
2.6 Quorum. The holders of a majority of the outstanding shares entitled to
vote on a matter, present in person or by proxy, shall constitute a quorum at
any meeting of stockholders, except as otherwise provided by law, the
certificate of incorporation of the Corporation, or these bylaws. If a quorum
shall not be present, in person or by proxy, at any meeting of stockholders, the
stockholders entitled to vote thereat who are present, in person or by proxy,
or, if no stockholder entitled to vote is present, any officer of the
Corporation may adjourn the meeting from time to time, without notice other than
announcement at the meeting (unless the board of directors, after such
adjournment, fixes a new record date for the adjourned meeting) , until a quorum
shall be present, in person or by proxy. At any adjourned meeting at which a
quorum shall be present, in person or by proxy, any business may be transacted
which may have been transacted at the original meeting had a quorum been
present; provided that, if the adjournment is for more than 30 days or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder of record entitled
to vote at the adjourned meeting.
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<PAGE>
2.7 Required Vote; Withdrawal of Quorum. When a quorum is present at any
meeting, the vote of the holders of at least a majority of the outstanding
shares entitled to vote who are present, in person or by proxy, shall decide any
question brought before such meeting, unless the question is one on which, by
express provision of statute, the certificate of incorporation of the
Corporation, or these by-laws, a different vote is required, in which case such
express provision shall govern and control the decision of such question. The
stockholders present at a duly constituted meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum.
2.8. Method of Voting; Proxies. Except as otherwise provided in the
certificate of incorporation of the Corporation or by law, each outstanding
share, regardless of class, shall be entitled to one vote on each matter
submitted to a vote at a meeting of stockholders. Elections of directors need
not be by written ballot. At any meeting of stockholders, every stockholder
having the right to vote may vote either in person or by a proxy executed in
writing by the stockholder or by his duly authorized attorney-in-fact. Each such
proxy shall be filed with the Secretary of the Corporation before or at the time
of the meeting. No proxy shall be valid after three years from the date of its
execution, unless otherwise provided in the proxy. If no date is stated in a
proxy, such proxy shall be presumed to have been executed on the date of the
meeting at which it is to be voted. Each proxy shall be revocable unless
expressly provided therein to be irrevocable and coupled with an interest
sufficient in law to support an irrevocable power or unless otherwise made
irrevocable by law.
2.9 Record Date. (a) For the purpose of determining stockholders entitled
to notice of or to vote at any meeting of stockholders, or any adjournment
thereof, or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion, or exchange of stock or for the purpose of any other lawful
action, the board of directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is adopted
by the board of directors, for any such determination of stockholders, such date
in any case to be not more than 60 days and not less than ten
4
<PAGE>
days prior to such meeting nor more than 60 days prior to any other action. If
no record date is fixed:
(i) The record date for determining stockholders entitled to notice of or
to vote at a meeting of stockholders shall be at the close of business on the
day next preceding the day on which notice is given or, if notice is waived, at
the close of business on the day next preceding the day on which the meeting is
held.
(ii) The record date for determining stockholders for any other purpose
shall be at the close of business on the day on which the board of directors
adopts the resolution relating thereto.
(iii) A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the
meeting,, provided, however, that the board of directors may fix a new record
date for the adjourned meeting.
(b) In order that the Corporation may determine the stockholders entitled
to consent to corporate action in writing without a meeting, the board of
directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the board of
directors, and which date shall not be more than ten days after the date upon
which the resolution fixing the record date is adopted by the board of
directors. If no record date has been fixed by the board of directors, the
record date for determining stockholders entitled to consent to corporate action
in writing without a meeting, when no prior action by the board of directors is
required by law or these by-laws, shall be the first date on which a signed
written consent setting forth the action taken or proposed to be taken is
delivered to the Corporation by delivery to its registered office in the State
of Michigan, its principal place of business, or an officer or agent of the
Corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to the Corporation's registered office
in the State of Michigan, principal place of business, or such officer or agent
shall be by hand or by certified or registered mail, return receipt requested.
If no record date has been fixed by the board of directors and prior
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<PAGE>
action by the board of directors is required by law or these by laws, the record
date for determining stockholders entitled to consent to corporate action in
writing without a meeting shall be at the close of business on the day on which
the board of directors adopts the resolution taking such prior action.
2.10 Conduct of Meeting. The Chairman of the Board, if such office has been
filled, and, if not or if the chairman of the Board is absent or otherwise
unable to act, the President shall preside at all meetings of stockholders. The
Secretary shall keep the records of each meeting of stockholders. In the absence
or inability to act of any such officer, such officer's duties shall be
performed by the officer given the authority to act for such absent or
non-acting officer under these by-laws or by some person appointed by the
meeting.
2.11 Inspectors. The board of directors may, in advance of any meeting of
stockholders, appoint one or more inspectors to act at such meeting or any
adjournment thereof. If any of the inspectors so appointed shall fail to appear
or act, the chairman of the meeting shall, or if inspectors shall not have been
appointed, the chairman of the meeting may, appoint one or more inspectors. Each
inspector, before entering upon the discharge of his duties, shall take and sign
an oath faithfully to execute the duties of inspector at such meeting with
strict impartiality and according to the best of his ability. The inspectors
shall determine the number of shares of capital stock of the Corporation
outstanding and the voting power of each, the number of shares represented at
the meeting, the existence of a quorum, and the validity and effect of proxies
and shall receive votes, ballots, or consents, hear and determine all challenges
and questions arising in connection with the right to vote, count and tabulate
all votes, ballots, or consents, determine the results, and do such acts as are
proper to conduct the election or vote with fairness to all stockholders. On
request of the chairman of the meeting, the inspectors shall make a report in
writing of any challenge, request, or matter determined by them and shall
execute a certificate of any fact found by them. No director or candidate for
the office of director shall act as an inspector of an election of directors.
Inspectors need not be stockholders.
6
<PAGE>
ARTICLE THREE: DIRECTORS
3.1. Management. The business and property of the Corporation shall be
managed by the board of directors. Subject to the restrictions imposed by law,
the certificate of incorporation of the Corporation, or these by-laws, the board
of directors may exercise all the powers of the Corporation.
3.2 Number; Qualification; Election; Term. The number of directors which
shall constitute the entire board of directors shall be not less than one. The
first board of directors shall consist of the number of directors named in the
certificate of incorporation of the Corporation or, if no directors are so
named, shall consist of the number of directors elected by the incorporators at
an organizational meeting or by unanimous written consent in lieu thereof.
Thereafter, within the limits above specified, the number of directors which
shall constitute the entire board of directors shall be determined by resolution
of the board of directors or by resolution of the stockholders at the annual
meeting thereof or at a special meeting thereof called for that purpose. Except
as otherwise required by law, the certificate of incorporation of the
Corporation, or these bylaws, the directors shall be elected at an annual
meeting of stockholders at which a quorum is present. Directors shall be elected
by a plurality of the votes of the shares present in person or represented by
proxy and entitled to vote on the election of directors. Each director so chosen
shall hold office until the first annual meeting of stockholders held after his
election and until his successor is elected and qualified or, if earlier, until
his death, resignation, or removal from office. None of the directors need be a
stockholder of the Corporation or a resident of the State of Michigan. Each
director must have attained the age of majority.
3.3 Change in Number. No decrease in the number of directors constituting
the entire board of directors shall have the effect of shortening the term of
any incumbent director.
3.4. Removal. Except as otherwise provided in the certificate of
incorporation of the Corporation or these by-laws, at any meeting of
stockholders called expressly for that purpose, any director or the entire board
of directors may be removed, with or without cause, by a vote of the holders of
a majority of
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<PAGE>
the shares then entitled to vote on the election of directors; provided,
however, that so long as stockholders have the right to cumulate votes in the
election of directors pursuant to the certificate of incorporation of the
Corporation, if less than the entire board of directors is to be removed, no one
of the directors may be removed if the votes cast against his removal would be
sufficient to elect him if then cumulatively voted at an election of the entire
board of directors.
3.5. Vacancies. Vacancies and newly-created directorships resulting from
any increase in the authorized number of directors may be filled by a majority
of the directors then in office, though less than a quorum, or by the sole
remaining director, and each director so chosen shall hold office until the
first annual meeting of stockholders held after his election and until his
successor is elected and qualified or, if earlier, until his death, resignation,
or removal from office. If there are no directors in office, an election of
directors may be held in the manner provided by statute. If, at the time of
filling any vacancy or any newly-created directorship, the directors then in
office shall constitute less than a majority of the whole board of directors (as
constituted immediately prior to any such increase), the Court of Chancery may,
upon application of any stockholder or stockholders holding at least 10% of the
total number of the shares at the time outstanding having the right to vote for
such directors, summarily order an election to be held to fill any such
vacancies or newly-created directorships or to replace the directors chosen by
the directors then in office. Except as otherwise provided in these by-laws,
when one or more directors shall resign from the board of directors, effective
at a future date, a majority of the directors then in office, including those
who have so resigned, shall have the power to fill such vacancy or vacancies,
the vote thereon to take effect when such resignation or resignations shall
become effective, and each director so chosen shall hold office as provided in
these by-laws with respect to the filling of other vacancies.
3.6. Meetings of Directors. The directors may hold their meetings and may
have an off ice and keep the books of the corporation, except as otherwise
provided by statute, in such place or places within or without the State of
Michigan as the board of directors may from time to time determine or as shall
be specified in the notice of such meeting or duly executed waiver
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of notice of such meeting.
3.7. First Meeting. Each newly elected board of directors may hold its
first meeting for the purpose of organization and the transaction of business,
if a quorum is present, immediately after and at the same place as the annual
meeting of stockholders, and no notice of such meeting shall be necessary.
3.8. Election of officers. At the first meeting of the board of directors
after each annual meeting of stockholders at which a quorum shall be present,
the board of directors shall elect the officers of the Corporation.
3.9. Regular Meetings. Regular meetings of the board of directors shall be
held at such times and places as shall be designated from time to time by
resolution of the board of directors. Notice of such regular meetings shall not
be required.
3.10 Special Meetings. Special meetings of the board of directors shall be
held whenever called by the Chairman of the Board, the President, or any
director.
3.11 Notice. The Secretary shall give notice of each special meeting to
each director at least 24 hours before the meeting. Notice of any such meeting
need not be given to any director who shall, either before or after the meeting,
submit a signed waiver of notice or who shall attend such meeting without
protesting, prior to or at its commencement, the lack of notice to him. Neither
the business to be transacted at, nor the purpose of, any regular or special
meeting of the board of directors need be specified in the notice or waiver of
notice of such meeting.
3.12. Quorum; Majority Vote. At all meetings of the board of directors, a
majority of the directors fixed in the manner provided in these by-laws shall
constitute a quorum for the transaction of business. If at any meeting of the
board of directors there be less than a quorum present, a majority of those
present or any director solely present may adjourn the meeting from time to time
without further notice. Unless the act of a greater number is required by law,
the certificate of incorporation of the Corporation, or these by-laws, the act
of a
9
<PAGE>
majority of the directors present at a meeting at which a quorum is in
attendance shall be the act of the board of directors. At any time that the
certificate of incorporation of the Corporation provides that directors elected
by the holders of a class or series of stock shall have more or less than one
vote per director on any matter, every reference in these by-laws to a majority
or other proportion of directors shall refer to a majority or other proportion
of the votes of such directors.
3.13. Procedure. At meetings of the board of directors, business shall be
transacted in such order as from time to time the board of directors may
determine. The Chairman of the Board, if such office has been filled, and, if
not or if the Chairman of the Board is absent or otherwise unable to act, the
President shall preside at all meetings of the board of directors. In the
absence or inability to act of either such officer, a chairman shall be chosen
by the board of directors from among the directors present. The Secretary of the
Corporation shall act as the secretary of each meeting of the board of directors
unless the board of directors appoints another person to act as secretary of the
meeting. The board of directors shall keep regular minutes of its proceedings
which shall be placed in the minute book of the Corporation.
3.14. Presumption of Assent. A director of the Corporation who is present
at the meeting of the board of directors at which action on any corporate matter
is taken shall be presumed to have assented to the action unless his dissent
shall be entered in the minutes of the meeting or unless he shall file his
written dissent to such action with the person acting as secretary of the
meeting before the adjournment thereof or shall forward any dissent by certified
or registered mail to the Secretary of the Corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a director
who voted in favor of such action.
3.15 Compensation. The board of directors shall have the authority to fix
the compensation, including fees and reimbursement of expenses, paid to
directors for attendance at regular or special meetings of the board of
directors or any committee thereof; provided, that nothing contained herein
shall be construed to preclude any director from serving the Corporation in any
other capacity or receiving compensation
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therefor.
ARTICLE FOUR: COMMITTEES
4.1. Designation. The board of directors may, by resolution adopted by a
majority of the entire board of directors, designate one or more committees.
4.2. Number; Qualification; Term. Each committee shall consist of one or
more directors appointed by resolution adopted by a majority of the entire board
of directors. The number of committee members may be increased or decreased from
time to time by resolution adopted by a majority of the entire board of
directors. Each committee member shall serve as such until the earliest of (i)
the expiration of his term as director, (ii) his resignation as a committee
member or as a director, or (iii) his removal as a committee member or as a
director.
4.3. Authority. Each committee, to the extent expressly provided in the
resolution establishing such committee, shall have and may exercise all of the
authority of the board of directors in the management of the business and
property of the Corporation except to the extent expressly restricted by law,
the certificate of incorporation of the Corporation, or these bylaws.
4.4. Committee Changes. The board of directors shall have the power at any
time to fill vacancies in, to change the membership of, and to discharge any
committee.
4.5. Alternate Members of Committees. The board of directors may designate
one or more directors as alternate members of any committee. Any such alternate
member may replace any absent or disqualified member at any meeting of the
committee. If no alternate committee members have been so appointed to a
committee or each such alternate committee member is absent or disqualified, the
member or members of such committee present at any meeting and not disqualified
from voting, whether or not he or they constitute a quorum, may unanimously
appoint another member of the board of directors to act at the meeting in the
place of any such absent or disqualified member.
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4.6 Regular Meetings. Regular meetings of any committee may be held without
notice at such time and place as may be designated from time to time by the
committee and communicated to all members thereof.
4.7 Special Meetings. Special meetings of any committee may be held
whenever called by any committee member. The committee member calling any
special meeting shall cause notice of such special meeting, including therein
the time and place of such special meeting, to be given to each committee member
at least two days before such special meeting. Neither the business to be
transacted at, nor the purpose of, any special meeting of any committee need be
specified in the notice or waiver of notice of any special meeting.
4.8. Quorum: Majority Vote. At meetings of any committee, a majority of the
number of members designated by the board of directors shall constitute a quorum
for the transaction of business. If a quorum is not present at a meeting of any
committee,a majority of the members present may adjourn the meeting from time to
time, without notice other than an announcement at the meeting, until a quorum
is present. The act of a majority of the members present at any meeting at which
a quorum is in attendance shall be the act of a committee, unless the act of a
greater number is required by law, the certificate of incorporation of the
Corporation, or these by-laws.
4.9. Minutes. Each committee shall cause minutes of its proceedings to be
prepared and shall report the same to the board of directors upon the request of
the board of directors. The minutes of the proceedings of each committee shall
be delivered to the Secretary of the Corporation for placement in the minute
books of the Corporation.
4.10. Compensation. Committee members may, by resolution of the board of
directors, be allowed a fixed sum and expenses of attendance,if any, for
attending any committee meetings or a stated salary.
4.11. Responsibility. The designation of any committee and the delegation
of authority to it shall not operate to relieve the board of directors or any
director of any responsibility imposed upon it or such director by law.
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ARTICLE FIVE: NOTICE
5.1. Method. Whenever by statute, the certificate of incorporation of the
Corporation, or these by-laws, notice is required to be given to any committee
member, director, or stockholder and no provision is made as to how such notice
shall be given, personal notice shall not be required and any such notice may be
given (a) in writing, by mail, postage prepaid, addressed to such committee
member, director, or stockholder at his address as it appears on the books or
(in the case of a stockholder) the stock transfer records of the Corporation, or
(b) by any other method permitted by law (including but not limited to overnight
courier service, telegram, telex, or telefax). Any notice required or permitted
to be given by mail shall be deemed to be delivered and given at the time when
the same is deposited in the United States mail as aforesaid. Any notice
required or permitted to be given by overnight courier service shall be deemed
to be delivered and given at the time delivered to such service with all charges
prepaid and addressed as aforesaid. Any notice required or permitted to be given
by telegram, telex, or telefax shall be deemed to be delivered and given at the
time transmitted with all charges prepaid and addressed as aforesaid.
5.2. Waiver. Whenever any notice is required to be given to any
stockholder, director, or committee member of the Corporation by statute, the
certificate of incorporation of the Corporation, or these by-laws, a waiver
thereof in writing signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be equivalent to the
giving of such notice. Attendance of a stockholder, director, or committee
member at a meeting shall constitute a waiver of notice of such meeting, except
where such person attends for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
ARTICLE SIX: OFFICERS
6.1. Number; Titles; Term of Office. The officers of the Corporation shall
be a President, a Secretary, and such other officers as the board of directors
may from time to time elect or appoint, including a Chairman of the Board, one
or more Vice
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Presidents (with each Vice President to have such descriptive title, if any, as
the board of directors shall determine), and a Treasurer. Each officer shall
hold office until his successor shall have been duly elected and shall have
qualified, until his death, or until he shall resign or shall have been removed
in the manner hereinafter provided. Any two or more offices may be held by the
same person. None of the officers need be a stockholder or a director of the
Corporation or a resident of the State of Michigan.
6.2. Removal. Any officer or agent elected or appointed by the board of
directors may be removed by the board of directors whenever in its judgment the
best interest of the Corporation will be served thereby, but such removal shall
be without prejudice to the contract rights, if any, of the person so removed.
Election or appointment of an officer or agent shall not of itself create
contract rights.
6.3. Vacancies. Any vacancy occurring in any office of the Corporation (by
death, resignation, removal, or otherwise) may be filled by the board of
directors.
6.4. Authority. Officers shall have such authority and perform such duties
in the management of the Corporation as are provided in these by-laws or as may
be determined by resolution of the board of directors not inconsistent with
these by-laws.
6.5 Compensation. The compensation, if any, of officers and agents shall be
fixed from time to time by the board of directors; provided, however, that the
board of directors may delegate the power to determine the compensation of any
officer and agent (other than the officer to whom such power is delegated) to
the Chairman of the Board or the President.
6.6. Chairman of the Board. The Chairman of the Board, if elected by the
board of directors, shall have such powers and duties as may be prescribed by
the board of directors. Such officer shall preside at all meetings of the
stockholders and of the board of directors. Such officer may sign all
certificates for shares of stock of the Corporation.
6.7. President. The President shall be the chief executive officer of the
Corporation and, subject to the board of
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directors, he shall have general executive charge, management, and control of
the properties and operations of the Corporation in the ordinary course of its
business, with all such powers with respect to such properties and operations as
may be reasonably incident to such responsibilities. If the board of directors
has not elected a Chairman of the Board or in the absence or inability to act of
the Chairman of the Board, the President shall exercise all of the powers and
discharge all of the duties of the Chairman of the Board. As between the
Corporation and third parties, any action taken by the President in the
performance of the duties of the Chairman of the Board shall be conclusive
evidence that there is no Chairman of the Board or that the Chairman of the
Board is absent or unable to act.
6.8. Vice Presidents. Each Vice President shall have such powers and duties
as may be assigned to him by the board of directors, the Chairman of the Board,
or the President, and (in order of their seniority as determined by the board of
directors or, in the absence of such determination, as determined by the length
of time they have held the office of Vice President) shall exercise the powers
of the President during that officer's absence or inability to act. As between
the Corporation and third parties, any action taken by a Vice President in the
performance of the duties of the President shall be conclusive evidence of the
absence or inability to act of the President at the time such action was taken.
6.9. Treasurer. The Treasurer shall have custody of the Corporation's funds
and securities, shall keep full and accurate account of receipts and
disbursements, shall deposit all monies and valuable effects in the name and to
the credit of the Corporation in such depository or depositories as may be
designated by the board of directors, and shall perform such other duties as may
be prescribed by the board of directors, the Chairman of the Board, or the
President.
6.10 Assistant Treasurers. Each Assistant Treasurer shall have such powers
and duties as may be assigned to him by the board of directors, the Chairman of
the Board, or the President. The Assistant Treasurers (in the order of their
seniority as determined by the board of directors or, in the absence of such a
determination, as determined by the length of time they have held the office of
Assistant Treasurer) shall
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exercise the powers of the Treasurer during that officer's absence or inability
to act.
6.11. Secretary. Except as otherwise provided in these by-laws, the
Secretary shall keep the minutes of all meetings of the board of directors and
of the stockholders in books provided for that purpose, and he shall attend to
the giving and service of all notices. He may sign with the Chairman of the
Board or the President, in the name of the Corporation, all contracts of the
Corporation and affix the seal of the Corporation thereto. He may sign with the
Chairman of the Board or the President all certificates for shares of stock of
the Corporation, and he shall have charge of the certificate books, transfer
books, and stock papers as the board of directors may direct, all of which shall
at all reasonable times be open to inspection by any director upon application
at the office of the Corporation during business hours. He shall in general
perform all duties incident to the office of the Secretary, subject to the
control of the board of directors, the Chairman of the Board, and the President.
6.12 Assistant Secretaries. Each Assistant Secretary shall have such powers
and duties as may be assigned to him by the board of directors, the Chairman of
the Board, or the President. The Assistant Secretaries (in the order of their
seniority as determined by the board of directors or, in the absence of such a
determination, as determined by the length of time they have held the office of
Assistant Secretary) shall exercise the powers of the Secretary during that
officer's absence or inability to act.
ARTICLE SEVEN: CERTIFICATES AND SHAREHOLDERS
7.1. Certificates for Shares. Certificates for shares of stock of the
Corporation shall be in such form as shall be approved by the board of
directors. The certificates shall be signed by the Chairman of the Board or the
President or a Vice President and also by the Secretary or an Assistant
Secretary or by the Treasurer or an Assistant Treasurer. Any and all signatures
on the certificate may be a facsimile and may be sealed with the seal of the
Corporation or a facsimile thereof. If any officer, transfer agent, or registrar
who has signed, or whose facsimile signature has been placed upon, a certificate
has ceased to be such officer, transfer agent, or registrar before
16
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such certificate is issued, such certificate may be issued by the Corporation
with the same effect as if he were such officer, transfer agent, or registrar at
the date of issue. The certificates shall be consecutively numbered and shall be
entered in the books of the Corporation as they are issued and shall exhibit the
holder's name and the number of shares.
7.2. Replacement of Lost or Destroyed Certificates. The board of directors
may direct a new certificate or certificates to be issued in place of a
certificate or certificates theretofore issued by the Corporation and alleged to
have been lost or destroyed, upon the making of an affidavit of that fact by the
person claiming the certificate or certificates representing shares to be lost
or destroyed. When authorizing such issue of a new certificate or certificates
the board of directors may, in its discretion and as a condition precedent to
the issuance thereof, require the owner of such lost or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require and/or to give the Corporation a bond with a surety or
sureties satisfactory to the Corporation in such sum as it may direct as
indemnity against any claim, or expense resulting from a claim, that may be made
against the Corporation with respect to the certificate or certificates alleged
to have been lost or destroyed.
7.3 Transfer of Shares. Shares of stock of the Corporation shall be
transferable only on the books of the Corporation by the holders thereof in
person or by their duly authorized attorneys or legal representatives. Upon
surrender to the Corporation or the transfer agent of the Corporation of a
certificate representing shares duly endorsed or accompanied by proper evidence
of succession, assignment, or authority to transfer, the Corporation or its
transfer agent shall issue a new certificate to the person entitled thereto,
cancel the old certificate, and record the transaction upon its books.
7.4. Registered Stockholders. The Corporation shall be entitled to treat
the holder of record of any share or shares of stock as the holder in fact
thereof and, accordingly, shall not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
17
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otherwise provided by law.
7.5. Regulations. The board of directors shall have the power and authority
to make all such rules and regulations as they may deem expedient concerning the
issue, transfer, and registration or the replacement of certificates for shares
of stock of the Corporation.
7.6. Legends. The board of directors shall have the power and authority to
provide that certificates representing shares of stock bear such legends as the
board of directors deems appropriate to assure that the Corporation does not
become liable for violations of federal or state securities laws or other
applicable law.
ARTICLE EIGHT: MISCELLANEOUS PROVISIONS
8.1. Dividends. Subject to provisions of law and the certificate of
incorporation of the Corporation, dividends may be declared by the board of
directors at any regular or special meeting and may be paid in cash, in
property, or in shares of stock of the Corporation. Such declaration and payment
shall be at the discretion of the board of directors.
8.2. Reserves. There may be created by the board of directors out of funds
of the Corporation legally available therefor such reserve or reserves as the
directors from time to time, in their discretion, consider proper to provide for
contingencies, to equalize dividends, or to repair or maintain any property of
the Corporation, or for such other purpose as the board of directors shall
consider beneficial to the Corporation, and the board of directors may modify or
abolish any such reserve in the manner in which it was created.
8.3. Books and Records. The Corporation shall keep correct and complete
books and records of account, shall keep minutes of the proceedings of its
stockholders and board of directors and shall keep at its registered office or
principal place of business, or at the office of its transfer agent or
registrar, a record of its stockholders, giving the names and addresses of all
stockholders and the number and class of the shares held by each.
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8.4. Fiscal Year. The fiscal year of the Corporation shall be fixed by the
board of directors; provided, that if such fiscal year is not fixed by the board
of directors and the selection of the fiscal year is not expressly deferred by
the board of directors, the fiscal year shall be the calendar year.
8.5. Seal. The seal of the Corporation shall be such as from time to time
may be approved by the board of directors.
8.6. Resignations. Any director, committee member, or officer may resign by
so stating at any meeting of the board of directors or by giving written notice
to the board of directors, the Chairman of the Board, the President, or the
Secretary. Such resignation shall take effect at the time specified therein or,
if no time is specified therein, immediately upon its receipt. Unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
8.7. Securities of Other Corporations. The Chairman of the Board, the
President, or any Vice President of the Corporation shall have the power and
authority to transfer, endorse for transfer, vote, consent, or take any other
action with respect to any securities of another issuer which may be held or
owned by the Corporation and to make, execute, and deliver any waiver, proxy, or
consent with respect to any such securities.
8.8 Telephone Meetings. Stockholders (acting for themselves or through a
proxy), members of the board of directors, and members of a committee of the
board of directors may participate in and hold a meeting of such stockholders,
board of directors, or committee by means of a conference telephone or similar
communications equipment by means of which persons participating in the meeting
can hear each other, and participation in a meeting pursuant to this section
shall constitute presence in person at such meeting, except where a person
participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
8.9. Action Without a Meeting. (a) Unless otherwise provided in the
certificate of incorporation of the Corporation, any action required by the
Michigan Business corporation Act to be taken at any annual or special meeting
of the stockholders, or
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any action which may be taken at any annual or special meeting of the
stockholders, may be taken without a meeting, without prior notice, and without
a vote, if a consent or consents in writing, setting forth the action so taken,
shall be signed by the holders (acting for themselves or through a proxy) of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which the holders of
all shares entitled to vote thereon were present and voted and shall be
delivered to the Corporation by delivery to its registered office in the State
of Michigan, its principal place of business, or an officer or agent of the
Corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Every written consent of stockholders shall bear the
date of signature of each stockholder who signs the consent and no written
consent shall be effective to take the corporate action referred to therein
unless, within sixty days of the earliest dated consent delivered in the manner
required by this Section 8.9(a) to the Corporation, written consents signed by a
sufficient number of holders to take action are delivered to the Corporation by
delivery to its registered office in the State of Michigan, its principal place
of business, or an officer or agent of the Corporation having custody of the
book in which proceedings of meetings of stockholders are recorded. Delivery
made to the Corporation's registered office, principal place of business, or
such officer or agent shall be by hand or by certified or registered mail,
return receipt requested.
(b) Unless otherwise restricted by the certificate of incorporation of the
Corporation or by these by-laws, any action required or permitted to be taken at
a meeting of the board of directors, or of any committee of the board of
directors, may be taken without a meeting if a consent or consents in writing,
setting forth the action so taken, shall be signed by all the directors or all
the committee members, as the case may be, entitled to vote with respect to the
subject matter thereof, and such consent shall have the same force and effect as
a vote of such directors or committee members, as the case may be, and may be
stated as such in any certificate or document filed with the Secretary of State
of the State of Michigan or in any certificate delivered to any person. Such
consent or consents shall be filed with the minutes of proceedings of the board
or committee, as the case may be.
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8.10 Invalid Provisions. If any part of these by-laws shall be held invalid
or inoperative for any reason, the remaining parts, so far as it is possible and
reasonable, shall remain valid and operative.
8.11 Mortgages, etc. With respect to any deed, deed of trust, mortgage, or
other instrument executed by the Corporation through its duly authorized officer
or officers, the attestation to such execution by the Secretary of the
Corporation shall not be necessary to constitute such deed, deed of trust,
mortgage, or other instrument a valid and binding obligation against the
Corporation unless the resolutions, if any, of the board of directors
authorizing such execution expressly state that such attestation is necessary.
8.12. Headings. The headings used in these by-laws have been inserted for
administrative convenience only and do not constitute matter to be construed in
interpretation.
8.13. References. Whenever herein the singular number is used, the same
shall include the plural where appropriate,and words of any gender should
include each other gender where appropriate.
8.14. Amendments. These by-laws may be altered, amended, or repealed or new
by-laws may be adopted by the stockholders or by the board of directors at any
regular meeting of the stockholders or the board of directors or at any special
meeting of the stockholders or the board of directors if notice of such
alteration, amendment, repeal, or adoption of new by-laws be contained in the
notice of such special meeting.
The undersigned, the Secretary of the Corporation, hereby certifies that
the foregoing by-laws were adopted by unanimous consent by the directors of the
Corporation as of September 14, 1990.
Jeffrey A. Bixler, Secretary
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Exhibit 3.118
ARTICLES OF INCORPORATION
OF
WESTCOTT ECI, INC.
ARTICLE I
The name of the corporation is Westcott ECI, Inc.
ARTICLE II
The period of its duration is perpetual.
ARTICLE III
The corporation is organized for the purpose of engaging in any lawful act,
activity and/or business for which corporations may be organized under the Texas
Business Corporation Act.
ARTICLE IV
The aggregate number of shares which the corporation shall have the
authority to issue is 1,000 shares of Common Stock, par value $.01 per share.
ARTICLE V
No holder of any shares of any class of the corporation's authorized
shares, or any other class of stock of the corporation hereafter authorized,
shall, as such holder, have any preemptive or preferential right to receive,
purchase, or subscribe to (a) any unissued or treasury shares of any class of
stock of the corporation (whether now or hereafter authorized), (b) any
obligations, evidences of indebtedness, or other securities of the corporation
convertible into or exchangeable for, or carrying or accompanied by any rights
to receive, purchase, or subscribe to, any such unissued or treasury shares, (c)
any right of subscription to or to receive, or any warrant or option for the
purchase of, any of the foregoing securities, or (d) any other securities that
may be issued or sold by the corporation.
ARTICLE VI
The corporation will not commence business until it has received for the
issuance of its shares consideration of the value
<PAGE>
of $1,000.00, consisting of money, labor done or property actually received.
ARTICLE VII
The address of the registered office of the corporation is 1303 Marsh Lane,
Carrollton, Texas 75006, and the name of its initial registered agent at such
address is Jack T. Smith.
ARTICLE VIII
The name and address of the incorporator are as follows:
NAME ADDRESS
Klara A. Zehentmayr 4500 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201
ARTICLE IX
The number of directors constituting the Board of Directors of this
corporation on the date hereof is two (2), and the names and addresses of the
persons who are to serve as directors until the next annual meeting of the
shareholders, or until their successors are elected and qualified, are as
follows:
NAME ADDRESS
Jack T. Smith 1303 Marsh Lane
Carrollton, Texas 75006
Phyllis Farragut 1303 Marsh Lane
Carrollton, Texas 75006
ARTICLE X
The corporation shall indemnify persons for whom indemnification is
permitted by Article 2.02-1 of the Texas
-2-
<PAGE>
Business Corporation Act, and such indemnification shall be made to the fullest
extent permitted thereby.
ARTICLE XI
To the fullest extent permitted by law, directors and former directors of
the corporation shall not be liable to the corporation or its shareholders for
monetary damages for an act or omission in the director's capacity as a
director. No amendment of this Article XI shall adversely affect any right or
protection of a director that exists at the time of such amendment, modification
or repeal.
ARTICLE XII
The right to accumulate votes in the election of directors and/or
cumulative voting by any shareholder is hereby expressly denied.
ARTICLE XIII
Any action required by the Texas Business Corporation Act, or other
applicable laws, or any action which may be taken without a meeting, may be
taken without a meeting, without prior notice, and without a vote, if a consent
or consents in writing, setting forth the action so taken, shall be signed by
the holder or holders of shares having not less than the minimum number of votes
that would be necessary to take such action at a meeting at which the holders of
all shares entitled to vote on the action were present and voted.
The undersigned, the incorporator of this corporation, has signed these
Articles of Incorporation on this 26th day of January, 1993.
________________________________
Klara A. Zehentmayr
-3-
<PAGE>
Exhibit 3.119
BYLAWS
OF
WESTCOTT ECI, INC.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1: OFFICES.......................................................... 1
1.01 Registered Office and Agent...................................... 1
1.02 Other Offices.................................................... 1
ARTICLE 2: SHAREHOLDERS..................................................... 1
2.01 Place of Meetings................................................ 1
2.02 Annual Meetings.................................................. 1
2.03 Voting List...................................................... 1
2.04 Special Meetings................................................. 1
2.05 Notice of Meetings............................................... 2
2.06 Quorum........................................................... 2
2.07 Vote Required.................................................... 2
2.08 Method of Voting................................................. 2
2.09 Record Date; Closing Transfer Books.............................. 3
2.10 Order of Business at Meetings.................................... 3
ARTICLE 3: DIRECTORS........................................................ 3
3.01 Management....................................................... 3
3.02 Number; Qualification; Election; Term............................ 3
3.03 Change in Number................................................. 4
3.04 Removal.......................................................... 4
3.05 Vacancies........................................................ 4
3.06 Election of Directors............................................ 4
3.07 Place of Meetings................................................ 4
3.08 First Meetings................................................... 5
3.09 Regular Meetings................................................. 5
3.10 Special Meetings................................................. 5
3.11 Quorum; Majority Vote............................................ 5
3.12 Compensation..................................................... 5
3.13 Procedure........................................................ 5
3.14 Interested Directors and Officers................................ 5
3.15 Presumption of Assent............................................ 6
ARTICLE 4: COMMITTEES....................................................... 6
4.01 Designation...................................................... 6
4.02 Number; Qualification; Term...................................... 7
4.03 Authority........................................................ 7
4.04 Change in Number................................................. 8
4.05 Removal.......................................................... 8
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Page
4.06 Vacancies........................................................ 8
4.07 Meetings......................................................... 8
4.08 Quorum; Majority Vote............................................ 8
4.09 Compensation..................................................... 8
4.10 Procedure........................................................ 8
4.11 Responsibility................................................... 8
ARTICLE 5: PROVISIONS RELATING TO MEETINGS.................................. 8
5.01 Notice of Meetings............................................... 9
5.02 Waiver of Notice................................................. 9
5.03 Telephone and Similar Meetings................................... 9
5.04 Action Without Meeting........................................... 9
ARTICLE 6: OFFICERS AND AGENTS.............................................. 10
6.01 Number; Qualification; Election; Term............................ 10
6.02 Removal.......................................................... 10
6.03 Vacancies........................................................ 10
6.04 Authority........................................................ 10
6.05 Compensation..................................................... 10
6.07 President........................................................ 11
6.08 Vice Presidents.................................................. 11
6.09 Secretary........................................................ 11
6.10 Assistant Secretaries............................................ 12
6.11 Treasurer........................................................ 12
6.12 Assistant Treasurers............................................. 12
ARTICLE 7: CERTIFICATES AND SHAREHOLDERS.................................... 12
7.01 Certificated and Uncertificated Shares........................... 12
7.02 Certificates for Certificated Shares............................. 13
7.03 Issuance......................................................... 13
7.04 Payment for Shares............................................... 13
7.05 Subscriptions.................................................... 13
7.06 Lost, Stolen or Destroyed Certificates........................... 14
7.07 Transfer of Shares............................................... 14
7.08 Registered Owner................................................. 14
ARTICLE 8: INDEMNIFICATION.................................................. 14
8.01 Indemnification.................................................. 14
ARTICLE 9: GENERAL PROVISIONS............................................... 14
9.01 Distributions and Share Dividends................................ 14
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Page
9.02 Books and Records................................................ 15
9.03 Checks and Notes................................................. 15
9.04 Fiscal Year...................................................... 15
9.05 Seal............................................................. 15
9.06 Resignation...................................................... 15
9.07 Amendment of Bylaws.............................................. 15
9.08 Construction..................................................... 16
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BYLAWS
OF
WESTCOTT ECI, INC.
ARTICLE 1: OFFICES
1.01 Registered Office and Agent. The registered office and registered
agent of the corporation shall be as designated from time to time by the
appropriate filing by the corporation in the office of the Secretary of State of
the State of Texas.
1.02 Other Offices. The corporation may also have offices at other
places in or out of the State of Texas as the board of directors may determine
or as the business of the corporation may require.
ARTICLE 2: SHAREHOLDERS
2.01 Place of Meetings. Meetings of shareholders shall be held at the
time and place, in or out of the State of Texas, as stated in any notice of a
meeting or in a waiver of such notice.
2.02 Annual Meetings. Annual meetings of the shareholders shall be held
at a time, day and month to be selected by the corporation's board of
directors. At an annual meeting, the shareholders shall elect directors and
transact such other business as may properly be brought before the meeting.
2.03 Voting List. At least ten (10) days before each meeting of
shareholders, a complete list of shareholders entitled to vote at the meeting,
arranged in alphabetical order, with the address of each and the number of
voting shares held by each, shall be prepared by the officer or agent having
charge of the stock transfer books. The list, for a period of ten (10) days
prior to the meeting, shall be kept on file at the registered office or
principal place of business of the corporation and shall be subject to
inspection by any shareholder at any time during usual business hours. The list
shall also be produced and kept open at the time and place of the meeting, and
shall be subject to the inspection of any shareholder during the whole time of
the meeting.
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2.04 Special Meetings. Special meetings of the shareholders, unless
otherwise prescribed by statute, the articles of incorporation, or these bylaws,
may be called by the president, the board of directors, or the holders of not
less than the percentage of all the shares entitled to vote at the meeting as
required by law to call such a meeting. Business transacted at a special
meeting shall be confined to the purpose or purposes stated in the notice of
such meeting.
2.05 Notice of Meetings. Written or printed notice stating the place,
day and hour of a meeting and, in case of a special meeting, the purpose or
purposes for which such meeting is called, shall be delivered not less than ten
(10) nor more than sixty (60) days before the date of the meeting, either
personally or by mail, by or at the direction of the president, the secretary,
or the officer or person calling the meeting, to each shareholder entitled to
vote at the meeting. If mailed, such notice shall be deemed to be delivered
when deposited in the United States mail addressed to the shareholder at his
address as it appears on the stock transfer records of the corporation, with
postage thereon prepaid.
2.06 Quorum. Unless otherwise provided for in the articles of
incorporation, the holders of a majority of the shares issued and outstanding
and entitled to vote at a meeting of the shareholders, present in person or
represented by proxy, shall be the requisite number of such shareholders and
shall constitute a quorum for the transaction of business. Unless otherwise
provided in the articles of incorporation or these bylaws, once a quorum is
present at a meeting of shareholders, the shareholders represented in person or
by proxy at the meeting may conduct such business as may be properly brought
before the meeting until it is adjourned, and the subsequent withdrawal from the
meeting of any shareholder or the refusal of any shareholder represented in
person or by proxy to vote shall not affect the presence of a quorum at the
meeting. Unless otherwise provided in the articles of incorporation or these
bylaws, the shareholders represented in person or by proxy at a meeting of
shareholders at which a quorum is not present may adjourn such meeting until
such time and to such place as may be determined by a vote of the holders of a
majority of the shares represented in person or by proxy at such meeting.
2.07 Vote Required. With respect to any matter, other than the election
of directors or a matter for which the affirmative vote of the holders of a
specified portion of the shares entitled
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to vote is required by statute, the affirmative vote of the holders of a
majority of the shares entitled to vote on any such matter and represented in
person or by proxy at a meeting of shareholders at which a quorum is present
shall be the act of the shareholders.
2.08 Method of Voting. Except as otherwise provided in the articles of
incorporation, each outstanding share, regardless of class, shall be entitled to
one vote on each matter submitted to a vote at a meeting of shareholders. At
any meeting of the shareholders, any shareholder having the right to vote may
vote either in person or by proxy executed in writing by the shareholder. A
telegram, telex cablegram, or similar transmission by the shareholder, or a
photographic, photostatic, facsimile, or similar reproduction of a writing
executed by the shareholder, shall be treated as an execution in writing. No
proxy shall be valid after eleven (11) months from the date of its execution,
unless otherwise provided in such proxy. Each proxy shall be revocable unless
the proxy form conspicuously states that the proxy is irrevocable and the proxy
is coupled with an interest as provided by applicable law. Each proxy shall be
filed with the secretary of the corporation prior to or at the time of the
meeting. Voting for directors shall be in accordance with Section 3.06 of these
bylaws. Any vote may be taken by voice or by show of hands unless someone
entitled to vote objects, in which case written ballots shall be used.
2.09 Record Date; Closing Transfer Books. The board of directors may fix
in advance a record date for the purpose of determining shareholders entitled to
notice of, or to vote at, a meeting of the shareholders or any reconvening
thereof, or entitled to receive a distribution by the corporation or a share
dividend, or in order to make a determination of shareholders for any other
proper purpose, the record date to be not less than ten (10) nor more than sixty
(60) days prior to the meeting; or the board of directors may close the stock
transfer records for such purpose for a period of not less than ten (10) nor
more than sixty (60) days prior to such meeting. In the absence of any action
by the board of directors, the date upon which the notice of the meeting is
mailed, or the date on which the resolution of the board of directors declaring
such distribution or share dividend is declared, shall be the record date.
2.10 Order of Business at Meetings. The order of business at all
meetings of shareholders shall be as determined by the chairman
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of the meeting, but the order of business to be followed at any meeting, other
than a special meeting, at which a quorum is present may be changed by a
majority of the votes cast at such meeting by the shareholders present in person
or represented by proxy and entitled to vote at the meeting. With respect to
special meetings, only business within the purpose or purposes described in the
notice of the special meeting may be conducted at a special meeting of the
shareholders.
ARTICLE 3: DIRECTORS
3.01 Management. The business and affairs of the corporation shall be
managed under the direction of the board of directors[who may exercise all such
powers of the corporation and do all such lawful acts and things as are not (by
statute or by the articles of incorporation or by these bylaws) directed or
required to be exercised or done by the shareholders.
3.02 Number; Qualification; Election; Term. The board of directors shall
consist of not less than one (1) nor more than [ ] directors, and
within that maximum and minimum shall be such number as shall be from time to
time specified by resolution of the board of directors; provided, however, no
director's term shall be shortened by reason of a resolution reducing the number
of directors; and further provided that the number of directors constituting the
initial board of directors shall be as provided in the articles of incorporation
and shall remain at such number unless and until changed by resolution of the
board of directors. The directors shall be elected at the annual meeting of the
shareholders, except as provided in Sections 3.03 and 3.05 hereof. Each
director elected shall hold office until his successor shall be elected and
shall qualify.
3.03 Change in Number. The number of directors may be increased or
decreased from time to time by amendment to these bylaws but no decrease shall
have the effect of shortening the term of any incumbent director. Any
directorship to be filled by reason of an increase in the number of directors
may be filled by the board of directors for a term of office continuing only
until the election of one or more directors by the shareholders or may be filled
by election at an annual meeting or at a special meeting of shareholders called
for that purpose; provided, however, the board of directors may fill no more
than two such directorships during
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the period between any two annual meetings of shareholders. Notwithstanding the
provisions of this Section 3.03 to the contrary, whenever the holders of any
class or series of shares are entitled to elect one or more directors by the
provisions of the articles of incorporation, any vacancies in such directorships
and any newly created directorships of such class or series to be filled by
reason of an increase in the number of such directors may be filled by the
affirmative vote of a majority of the directors elected by such class or series
then in office or by a sole remaining director so elected, or by the vote of
the holders of the outstanding shares of such class or series, and such
directorships shall not in any case be filled by the vote of the remaining
directors or the holders of the outstanding shares as a whole unless otherwise
provided in the articles of incorporation.
3.04 Removal. Any director may be removed either for or without cause at
any special or annual meeting of shareholders, by the affirmative vote of a
majority in number of shares of the shareholders present, in person or by
proxy, at such meeting and entitled to vote for the election of such director
if notice of intention to act upon such matter shall have been given in the
notice calling such meeting.
3.05 Vacancies. Subject to the provisions of Section 3.03 and 3.04, any
vacancy occurring in the board of directors (by death, resignation, removal or
otherwise) may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the board of directors. A director
elected to fill a vacancy shall be elected for the unexpired term of his
predecessor in office.
3.06 Election of Directors. Unless otherwise provided in the articles of
incorporation, directors shall be elected by a plurality of the votes cast by
the holders of shares entitled to vote in the election of directors at a meeting
of shareholders at which a quorum is present.
3.07 Place of Meetings. Meetings of the board of directors, regular or
special, may be held in or out of the State of Texas.
3.08 First Meetings. The first meeting of a newly elected board of
directors shall be held without further notice immediately following the annual
meeting of shareholders, and at the same
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place, unless by unanimous consent of the directors then elected and serving,
the time or place is changed.
3.09 Regular Meetings. Regular meetings of the board of directors may be
held without notice at such time and place as shall from time to time be
determined by the board.
3.10 Special Meetings. Special meetings of the board of directors may be
called by the chairman of the board or president on five (5) days' notice to
each director, either personally, by mail, telegram or telefax. Special
meetings shall be called by the president or secretary in like manner and on
like notice upon the written request of two directors. Except as otherwise
expressly provided by statute, the articles of incorporation, or these bylaws,
neither the business to be transacted at, nor the purpose of, any special
meeting need be specified in a notice or waiver of notice.
3.11 Quorum; Majority Vote. At meetings of the board of directors a
majority of the number of directors fixed by these bylaws (less any unfilled
vacancies) shall constitute a quorum for the transaction of business. The act
of a majority of the directors present at a meeting at which a quorum is present
shall be the act of the board of directors, except as otherwise specifically
provided by statute, the articles of incorporation, or these bylaws. If a
quorum is not present at a meeting of the board of directors, the directors
present may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum is present.
3.12 Compensation. By resolution of the board of directors, the
directors may be paid their expenses, if any, of attendance at each meeting of
the board of directors and may be paid a fixed sum for attendance at each
meeting of the board of directors or a stated salary as director. No such
payment shall preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
3.13 Procedure. At meetings of the board of directors, business shall be
transacted in such order as the board of directors may determine. The board of
directors shall keep regular minutes of its proceedings. The minutes shall be
placed in the minute book of the corporation.
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3.14 Interested Directors and Officers.
(a) Validity. If Subsection (b) of this Section is satisfied,
no contract or other transaction between the corporation and any of its
directors or officers or any corporation, partnership, association, or
other organization in which any of them have a financial interest or is
otherwise directly or indirectly interested, shall be void or voidable
solely because of this relationship or because of the presence of the
director or officer at the meeting authorizing the contract or transaction,
or his participation or vote in the meeting or authorization.
(b) Disclosure, Approval; Fairness. Subsection (a) shall apply
only if:
(i) the material facts of the relationship or interest of each
such director or officer are known or disclosed:
(A) to the board of directors or applicable committee
thereof and it nevertheless in good faith authorizes the contract
or transaction by a majority of the disinterested directors
present, even though such disinterested directors be less than a
quorum; or
(B) to the shareholders at a meeting of the shareholders
and they nevertheless in good faith approve the contract or
transaction by a majority of the shares present; or
(ii) the contract or transaction is fair to the corporation as of
the time it is authorized or ratified by the board of directors, the
applicable committee thereof or the shareholders.
(c) Non-Exclusive. This provision shall not be construed to
invalidate a contract or transaction which would be valid in the absence of
this provision.
3.15 Presumption of Assent. A director of the corporation who is present
at any meeting of the board of directors or applicable committee thereof at
which action on any matter is taken shall be
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presumed to have assented to the action unless his dissent shall be entered in
the minutes of the meeting or unless he shall file his written dissent to such
action with the person acting as secretary of the meeting before the adjournment
thereof or shall forward any dissent by certified or registered mail to the
secretary of the corporation immediately after the adjournment of the meeting.
Such right to dissent shall not apply to a director who voted in favor of such
action.
ARTICLE 4: COMMITTEES
4.01 Designation. The board of directors may, by resolution adopted by a
majority of the whole board, designate one or more committees.
4.02 Number; Qualification; Term. Each committee shall consist of one or
more directors and may have one or more alternative members who may, subject to
any limitations imposed by the board of directors, replace absent or
disqualified members at any meeting of that committee. Each committee member
shall serve as such until the earliest of (a) the expiration of his term as
director, (b) his resignation as a committee member or director, or (c) his
removal as a committee member or director.
4.03 Authority. Each committee, to the extent provided in the resolution
establishing such committee, shall have and may exercise any or all of the
authority of the board of directors in the management of the business and
affairs of the corporation. However, no committee shall have the authority of
the board in reference to:
(a) amending the articles of incorporation, except that a
committee may, to the extent provided in the resolution designating the
committees or in the articles of incorporation or the bylaws, exercise the
authority vested in it in accordance with Article 2.13 of the Texas
Business Corporations Act;
(b) approving a plan of merger or share exchange;
(c) recommending to the shareholders the sale, lease or exchange
of all or substantially all of the property and
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assets of the corporation otherwise than in the usual and regular course of
its business;
(d) recommending to the shareholders a voluntary dissolution of
the corporation or a revocation thereof;
(e) amending, altering, or repealing these bylaws or adopting
new bylaws;
(f) filling vacancies in or removing members of the board of
directors or of any committee appointed by the board of directors;
(g) filling any directorship to be filled by reason of an
increase in the number of directors;
(h) electing or removing officers or members of any committee;
(i) fixing the compensation of any committee member;
(j) altering or repealing any resolution of the board of
directors which by its terms provides that it shall not be so amendable or
repealable;
(k) declaring a distribution;
(l) issuing shares of the corporation; or
(m) proposing a reduction of the stated capital of the
corporation.
4.04 Change in Number. The number of members of any committee may be
increased or decreased from time to time by resolution adopted by a majority of
the whole board of directors.
4.05 Removal. Any member of a committee may be removed by the
affirmative vote of a majority of the whole board of directors, whenever in its
judgment the best interests of the corporation will be served thereby.
4.06 Vacancies. A vacancy occurring in a committee (by death,
resignation, removal or otherwise) may be filled by the board of
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directors in the manner provided for original designations in Section 4.01
hereof.
4.07 Meetings. The time, place and notice (if any) of committee meetings
shall be determined by the committee.
4.08 Quorum; Majority Vote. At meetings of any committee, a majority of
the number of members designated by the board of directors shall constitute a
quorum for the transaction of business. The act of a majority of the members
present at any meeting at which a quorum is present shall be the act of the
committee, except as otherwise specifically provided by statute, the articles
of incorporation or these bylaws. If a quorum is not present at a meeting of
any committee, the members present may adjourn the meeting from time to time,
without notice other than an announcement at the meeting, until a quorum is
present.
4.09 Compensation. By resolution of the board of directors, the members
of any committee may be paid their expenses, if any, of attendance at each
meeting of the committee and may be paid a fixed sum for attendance at each
meeting of the committee or a stated salary as a committee member. No such
payment shall preclude any committee member from serving the corporation in any
other capacity and receiving compensation therefor.
4.10 Procedure. Each committee shall keep regular minutes of its
proceedings and report the same to the board of directors when required. The
minutes of the proceedings of each committee shall be placed in the minute book
of the corporation.
4.11 Responsibility. The designation of any committee and the delegation
of authority to it shall not operate to relieve the board of directors, or any
member thereof, of any responsibility imposed upon it or him by law.
ARTICLE 5: PROVISIONS RELATING TO MEETINGS
5.01 Notice of Meetings. Whenever by statute, the articles of
incorporation, these bylaws or otherwise, notice is required to be given to a
director, committee member or shareholder, and no provision is made as to how
the notice shall be given, it shall not be construed to mean personal notice,
but any such notice may be given: (a) in writing, by mail, postage prepaid,
addressed to the
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director, committee member or shareholder at the address appearing on the books
of the corporation; or (b) in any other method permitted by law. Any notice
required or permitted to be given by mail shall be deemed given at the time when
the same is thus deposited in the United States mails.
5.02 Waiver of Notice. Whenever by statute, the articles of
incorporation, these bylaws or otherwise, notice is required to be given to a
director, committee member or shareholder, a waiver thereof in writing signed by
the person or persons entitled to such notice, whether before or after the time
stated in such notice, shall be equivalent to the giving of such notice.
Attendance at a meeting shall constitute a waiver of notice of such meeting,
except where a person attends for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
5.03 Telephone and Similar Meetings. Shareholders, directors or
committee members may participate in and hold a meeting by means of a conference
telephone or similar communications equipment by means of which persons
participating in the meeting can hear each other. Participation in such a
meeting shall constitute presence in person at such meeting, except where a
person participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
5.04 Action Without Meeting. Any action which may be taken, or is
required by law, the articles of incorporation or these bylaws to be taken, at a
meeting of shareholders, directors or any committee members may be taken without
notice and without a meeting if a consent in writing, setting forth the action
so taken, shall be signed by (a) in the case of shareholders, either (i) all of
the shareholders entitled to vote with respect to such action, or (ii) if the
articles of incorporation so provide, by the holder or holders of shares having
not less than the minimum number of votes that would be necessary to take such
action at a meeting at which the holders of all shares entitled to vote on the
action were present and voted, and (b) in the case of directors or committee
members, all of such members of the board of directors or committee, as the case
may be, entitled to vote with respect to the subject matter thereof. Such
consent shall have the same force and effect, as of the date stated therein, as
a unanimous vote of such shareholders, directors or committee members, as the
case may be,
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and may be stated as such in any document filed with the Secretary of State of
Texas or in any certificate or other document delivered to any person. The
consent may be in one or more counterparts so long as each shareholder, director
or committee member signs one of the counterparts. The signed consent shall be
placed in the minute book of the corporation.
ARTICLE 6: OFFICERS AND AGENTS
6.01 Number; Qualification; Election; Term.
(a) The corporation shall have: (i) a president and a
secretary; and (ii) such other officers (including a chairman of the board,
one or more vice presidents and a treasurer) and such assistant officers
and agents as the board of directors may, from time to time, deem
necessary.
(b) Officers named in Subsection 6.01(a)(i) shall be elected by
the board of directors on the expiration of an officer's term or whenever a
vacancy exists. Officers and agents named in Subsection 6.01(a)(ii) may
be elected by the board at any meeting.
(c) Any two or more offices may be held by the same person.
6.02 Removal. Any officer or agent may be removed by the board of
directors whenever in its judgment the best interest of the corporation will be
served thereby. Such removal shall be without prejudice to the contract rights,
if any, of the person so removed. Election or appointment of an officer or
agent shall not of itself create contract rights.
6.03 Vacancies. Any vacancy occurring in any office of the corporation
(by death, resignation, removal or otherwise) may be filled by the board of
directors.
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6.04 Authority. Officers and agents shall have such authority and
perform such duties in the management of the corporation as are provided in
these bylaws or as may be determined, from time to time, by resolution of the
board of directors not inconsistent with these bylaws.
6.05 Compensation. The compensation of officers and agents shall be
fixed from time to time by the board of directors; provided, that the board of
directors may delegate to any one or more officers the authority to fix such
compensation.
6.06 Chairman of the Board. The chairman of the board of directors, if
there shall be such an officer, shall, if present, preside at all meetings of
the board of directors and exercise and perform such other powers and duties as
may be from time to time assigned to him by the board of directors or prescribed
by the bylaws.
6.07 President. Unless and to the extent that such powers and duties are
expressly delegated to a chairman of the board by the board of directors, the
president shall be the chief executive officer of the corporation and, subject
to the supervision of the board of directors, shall have general management and
control of the business and affairs of the corporation in the ordinary course of
its business with all such powers with respect to such general management and
control as may be reasonably incident to such responsibilities, including, but
not limited to, the power to employ, discharge, or suspend employees and agents
of the corporation, to fix the compensation of employees and agents, and to
suspend, with or without cause, any officer of the corporation pending final
action by the board of directors with respect to continued suspension, removal,
or reinstatement of such officer. Except as otherwise expressly delegated to
the chairman of the board, the president shall preside at all meetings of the
shareholders and board of directors.
6.08 Vice Presidents. The vice presidents in the order of their
seniority, unless otherwise determined by the board of directors, shall, in the
absence or disability of the president, perform the duties and have the
authority and exercise the powers of the president. They shall perform such
other duties and have such other authority and powers as the board of directors
may from time to time prescribe or as the president may from time to time
delegate.
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6.09 Secretary.
(a) The secretary shall attend all meetings of the board of
directors and all meetings of the shareholders and record all votes,
actions and the minutes of all proceedings in a book to be kept for that
purpose and shall perform like duties for the executive and other
committees when required.
(b) He shall give, or cause to be given, notice of all meetings
of the shareholders and special meetings of the board of directors.
(c) He shall keep in safe custody the seal of the corporation
and, when authorized by the board of directors or the executive committee,
affix the same to any instrument requiring it. When so affixed, it shall
be attested by his signature or by the signature of the treasurer or an
assistant secretary.
(d) He shall be under the supervision of the president. He
shall perform such other duties and have such other authority and powers as
the board of directors may from time to time prescribe or as the president
may from time to time delegate.
6.10 Assistant Secretaries. The assistant secretaries in the order of
their seniority, unless otherwise determined by the board of directors, shall,
in the absence or disability of the secretary, perform the duties and have the
authority and exercise the powers of the secretary. They shall perform such
other duties and have such other powers as the board of directors may from time
to time prescribe or as the president may from time to time delegate.
6.11 Treasurer.
(a) The treasurer shall have the custody of the corporate funds
and securities, shall keep full and accurate accounts of receipts and
disbursements of the corporation, and shall deposit all funds and other
valuables in the name and to the credit of the corporation in depositories
designated by the board of directors.
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(b) He shall disburse the funds of the corporation as ordered by
the board of directors, and prepare financial statements as they direct.
(c) If required by the board of directors, he shall give the
corporation a bond (in such form, in such sum, and with such surety or
sureties as shall be satisfactory to the board) for the faithful
performance of the duties of his office and for the restoration to the
corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
corporation.
(d) He shall perform such other duties and have such other
authority and powers as the board of directors may from time to time
prescribe or as the president may from time to time delegate.
6.12 Assistant Treasurers. The assistant treasurers in the order of
their seniority, unless otherwise determined by the board of directors, shall,
in the absence or disability of the treasurer, perform the duties and have the
authority and exercise the powers of the treasurer. They shall perform such
other duties and have such other powers as the board of directors may from time
to time prescribe or the president may from time to time delegate.
ARTICLE 7: CERTIFICATES AND SHAREHOLDERS
7.01 Certificated and Uncertificated Shares. The shares of the
corporation may be either certificated shares or uncertificated shares. As used
herein, the term "certificated shares" means shares represented by instruments
in bearer or registered form, and the term "uncertificated shares" means shares
not represented by instruments and the transfers of which are registered upon
books maintained for that purpose by or on behalf of the corporation.
7.02 Certificates for Certificated Shares. The certificates representing
certificated shares of stock of the corporation shall be in such form as shall
be approved by the board of directors in conformity with law. The certificates
shall be consecutively numbered, shall be entered as they are issued in the
books of the corporation or in the records of the corporation's designated
15
<PAGE>
transfer agent, if any, and shall state upon the face thereof: (a) that the
corporation is organized under the laws of the State of Texas; (b) the name of
the person to whom issued; (c) the number and class of shares and the
designation of the series, if any, which such certificate represents; (d) the
par value of each share represented by such certificate, or a statement that the
shares are without par value; and (e) such other matters as may be required by
law. The certificates shall be signed by the chairman of the board, president
or any vice president, and by the secretary, an assistant secretary or any other
officer and may be sealed with the seal of the corporation or a facsimile
thereof. If any certificate is countersigned by a transfer agent or registered
by a registrar, either of which is other than the corporation itself or an
employee of the corporation, the signatures of the foregoing officers may be a
facsimile.
7.03 Issuance. Shares (both treasury and authorized but unissued) may be
issued for such consideration (not less than par value) and to such persons as
the board of directors may determine from time to time. Shares may not be
issued until the full amount of the consideration, fixed as provided by law, has
been paid. After the issuance of uncertificated shares, the corporation or the
transfer agent of the corporation shall send to the registered owner of such
uncertificated shares a written notice containing the information required to be
stated on certificates representing shares of stock as set forth in Section 7.02
above and such additional information as may be required by Section 8.408 of the
Texas Uniform Commercial Code as currently in effect and as the same may be
amended from time to time hereafter.
7.04 Payment for Shares.
(a) Kind. The consideration for the issuance of shares shall
consist of money paid, labor done (including services actually performed
for the corporation) or property (tangible or intangible) actually
received. Neither promissory notes nor the promise of future services
shall constitute payment or part payment for the issuance of shares.
(b) Valuation. In the absence of fraud in the transaction, the
judgment of the board of directors as to the value of consideration
received shall be conclusive.
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7.05 Subscriptions. Unless otherwise provided in the subscription
agreement, subscriptions for shares, whether made before or after organization
of the corporation, shall be paid in full at such time or in such installments
and at such times as shall be determined by the board of directors. Any call
made by the board of directors for payment on subscriptions shall be uniform as
to all shares of the same class or as to all shares of the same series, as the
case may be. In case of default in the payment on any installment or call when
payment is due, the corporation may proceed to collect the amount due in the
same manner as any debt due to the corporation.
7.06 Lost, Stolen or Destroyed Certificates. The corporation shall issue
a new certificate in place of any certificate for shares previously issued if
the registered owner of the certificate:
(a) Claim. Makes proof in affidavit form that it has been lost,
destroyed or wrongfully taken; and
(b) Timely Request. Requests the issuance of a new certificate
before the corporation has notice that the certificate has been acquired by
a purchaser for value in good faith and without notice of an adverse claim;
and
(c) Bond. Gives a bond in such form, and with such surety or
sureties, with fixed or open penalty, as the corporation may direct, to
indemnify the corporation (and its transfer agent and registrar, if any)
against any claim that may be made on account of the alleged loss,
destruction or theft of the certificate; and
(d) Other Requirements. Satisfies any other reasonable
requirements imposed by the corporation.
7.07 Transfer of Shares. Shares of stock and other securities of the
corporation shall be transferable in accordance with the provisions of Chapter 8
- - Investment Securities - of the Texas Business and Commerce Code.
7.08 Registered Owner. The corporation may regard the person in whose
name any shares issued by the corporation are registered in the corporation's
share transfer records at any particular time as the owner of these shares at
that time for purposes of voting
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those shares, receiving distributions thereon or notices in respect thereof,
transferring those shares, exercising rights of dissent with respect to those
shares or for any other matters related to the shares.
ARTICLE 8: INDEMNIFICATION
8.01 Indemnification. The corporation shall indemnify any officer or
director to the fullest extent permitted by law.
ARTICLE 9: GENERAL PROVISIONS
9.01 Distributions and Share Dividends.
(a) Declaration and Payment. Subject to statute and the
articles of incorporation, distributions and share dividends may be
declared by the board of directors at any regular or special meeting, and
paid by the corporation.
(b) Record Date. The board of directors may fix in advance a
record date for the purpose of determining shareholders entitled to receive
payment of any dividend, the record date to be not more than sixty (60)
days prior to the payment date of such dividend, or the board of directors
may close the stock transfer books for such purpose for a period of not
more than sixty (60) days prior to the payment date of such dividend. In
the absence of any action by the board of directors, the date upon which
the board of directors adopts the resolution declaring the dividend shall
be the record date.
9.02 Books and Records. The corporation shall keep correct and complete
books and records of account, shall keep minutes of the proceedings of its
shareholders and board of directors, and shall keep at its registered office or
principal place of business, or at the office of its transfer agent or
registrar, a record of its shareholders, giving the names and addresses of all
shareholders and the number and class of the shares held by each.
9.03 Checks and Notes. Checks, demands for money, and notes of the
corporation shall be signed by officer(s) or other person(s) designated from
time to time by the board of directors.
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9.04 Fiscal Year. The fiscal year of the corporation shall be fixed by
resolution of the board of directors.
9.05 Seal. The board of directors shall determine the type of seal which
may be necessary or appropriate for use by the corporation.
9.06 Resignation. A director, committee member, officer or agent may
resign by so stating at any meeting of the board of directors or by giving
written notice to the board of directors, the president or the secretary. The
resignation shall take effect at the time specified in the statement at the
board of directors meeting or in the written notice, or immediately if no time
is specified, but in no event may the effective time of such resignation be
prior to the time such statement is made or such notice is given. Unless it
specifies otherwise, a resignation shall be effective without being accepted.
9.07 Amendment of Bylaws.
(a) These bylaws may be altered, amended or repealed at any
meeting of the board of directors at which a quorum is present, by the
affirmative vote of a majority of the directors present at such meeting,
provided notice of the proposed alteration, amendment or repeal is
contained in the notice of the meeting.
(b) These bylaws may also be altered, amended or repealed at any
meeting of the shareholders at which a quorum is present or represented, by
the affirmative vote of the holders of a majority of the shares present or
represented at the meeting and entitled to vote thereat, provided notice of
the proposed alteration, amendment or repeal is contained in the notice of
the meeting.
9.08 Construction. Whenever the context so requires, the masculine shall
include the feminine and neuter, and the singular shall include the plural, and
conversely. If any portion of these bylaws shall be invalid or inoperative,
then, so far as is reasonable and possible:
(a) The remainder of these bylaws shall be considered valid and
operative, and
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(b) Effect shall be given to the intent manifested by the
portion held invalid or inoperative.
The undersigned, as secretary of the corporation, hereby certifies that the
foregoing bylaws were adopted by the board of directors of the corporation as of
January, 1993.
___________________________________
Phyllis Farragut
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Exhibit 3.120
CERTIFICATE OF INCORPORATION
OF
SURF'S UP PUBLICATIONS, INC.
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the
acts amendatory thereof and supplemental thereto, and known, identified and
referred to as the "General Corporation Law of the State of Delaware") hereby
certifies that:
FIRST: The name of the corporation (hereinafter called "Corporation") is
Surf's Up Publications, Inc.
SECOND: The address, including street number, city and count , of the
registered office of the Corporation in the State of Delaware is 229 South State
Street, City of Dover, county of Kent; and the name of the registered agent of
the Corporation in the State of Delaware at such address is The Prentice-Hall
Corporation System., Inc.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is 1,000. The par value of each such share is $.Of. All
such shares are of one class and are shares of common stock.
FIFTH: The name and mailing address of the incorporator is Patrick L.
Ferriere, Esq., 40 Wall Street, New York, New York 10005.
SIXTH: The Corporation is to have perpetual existence.
SEVENTH: The name and mailing address of the person
who is to serve as director until the first annual meeting of
<PAGE>
stockholders or until his successor is elected and has qualified is:
Name Address
Mr. R.C. Clyde Parker c/o Cole & Dietz
40 Wall Street
New York, NY 10005
Signed on December 27, 1978 Patrick L. Ferriere, Esq.
Incorporator
<PAGE>
SURF's UP PUBLICATIONS,INC.
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
Surf's Up Publications,Inc. a corporation duly organized and existing by
virtue of the General Corporation Law of the State of Delaware, does hereby
certify:
1. The name of the corporation is Surf's Up Publications,Inc.
2. The Certificate of Incorporation of the Corporation is hereby
amended in the following respects:
(a) By striking out Article FIRST thereof, and by substituting in lieu
of said article the following new Article FIRST:
"FIRST: The name of the Corporation is Western Empire
Publications, Inc."
<PAGE>
3. The Corporation has not yet received any payment for any of its
stock.
4. This Certificate of Amendment has been duly adopted in accordance
with the provisions of Section 241 of the General Corporation Law of the State
of Delaware.
IN WITNESS WHEREOF, Surf's Up Publications,Inc. has caused the
Certificate to be signed by Frederick D. Schroeder, its Vice President,and
attested to by Patrick L. Ferriere, its Assistant Secretary, this 6th day of
February, 1979.
Surf's Up Publications, Inc-.
By___________________________
--------------------------------------
Frederick D. Schroeder, Vice President
Attest:
Patrick L. Ferriere, Assistant Secretary
<PAGE>
Exhibit 3.121
Certificate of Amendment
February 6, 1979
changing name to "WESTERN EMPIRE
PUBLICATIONS, INC."
BY -LAWS
OF
SURF'S UP PUBLICATIONS, INC.
(A Delaware Corporation)
ARTICLE I
STOCKHOLDERS
1. CERTIFICATES REPRESENTING STOCK. Every holder of stock in the
corporation shall be entitled to have a certificate signed by, or in the name
of, the corporation by the Chairman or Vice-Chairman of the Board of Directors,
if any, or by the President or a Vice-President and by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary of the
corporation certifying the number of shares owned by him in the corporation.
Any and all signatures on any such certificate may be facsimiles. In case any
officer, transfer agent, or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent, or registrar before such certificate is issued, it may
be issued by the corporation with the same effect as if he were such officer,
transfer agent, or registrar at the date of issue.
Whenever the corporation shall be authorized to issue more than one class
of stock or more than one series of any class of stock, and whenever the
corporation shall issue any shares of its stock as partly paid stock, the
certificates representing shares of any such class or series or of any such
partly paid stock shall set forth thereon the statements prescribed by the
General Corporation Law. Any restrictions on the transfer or registration of
transfer of any shares of stock of any class or series shall be noted
conspicuously on the certificate representing-ting such shares.
<PAGE>
The corporation may issue a new certificate of stock in place of any
certificate theretofore issued by it, alleged to have been lost, stolen, or
destroyed, and the Board of Directors may require the owner of any lost, stolen,
or destroyed certificate, or his legal representative, to give the corporation a
bond sufficient to indemnify the corporation against any
claim that may be made against it on account of the alleged loss, theft, or
destruction of any such certificate or the issuance of any such new certificate.
2.FRACTIONAL SHARE INTERESTS. The corporation may, but shall not be
required to, issue fractions of a share. If the corporation does not issue
fractions of a share, it shall (1) arrange for the disposition of fractional
interests by those entitled thereto, (2) pay in cash the fair value of fractions
of a share as of the time when those entitled to receive such fractions are
determined, or(3) issue scrip or warrants in registered or bearer form which,
shall entitle the holder to receive a certificate for a full share upon the
surrender of such scrip or warrants aggregating a full share. A certificate for
a fractional share shall, but scrip or warrants shall not unless otherwise
provided therein, entitle the holder to exercise voting rights, to receive
dividends thereon, and to participate in any of the assets of the corporation in
the event of liquidation. The Board of Directors may cause scrip or warrants to
be issued subject to the conditions that they shall become void if not exchanged
for certificates representing full shares before a specified date, or subject to
the conditions that the shares for which scrip or warrants are exchangeable may
be sold by the corporation and the proceeds thereof distributed to the holders
of scrip or warrants, or subject to any other conditions which the Board of
Directors may impose.
3. STOCK TRANSFERS. Upon compliance with provisions restricting
the transfer or registration of transfer of shares of stock, if any, transfers
or registration of transfers of shares of stock of the corporation shall be made
only on the stock ledger of the corporation by the registered holder thereof, or
by his attorney thereunto authorized by power of attorney duly executed and
filed with the Secretary of the corporation or with a transfer agent or a
registrar, if any, and on surrender of the certificate or certificates for such
shares of stock properly endorsed and the payment of all taxes due thereon.
2
<PAGE>
4. RECORD DATE FOR STOCKHOLDERS. For the purpose of determining
the stockholders entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or the allotment of any rights, or entitled to exercise any rights
in respect of any change, conversion, or exchange of stock or for the Purpose of
any other lawful action, the directors may fix, in advance, a record date, which
shall not be more than sixty days nor less than ten days before the date of such
meeting, nor more than sixty days prior to any other action. If no record date
is fixed, the record date for determining stockholders entitled to notice of or
to vote at a meeting of stockholders shall be at the close of business on the
day next preceding the day on which notice is given, or, if notice is waived, at
the close of business on the day next preceding the-day oh which the meeting is
held; the record date for determining stockholders entitled to express consent
to corporate action in writing without a meeting, when no prior action by the
Board of Directors is necessary, shall be the day on which the first written
consent is expressed; and the record date for determining stockholders for any
other purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto. A determination of
stockholders of record entitled to notice of or to vote at any meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
5. MEANING OF CERTAIN ITEMS. As used herein in respect of the right to
notice of a meeting of stockholders or a waiver thereof or to participate or
vote thereat or to consent or dissent in writing in lieu of a meeting, as the
case may be, the term "share" or "shares" or "share of stock" or "shares of
stock" or "stockholder" or "stockholders" refers to an outstanding share or
shares of stock and to a holder or holders of record of outstanding shares of
stock when the corporation is authorized to issue only one class of shares of
stock, and said reference is also intended to include any outstanding share or
shares of stock and any holder or holders of record of outstanding shares of
stock of any class upon which or upon whom the certificate of incorporation
confers such rights where there are two or more classes or series of shares of
stock or upon which or upon whom
3
<PAGE>
the General Corporation Law confers such rights notwithstanding that the
certificate of incorporation may provide for more than one class or series of
shares of stock, one or more of which are limited or denied such rights
thereunder; provided, however, that no such right shall vest in the event of an
increase or a decrease in the authorized number of shares of stock of any class
or series which is otherwise denied voting rights under the provisions of the
certificate of incorporation.
6. STOCKHOLDER MEETINGS.
- TIME. The annual meeting shall be held on the date and at the time
fixed, from time to time, by the directors, provided, that the first annual
meeting shall be held on a date within thirteen months after the organization of
the corporation,
and each successive annual meeting shall be held on a date within thirteen
months after the date of the preceding annual meeting. A special meeting shall
be held on the date and at the time fixed by the directors.
- PLACE. Annual meetings and special meetings shall be held at such place,
within or without the State of Delaware, as the directors may, from time to
time, fix. Whenever the directors shall fail to fix such place, the meeting
shall be held at the registered office of-the corporation in the State of
Delaware.
- CALL. Annual meetings and special meetings may be called by the
directors or by any officer instructed by the directors to call the meeting.
- N0TICE OR WAIVER OF NOTICE. Written notice of all meetings shall be
given, stating the place, date, and hour of the meeting and stating the place
within the city or other municipality or community at which the list of
stockholders of the corporation may be examined. The notice of an annual meeting
shall state that the meeting is called for the election of directors and for the
transaction of other business which may properly come before the meeting, and
shall, (if any other action which could be taken at a special meeting is to be
taken at such annual meeting) state the purpose or purposes. The notice of a
special meeting shall in all instances state the purpose or purposes for which
the meeting is called. The notice of any meeting shall also include, or be
accompanied by, any additional
4
<PAGE>
statements, information, or documents prescribed by the General Corporation
Law. Except as otherwise provided by the General Corporation Law, a copy of the
notice of any meeting shall be given, personally or by mail, not less than ten
days nor more than sixty days before the date of the meeting, unless the lapse
of the prescribed period of time shall have been waived, and directed to each
stockholder at his record address or at such other address which he may have
furnished by request in writing to the Secretary of the corporation. Notice by
mail shall be deemed to be given when deposited, with postage thereon prepaid,
in the United States .Mail. If a meeting is adjourned to another time, not more
than thirty days hence, and/or to another place, and if an announcement of the
adjourned time and/or place is made at the meeting, it shall not be necessary to
give notice of the adjourned meeting unless the directors, after adjournment,
fix a new record date for the adjourned meeting. Notice need not be given to any
stockholder who submits a written waiver of notice signed by him before or after
the time stated therein. Attendance of a stockholder at a meeting of
stockholders shall constitute a waiver of notice of such meeting, except when
the stockholder attends the meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened. Neither the business to be transacted at,
nor the purpose of, any regular or special meeting of the stockholders need be
specified in any written waiver of notice.
- STOCKHOLDER LIST. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders, arranged in alphabetical
order, and showing the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten days prior to the meeting,
either at a place within the city or other municipality or community where the
meeting is to he held, which place shall be specified in tile notice of the
meeting, or if not so specified, at the place where the meeting is to he held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present. The stock ledger shall be the only evidence as to who are the
stockholders
5
<PAGE>
entitled to examine the stock ledger, the list required by this section or the
books of the corporation, or to vote at any meeting of stockholders.
- CONDUCT OF MEETING. Meetings of the stockholders shall be presided over
one of the following officers in the order of seniority and if present and
acting the Chairman of the Board, if any, the Vice Chairman of the Board, if
any, the President, a Vice President, or, if none of the foregoing is in office
and present and acting, by a chairman to be chosen by the stockholders. The
Secretary of the corporation, or in his absence, an Assistant Secretary, shall
act as secretary of every meeting, but if neither the Secretary nor an Assistant
Secretary is present the Chairman of the meeting shall appoint a secretary of
the meeting.
- PROXY REPRESENTATION. Every stockholder may authorize
another person or persons to act for him by proxy in all matters in which a
stockholder is entitled to participate, whether by waiving notice of any
meeting, voting or participating at a meeting, or expressing consent or dissent
without a meeting. Every proxy must be signed by the stockholder or by his
attorney-in-fact. No proxy shall be voted or acted upon after three years from
its date unless such proxy provides for a longer period. A duly executed proxy
shall be irrevocable if it states that it is irrevocable and, if, and only as
long as, it is coupled with an interest sufficient in law to support an
irrevocable power. A proxy may be made irrevocable regardless of whether the
interest with which it is coupled is an interest in the stock itself or an
interest in the corporation generally.
- INSPECTORS. The directors, in advance of any meeting, may, but need not,
appoint one or more inspectors of election to act at the meeting or any
adjournment thereof. If an inspector or inspectors are not appointed, the
person presiding at the meeting may, but need not, appoint one or more
inspectors. In case any person who may be appointed as an inspector fails to
appear or act, the vacancy may be filled by appointment made by the directors in
advance of the meeting or at the meeting by the person presiding thereat. Each
inspector, if any, before entering upon the discharge of his duties, shall take
and sign an oath faithfully to execute the duties of inspector at such meeting
with strict impartiality and according to the best of his
6
<PAGE>
ability. The inspectors, if any, shall determine the number of shares of stock
outstanding and the voting power of each, the shares of stock represented at the
meeting, the existence of a quorum, the validity and effect of proxies, and
shall receive votes, ballots or consents, hear and determine all challenges and
questions arising in connection with the right to vote, count and tabulate all
votes, ballots or consents, determine the result, and do such acts as are Proper
to conduct the election or vote with fairness to all stockholders. On request
of the person presiding at the meeting, the inspector or inspectors, if any,
shall make a report in writing of any challenge, question or matter determined
by him or them and execute a certificate of any fact found by him or them.
- QUORUM. The holders of a majority of the outstanding shares stock shall
constitute a quorum at a meeting of stockholders for the transaction of any
business. The stock-
holders present may adjourn the meeting despite the absence of a quorum.
- VOTING. Each share of stock shall entitle the holder thereof to one vote.
In the election of directors, a plurality of the votes cast shall elect. Any
other action shall be authorized by a majority of the votes cast except there
the General Corporation Law prescribes a different percentage of votes and/or a
different exercise of voting power, and except as may be otherwise prescribed by
the provisions of the certificate of incorporation and these bylaws. In the
election of directors, and for any other action, voting need not be by ballot.
7. STOCKHOLDER ACTION WITHOUT MEETINGS. Any action
required by the General Corporation to be taken at any annual or special meeting
of stockholders, or any, action which may be taken at any annual or special
meeting of stockholders, may be taken without a meeting, without prior notice
and without a vote, if a consent in writing, setting forth the action so taken,
shall he signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted. Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to those stockholders who
have not consented in writing.
7
<PAGE>
ARTICLE II
DIRECTORS
1.FUNCTIONS AND DEFINITIONS. The business and affairs of the corporation
shall be managed by or under the direction of the Board of Directors of the
corporation. The Board of Directors shall have the authority to fix the
compensation of the thereof. The use of the phrase "whole board" herein refers
to the total number of directors which the corporation would have if there were
no vacancies.
2. QUALIFICATIONS AND NUMBER. A director need not be a stockholder, a
citizen of the United States, or a resident of the State of Delaware. The
initial Board of Directors shall consist of one person. Thereafter the number
of directors constituting the whole board shall be at least one. Subject to the
foregoing limitation and except for the first Board of Directors such number may
be fixed from time to time by action of the stockholders or of the directors,
or, if the member is not fixed, the number shall be one. The number of
directors may be increased or decreased by action of the stockholders or of the
directors.
3. ELECTION AND TERM. The first Board of Directors,
unless the members thereof shall have been named in the certificate of
incorporation, shall be elected by the incorporator or incorporators and shall
hold office until the first annual meeting of stockholders and until their
successors are elected and qualified or until their earlier resignation or
removal. Any director may resign at any time upon written notice to the
corporation. Thereafter, directors who are elected at an annual meeting of
stockholders, and directors who are elected in the interim to fill vacancies and
newly created directorships, shall hold office until the next annual meeting of
stockholders and until their successors are elected and qualified or until their
earlier resignation or removal. In the interim between annual meetings of
stockholders or of special meetings of stockholders called for the election of
directors and/or for the removal of one or more directors and for the filling of
any vacancy in that connection, newly created directorships and any vacancies in
the Board of Directors, including unfilled vacancies resulting from the removal
of directors for cause or without
8
<PAGE>
cause, may be filled by the vote of a majority of the remaining directors then
in office, although less than a quorum, or by the sole remaining director.
4. MEETINGS.
- TIME. Meetings shall be held at such time as the Board shall fix,
except that the first meeting of a newly elected Board shall be held as soon
after its election as the directors may conveniently assemble.
- PLACE. Meetings shall be held at such place within or without the
State of Delaware as shall be fixed by the Board.
- CALL. No call shall be required for regular meetings for which
the time and place have been fixed. Special meetings may be called by or at the
direction of the Chairman of the Board, if any, the Vice-Chairman of the Board,
if any, of the President, or of a majority of the directors in office.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. No notice shall be
required for regular meetings for which the time and place have been fixed.
Written, oral, or any other mode of notice of the time and place shall be given
for special meetings in sufficient time for the convenient assembly of the
directors thereat. Notice need not be given to any director or to any member of
a committee of directors who submits a written waiver of notice signed by him
before or after the time stated therein. Attendance of any such person at a
meeting shall constitute a waiver of notice of such meeting, except when he
attends a meeting for the express purpose. of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened. Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the directors need be specified in any
written waiver of notice.
- QUORUM AND ACTION. A majority of the whole Board shall constitute a
quorum except when a vacancy or vacancies prevents such majority, whereupon a
majority of the directors in office shall constitute a quorum, provided, that
such majority shall constitute at least one-third of the whole Board. A
majority of the directors present, whether or not a quorum is
9
<PAGE>
present, may adjourn a meeting to another time and place. Except as herein
otherwise provided, and except as otherwise provided by the General Corporation
Law, tile vote of the majority of the directors present at a meeting at which a
quorum is present shall be the act of the Board. The quorum and voting
provisions herein stated shall not be construed as conflicting with any
provisions of the General corporation Law and these By-Laws which govern a
meeting of directors held to fill vacancies and newly created directorships in
the Board or action of disinterested directors.
Any member or members of the Board of Directors or of any committee
designated by the Board, may participate in a meeting of the Board, or any such
committee, as the case may be, by means of conference telephone or similar
communications equipment by means of which all persons Participating in the
meeting can hear each other.
- CHAIRMAN OF THE MEETING. The Chairman of the Board, if any and if
presenting and acting, shall preside at all meetings. Otherwise, the
Vice-Chairman of the Board, if any and if present and acting, or the President,
if present and acting, or any other director chosen by the Board, shall preside.
5 REMOVAL OF DIRECTORS. Except as may otherwise provided by the
General Corporation Law, any director or the entire Board of Directors may be
removed, with or without cause, by the holders of a majority of the shares then
entitled to vote at an election of directors.
6. COMMITTEES. The Board of Directors may, by resolution passed by a
majority of the whole Board, designate one or more committees, each committee to
consist of one or more of the directors of the corporation. The Board may
designate one or more directors as alternate members of any committee, who may
replace any, absent or disqualified member at any meeting of the committee. In
the absence or disqualification of any member of any such committee or
committees, the member or members thereof present at any meeting and not
disqualified from voting, whether or not lie or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the Board, shall have and
may exercise the powers and authority of the
10
<PAGE>
Board of Directors in the management of the business and affairs of the
corporation with the exception of any authority the delegation of which is
prohibited by Section 141 of the General Corporation Law, and may authorize the
seal of the corporation to be affixed to all. papers which may require it.
7. WRITTEN ACTION. Any action required or permitted to be taken at any
meeting of the Board of Directors or any committee thereof may betaken without a
meeting if all members of the Board or committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the Board or committee.
ARTICLE III
OFFICERS
The officers of the corporation shall consist of a President, a Secretary,
a Treasurer, and, if deemed necessary, expedient, or desirable by the Board of
Directors, a chairman of the Board, a Vice-Chairman of the Board, an Executive
Vice-president, one or more other Vice-Presidents, one or more Assistant
Secretaries, one or more Assistant Treasurers, and such other officers with such
titles as the resolution of the Board of Directors choosing them shall
designate. Except as may otherwise be provided in the resolution of the Board
of Directors choosing hint, no officer other than the Chairman or Vice-Chairman
of the Board, if any, need be a director. Any number of offices may be held by
the same Person, as the directors may determine, except that no person may hold
the offices of President and Secretary simultaneously.
Unless otherwise provided in the resolution choosing him, each officer
shall be chosen for a term which shall continue until the meeting of the Board
of Directors following the next annual meeting of stockholders and until his
successor shall have been chosen and qualified.
All officers of this corporation shall have such authority and perform such
duties in the management and operation of the corporation as shall be prescribed
in the resolutions of the Board of Directors designating and choosing such
officers and prescribing their authority and duties, and shall have such
11
<PAGE>
additional authority and duties as are incident to their office except to the
extent that such resolutions may be inconsistent therewith. The Secretary or an
Assistant Secretary of the corporation shall record all of the proceedings of
all meetings actions in writing of stockholders, directors, and committees of
directors, and shall exercise such additional authority and perform such
additional duties as the Board shall assign to him. Any officer may be removed,
with or without cause, by the Board OF Directors. Any vacancy in any office may
be filled by the Board of Directors.
ARTICLE IV
CORPORATE SEAL
The corporate seal shall be in such form as the Board of Directors shall
prescribe.
ARTICLE V
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and shall be subject to
change, by the Board of Directors.
ARTICLE VI
CONTROL OVER BYLAWS
Subject to the provisions of the certificate of incorporation and the
provisions of The General corporation Law, the power to amend, alter or repeal
these By-Laws and to adopt new By-Laws may be exercised by the Board of
Directors or by the stockholders.
I HEREBY CERTIFY that the foregoing is a full, true and correct copy of the
By-Laws of SURF'S UP PUBLICATIONS,INC. a Delaware corporation, as in effect on
the date hereof.
WlTNESS my hand and the seal of the corporation.
Dated.
12
<PAGE>
___________________________
Secretary of
SURF'S UP PUBLICATIONS, INC.
[SEAL]
13
<PAGE>
Exhibit 3.122
597431
ENDORSED
FILED
In the office of the
Secretary of State of
the State of California
ARTICLES OF INCORPORATION
TRM PUBLICATIONS, INC.
0197
0
H.P. SULLIVAN, Secretary
of State
FIRST: The name of the corporation is TPJI Publications, INC.
SECOND: The corporation's purposes are:
(a) To engage primarily in the publication of a magazine named Street Chopper.
(b) The corporation's secondary purposesis to advertise, sell, distribute and
publish magazines, periodicals and catalogues having to do with the sale,
manufacture, repair and design of motorcycles and related items.
(c) To engage in any business, whether related or unrelated to those described
in clauses (a) and (b) of this article, that may from time to time be
authorized or approved by the Board of Directors of this corporation.
(d) To act as a partner or a joint adventurer or in any other legal capacity
whenever deemed advisable by the Board of Directors.
(e) To do business anywhere in the world; and
(f) To have and to exercise all the rights and powers that are now or may
hereafter be granted to a corporation by law.
<PAGE>
THIRD: The county in the State of California where the principal office for the
transaction of the business of this corporation is to be located is Orange
County.
FOURTH: The number of directors of the corporation is three:
1. THOMAS M. MCMULLEN 1221 North Euclid
Fullerton, California
2. ROSEMARIE MCMULLEN 1221 North Euclid
Fullerton, California
3. JAMES L. CLARK 1643 Picadilly Way
Fullerton, California
FIFTH: The corporation is authorized to issue only one class of stock. The total
number of shares that the corporation is authorized to issue is 7500 shares.
Each share shall be without par value. No distinction shall exist between the
shares of the corporation of the holders thereof.
IN WITNESS WHEREOF, the undersigned, constituting the incorporators
and first directors of this corporation, have executed these Articles of
Incorporation on this 29 day of April, 1970.
THOMAS M. MCMULLEN
ROSEMARIE MCMULLEN
<PAGE>
JAMES L.CLARK
<PAGE>
A469739
Endorsed
FILED -
In the office of the
Secretary of State of
the State of
California
Dec 26, 1995
CERTIFICATE OF AMENDMENT OF ARTICLES
OF INCORPORATION OF
MCMULLEN & YEE PUBLISHING, INC.
Bill Jones, Secretary
of State
Curtis A. Thompson and Beverly C. Chell certify that:
1. They are the Vice President and Secretary, respectively of McMullen & Yee
Publishing, Inc., a California corporation.
2. Article FIRST of tie Articles of Incorporation (hereinafter, the "Articles")
of the Corporation is amended (the "Amendment") to read as follows:
ARTICLE FIRST
The name of this corporation is McMullen Argus Publishing, Inc.
3. The foregoing Amendment of the Articles has been duly approved by the Board
of Directors of the Corporation.
4. The foregoing Amendment of the Articles has been duly approved by the
required vote of shareholders in accordance with Section 902 of the Corporation
Code of the State of California. The total number of outstanding shares of the
Corporation entitled to vote with respect to
<PAGE>
the Amendment is 1,770. The foregoing Amendment was approved unanimously by vote
of the 1,770 shares. The percentage vote required was more than 50%.
I further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this Certificate are true and correct
and of my own knowledge.
DATED: November 14, 1995
Curtis A. Thompson
Vice President
Beverly C. Chell
Secretary
<PAGE>
A408159
CERTIFICATE OF AMENDMENT OF ARTICLES
OF INCORPORATION OF
ENDORSED
FILED
In the office of the
Secretary of State of
the State of California
MCMULLEN PUBLISHING, INC.
SEP 10,1991
KENNETH N. YEE certifies that:
1. He is the President and the Secretary, of McMullen Publishing,
Inc. a California corporation.
2. Article I of the Articles of Incorporation of this corporation is
amended to read as follows:
ARTICLE I
The name of this corporation is McMULLEN & YEE PUBLISHING, INC.
3. The foregoing Amendment of Articles of Incorporation has been
duly approved by the Board of Directors
4. The foregoing Amendment of Articles of Incorporation has been
duly approved by the required vote of shareholders in accordance with Section
902 of the Corporations Code. The total number of outstanding shares of the
corporation is 2,360. The number of shares voting in favor of the amendment
equaled or exceeded the vote required. The percentage vote required was more
than 50%.
I further declare under penalty of perjury under the laws of the State of
California, that the matters set forth in this Certificate are true and correct
of my own knowledge.
DATED, September 6th, 1991
<PAGE>
Kenneth N. Yee
<PAGE>
ENDORSED
FILED
In the office of the
Secretary of State of
California
FEB 25 1980
March Fong Eu,
Secretary of State
By James E. Harris
CERTIFICATE OF AMENDMENT OF ARTICLES OF
INCORPORATION OF T.R.M..PUBLICATIONS, INC. INC.
The undersigned hereby certify that they are now and at all times
mentioned have been, respectively, the President and Secretary of T.R.M.
Publications, Inc., a California corporation.
The undersigned further certify:
1. At a special directors meeting of the corporation duly held on
January 31, 1980 at 9:00 o'clock at the principal office of the corporation at
2145 W. La Palma, the following resolution was adopted:
RESOLVED that the Article First of the Articles of Incorporation be
amended to read as follows:
ARTICLE 1. The name of the corporation is, McMullen Publishing, Inc.
2. At a special shareholders meeting duly held on January 31, 1980,
at the hour of 9:30 o'clock, at the principal office of the corporation at 2145
W. La Palma, the foregoing amendment of the Articles of Incorporation was
approved by resolution of the shareholders, identical in form to the directors
resolution set forth above. The total number of shares of the corporation
entitled to vote on the adoption of the foregoing amendment is 2360. The
amendment was adopted by the vote of 2360 shares.
Each of the undersigned declares under penalty of perjury that the
above facts and certificate of amendment is true and correct. Executed this
third day of February, 1980, at Anaheim, California.
<PAGE>
President Secretary
THOMAS M. McMULLEN DEANNA LEE McMULLEN
<PAGE>
Exhibit 1.23
MCMULLEN ARGUS PUBLISHING, INC.
BY-LAWS
ARTICLE I
MEETINGS OF STOCKHOLDERS
Section 1. PLACE OF MEETING AND NOTICE. Meetings of the stockholders
of the Corporation shall be held at such place either within or without the
State of Delaware as the Board of Directors may determine.
Section 2. ANNUAL AND SPECIAL MEETINGS. Annual meetings of
stockholders shall be held, at a date, time and place fixed by the Board of
Directors and stated in the notice of meeting, to elect a Board of Directors and
to transact such other business as may properly come before the meeting.
Special meetings of the stockholders may be called by the President for any
purpose and shall be called by the President or Secretary if directed by the
Board of Directors or requested in writing by the holders of not less than 25%
of the capital stock of the Corporation. Each such stockholder request shall
state the purpose of the proposed meeting.
Section 3. NOTICE. Except as otherwise provided by law, at least 10
and not more than 60 days before each meeting of stockholders, written notice of
the time, date and place of the meeting, and, in the case of a special meeting,
the purpose or purposes for which the meeting is called, shall be given to each
stockholder.
Section 4. QUORUM. At any meeting of stockholders, the holders of
record, present in person or by proxy, of a majority of the Corporation's issued
and outstanding capital stock shall constitute a quorum for the transaction of
business, except as otherwise provided by law. In the absence of a quorum, any
officer entitled to preside at or to act as secretary of the meeting shall have
power to adjourn the meeting from time to time until a quorum is present.
Section 5. VOTING. Except as otherwise provided by law, all matters
submitted to a meeting of stockholders shall be decided by vote of the holders
of record, present in person or by proxy, of a majority of the Corporation's
issued and outstanding capital stock.
ARTICLE II
DIRECTORS
Section 1. NUMBER, ELECTION AND REMOVAL OF DIRECTORS. The number of
Directors that
<PAGE>
shall constitute the Board of Directors shall not be less than one or more than
fifteen. The first Board of Directors shall consist of three Directors.
Thereafter, within the limits specified above, the number of Directors shall be
determined by the Board of Directors or the stockholders. The Directors shall
be elected by stockholders at their annual meeting. Vacancies and newly created
directorships resulting from any increase in the number of Directors may be
filled by a majority of the Directors then in office, although less than a
quorum, or by the sole remaining Director or by the stockholders. A Director
may be removed with or without cause by the stockholders.
Section 2. MEETINGS. Regular meetings of the Board of Directors shall
be held at such times and places as may from time to time be fixed by the Board
of Directors or as may be specified in a notice of meeting.
Section 3. QUORUM. One-third of the total number of Director shall
constitute a quorum for the transaction of business. If a quorum is not present
at any meeting of the Board of Directors, the Directors present may adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until such a quorum is present. Except as otherwise provided by law,
the Certificate of Incorporation of the Corporation, these By-Laws or any
contract or agreement to which the Corporation is a party, the act of a majority
of the Directors present at any meeting at which there is a quorum shall be the
act of the Board of Directors.
Section 4. COMMITTEES. The Board of Directors may, by resolution
adopted by a majority of the whole Board, designate one or more committees,
including, without limitation, an Executive Committee, to have and exercise such
power and authority as the Board of Directors shall specify. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another Director to act at the
meeting in place of any such absent or disqualified member.
ARTICLE III
OFFICERS
The officers of the Corporation shall consist of a President, a Secretary,
a Treasurer and such other additional officers with such titles as the Board of
Directors shall determine, all of which shall be chosen by and shall serve at
the pleasure of the Board of Directors. Such officers shall have the usual
powers and shall perform all the usual duties incident to their respective
offices. All officers shall be subject to the supervision and direction of the
Board of Directors. The authority, duties or responsibilities of any officer of
the Corporation may be suspended by the President with or without cause. Any
officer elected or appointed by the Board of Directors may be removed by the
Board of Directors with or without cause.
<PAGE>
ARTICLE IV
INDEMNIFICATION
To the fullest extent permitted by the Delaware General Corporation Law,
the Corporation shall indemnify any current or former Director or officer of the
Corporation and may, at the discretion of the Board of Directors, indemnify any
current or former employee or agent of the Corporation against all expenses,
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 brought by or in the right of the Corporation or otherwise, to which
he was or is a party by reason of his current or former position with the
Corporation or by reason of the fact that he is or was serving, at the request
of the Corporation, as a director, officer, partner, trustee, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise.
ARTICLE V
GENERAL PROVISIONS
Section 1. NOTICES. Whenever any statute, the Certificate of
Incorporation or these By-Laws require notice to be given to any Director or
stockholder, such notice may be given in writing by mail, addressed to such
Director or stockholder at his address as it appears in the records of the
Corporation, with postage thereon prepaid. Such notice shall be deemed to have
been given when it is deposited in the United States mail. Notice to Directors
may also be given by telegram.
Section 2. FISCAL YEAR. The fiscal year of the Corporation shall be
fixed by the Board of Directors.
<PAGE>
Exhibit 3.124
CERTIFICATE OF INCORPORATION
OF
THE ELECTRONICS SOURCE BOOK, INC.
The undersigned, in order to form a corporation for the purpose
hereinafter stated under and pursuant to the provisions of the Delaware General
Corporation Law hereby certifies that:
FIRST: The name of the Corporation is The Electronics Source Book,
Inc.
SECOND: The registered office and registered agent of the Corporation
is The Corporation Trust Company, 1209 Orange Street, Wilmington, New Castle
County, Delaware, 19801.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of Delaware.
FOURTH: The total number of shares of stock that the Corporation is
authorized to issue is 1,000 shares of Common Stock, par value $0.01 each.
FIFTH: The name and address of the incorporator is Beverly C. Chell,
745 Fifth Avenue, Now York, New York 10151.
SIXTH: The Board of Directors of the Corporation, acting by majority
vote, may alter, amend Or repeal the By-Laws of the Corporation.
SEVENTH: Except as otherwise provided by the Delaware General
Corporation Law as the same exists or may hereafter be amended, no director of
the Corporation shall be personally liable to the Corporation or its
stockholders for monctary damages for breach of fiduciary duty as a director.
Any repeal or modification of this Article SEVENTH by the stockholders of the
Corporation shall not adversely affect any right or protection of a director of
the Corporation existing at the time of such repeal or modification.
IN WITNESS WHEREOF, the undersigned has signed this Cerificate of
Incorporation on April 28, 1994.
Beverly C. Chell
<PAGE>
Exhibit 3.125
THE ELECTRONIC SOURCE BOOK, INC
BY-LAWS
ARTICLE I
MEETINGS OF STOCKHOLDERS
Section 1. PLACE OF MEETING AND NOTICE. Meetings of the stockholders
of the Corporation shall be held at such place either within or without the
State of Delaware as the Board of Directors may determine.
Section 2. ANNUAL AND SPECIAL MEETINGS. Annual meetings of
stockholders shall be held, at a date, time and place fixed by the Board of
Directors and stated in the notice of meeting, to elect a Board of Directors and
to transact such other business as may properly come before the meeting.
Special meetings of the stockholders may be called by the President for any
purpose and shall be called by the President or Secretary if directed by the
Board of Directors or requested in writing by the holders of not less than 25%
of the capital stock of the Corporation. Each such stockholder request shall
state the purpose of the proposed meeting.
Section 3. NOTICE. Except as otherwise provided by law, at least 10
and not more than 60 days before each meeting of stockholders, written notice of
the time, date and place of the meeting, and, in the case of a special meeting,
the purpose or purposes for which the meeting is called, shall be given to each
stockholder.
Section 4. QUORUM. At any meeting of stockholders, the holders of
record, present in person or by proxy, of a majority of the Corporation's issued
and outstanding capital stock shall constitute a quorum for the transaction of
business, except as otherwise provided by law. In the absence of a quorum, any
officer entitled to preside at or to act as secretary of the meeting shall have
power to adjourn the meeting from time to time until a quorum is present.
Section 5. VOTING. Except as otherwise provided by law, all matters
submitted to a meeting of stockholders shall be decided by vote of the holders
of record, present in person or by proxy, of a majority of the Corporation's
issued and outstanding capital stock.
ARTICLE II
DIRECTORS
Section 1. NUMBER, ELECTION AND REMOVAL OF DIRECTORS. The number of
Directors that shall constitute the Board of Directors shall not be less than
one or more than fifteen. The
<PAGE>
first Board of Directors shall consist of three Directors. Thereafter, within
the limits specified above, the number of Directors shall be determined by the
Board of Directors or the stockholders. The Directors shall be elected by
stockholders at their annual meeting. Vacancies and newly created directorships
resulting from any increase in the number of Directors may be filled by a
majority of the Directors then in office, although less than a quorum, or by the
sole remaining Director or by the stockholders. A Director may be removed with
or without cause by the stockholders.
Section 2. MEETINGS. Regular meetings of the Board of Directors shall
be held at such times and places as may from time to time be fixed by the Board
of Directors or as may be specified in a notice of meeting.
Section 3. QUORUM. One-third of the total number of Director shall
constitute a quorum for the transaction of business. If a quorum is not present
at any meeting of the Board of Directors, the Directors present may adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until such a quorum is present. Except as otherwise provided by law,
the Certificate of Incorporation of the Corporation, these By-Laws or any
contract or agreement to which the Corporation is a party, the act of a majority
of the Directors present at any meeting at which there is a quorum shall be the
act of the Board of Directors.
Section 4. COMMITTEES. The Board of Directors may, by resolution
adopted by a majority of the whole Board, designate one or more committees,
including, without limitation, an Executive Committee, to have and exercise such
power and authority as the Board of Directors shall specify. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another Director to act at the
meeting in place of any such absent or disqualified member.
ARTICLE III
OFFICERS
The officers of the Corporation shall consist of a President, a Secretary,
a Treasurer and such other additional officers with such titles as the Board of
Directors shall determine, all of which shall be chosen by and shall serve at
the pleasure of the Board of Directors. Such officers shall have the usual
powers and shall perform all the usual duties incident to their respective
offices. All officers shall be subject to the supervision and direction of the
Board of Directors. The authority, duties or responsibilities of any officer of
the Corporation may be suspended by the President with or without cause. Any
officer elected or appointed by the Board of Directors may be removed by the
Board of Directors with or without cause.
<PAGE>
ARTICLE IV
INDEMNIFICATION
To the fullest extent permitted by the Delaware General Corporation Law,
the Corporation shall indemnify any current or former Director or officer of the
Corporation and may, at the discretion of the Board of Directors, indemnify any
current or former employee or agent of the Corporation against all expenses,
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 brought by or in the right of the Corporation or otherwise, to which
he was or is a party by reason of his current or former position with the
Corporation or by reason of the fact that he is or was serving, at the request
of the Corporation, as a director, officer, partner, trustee, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise.
ARTICLE V
GENERAL PROVISIONS
Section 1. NOTICES. Whenever any statute, the Certificate of
Incorporation or these By-Laws require notice to be given to any Director or
stockholder, such notice may be given in writing by mail, addressed to such
Director or stockholder at his address as it appears in the records of the
Corporation, with postage thereon prepaid. Such notice shall be deemed to have
been given when it is deposited in the United States mail. Notice to Directors
may also be given by telegram.
Section 2. FISCAL YEAR. The fiscal year of the Corporation shall be
fixed by the Board of Directors.
<PAGE>
Exhibit 3.126
ARTICLES OF INCORPORATION
STATE OF TEXAS
COUNTY OF HARRIS KNOW ALL MEN BY THESE PRESENTS:
That We, CHAS. N. TUNNELL, LEE M. WEBB, MAZIE WAY WEBB and RUBYE TUNNELL,
all citizens of Harris County, Texas, under and by virtue of the laws of this
State, do hereby voluntarily associate ouselves together for the purpose of
forming a private corporation under the terms and conditions hereinafter set out
as follows:
I.
The name of this Corporation is TUNNELL-WEBB PUBLICATIONS, INC.
II.
The purpose for which it is formed is to transact a printing and publishing
business, and in connection therewith, to sell goods, wares and merchandise of a
stationery and blank book manufacturing business.
III.
The place where the business of the Corporation is to be transacted is at
Houston, in Harris County, Texas, its address being 542 M & M Building, said
City, County and State.
IV.
The term for which it is to exist is fifty years.
V.
The number of directors shall be four and the names and residences of those
who are appointees for the first year are as follows:
Chas. N. Tunnell 806 Dennis Houston, Texas
Lee M. Webb 5802 Goodrich Houston, Texas
Mazie Way Webb 5802 Goodrich Houston, Texas
Rubye tunnell 6501 Rodrigo Houston, Texas
VI.
The amount of capital stock is One Thousand and No/100 ($1,000.00) Dollars,
divided into twenty (20) shares of Fifty and No/100 ($50.00) Dollars each, all
of which capital stock has been subscribed and fifty (50%) per cent paid in, as
per affidavit attached hereto.
INTESTIMONY WHEREOF, we hereunto sign our names this the 18th day of June,
<PAGE>
1936.
(Signed) Chas. N. Tunnell
Lee M. Webb
Mazie Way Webb
Rubye Tunnell
THE STATE OF TEXAS
COUNTY OF HARRIS
BEFORE ME, the undersigned authority, on this day personally appeared CHAS.
N. TUNNELL, LEE M. WEBB, MAZIE WAY WEBB, and RUBYE TUNNELL, known to me to be
the persons whose names are subscribed to the foregoing instrument and also
known to me to be citizens of said State, and each acknowledged to me that he
executed the same for the purposes and considerations therein expressed.
IN TESTIMONY WHEREOF, I hereunto subscribe my name and affix the seal of my
office this the 18th day of June, A. D. 1936
(Signed) R. Dyrel Kirk
Notary Public, Harris County, Texas.
(Seal)
THE STATE OF TEXAS
COUNTY OF HARRIS
BEFORE ME, the undersigned authority, on this day personally appeared CHAS.
N. TUNNELL, LEE M. WEBB, MAZIE WAY WEBB and RUBYE TUNNELL, known to me, who,
after being duly sworn, on oath, say each for himself:
Thay they are the identical parties who executed the charter of
TUNNELL-WEBB PUBLICATIONS, INC., that the full amount of the capital stock of
said Company has been in good faith subscribed, and Five Hundred and No/100
($500.00) Dollars thereof in cash paid in, all of which cash is on deposit in
the name and to the account of said TUNNELL-WEBB PUBLICATIONS, INC., in the City
National Bank, of Houston, Texas; that the following are the names, residences
and postoffice addresses of the parties subscribing to the capital stock:
Chas. N. Tunnell 806 Dennis Houston, Texas
Lee M. Webb 5802 Goodrich Houston, Texas
Mazie Way Webb 5802 Goodrich Houston, Texas
Rubye tunnell 6501 Rodrigo Houston, Texas
<PAGE>
That the amounts subscribed by each and the amount paid by each, such
payment being in cash, are as follows:
NO. AMOUNT AMOUNT
NAMES SHARES SUBSCRIBED PAID IN
Chas. N. Tunnell 5 $ 250.00 $125.00
Lee M. Webb 9 450.00 225.00
Mazie Way Webb 1 50.00 25.00
Rubye Tunnell 5 250.00 125.00
-- --------- -------
20 $1,000.00 $500.00
(Signed) Chas. N. Tunnell
Lee M. Webb
Mazie Way Webb
Rubye Tunnel
Subscribed and sworn to before me this 19th day of June, 1936, to certify which
witness my hand and seal of office.
(Signed) R. Dyrel Kirk
Notary Public, Harris County, Texas
(Seal)
Filed in the office of the Secretary of State June 23, 1936.
<PAGE>
The State of Texas
SECRETARY OF STATE
CERTIFICATE OF CORRECTION
OF
TUNNELL PUBLICATIONS, INC.
CHARTER NO. 69746-0
The undersigned, as Secretary State of Texas, hereby, certifies that the
attached Articles of Correction, duly executed pursuant to the provions of the
Texas Miscellaneous Corporation Laws Act, have been received in this office and
are found to conform to law.
ACCORDINGLY, the undersigned, as Secretary of State, and by virtue of the
authority vested in the Secretary by law, hereby issues this Certficate of
Correction and attaches hereto a copy of the Articles of Correction.
Dated: June 26, 1996
Antonio O. Garza, Jr.
-----------------------
Antonio O. Garza, Jr.
Secretary of State
<PAGE>
ARTICLES OF CORRECTION FILED
TO THE In the office of the
ARTICLES OF INCORPORATION Secretary of State of Texas
OF JUN 25, 1996
TUNNELL PUBLICATIONS, INC. Corporations Section
These articles are adopted to correct a document which is an inaccurate record
of corporate action, contains an inaccurate or erroneous statement or was
defectively or erroneously executed, sealed, acknowledged or verified.
ARTICLE ONE
The name of the corporation is Tunnell Publications, Inc.
ARTICLE TWO
The document to be corrected is Articles of Amendment of Articles of
Incorporation of Tunnell Publications, Inc., which was filed in the Office of
the Secretary of State on the 22nd day of April, q986.
ARTICLE THREE
Under the amendment to Article VI of the Articles of Incorporation was amended
to read as follows:
"The aggregate number of shares which the Corporation shall have authority
to issue is 1,000 shares of common stock at the par value of $5.00 each."
The par value of $5.00 was erroneously state and should be $1.00 par value.
ARTICLE FOUR
The amendment to Article VI of the Articles of Incorporation should read as
follows:
"The aggregate number of shares which the Corporation shall have authority
to issue is 1,000 shares of common stock at the par value of $1.00."
Raymond Anderson
--------------------------
Raymond Anderson
Secretary
<PAGE>
Exhibit 3.127
BY-LAWS-Continued
(Space for additional By-Laws or the filing of important papers)
ARTICLE 1.
STOCKHOLDERS
Section 1. The stockholders of this company shall be those who appear on
the books of the company as holders of one or more shares of the capital stock.
Section 2. The annual meeting of the stockholders shall be held on the 3rd
day of August of each year at the principal office of the company, for the
election of the Board of Directors for the ensuing year, and for the transaction
of such other business as may properly come before the meeting. Notice of the
meeting shall be mailed to each stockholder to his address as the same appears
on the records of the Company, at least five days prior to the meeting.
Section 3. A special meeting of the stockholders may be held at any time
upon the call of the President, or by order of the Board of Directors, and it
shall be the duty of the said President to call such a meeting whenever
requested so to do by stockholders holding 10% of the capital stock. Written
notice of such special meeting shall be mailed to each stockholder at his
address as the same appears on the records of the company, at least ten days
prior to meeting, stating therein the purpose for which the meeting is held.
Section 4. The majority of the stock of the Company
<PAGE>
BY-LAWS-Continued
(Space for additional By-Laws or the filing of important papers)
must be represented in person or by proxy to constitute a quorum. Only those
shall be entitled to vote who appear as stockholders upon the records of the
company. If a quorum fail to attend at the time and place of meeting, those who
do attend may adjourn from time to time until the meeting shall be regularly
constituted.
Section 5. At such meetings, all questions, unless by the bylaws otherwise
provided, shall be determined by a majority vote of the stockholders present in
person or by proxy, each stockholder being entitled to one vote for each share
of stock in his name as appears upon the record.
Section 6. All the meetings of the stockholders shall be presided over by a
chairman, who shall be elected at the meeting. Such meeting shall be attended by
the Secretary of the company; who shall ex-officio be the secretary of such
meeting. The proceedings of each meeting shall be verified by the signature of
the Chairman.
ARTICLE 11.
DIRECTORS
The affairs of this company shall be under the management of its Board of
Directors, and such officers and agents as said Board may elect or employ.
Section 2. The Board of Directors shall be four in number, unless otherwise
determined by the stockholders from time to
<PAGE>
BY-LAWS-Continued
(Space for additional By-Laws or the filing of important papers)
time. Said Directors shall be elected each year at the annual meeting of
stockholders to hold office until the next annual meeting, or until the election
of their successors. Vacancies in the Board shall be filled by the Board of
Directors. The person elected shall hold office until the next annual meeting of
stockholders, when the vacancy shall be filled as usual.
Section 3. The Board of Directors shall, as soon after their annual
election as conveniently may be, elect from their number a President and Vice-
President, who shall hold this office for one year and until others are chosen
and qualify in their stead. The Board shall also annually elect a Secretary-
Treasurer who need not be a member of the Board, and such other officers, agents
and factors as they deem necessary, who shall hold office until others are
choosen and qualify in their stead, subject to removal by the Board at any time,
with or without cause.
Section 4. The Board of Directors shall hold its meetings at such times and
places as it may designate. A special meeting may be called at any time by the
President or any Director. Notice of the Directors' meeting shall be given by
mailing notice thereof to each Director 3 days before such meeting.
<PAGE>
BY-LAWS-Continued
(Space for additional By-Laws or the filing of important papers)
Section 5. A majority of Directors in office shall be necessary to
constitute a quorum for the transaction of business. Any question coming before
the Board shall be determined by a majority of those present.
Section 6. The Board of Directors may delegate its powers to the President,
who shall be endowed with all powers of the Board to be excercised when he sees
fit, at any time when the Board is not in session, and power is hereby given to
said President when so authorized by the board.
ARTICLE III
THE DUTIES AND POWERS OF OFFICERS
Section 1. The President shall preside at all meetings of the Board: shall
be ex-officio, a member of all committees; shall employ and discharge all
clerks, employees and agents, subject, however, to the right of the Board to
direct by the majority vote the employment or dismissal of any agent or
employee. He shall sign all checks, all certificates of stock and conveyances of
real estate, and any other instrument in writing requiring a signature, and
perform such other duties as may be required of him from time to time by the
directors.
Section 2. In case of absence of the president, or his inability to act,
his duty shall be performed by the Vice-President, who, in that event shall
exercise any of the above powers of the
<PAGE>
BY-LAWS-Continued
(Space for additional By-Laws or the filing of important papers)
the President.
Section 3. The Secretary, shall attend all the meetings of the stockholders
and directors and keep a full and accurate account of their proceedings in a
book to be kept for that purpose. He shall record all transfers of stock, and
cancel and preserve all certificates of stock transferred, as well as the
address of all stockholders. The Secretary shall also be the transfer agent of
the company for the transfer of all certificates of stock. He shall also keep
the seal of the company and affix the same to all certificates of stock,
conveyances of real estate, and such other instruments requiring the seal as may
be directed by the Board of Directors. The Secretary shall also keep such other
books, and perform such other duties as may be required of him by the Board of
Directors.
Section 4. The Secretary shall also be the Treasurer and shall keep a full
and accurate account of receipts and disbursements of the company in books
belonging to the company, and shall deposit all monies and other valuable
objects in the name of the company in such depositories or safety vaults that
may be designated by the Board. A report of the finances of the company shall be
made by the Treasurer whenever requested by the President and a report of like
character shall be submitted by him at each annual meeting. He may be required
by the Directors at any time to give such bond
<PAGE>
BY-LAWS-Continued
(Space for additional By-Laws or the filing of important papers)
as the Directors may designate.
ARTICLE IV.
CAPITAL STOCK
Section 1. All certificates of stock shall be signed by the President and
Secretary and be attested by the Corpate seal.
Section 2. The certificate of stock may be transferred, sold, assigned, or
pledged by an indorsement to the proper effect in writing on the back of
certificate, and delivery of such certificate by the transferrer to the
transferee; provided that until notice given of such transfer to the Secretary
of the company, and the surrender of the certificate of stock for cancellation,
and the issue of a new certificate in lieu of that surrendered, this company may
regard and treat the transferrer as being still the owner of the stock.
Section 3. All surrendered certificates shall be marked: "Cancelled," with
the date of cancellation, by the Secretary, and shall be immediately pasted into
the stock book opposite memorandum of their issue.
Section 4. A duplicate certificate of stock may be issued for such as may
have been lost or destroyed upon the applicant's furnishing affidavit that he is
owner of said certificate and that same has been, lost or destroyed, together
<PAGE>
BY-LAWS-Continued
(Space for additional By-Laws or the filing of important papers)
with bond of indemnity, with satisfactory security to the company conditioned
upon loss in consequence of issue of said duplicate certificate. And no such
duplicate shall be issued until after the publication once a week for four
weeks, at the expense of the applicant, of a notice of the application therefor
in some newspaper of general circulation, designated by the President, published
in the City of the applicant's residence.
ARTICLE V.
(CHECKS AND NOTES)
The monies of the corporation shall be deposited in the name of the
corporation in such bank or trust company as the Board of Directors shall
designate, and shall be drawn out only by checks signed by the Treasurer or
other person designated by the Board. The signature of the President and
Secretary should be required for notes for all business obligations of the
company.
ARTICLE VI
MISCELLANEOUS
Section 1. The seal of this company shall be circular in form with the
words, "TUNNELL-WEBB PUBLICATIONS, INC." on the circumference, with five-
pointed star in the center.
Section 2. The fiscal business year of this company shall begin on the
first day of January, and end on the
<PAGE>
BY-LAWS-Continued
(Space for additional By-Laws or the filing of important papers)
31st day of December, following in each year.
Section 3. The Board of Directors may, at any time, declare a dividend of
such part of the net earnings of the company as it may deem prudent to divide,
carrying all or any part of the residue to the surplus account, or account of
undivided profits or for use in improvements as it shall deem best.
Section 4. Bylaws may be altered, amended, modified or added to by the vote
of stockholders holding a majority of the stock of the company, present in
person or by proxy, at any general, or special meeting of stockholders of the
company. A copy of such amended Bylaws shall be sent to each stockholder within
thirty days after their adoption.
Tr.@ J.
<PAGE>
Exhibit 3.128
CERTIFICATE OF AMENDMENT
OF THE CERTIFICATE OF INCORPORATION
OF
K-III KG CORPORATION - NEW YORK I
UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW
WE THE UNDERSIGNED, Michaelanne Discepolo and Beverly C. Chell, being
respectively the Vice President and Secretary of K-III KG Corporation - New York
I hereby certify:
1. The name of the corporation is K-III KG Corporation - New York I.
2. The Certificate of Incorporation of said corporation was filed by the
Department of State on the 13th day of January, 1994.
3. The Certificate of Incorporation is amended to change the name of the
corporation. To effect the foregoing, Article First is amended to read as
follows:
First: The name of the corporation is "The Katharine Gibbs Corporation
- - Melville"
4. The amendment was authorized by the unanimous written consent of the
Board of Directors, there being no shareholders nor subscribers for shares.
IN WITNESS WHEREOF, we have signed this certificate on the 10th day of
February, 1997 and we affirm the statements contained therein as true under
penalties of perjury.
/s/ Michaelanne Discepolo
------------------------------------
Michaelanne Discepolo
Vice President
/s/ Beverly C. Chell
------------------------------------
Beverly C. Chell
Secretary
<PAGE>
Exhibit 3.129
CERTIFICATE OF AMENDMENT
OF THE CERTIFICATE OF INCORPORATION
OF
K-III KG CORPORATION - NEW YORK II
UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW
----------
WE THE UNDERSIGNED, Michaelanne Discepolo and Beverly C. Chell, being
respectively the Vice President and Secretary of K-III KG Corporation - New York
II hereby certify:
1. The name of the corporation is K-III KG Corporation - New York II.
2. The Certificate of Incorporation of said corporation was filed by the
Department of State on the 13th day of January, 1994.
3. The Certificate of Incorporation is amended to change the name of the
corporation. To effect the foregoing, Article First is amended to read as
follows:
FIRST: The name of the corporation of "The Katharine Gibbs Corporation
- - New York"
4. The amendment was authorized by the unanimous written consent of the
Board of Directors, there being no shareholders nor subscribers for shares, and
by the written consent of the Incorporator.
IN WITNESS WHEREOF, we have signed this certificate on the 10th day of
February, 1997 and we affirm the statements contained therein as true under
penalties of perjury.
/s/ Michaelanne Discepolo
------------------------------
Michaelanne Discepolo
Vice President
/s/ Beverly C. Chell
------------------------------
Beverly C. Chell
Secretary
<PAGE>
Exhibit 10.3
================================================================================
CREDIT AGREEMENT
among
K-III COMMUNICATIONS CORPORATION,
VARIOUS LENDING INSTITUTIONS,
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, N.A.,
AS ADMINISTRATIVE AGENT
------------------------------------------
Dated as of May 24, 1996
------------------------------------------
$250,000,000
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1. Amount and Terms of Credit.............................. 1
1.01 Commitments............................................. 1
1.02 Minimum Borrowing Amounts, etc.......................... 2
1.03 Notice of Borrowing..................................... 2
1.04 Disbursement of Funds................................... 3
1.05 Register................................................ 3
1.06 Conversions............................................. 4
1.07 Pro Rata Borrowings..................................... 4
1.08 Interest................................................ 4
1.09 Interest Periods........................................ 5
1.10 Increased Costs, Illegality, etc........................ 7
1.11 Compensation............................................ 10
1.12 Change of Lending Office................................ 11
SECTION 2. Fees; Commitments....................................... 11
2.01 Fees.................................................... 11
2.02 Voluntary Reduction of Commitments...................... 11
2.03 Mandatory Reduction of Commitments, etc................. 12
SECTION 3. Payments................................................ 13
3.01 Voluntary Prepayments................................... 13
3.02 Mandatory Repayments.................................... 13
3.03 Method and Place of Payment............................. 15
3.04 Net Payments............................................ 16
SECTION 4. Conditions Precedent.................................... 17
4.01 Execution of Agreement.................................. 17
4.02 No Default; Representations and Warranties.............. 17
4.03 Opinions of Counsel..................................... 17
4.04 Corporate Proceedings................................... 18
(i)
<PAGE>
Page
----
4.05 Existing Credit Agreements.............................. 18
4.06 Subsidiary Guaranty..................................... 19
4.07 Notice of Borrowing..................................... 19
4.08 Payment of Fees, etc.................................... 19
4.09 Contribution Agreement.................................. 19
4.10 Existing Indebtedness Agreements........................ 19
4.11 Additional Credit Agreement............................. 19
SECTION 5. Representations, Warranties and Agreements.............. 20
5.01 Corporate Status........................................ 20
5.02 Corporate Power and Authority........................... 20
5.03 No Violation............................................ 21
5.04 Litigation.............................................. 21
5.05 Use of Proceeds; Margin Regulations..................... 21
5.06 Governmental Approvals.................................. 22
5.07 Investment Company Act.................................. 22
5.08 Public Utility Holding Company Act...................... 22
5.09 True and Complete Disclosure............................ 22
5.10 Financial Statements; Financial Condition............... 23
5.11 Tax Returns and Payments................................ 23
5.12 Compliance with ERISA................................... 24
5.13 Subsidiaries............................................ 24
5.14 Intellectual Property................................... 25
5.15 Compliance with Statutes, etc........................... 26
SECTION 6. Affirmative Covenants................................... 26
6.01 Information Covenants................................... 26
6.02 Books, Records and Inspections.......................... 28
6.03 Payment of Taxes........................................ 29
6.04 Corporate Franchises.................................... 29
6.05 Compliance with Statutes, etc........................... 29
6.06 ERISA................................................... 30
6.07 End of Fiscal Years; Fiscal Quarters.................... 30
6.08 Use of Proceeds......................................... 31
6.09 Ownership of Subsidiaries............................... 31
6.10 Maintenance of Corporate Separateness................... 31
(ii)
<PAGE>
Page
----
SECTION 7. Negative Covenants...................................... 31
7.01 Changes in Business..................................... 31
7.02 Consolidation, Merger, Sale or Purchase of Assets, etc.. 32
7.03 Liens................................................... 35
7.04 Indebtedness............................................ 37
7.05 Advances, Investments and Loans......................... 39
7.06 Contingent Obligations.................................. 42
7.07 Dividends, etc.......................................... 43
7.08 Transactions with Affiliates............................ 45
7.09 Fixed Charge Coverage Ratio............................. 46
7.10 Interest Coverage Ratio................................. 46
7.11 Leverage Ratio.......................................... 46
7.12 Issuance of Stock....................................... 47
7.13 Modifications of Certain Agreements, etc................ 48
7.14 Limitation on the Creation of Subsidiaries;
Redesignation of Partially-Owned Restricted
Subsidiaries.......................................... 49
7.15 Limitation on Payments Under the Non-Compete Notes...... 50
SECTION 8. Events of Default....................................... 50
8.01 Payments................................................ 50
8.02 Representations, etc.................................... 50
8.03 Covenants............................................... 50
8.04 Default Under Other Agreements.......................... 50
8.05 Bankruptcy, etc......................................... 51
8.06 ERISA................................................... 51
8.07 Subsidiary Guaranty..................................... 52
8.08 Judgments............................................... 52
8.09 Ownership............................................... 52
SECTION 9. Definitions............................................. 53
SECTION 10. The Administrative Agent............................... 83
10.01 Appointment............................................ 83
10.02 Delegation of Duties................................... 83
(iii)
<PAGE>
10.03 Exculpatory Provisions.................................. 83
10.04 Reliance by Administrative Agent........................ 84
10.05 Notice of Default....................................... 84
10.06 Non-Reliance on Administrative Agent and Other Banks.... 85
10.07 Indemnification......................................... 85
10.08 Administrative Agent in Its Individual Capacity......... 86
10.09 Holders................................................. 87
10.10 Resignation of the Administrative Agent; Successor Agent 87
SECTION 11. Miscellaneous........................................... 87
11.01 Payment of Expenses, etc................................ 87
11.02 Right of Setoff......................................... 88
11.03 Notices................................................. 88
11.04 Benefit of Agreement.................................... 89
11.05 No Waiver; Remedies Cumulative.......................... 91
11.06 Payments Pro Rata....................................... 91
11.07 Calculations; Computations.............................. 92
11.08 Governing Law; Submission to Jurisdiction; Venue........ 92
11.09 Counterparts............................................ 93
11.10 Effectiveness........................................... 94
11.11 Headings Descriptive.................................... 94
11.12 Amendment or Waiver..................................... 94
11.13 Survival................................................ 95
11.14 Domicile of Loans....................................... 95
11.15 Confidentiality......................................... 95
11.16 Waiver of Jury Trial.................................... 95
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
(iv)
<PAGE>
EXHIBIT A -- Form of Notice of Borrowing
EXHIBIT B-1 -- Form of Opinion of Simpson, Thacher & Bartlett
EXHIBIT B-2 -- Form of Opinion of Beverly C. Chell, Esq.
EXHIBIT B-3 -- Form of Opinion of White & Case
EXHIBIT C -- Form of Officer's Certificate
EXHIBIT D -- Form of Subsidiary Guaranty
EXHIBIT E -- Form of Contribution Agreement
EXHIBIT F -- Form of Assignment and Assumption
Agreement
EXHIBIT G -- Form of Subsidiary Assumption Agreement
(v)
<PAGE>
CREDIT AGREEMENT, dated as of May 24, 1996, among K-III
COMMUNICATIONS CORPORATION, a Delaware corporation (the "Company"), the lending
institutions listed from time to time on Annex I hereto (each a "Bank" and,
collectively, the "Banks"), 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, N.A., as Administrative Agent (the "Administrative
Agent"). Unless otherwise defined herein, all capitalized terms used herein and
defined in Section 9 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 the credit facility 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
herein set forth, each Bank severally agrees at any time and from time to time
on and after the Effective Date and prior to the Conversion Date, to make a
revolving loan or revolving loans (each a "Revolving Loan" and, collectively,
the "Revolving Loans") to the Company, which Revolving Loans (i) shall, at the
option of the Company, 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 equals the Revolving Loan Commitment of such Bank at such time.
(b) Subject to and upon the terms and conditions set forth herein,
the Company and each Bank which has Revolving Loans outstanding at such time
agree that, at 9:00 A.M. (New York time) on the Conversion Date, the aggregate
principal amount of Revolving Loans owing to such Bank and outstanding at such
time shall (unless such
-1-
<PAGE>
Revolving Loans have been declared (or have become) due and payable pursuant
to this Agreement), without any notice or action by any party, automatically
convert to and thereafter constitute Term Loans owing to such Bank hereunder.
The Term Loans of any Bank (i) shall, at the option of the Company, be Base
Rate Loans or Eurodollar Loans, provided that all Term Loans comprising the
same Borrowing shall, unless otherwise specifically provided herein, consist
of Term Loans of the same Type and (ii) shall not exceed in initial principal
amount for such Bank an amount which equals the aggregate principal amount of
Revolving Loans owed to such Bank and outstanding immediately prior to such
conversion. Once repaid, Term Loans may not be reborrowed.
1.02 Minimum Borrowing Amounts, etc. The aggregate principal amount
of each Borrowing shall not be less than the Minimum Borrowing Amount. More than
one Borrowing may be incurred on any day, provided that at no time shall there
be outstanding more than 5 Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Company desires to incur
Revolving Loans hereunder, it shall give the Administrative Agent at its Notice
Office, prior to 12:00 Noon (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 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) the aggregate principal amount of the Revolving Loans to be made
pursuant to such Borrowing, (ii) the date of such Borrowing (which shall be a
Business Day) and (iii) 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 Revolving 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.
(b) Without in any way limiting the obligation of the Company to
confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent may prior to receipt of written confirmation act without
liability upon the basis of such telephonic notice, believed by the
Administrative Agent, in good faith to be from the chairman, a vice chairman,
the president, a vice president, a treasurer, an assistant
-2-
<PAGE>
treasurer or the director of treasury operations of the Company. In each such
case, the Company hereby waives the right to dispute the Administrative
Agent's record of the terms of such telephonic notice.
1.04 Disbursement of Funds. No later than 1:00 P.M. (New York time)
on the date specified in each Notice of Borrowing, each Bank will make available
its Pro Rata Share (if any) of each Borrowing requested to be made on such date
in the manner provided below. 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
Company by depositing to its account at the Payment Office the aggregate of the
amounts so made available in the type of funds received. Unless the
Administrative Agent shall have been notified by any Bank prior to the date of
Borrowing 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 Company 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
Company, 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 promptly notify the Company, and the Company
shall immediately pay such corresponding amount to the Administrative Agent. The
Administrative Agent shall also be entitled to recover from the Bank or the
Company, 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 Company 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 rate or (y) if paid by the Company,
the then applicable rate of interest, calculated in accordance with Section
1.08, for the 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 Company 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 Revolving Loan Commitments of the Banks from
time to time and (i) if prior to the Conversion Date, the principal amount of
the Revolving Loans, and (ii) if the Conversion Date has occurred, the principal
amount of the Term Loans owing
-3-
<PAGE>
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 Company or any Bank at any
reasonable time and from time to time upon reasonable prior notice.
(b) The Company 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 Company 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 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 Company 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 Company by giving the Administrative Agent
at its Notice Office, prior to 12:00 Noon (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 Loans under this
Agreement shall be made by the Banks pro rata on the basis of their Revolving
Loan Commitments. 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
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aceleration or otherwise) at a rate per annum which shall at all times be the
Applicable 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 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 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 11.07(b).
(f) The Administrative Agent, upon determining the interest rate for
any Borrowing of Eurodollar Loans for any Interest Period, shall promptly notify
the Company and the Banks thereof.
1.09 Interest Periods. At the time the Company 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 12:00 Noon (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 Agent written notice (or telephonic
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notice promptly confirmed in writing) of the Interest Period applicable to
such Borrowing, which Interest Period shall, at the option of the Company, 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. Notwithstanding anything to the contrary contained above:
(i) 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 shall extend beyond the Final Maturity Date;
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 Company that such an election will
not be permitted as a result thereof.
If upon the expiration of any Interest Period, the Company 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 Company 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.
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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 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;
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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 Company 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 Company 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 Company with respect to Eurodollar Loans which have not yet been incurred
shall be deemed rescinded by the Company, (y) in the case of clause (ii) above,
the Company 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 Company 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 Company 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.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Company may (and in
the case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii) the
Company 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 Company 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).
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(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 Company 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 Company, 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 Company'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, (y) any Bank has notified the Company 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) or 3.04 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 Company 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, provided that (i) at the time of any replacement pursuant
to this Section 1.10(c)(ii), the Replacement Bank shall enter into one or more
assignment agreements pursuant to Section 11.04(b) hereof (and with all fees
payable pursuant to said Section 11.04(b) to be paid by the Replacement Bank)
pursuant to which the Replacement Bank shall acquire all of the Revolving Loan
Commitments, if prior to the Conversion Date, and outstanding Loans of the
Replaced Bank and, in connection therewith, shall pay to the Replaced Bank 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
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Bank and (b) an amount equal to all accrued, but theretofore unpaid, Fees owing
to the Replaced Bank pursuant to Section 2.01 hereof and (ii) all obligations of
the Company 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, 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,
3.04, 10.07 and 11.01 of this Agreement) under this Agreement, which shall
survive as to such Replaced Bank.
1.11 Compensation. The Company 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 Company 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 Company; or (iv) as a consequence of (x) any
other default by the Company 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 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.
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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) or 3.04 with respect to such Bank, it will, if
requested by the Company, use reasonable efforts (subject to overall policy
considerations of such Bank) to designate another lending office for any Loans
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 Company or the right of any Bank provided in Sections 1.10 or 3.04.
SECTION 2. Fees; Commitments.
2.01 Fees. (a) The Company 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 earlier of (x) the date the Total Revolving Loan
Commitment has been terminated and (y) the Conversion Date, 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 the year
following the Effective Date and the earlier of (x) the date upon which the
Total Revolving Loan Commitment is terminated and (y) the Conversion Date.
(b) The Company shall pay to the Administrative Agent, for its own
account, such other fees as have been agreed to in writing by the Company and
the Administrative Agent.
(c) All computations of Fees shall be made in accordance with
Section 11.07(b).
2.02 Voluntary Reduction of Commitments. At any time prior to the
Conversion Date, 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 shall promptly transmit to
each of the Banks), the Company shall have the right, without premium or
penalty, to terminate or partially reduce the Total Unutilized Revolving Loan
Commitment; provided that (x) any such
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termination or partial reduction shall apply to proportionately and
permanently reduce the Revolving Loan Commitment of each of the Banks, (y)
any partial reduction pursuant to this Section 2.02 shall be in the amount of
at least $2,000,000, (z) 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 (x)) by an amount which exceeds the remainder of the Aggregate
Unutilized Revolving Loan Commitment of such Bank as in effect immediately
before giving effect to such reduction.
2.03 Mandatory Reduction of Commitments, etc. (a) 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
Company 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) 9:00 a.m. (New York time) on
the Conversion Date.
(b) 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 Company, provided that such
notice may only be given while an Event of Default exists, and (z) the date the
Company or any of its Subsidiaries shall be required to make an offer to
purchase Senior Notes or any other Indebtedness of the Company or its Restricted
Subsidiaries (other than Indebtedness 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 Company or any of its Restricted Subsidiaries of
additional Net Cash Proceeds from such Asset Sale, in each case, (x) if prior to
the Conversion Date, the Total Revolving Loan Commitment shall be reduced and
(y) if the Conversion Date has occurred, the aggregate principal amount of Term
Loans shall be repaid, in each such case, in an aggregate amount equal to the
Applicable Percentage of the then Remaining Net Cash Proceeds from such Asset
Sale.
(c) Each reduction to the Total Revolving Loan Commitment pursuant
to this Section 2.03 shall be applied proportionately to reduce the Revolving
Loan Commitment of each Bank.
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SECTION 3. Payments.
3.01 Voluntary Prepayments. The Company 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 Company 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, 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
Company prior to 12:00 Noon (New York time) at least two Business Days prior
to the date of such prepayment, which notice shall promptly be transmitted by
the Administrative Agent to each of the Banks; (ii) each partial prepayment
of any Borrowing shall be in an aggregate principal amount of at least
$1,000,000 and, if greater, in an integral multiple of $500,000, 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 pursuant to this
Section 3.01 shall reduce the then remaining Scheduled TL Repayments on a pro
rata basis (based upon the then remaining principal amount of each such
Scheduled TL Repayment); and (iv) each prepayment in respect of any Loans
made pursuant to a Borrowing shall be applied pro rata among such Loans;
provided that at the Company's election in connection with any prepayment of
Revolving Loans pursuant to this Section 3.01, such prepayment shall not be
applied to any Revolving Loans of a Defaulting Bank.
3.02 Mandatory Repayments. (a) (i) If on any date the aggregate
outstanding principal amount of Revolving Loans made by Non-Defaulting Banks (in
each case after giving effect to all other repayments thereof on such date)
exceeds the Adjusted Total Commitment as then in effect, the Company shall repay
on such date the principal of Revolving Loans of Non-Defaulting Banks in an
aggregate amount equal to such excess.
(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 Company 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 3.02, the Company shall repay, on each date set forth below (provided
that if any
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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 TL Repayment Date"), the Term Loans in an amount equal
to the product of (x) the aggregate principal amount of Revolving Loans
converted to Term Loans on the Conversion Date pursuant to Section 1.01(b)
hereof multiplied by (y) the percentage set forth below opposite such date (each
such repayment, as the same may be reduced as provided in Sections 3.01, and
3.02(d), a "Scheduled TL Repayment"):
Scheduled TL Repayment Date Percentage
--------------------------- ----------
June 30, 2000 10%
December 31, 2000 10%
June 30, 2001 10%
December 31, 2001 10%
June 30, 2002 10%
December 31, 2002 10%
June 30, 2003 10%
December 31, 2003 10%
June 30, 2004 20%
(c) In the event that a Specified Change of Control Event occurs,
the Company shall repay all outstanding Term Loans 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 Company or its Restricted Subsidiaries are
required to be repurchased, redeemed or prepaid as a result of any such
Specified Change of Control Event.
(d) The aggregate principal amount of Term Loans shall be repaid at
the times, and in the amounts, provided in Section 2.03(b). The amount of each
principal repayment of Term Loans pursuant to this Section 3.02(d) shall be
applied to reduce each of the remaining Scheduled TL Repayments on a pro rata
basis (based upon the then remaining amount of each such Scheduled TL
Repayment).
(e) Notwithstanding anything to the contrary contained in this
Agreement, all then outstanding Term Loans under this Agreement shall be repaid
in full on the Final Maturity Date.
(f) With respect to each repayment of Loans required by this Section
3.02, the Company may designate the Types of Loans which are to be repaid and
the
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specific Borrowing(s) pursuant to which made; provided that (i) Eurodollar
Loans may be designated for repayment pursuant to this Section 3.02 only on
the last day of an Interest Period applicable thereto unless all Eurodollar
Loans with Interest Periods ending on such date of required repayment and all
Base Rate Loans 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 3.02(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 3.02(a)(ii) shall be applied pro rata
among such Revolving Loans. In the absence of a designation by the Company 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 3.02, if at any time
the mandatory repayment of Loans pursuant to Section 3.02(a) or (b) arising
solely as a result of a reduction to the Revolving Loan Commitment pursuant
to Section 2.03(b) would result, after giving effect to the procedures set
forth above in this clause (f), in the Company 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 Company 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 Company 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 Company), to repay an aggregate principal amount
of such Loans equal to the Affected Eurodollar Loans not initially repaid
pursuant to this sentence.
3.03 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
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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 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.
3.04 Net Payments. All payments made by the Company hereunder will
be made without setoff, counterclaim or other defense. Promptly upon notice from
any Bank to the Company, the Company agrees to pay, prior to the date on which
penalties attach thereto, all present and future income, stamp and other taxes,
levies, or costs and charges whatsoever imposed, assessed, levied or collected
on or in respect of a Loan solely as a result of the interest rate being
determined by reference to the Eurodollar Rate, and/or the provisions of this
Agreement relating to the Eurodollar Rate, and/or the recording, registration,
notarization or other formalization of any thereof and/or any payments of
principal, interest or other amounts made on a Loan when the interest rate is
determined by reference to the Eurodollar Rate (all such taxes, levies, costs
and charges being herein collectively called "Taxes"); provided that Taxes shall
not include (x) taxes imposed on or measured by the overall net income or
receipts of the Administrative Agent or any Bank by the United States of America
or any political subdivision or taxing authority thereof or therein or (y) taxes
on or measured by the overall net income of any foreign office, branch or
subsidiary of the Administrative Agent or that Bank by any foreign country or
subdivision thereof in which the Administrative Agent's or that Bank's office,
branch or subsidiary is doing business. The Company agrees to also pay such
additional amounts equal to increases in taxes payable by that Bank described in
the foregoing proviso which increases arise solely from the receipt by that Bank
of payments made by the Company described in the immediately preceding sentence
of this Section 3.04. Promptly after the date on which payment of any such Tax
is due pursuant to applicable law, the Company will, at the request of that
Bank, furnish to that Bank evidence, in form and substance satisfactory to that
Bank, that the Company has met its obligation under this Section 3.04. The
Company agrees to indemnify each Bank against, and reimburse each Bank on demand
for, any Taxes, as reasonably determined by that Bank in its good faith. Such
Bank shall provide the Company with appropriate receipts for any payments or
reimbursements made by the Company pursuant
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to this Section 3.04. Notwithstanding the foregoing, the Company 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 (and shall not be required to make payments as otherwise
required in this Section on account of such deductions or withholdings)
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 for Federal income tax purposes or (ii) who has
the Prescribed Forms on file with the Company 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, provided that if the Company shall so
deduct or withhold any such taxes, it shall provide a statement to the
Administrative Agent and such Bank, setting forth the amount of such taxes so
deducted or withheld, the applicable rate and any other information or
documentation which the Administrative Agent or such Bank may reasonably
request for assisting the Administrative Agent or such Bank to obtain any
allowable credits or deductions for the taxes so deducted or withheld in the
jurisdiction or jurisdictions in which the Administrative Agent or such Bank
is subject to tax.
SECTION 4. Conditions Precedent. The obligation of each Bank to make
each Loan to the Company hereunder is subject, at the time of the making of each
such Loan (except as otherwise hereinafter indicated), to the satisfaction of
the following conditions:
4.01 Execution of Agreement. On or prior to the Initial Borrowing
Date, this Agreement shall have been executed and delivered in accordance with
Section 11.10.
4.02 No Default; Representations and Warranties. At the time of the
making of each Loan and also after giving effect thereto (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 the date of such Loan,
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.
4.03 Opinions of Counsel. On the Effective Date, the Administrative
Agent shall have received opinions, addressed to each of the Banks and dated the
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Effective Date, (i) from Simpson, Thacher & Bartlett, special counsel to the
Credit Parties, which opinion shall cover the matters contained in Exhibit B-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 B-2 and such other matters incident to the transactions contemplated
herein as the Administrative Agent may reasonably request, and (iii) from White
& Case, special counsel to the Administrative Agent, which opinion shall cover
the matters contained in Exhibit B-3.
4.04 Corporate Proceedings. (a) On the Effective Date, the
Administrative Agent shall have received from the Company and each Subsidiary
Guarantor, a certificate, dated the Effective Date, signed by the chairman, a
vice chairman, the president, any vice-president or the treasurer of such
Person, and attested to by the secretary or any assistant secretary of such
Person, in the form of Exhibit C 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.
(b) On the Effective Date, 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.
4.05 Existing Credit Agreements. On or prior to the Initial
Borrowing Date, the commitments under the Existing Credit Agreements shall have
been terminated, all loans thereunder shall have been repaid in full, together
with interest thereon, all letters of credit issued thereunder shall have been
terminated or incorporated as Letters of Credit under (and as defined in) the
Additional Credit Agreement, and all other amounts owing pursuant to the
Existing Credit Agreements shall have been repaid in full, and the
Administrative Agent shall have received evidence in form, scope and substance
satisfactory to it that the matters set forth in this Section 5.04 have been
satisfied at such time.
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4.06 Subsidiary Guaranty. On the Effective Date, each Subsidiary
Guarantor shall have duly authorized, executed and delivered a guaranty in the
form of Exhibit D 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.
4.07 Notice of Borrowing. The Administrative Agent shall have
received a Notice of Borrowing satisfying the requirements of Section 1.03 with
respect to any Borrowing of Revolving Loans.
4.08 Payment of Fees, etc. On the Effective Date, all costs, fees
and expenses, and all other compensation contemplated by this Agreement, due to
the Administrative Agent or the Banks shall have been paid to the extent due.
4.09 Contribution Agreement. On the Effective Date, the
Subsidiary Guarantors shall have entered into a contribution agreement 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 "Contribution
Agreement"), and the Contribution Agreement shall be in full force and effect.
4.10 Existing Indebtedness Agreements. On or prior to the Initial
Borrowing Date, 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 Company 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").
4.11 Additional Credit Agreement. On or prior to the Initial
Borrowing Date, a Borrowing under (and as defined in) the Additional Credit
Agreement shall have occurred.
The acceptance of the benefits of each Loan shall constitute a
representation and warranty by the Company to each of the Banks that all of the
applicable conditions specified above exist as of the date of such Loan. All of
the certificates, legal opinions and other documents and papers referred to in
this Section 4, 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
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Banks and shall be reasonably satisfactory in form and substance to the
Administrative Agent.
SECTION 5. Representations, Warranties and Agreements. In order to
induce the Banks to enter into this Agreement and to make the Loans provided for
herein, the Company 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 (with the making of each
Loan on and after the Initial Borrowing Date being deemed to constitute a
representation and warranty that the matters specified in this Section 5 are
true and correct in all material respects on and as of the Initial Borrowing
Date and as of the date of each such Loan, unless stated to relate to a specific
earlier date):
5.01 Corporate Status. The Company 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 Company and its
Restricted Subsidiaries taken as a whole.
5.02 Corporate Power and Authority. Each of the Company 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. Each of the Company and each of its Restricted Subsidiaries has duly
executed and delivered 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).
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5.03 No Violation. Neither the execution, delivery or performance by
the Company 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 upon any of the property or
assets of the Company 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 Company 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 ByLaws of the Company or any of its
Subsidiaries.
5.04 Litigation. There are no actions, suits or proceedings
pending, or, to the best knowledge of the Company, threatened, with respect
to the Company 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 Company 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 or the Administrative Agent or on the ability of the Company 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.
5.05 Use of Proceeds; Margin Regulations. (a) The proceeds of all
Loans shall be used for general corporate and working capital purposes of the
Company and its Subsidiaries (including, without limitation, to finance
Permitted Acquisitions and refinance Senior Notes).
(b) Neither the making of any Loan hereunder, nor the use of the
proceeds thereof, will violate the provisions of Regulation G, 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
Company may use the proceeds of Loans to purchase Margin Stock in compliance
with Regulations G, 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 7 of the
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Company, or of the Company and its Restricted Subsidiaries on a consolidated
basis, shall constitute Margin Stock.
5.06 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
Company and its Restricted Subsidiaries taken as a whole or (y) the rights or
remedies of the Banks or the Administrative Agent or on the ability of the
Company 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.
5.07 Investment Company Act. Neither the Company 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.
5.08 Public Utility Holding Company Act. Neither the Company 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.
5.09 True and Complete Disclosure. (a) All factual information
(taken as a whole) heretofore or contemporaneously furnished by the Company or
any of its Subsidiaries in writing to the Administrative Agent and/or any Bank
on or before the Initial Borrowing 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
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purposes of this Section 5.09(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.
5.10 Financial Statements; Financial Condition. (a) The consolidated
balance sheets of the Company and its Subsidiaries as at December 31, 1995 and
March 31, 1996 and the related consolidated statements of income and cash flows
of the Company 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, 1995 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 Company 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, 1996
statements, to normal year-end audit adjustments).
(b) Since December 31, 1995 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 Company
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).
5.11 Tax Returns and Payments. Each of the Company 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 for which adequate reserves have been provided
in accordance with GAAP.
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5.12 Compliance with ERISA. As of the Effective Date, there are
no Plans and neither the Company 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 Loan, 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 Company 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
Company, 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 Company,
any of its Restricted Subsidiaries or any ERISA Affiliate exists or is likely
to arise on account of any Plan; and the Company 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) where,
with respect to any of the foregoing representations in this Section 5.12,
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 Company 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 Company,
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 Company and its Restricted Subsidiaries taken
as a whole. Notwithstanding anything in this Section 5.12 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 Company.
5.13 Subsidiaries. On the Effective Date, the corporations listed on
Annex III under the name of the Company are the only Subsidiaries of the
Company.
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Annex III correctly sets forth, as of the Effective Date, the percentage
ownership (direct and indirect) of the Company in each class of capital stock
of each of its Subsidiaries and also identifies the direct owner thereof.
5.14 Intellectual Property. (a) The Company 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 condition (financial or otherwise), operations, assets,
liabilities or prospects of the Company and its Restricted Subsidiaries taken as
a whole.
(b) The Company 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 Company 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 Company 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 Company 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 Company and its Restricted Subsidiaries that are material to the Company and
its Restricted Subsidiaries taken as a whole.
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5.15 Compliance with Statutes, etc. The Company 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 Company 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 Company and its Restricted Subsidiaries
taken as a whole.
SECTION 6. Affirmative Covenants. The Company hereby covenants and
agrees that on the Effective Date and thereafter for so long as this Agreement
is in effect and until the Revolving Loan Commitments have terminated, no Notes
are outstanding and the Loans together with interest, Fees and all other
Obligations are paid in full:
6.01 Information Covenants. The Company will furnish to each Bank:
(a) Annual Financial Statements. Within 100 days after the close of
each fiscal year of the Company, the consolidated balance sheets of each
of (A) the Company and its Subsidiaries and of (B) the Company 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 Company
and its Restricted Subsidiaries the corresponding figures from the budget
for such fiscal year delivered pursuant to Section 6.01(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 Company and its Subsidiaries
or of the Company 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
Company 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
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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 Company (beginning with the
quarterly accounting period ending June 30, 1996) and, at the sole option
of the Company, 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 Company and its Subsidiaries and of (B)
the Company 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 Company
that they fairly present the financial condition of the Company and its
Subsidiaries or of the Company 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 Company, budgets of the Company and its Restricted
Subsidiaries in reasonable detail for each of the four fiscal quarters of
such fiscal year setting forth Consolidated EBITDA 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 6.01(a) and (b), a
certificate of the chief financial officer, controller or chief accounting
officer of the Company (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 Company and its
Subsidiaries were in compliance with the provisions of Sections 7.04(c),
7.05(d), 7.07 and Sections 7.09 through and including 7.11, as at the end
of such fiscal quarter or year, as the case may be and (ii) setting forth
the calculations
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demonstrating (A) with respect to each Affected Transaction consummated
during the most recently ended fiscal quarter, that the Company was in
compliance, on a Pro Forma Basis, with Sections 7.09, 7.10 and 7.11 and
(B) with respect to each business sold (or deemed sold) pursuant to
Section 7.02(c) hereof, compliance by the Company with clause (iii) of
such Section 7.02(c). In addition, at the time of the delivery of the
financial statements provided for in Section 6.01(a) and (b), a
certificate of the chief financial officer, controller or chief accounting
officer of the Company 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 Company 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
Company 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 Company 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 Company and its Restricted Subsidiaries taken as a whole,
or the ability of the Company 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 Company 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 Company 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 Company
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.
6.02 Books, Records and Inspections. The Company will, and will
cause each of its Restricted Subsidiaries to, permit, upon notice to the chief
financial
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officer or other Authorized Officer of the Company, officers and designated
representatives of the Administrative Agent or the Required Banks to visit
and inspect any of the properties or assets of the Company and any of its
Restricted Subsidiaries in whomsoever's possession, and to examine the books
of account of the Company and any of its Restricted Subsidiaries and discuss
the affairs, finances and accounts of the Company 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.
6.03 Payment of Taxes. The Company 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 7.03(a) or charge upon any properties of the Company or
any of its Restricted Subsidiaries; provided that neither the Company 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.
6.04 Corporate Franchises. The Company 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 Company and its Restricted Subsidiaries taken as
a whole; provided, however, that any transaction permitted by Section 7.02 will
not constitute a breach of this Section 6.04.
6.05 Compliance with Statutes, etc. The Company 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 Company and its
Restricted Subsidiaries taken as a whole
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or on the ability of the Company 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.
6.06 ERISA. As soon as possible and, in any event, within 30 days
after the Company, 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 expected that a material liability of
the Company and its Restricted Subsidiaries and ERISA Affiliates, taken as a
whole, could result in connection therewith, the Company will deliver to each of
the Banks a certificate of the chief financial officer or other Authorized
Officer of the Company setting forth details as to such occurrence and such
action, if any, which the Company, 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 Company, 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
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 Company, 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
Company 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.
6.07 End of Fiscal Years; Fiscal Quarters. The Company 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.
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6.08 Use of Proceeds. All proceeds of the Loans shall be used as
provided in Section 5.05.
6.09 Ownership of Subsidiaries. The Company 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 Company or any Restricted Subsidiary of any such
Restricted Subsidiary is sold, transferred or disposed of in a transaction
permitted by Section 7.02(c) or (j) or any such Restricted Subsidiary is merged,
consolidated or liquidated in a transaction permitted by Section 7.02(e),
provided that the Company shall not be required to own a majority of the capital
stock of Canadian Sailings Inc. so long as the Company continues to hold at
least as much of such capital stock as is held on the Effective Date.
6.10 Maintenance of Corporate Separateness. The Company will, and
will cause each of its Subsidiaries to, satisfy customary corporate formalities,
including the holding of regular board of directors' and shareholders' meetings
and the maintenance of corporate offices and records. Neither the Company 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 Company 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 Company and its Restricted Subsidiaries.
Finally, neither the Company 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
Company or any Restricted Subsidiary being ignored by any court of competent
jurisdiction, or in the assets and liabilities of the Company or any Restricted
Subsidiary being substantively consolidated with those of any Unrestricted
Subsidiary in a bankruptcy, reorganization or other insolvency proceeding.
SECTION 7. Negative Covenants. The Company hereby covenants and
agrees that as of the Effective Date, and thereafter for so long as this
Agreement is in effect and until the Revolving Loan Commitments have terminated,
no Notes are outstanding and the Loans, together with interest, Fees and all
other Obligations are paid in full:
7.01 Changes in Business. The Company will not, and will not permit
any of its Restricted Subsidiaries to, engage in any businesses other than
Businesses,
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provided that the Company and its Restricted Subsidiaries may engage
in businesses other than a Business so long as the businesses engaged in by the
Company and its Restricted Subsidiaries, taken as a whole, consist substantially
of Businesses.
7.02 Consolidation, Merger, Sale or Purchase of Assets, etc. The
Company 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 Company and/or its Restricted
Subsidiaries;
(b) the advances, investments and loans permitted pursuant to
Section 7.05;
(c) Asset Sales constituting the disposition of a business
(including, without limitation, to the extent permitted in this Section
7.02(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 pursuant to any
Permitted Restricted Subsidiary Conversion) (x) is for fair market value,
as determined in good faith by management of the Company (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 Company and/or its Restricted Subsidiaries in
connection with any such Asset Sale, (I) the market value of such
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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 Company or any of its Restricted Subsidiaries pursuant to
Section 7.02(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 Company and/or its Restricted Subsidiaries pursuant to
this Section 7.02(c) in any fiscal year of the Company 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 Company 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 7.02(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 Company, after giving effect to such sale, transfer or
disposition, the Company shall own at least a majority of the capital
stock of such Restricted Subsidiary;
(d) Asset Sales constituting the disposition of the capital stock
owned by the Company and its Restricted Subsidiaries of Unrestricted
Subsidiaries;
(e) any Restricted Subsidiary may be merged or consolidated with or
into, or be liquidated into, the Company or any other Restricted
Subsidiary of the Company, or all or any part of its business, properties
and assets may be conveyed, leased, sold or otherwise transferred to the
Company or any other Restricted Subsidiary, provided that (v) in any such
merger or consolidation involving the Company, the Company 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
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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 if after giving effect to such transfer
the Net Investments in Excluded Foreign Restricted Subsidiaries would
exceed $30,000,000 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 Company shall have
determined, with respect to such transaction, that the Company and its
Restricted Subsidiaries would have been in compliance, on a Pro Forma
Basis, with Sections 7.09, 7.10 and 7.11 of this Agreement;
(f) the Company 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 7.04);
(g) so long as no Default or Event of Default exists or would result
therefrom, the Company 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 Company
and its Restricted Subsidiaries shall be in compliance with Section 7.01
hereof; (B) the Company shall have determined, with respect to such
acquisition, that, on a Pro Forma Basis, the Company and its Restricted
Subsidiaries would have been in compliance with Sections 7.09, 7.10 and
7.11 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 constitute a Restricted Subsidiary and all of the applicable
provisions of Section 7.14 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 Company or any of its Restricted
Subsidiaries, its opposition to the consummation by the Company or such
Subsidiary of such acquisition;
(h) the Company 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;
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(i) Capital Expenditures by the Company and/or its Restricted
Subsidiaries made in the ordinary course of business; and
(j) the Company 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
Company; (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 Company 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 Company or any of
its Restricted Subsidiaries pursuant to Section 7.02(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 Company and its Restricted Subsidiaries in any fiscal year shall not
exceed $25,000,000.
7.03 Liens. The Company 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 Company 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 Company 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 Company 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
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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 Company 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");
(d) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 8.08;
(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 Company 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 Company 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 Company or any of its Restricted Subsidiaries of any equipment or
goods in the normal course of business, provided that such payables shall
not constitute Indebtedness;
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(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 7.04(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 7.04(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 Company or any of its Restricted
Subsidiaries in the ordinary course of business;
(o) Liens created under this Agreement and/or the other Credit
Documents;
(p) Liens created under the Additional Credit Agreement and the
other Additional Facility Documents; and
(q) Liens not otherwise permitted hereunder which secure
Indebtedness, Contingent Obligations or other obligations (in each case
permitted hereunder) not exceeding (as to the Company and its Restricted
Subsidiaries) $20,000,000 in the aggregate at any time outstanding.
7.04 Indebtedness. The Company 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 and the other
Credit Documents;
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(b) Indebtedness incurred pursuant to the Additional Credit
Agreement and the other Additional Facility Documents;
(c) Capitalized Lease Obligations of the Company and its Restricted
Subsidiaries; provided that the aggregate Capitalized Lease Obligations
under all Capital Leases outstanding at any one time shall not exceed
$50,000,000;
(d) Existing Indebtedness of the Company 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
7.04(i);
(e) Indebtedness to the extent permitted pursuant to Section
7.05(c);
(f) Indebtedness evidenced by the Subordinated Exchange Debentures
after the issuance thereof in an aggregate principal amount not to exceed
$500,000,000 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 Company 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
Final 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 Company 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 the Securities Act of 1933, as amended, the Senior
Notes, (II) in the case of other senior Indebtedness, this Agreement and
the other Credit Documents, and (III)
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in the case of other Indebtedness, similar Indebtedness of the Company
then outstanding or if no similar Indebtedness of the Company 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
Company shall have determined, with respect to the incurrence of such
Indebtedness, that the Company and its Restricted Subsidiaries would
have been in compliance, on Pro Forma Basis, with Sections 7.09, 7.10
and 7.11 of this Agreement (any Indebtedness issued pursuant to this
Section 7.04(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 7.04(j),
shall not exceed $300,000,000 at any time outstanding;
(i) Indebtedness of the Company and its Restricted Subsidiaries
constituting Permitted Refinancing Debt; and
(j) additional Indebtedness of the Company 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 $150,000,000, provided that the
aggregate principal amount of such Indebtedness incurred by the Subsidiary
Guarantors (taken as a whole), when added to the aggregate principal
amount of Additional Indebtedness incurred by the Subsidiary Guarantors
(taken as a whole) pursuant to Section 7.04(h), shall not exceed
$300,000,000 at any time outstanding.
7.05 Advances, Investments and Loans. The Company 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:
(a) the Company and its Restricted Subsidiaries may invest in cash
and Cash Equivalents;
(b) the Company 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 Company or such Restricted Subsidiary, as the
case may be;
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(c) the Company 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 Company
(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 $30,000,000, and
(ii) no such Intercompany Loan may be made by the Company 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 Company and its Restricted Subsidiaries may make loans and
advances of cash to, or cash capital contributions in, any Unrestricted
Subsidiary of the Company; 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 Company 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 Company and its Restricted Subsidiaries shall be permitted
to (i) make Permitted Acquisitions, (ii) engage in any transaction to the
extent permitted by Section 7.02(e) and (iii) acquire and hold promissory
notes issued by the purchasers of assets sold in accordance with Section
7.02(c) or 7.02(j);
(f) the Company 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;
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(g) the Company 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;
(h) Interest Rate Protection Agreements permitted by Section 7.06(d)
shall be permitted;
(i) investments by the Company 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 7.14(b)(x), all of the applicable provisions of Section 7.14
shall have been satisfied with respect to such Restricted Subsidiary, (y)
Excluded Domestic Restricted Subsidiaries, provided that, the Company
shall have determined, in connection with any such investment, that the
Company and its Restricted Subsidiaries would have been in compliance, on
a Pro Forma Basis, with Sections 7.09, 7.10 and 7.11 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 $30,000,000;
(j) the Company and its Restricted Subsidiaries may make loans and
advances to officers, employees and agents in the ordinary course of
business (i) constituting travel advances or (ii) otherwise equal in the
aggregate for the Company and its Restricted Subsidiaries, in the case of
all loans and advances pursuant to this clause (ii), to no more than
$10,000,000 at any one time outstanding less the principal amount of all
Contingent Obligations then outstanding pursuant to Section 7.06(h);
(k) the Company 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
Company, provided that (x) the aggregate amount of cash actually advanced
to all such management investors by the Company and its Restricted
Subsidiaries shall not exceed $10,000,000 at any time, and (y) the
aggregate principal amount of all such obligations, loans and advances
shall not exceed $25,000,000 at any one time outstanding; and
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(l) advances, investments and loans not otherwise permitted
hereunder with an aggregate cost or principal amount, as the case may be,
not to exceed $25,000,000 at any time outstanding.
7.06 Contingent Obligations. The Company 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 Company 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 guarantied the indebtedness refinanced thereby or
(B) such Subsidiary Guarantor would
have guarantied the indebtedness refinanced thereby if it had been a
Subsidiary of the Company while such indebtedness was outstanding;
(b) Contingent Obligations pursuant to the Subsidiary Guaranty;
(c) Contingent Obligations pursuant to the Additional Facility
Documents;
(d) Contingent Obligations under Interest Rate Protection Agreements
with respect to the Loans, loans incurred under the Additional Credit
Agreement or any other floating rate Indebtedness of the Company and its
Restricted Subsidiaries otherwise permitted by this Agreement;
(e) Contingent Obligations pursuant to the Contribution Agreement;
(f) Contingent Obligations of the Company 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) the Company may become liable as guarantor with respect to any
Indebtedness, obligation or liability of any Subsidiary Guarantor to the
extent that such Indebtedness, obligation or liability is otherwise
permitted by this Agreement;
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(h) the Company 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 $10,000,000 less the principal amount of all
loans and advances outstanding pursuant to Section 7.05(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 Company and all of its
Restricted Subsidiaries) in aggregate principal amount at any time
outstanding an amount equal to the lesser of (x) $30,000,000 and (y) when
added to the aggregate principal amount of Indebtedness outstanding under
Section 7.04(j) at such time, $150,000,000.
7.07 Dividends, etc. The Company 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 Company 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 Company 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 Company may pay regularly accruing dividends on each
issuance of Preferred Stock through the issuance of additional shares of
such Preferred Stock, provided that the Company 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 Company may pay Dividends to the Company
or to any Wholly-Owned Restricted Subsidiary of the Company;
(c) any Partially-Owned Restricted Subsidiary may pay cash Dividends
to its stockholders, provided that the Company and its Restricted
Subsidiaries
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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 (x) the Company may issue its Subordinated Exchange
Debentures in exchange for its Senior Preferred Stock in accordance with
the terms thereof, (y) the Company may issue its Subordinated Exchange
Debentures in exchange for its Series B Preferred Stock in accordance with
the terms thereof and (z) the Company may issue its Subordinated Exchange
Debentures in exchange for its Series C Preferred Stock in accordance with
the terms thereof, provided that in each such case, the Company shall have
determined, with respect to such issuance, that the Company and its
Restricted Subsidiaries would have been in compliance, on a Pro Forma
Basis, with Sections 7.09, 7.10 and 7.11 of this Agreement;
(e) the Company may exchange shares of its common stock in
replacement for shares of outstanding Preferred Stock;
(f) the Company 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 Company 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)
$5,000,000 in any fiscal year or $15,000,000 in the aggregate after the
Effective Date and (ii) the amount of cash proceeds received by the
Company in respect of the issuance of common equity to management
investors on or after the Effective Date;
(h) the Company and its Subsidiaries may enter into transactions
permitted under Section 7.05(g);
(i) the Company and its Restricted Subsidiaries may acquire the
capital stock of Unrestricted Subsidiaries in accordance with the
provisions of this Agreement;
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(j) so long as no Default or Event of Default exists at such time or
would result therefrom, the Company 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 7.04(h) and/or
7.04(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);
(k) so long as no Default or Event of Default exists at such time or
would result therefrom, the Company 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 Company does not exceed $25,000,000 and (y) the
Company shall have determined, in connection with such Dividend, that the
Company and its Restricted Subsidiaries would have been in compliance, on
a Pro Forma Basis, with Sections 7.09, 7.10 and 7.11 of this Agreement;
and
(l) the Company 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 Company shall have determined, in
connection with such Dividend, that the Company and its Restricted
Subsidiaries would have been in compliance, on a Pro Forma Basis, with
Sections 7.09, 7.10 and 7.11 of this Agreement.
7.08 Transactions with Affiliates. The Company 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 Company or any Restricted Subsidiary) other than
on terms and conditions substantially as favorable to the Company or such
Restricted Subsidiary as would be obtainable by the Company 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 Company 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 Company and its Restricted
Subsidiaries in amounts
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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 Company and/or its Restricted Subsidiaries; (v) the loans,
advances and contributions made (or deemed made) in Unrestricted Subsidiaries
in compliance with Section 7.05(d) shall be permitted; and (vi) transactions
specifically permitted by the provisions of this Agreement to occur between
the Company, its Restricted Subsidiaries and their respective Affiliates
shall be permitted to the extent so otherwise specifically permitted.
7.09 Fixed Charge Coverage Ratio. The Company will not permit the
ratio of (i) Consolidated EBITDA of the Company and its Restricted Subsidiaries
to (ii) Consolidated Fixed Charges of the Company and its Restricted
Subsidiaries, for any Test Period, to be less than 1.05 to 1.0.
7.10 Interest Coverage Ratio. The Company will not permit the ratio
of (i) Consolidated EBITDA of the Company and its Restricted Subsidiaries to
(ii) Consolidated Interest Expense of the Company 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:
Period Ratio
------ -----
Effective Date to and including
June 30, 1999 1.80 to 1.00
July 1, 1999 to and including
June 30, 2000 2.00 to 1.00
July 1, 2000 to and including
June 30, 2001 2.25 to 1.00
July 1, 2001 and thereafter 2.50 to 1.00
7.11 Leverage Ratio. The Company will not permit the ratio (the
"Leverage Ratio") of (i) Consolidated Debt of the Company and its Restricted
Subsidiaries at any date of determination thereof to (ii) Consolidated EBITDA of
the
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Company 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, 1999 6.00 to 1.00
July 1, 1999 to and including
June 30, 2000 5.50 to 1.00
July 1, 2000 to and including
June 30, 2001 5.00 to 1.00
July 1, 2001 and thereafter 4.50 to 1.00
7.12 Issuance of Stock. The Company 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 Company and its
Restricted Subsidiaries, to the extent permitted by Section 7.02, 7.03,
7.05, 7.07 or 7.13(b);
(b) issuances by Restricted Subsidiaries to the Company or to
Wholly- Owned Restricted Subsidiaries; and
(c) issuances by the Company 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 Final Maturity Date, (B) in no event shall such preferred stock
contain terms and conditions (including, without limitation, pay-in-kind
features, liquidation preferences, voting rights and
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exchange rights)materially less favorable to the Company 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 Company shall have
determined, in connection with such issuance, that the Company and its
Restricted Subsidiaries would have been in compliance, on a Pro Forma
Basis, with Sections 7.09, 7.10 and 7.11 of this Agreement, provided that,
for purposes of the calculation of compliance with Section 7.09, the ratio
set forth in Section 7.09 shall be deemed to equal 1.25 to 1.0 (any
Preferred Stock issued pursuant to this Section 7.12(c), "Additional
Preferred Stock").
7.13 Modifications of Certain Agreements, etc. The Company 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 Additional Facility
Documents, the Preferred Stock, the Subordinated Exchange Debentures, any
Additional Indebtedness, any Permitted Refinancing Debt or any agreement
related to any of the foregoing other than pursuant to a Permitted Amendment
and/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 the Subordinated Exchange Debentures and any
Permitted Refinancing Debt previously issued to refinance same may be (i)
refinanced with (A) 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 (B) the proceeds from a
common equity issuance by the Company or an issuance by the Company of
Additional Preferred Stock, in each case, after the Effective Date or (ii)
exchanged for Additional Preferred Stock or non-redeemable common equity of
the Company (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). In
addition, the Company 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 materially adversely
affect the interests of the Banks under this Agreement or the other Credit
Documents.
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7.14 Limitation on the Creation of Subsidiaries; Redesignation of
Partially-Owned Restricted Subsidiaries. (a) Notwithstanding anything to the
contrary contained in this Agreement, the Company 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 Company 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 G hereto.
(b) At any time and from time to time, (x) the Company 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 G hereto, and (y) the
Company 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 7.14(a) and at the time of any redesignation pursuant
to clause (x) of Section 7.14(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 4 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 Effective Date.
(d) Notwithstanding anything to the contrary contained in this
Section 7.14 or elsewhere in this Agreement, in no event shall any Subsidiary of
the Company guaranty any Indebtedness of the Company or any Wholly-Owned
Subsidiary unless such Subsidiary is a party to the Subsidiary Guaranty;
provided that, to the extent not prohibited by Section 7.04 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.
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7.15 Limitation on Payments Under the Non-Compete Notes. The Company
will not, and will not permit any of its Subsidiaries to, make any payment
representing the principal of, or interest on, any Non-Compete Note at any time
when any Default or Event of Default exists or would exist immediately after
giving effect to such payment.
SECTION 8. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
8.01 Payments. (a) The Company 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 interest on the
Loans or any Fees or any other amounts owing hereunder or under any other Credit
Document or (b) any Subsidiary 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 the Subsidiary Guaranty, and such default shall continue for
five or more days; or
8.02 Representations, etc. Any representation, warranty or statement
made by the Company 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
8.03 Covenants. The Company shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained
in Section 6.08 or 7, or (b) default in the due performance or observance by
it of any term, covenant or agreement (other than those referred to in
Section 8.01, 8.02 or clause (a) of this Section 8.03) 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
8.04 Default Under Other Agreements. (a) The Company 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
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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
Company 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 8.04 unless the
principal amount of any one issue of such Indebtedness or Contingent
Obligation exceeds $7,500,000 or the aggregate amount of all such
Indebtedness and Contingent Obligations referred to in clauses (a) and (b)
above exceeds $15,000,000 at any one time; or
8.05 Bankruptcy, etc. The Company or any of its Restricted
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 Company or any of its Restricted Subsidiaries
and the petition is not controverted within 10 days, or is not dismissed
within 60 days, after 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 Company or any of its Restricted
Subsidiaries; or the Company or any of its Restricted 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
Company or any of its Restricted Subsidiaries; or there is commenced against
the Company or any of its Restricted Subsidiaries any such proceeding which
remains undismissed for a period of 60 days; or the Company or any of its
Restricted Subsidiaries is adjudicated insolvent or bankrupt; or any order of
relief or other order approving any such case or proceeding is entered; or
the Company or any of its Restricted 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 Company or
any of its Restricted Subsidiaries makes a general assignment for the benefit
of creditors; or any corporate action is taken by the Company or any of its
Restricted Subsidiaries for the purpose of effecting any of the foregoing; or
8.06 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
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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 Company, 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
Company 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 Company, 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 Company and its Restricted Subsidiaries taken as a whole; or
8.07 Subsidiary Guaranty. (a) The Subsidiary Guaranty or any
provision thereof shall cease to be in full force and effect, or any Subsidiary
Guarantor thereunder or any Person acting on behalf of such Subsidiary Guarantor
shall deny or disaffirm such Subsidiary Guarantor's obligations under such
Subsidiary Guaranty or (b) except as otherwise provided in Section 8.01(b), any
Subsidiary 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 Subsidiary 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 6 (other than
Section 6.08) of this Agreement, such default shall continue unremedied for a
period of at least 30 days after notice to the defaulting Subsidiary Guarantor
by the Administrative Agent or the Required Banks; or
8.08 Judgments. One or more judgments or decrees shall be entered
against the Company or any of its Restricted Subsidiaries involving a liability
of $8,000,000 or more in the case of any one such judgment or decree or
$20,000,000 or more in the aggregate for all such judgments and decrees for the
Company and its Restricted 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
8.09 Ownership. A Change of Control Event shall have occurred;
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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 Company, take any or all
of the following actions, without prejudice to the rights of the Administrative
Agent or any Bank to enforce its claims against the Company, except as otherwise
specifically provided for in this Agreement (provided that if an Event of
Default specified in Section 8.05 shall occur with respect to the Company, 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 Revolving Loan
Commitment (or the unutilized portion thereof) terminated, whereupon the
Revolving Loan 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; and (ii) declare the
principal of and any accrued interest in respect of all Loans and all
obligations owing hereunder 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 Company.
SECTION 9. 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:
"Additional Credit Agreement" shall mean the credit agreement, dated
as of the date hereof, among the Company, Canadian Sailings Inc., a Canada
corporation, various lending institutions, The Bank of Nova Scotia, as the
Canadian lender, 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, N.A., as Administrative Agent, as amended, modified,
supplemented or extended from time to time in accordance with the terms thereof
and hereof.
"Additional Facility Amount" shall mean at any time, the aggregate
commitments then outstanding under the Additional Credit Agreement, provided
that, if at such time, any commitments with respect to any facility under the
Additional Credit Agreement shall have terminated "Additional Facility Amount"
shall mean, at such time, the aggregate principal amount of loans outstanding
with respect to such facility under the Additional Credit Facility at such time.
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"Additional Facility Documents" shall mean and include each of the
documents and other agreements entered into by the Company or any of its
Subsidiaries in connection with the Additional Credit Agreement (including,
without limitation, the Additional Credit Agreement and any guaranty or
guaranties relating thereto), 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.
"Additional Indebtedness" shall have the meaning provided in Section
7.04(h).
"Additional Preferred Stock" shall have the meaning provided in
Section 7.12(c).
"Adjusted Total Commitment" shall mean at any time the Total
Revolving Loan Commitment less the aggregate Revolving Loan Commitments of all
Defaulting Banks.
"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 10.10.
"Affected Eurodollar Loan" shall have the meaning provided in
Section 3.02(f).
"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 Company 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
7.02(e), (ii) any Permitted Acquisition, (iii) any incurrence of Additional
Indebtedness, (iv) any investment in an Excluded Domestic Restricted
Subsidiary pursuant to Section 7.05(d), (v) any issuance of Subordinated
Exchange Debentures, (vi) the payment of any Dividend as permitted by Section
7.07(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."
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"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 aggregate outstanding principal amount of all Revolving Loans made by
such Bank.
"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 1/8 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 6.01
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 6.01
Financials are required to be delivered to the Banks until the date the next
such Section 6.01 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 Applicable
Eurodollar Base Rate
Debt/EBITDA Ratio Margin Margin
- ----------------- ---------- ----------
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5.50:1 or Greater 1-1/2% 1/8 of 1%
Less than 5.50:1 but equal
to or greater than 5.00:1 1-1/8% 0%
Less than 5.00:1 but equal
to or greater than 4.50:1 7/8 of 1% 0%
Less than 4.50:1 but equal
to or greater than 4.00:1 5/8 of 1% 0%
Less than 4.00:1 1/2 of 1% 0%
; provided that if (A) any Section 6.01 Financials are not delivered when
required (the "Late Section 6.01 Financials") and such Late Section 6.01
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 6.01 Financials were required to have been delivered (the "Required
Delivery Date") and (B) the Company shall have made any interest payment during
the period from the Required Delivery Date to the actual date of delivery of
such Late Section 6.01 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 Company 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 6.01
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 6.01 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.
"Applicable Percentage" shall mean, (i) at any time prior to the
Conversion Date, a fraction (expressed as a percentage) the numerator of
which is the Total Revolving Loan Commitment at such time and the denominator
of which is equal to the sum of (y) the Total Revolving Loan Commitment at
such time and (z) the Additional Facility Amount at such time; provided that
if the Total Revolving Loan Commitment shall have terminated, the Applicable
Percentage shall be calculated based upon the aggregate principal amount of
Revolving Loans then outstanding and (ii) at any time after the Conversion
Date has occurred, a fraction (expressed as a percentage) the numerator of
which is equal to the aggregate principal amount of all Term Loans
outstanding at such time and the denominator of which is equal to the sum of
(y) the
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aggregate principal amount of Term Loans then outstanding and (z) the
Additional Facility Amount at such time.
"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 Company and reasonably satisfactory to the Administrative Agent.
"Asset Sale" shall mean any sale, transfer or other disposition by
the Company or any of its Restricted Subsidiaries to any Person other than the
Company 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 Company of its capital
stock) of the Company 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 7.02(a), (e) or (h); and (z)
for purposes of Sections 2.03(b), 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 $10,000,000).
"Authorized Officer" shall mean any officer of the Company
designated as such in writing to the Administrative Agent by the Company, 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
Company determines in good faith (x) should be reserved for post-closing
adjustments (to the extent the Company delivers to the Banks a certificate
signed by its chief financial officer, 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 Company delivers to
the Banks a certificate signed by its chief financial officer, 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
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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 Company 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
Company 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.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing or (ii) a
Bank having notified the Administrative Agent and/or the Company that it does
not intend to comply with the obligations under Section 1.01(a) or 1.01(b), 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 8.05.
"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).
"BONY Term Loan Facility" shall mean the credit facility among the
Company, various lending institutions and The Bank of New York, as Agent,
providing for the making of term loans to the Company in an aggregate amount not
to exceed $150,000,000 outstanding at any time, as same may have been modified,
supplemented or amended from time to time pursuant to the terms thereof.
"Borrowing" shall mean a borrowing of Loans from all Banks 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 Euro- dollar Loans.
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"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 and
(ii) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Euro- dollar 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 Euro- dollar 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.
"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of the Company 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
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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 Effective Date or in any agreement governing any
Indebtedness incurred pursuant to Section 7.04(f), (h), (i) or (j), (b) KKR or
one or more Affiliates of KKR shall cease to own (directly or indirectly) at
least 25% on a fully diluted basis of the economic and voting interest in the
Company's common stock or (c) any Person or "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934 , as amended)
becomes the "beneficial owner" (as defined in Rule 13d-3 of the Securities
Exchange Act of 1934, as amended) of more of the voting common stock of the
Company than that owned (directly or indirectly) by KKR and its Affiliates.
"Chase" shall mean The Chase Manhattan Bank, N.A. or any successor
thereto by merger.
"Chase Revolving Credit Facility" shall mean the amended and
restated credit facility among the Company, Canadian Sailings Inc., a Canada
corporation, various lending institutions, Bank of America NT&SA, The Bank of
New York, The Bank of Nova Scotia, Bankers Trust Company, Canadian Imperial Bank
of Commerce and Societe Generale, as Co-Agents, and Chase, as Administrative
Agent, providing for the making of revolving loans and the issuance of, and
participation in, letters of credit in an aggregate amount not to exceed
$670,000,000 outstanding at any time, as same may have been modified,
supplemented or amended from time to time pursuant to the terms thereof.
"Chase Term Loan Facility" shall mean the credit facility among the
Company, various lending institutions, Bank of America Illinois, The Bank of
Nova Scotia, Chemical Bank, Midland Bank plc and The Industrial Bank of Japan,
Limited,
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as Co-Agents, and Chase, as Administrative Agent, providing for the
making of term loans in an aggregate amount not to exceed $150,000,000
outstanding at any time, as same may have been modified, supplemented or amended
from time to time pursuant to the terms thereof.
"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.
"Commitment Fee" shall have the meaning provided in Section 2.01(a).
"Company" shall have the meaning provided in the first paragraph of
this Agreement.
"Consolidated Capital Expenditures" shall mean, for any period, the
aggregate of all Capital Expenditures by the Company 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 Company 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 Company 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 Company 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 Company and
its Restricted Subsidiaries, determined on a consolidated basis, other than
Indebtedness owing by the Company to any of its Restricted Subsidiaries or by
any of the Company's
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Restricted Subsidiaries to the Company or any other Restricted Subsidiary of
the Company, provided that, for purposes of this definition, (x) only the
principal amount of Indebtedness outstanding under the Non-Compete Notes
issued as of the date of determination (net of the amount of any reduction to
the amounts owed under such Non-Compete Notes made in accordance with the
terms of the Non-Competition Agreement referred to in the definition of
Non-Compete Notes) shall be included and (y) Indebtedness of any
Partially-Owned Restricted Subsidiary shall be included in Consolidated Debt
in an aggregate amount equal to the percentage equity ownership of the
Company 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 Company 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 Company 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 (vi), (viii) depreciation
expense and (ix) amortization expense, in the case of each of clauses (ii)
through (ix) 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 7.11 and the definitions of Applicable Margin, (1) there
shall be included in determining Consolidated EBITDA for any period (x) the net
income (or loss) 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 net income (or loss) of any related person,
business, property or assets to the extent not so acquired) by the Company 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 net income (or loss) of any
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Unrestricted Subsidiary that is converted into a Restricted Subsidiary during
such period (each, a "Converted Restricted Subsidiary"), in each case based
on the actual net income (or loss) 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 Company to represent the savings secured by the Company 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 net income (or loss) of any person, business, property or
asset (other than an Unrestricted Subsidiary) sold or disposed of by the
Company 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 net income (or loss) of any Restricted Subsidiary that is
converted into an Unrestricted Subsidiary during such period (each, a
"Converted Unrestricted Subsidiary"), in each case based on the actual net
income (or loss) 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, but only to the
extent of the equity percentage ownership of the Company 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 (the "Limited EBITDA Component") exceeds an amount
equal to 15% of the aggregate amount of Consolidated EBITDA of the Company
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 Company, (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 and the term loans outstanding
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under the Additional Credit Agreement but excluding the revolving loans
outstanding under the Additional Credit Agreement) and on the Non-Compete
Notes (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 Company 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 Company 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 Company and its
Restricted Subsidiaries determined on a consolidated basis with respect to all
outstanding Indebtedness of the Company 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 Company 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.
"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
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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
4.09.
"Conversion Date" shall mean May 23, 1997.
"Conversion Value Amount" shall have the meaning set forth in the
definition of Permitted Restricted Subsidiary Conversion.
"Copyrights" shall have the meaning provided in Section 5.14(a).
"Credit Documents" shall mean this Agreement, any Notes to the
extent issued, the Subsidiary Guaranty and the Contribution Agreement.
"Credit Party" shall mean the Company 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.
"Dividends" shall have the meaning provided in Section 7.07.
"EBITDA" shall mean, for any Restricted Subsidiary or business, for
any period, the portion of Consolidated EBITDA attributable to such Restricted
Subsidiary or business.
"Effective Date" shall have the meaning provided in Section 11.10.
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"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 Company or any Subsidiary of the Company 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 arithmetic average (rounded to the nearest 1/100
of 1%) of the offered quotation to first-class banks in the interbank Eurodollar
market by each Reference Bank for U.S. dollar deposits of amounts in same day
funds comparable to the outstanding principal amount of the Eurodollar Loan of
such Reference Bank for which an interest rate is then being determined with
maturities comparable to the Interest Period to be applicable to such Eurodollar
Loan, determined as of 10:00 A.M. (New York time) on the date which is 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); provided that if one or
more of the Reference Banks fails to provide the Administrative Agent with its
aforesaid rate, then the Eurodollar Rate in respect of Loans shall be determined
based on the rate or rates provided to the Administrative Agent by the other
Reference Banks or Bank.
"Event of Default" shall have the meaning provided in Section 8.
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"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 Company and/or
any of its Restricted Subsidiaries have consummated an Asset Sale pursuant to
Section 7.02(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 Company 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 6.01
Financials in respect of the first three fiscal quarters in each year of the
Company (commencing with the fiscal quarter ended June 30, 1996) by an amount
(if positive) equal to 75% of Excess Cash Flow for the fiscal quarter in respect
of which such Section 6.01 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 6.01 Financials
in respect of each fiscal year of the Company 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.
"Excluded Domestic Restricted Subsidiary" shall mean any Partially-
Owned Restricted Subsidiary with respect to which the Company shall have made a
Non-Guarantor Designation in accordance with the provisions hereof.
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"Excluded Foreign Restricted Subsidiaries" shall mean (i) Daily
Racing Form of Canada Ltd., a Canada corporation, (ii) Admirefruit Limited, a
U.K. corporation, (iii) Canadian Red Book, Inc., a Canada corporation, (iv)
Canadian Sailings Inc., a Canada corporation and (v) each Restricted Subsidiary
of the Company 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 7.14(a), and Section 7.14(c),
are satisfied with respect to such Subsidiary.
"Existing Contingent Obligations" shall have the meaning provided in
Section 7.06(f).
"Existing Credit Agreements" shall mean and include each of the
Chase Revolving Credit Facility, the Chase Term Loan Facility and the BONY Term
Loan Facility.
"Existing Debt" shall have the meaning provided in Section 7.04(d).
"Existing Indebtedness Agreements" shall have the meaning provided
in Section 4.10.
"Existing Preferred Stock" shall include preferred stock of the
Company 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.
"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 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 2.01 and (ii) all other fees payable to the Administrative Agent
or any Bank as may be agreed to from time to time between the Company and the
Administrative Agent or such Bank, as the case may be.
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"Final Maturity Date" shall mean June 30, 2004.
"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 7,
including defined terms as used therein, are subject (to the extent provided
therein) to Section 11.07(a).
"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.
"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.
"Information Memorandum" shall mean the Confidential Information
Memorandum dated April, 1996 and distributed to the Banks prior to the Effective
Date.
"Initial Borrowing Date" shall mean the date on or after the
Effective Date upon which the initial Borrowing of Loans hereunder occurs.
"Intellectual Property" shall have the meaning provided in Section
5.14(b).
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"Intercompany Loan" shall have the meaning provided in Section
7.05(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
designed to protect the Company or any of its Subsidiaries against fluctuations
in interest rates.
"KKR" shall mean Kohlberg Kravis Roberts & Co., a Delaware limited
partnership.
"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.
"Leverage Ratio" shall have the meaning provided in Section 7.11.
"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 (i) prior to the Conversion Date, Revolving Loans
and (ii) on or after the Conversion Date, Term Loans.
"Margin Stock" shall have the meaning provided in Regulation U.
"Maximum Exposure" shall have the meaning provided in the Additional
Credit Agreement.
"Minimum Borrowing Amount" shall mean $3,000,000.
"Minimum Retention Amount" shall mean, at any time, $10,000,000
multiplied by a fraction (i) the numerator of which shall be (x) if prior to the
Conversion Date, the Total Revolving Loan Commitment at such time or (y) if the
Conversion Date
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has occurred, the sum of the outstanding Term Loans at such time
and (ii) the denominator of which shall be $1,000,000,000.
"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 Company.
"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 Company 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 Company 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 Company 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 Company 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 Company and its Restricted Subsidiaries (other than Excluded Foreign
Restricted Subsidiaries) after the Effective Date.
"Net Maximum Exposure Reduction" shall have the meaning provided
therefor in the Additional Credit Agreement.
"Non-Compete Notes" shall mean the promissory notes issued by K-III
Holdings Corporation III pursuant to the Non-Competition Agreement, dated as of
June 17, 1991, among K-III Holdings Corporation III, News America Holdings
Incorporated and the other parties thereto in an aggregate principal amount not
to exceed $50,000,000, as such notes may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof.
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"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 the Additional Credit
Agreement) issued for the account of the Company or any of its Restricted
Subsidiaries, provided that the reimbursement obligations of the Company or such
Restricted Subsidiary with respect to such letter of credit may be secured only
to the extent permitted by Section 7.03(q).
"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 Company 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 Company 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 Company shall have determined, with respect
to such designation, that the Company and its Restricted Subsidiaries would have
been in compliance, on a Pro Forma Basis, with Sections 7.09, 7.10 and 7.11 of
this Agreement.
"Note" shall mean and include each promissory note, in the form
agreed by the Company 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.
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"Notice Office" shall mean the office of the Administrative Agent at
1 Chase Manhattan Plaza, New York, New York 10081, or such other office as the
Administrative Agent may designate to the Company 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 Company to the extent that the Company and its Wholly-Owned
Restricted Subsidiaries shall own less than 100% of the capital stock of such
Restricted Subsidiary.
"Payment Office" shall mean the office of the Administrative Agent
at 1 Chase Manhattan Plaza, New York, New York 10081, or such other office as
the Administrative Agent may designate to the Company 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
7.02(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 (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
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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
7.03(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
Company 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 Company or its
Restricted Subsidiaries, subordination provisions) not materially less
favorable to the Company 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 Company 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
Company 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 Company 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.
"Permitted Restricted Asset Sale" shall mean any sale, transfer or
other disposition by the Company or any of its Restricted Subsidiaries (other
than Canadian
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Sailings Inc.) 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 Company of its
capital stock) of the Company or such Restricted Subsidiary; provided that
the Company 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 Company shall
have delivered to the Administrative Agent the opinion of value of an
Appraisal Firm to the extent required by Section 7.02(c) and (iii) the
Company shall have, or shall have caused such Restricted Subsidiary to have,
complied with the other terms and conditions of Section 7.02(c) or (j), as
the case may be.
"Permitted Restricted Subsidiary Conversion" shall mean the
redesigna- tion by the Company of a Restricted Subsidiary (other than
Canadian Sailings Inc.) of the Company as an Unrestricted Subsidiary of the
Company 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 Company 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
Company shall have delivered to the Administrative Agent the opinion of value
of management of the Company or, to the extent required by Section 7.02(c),
the Appraisal Firm required by such Section (the value set forth in any such
opinion, the "Conversion Value Amount"), (iii) the Company shall have
complied with the other terms and conditions of Section 7.02(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 Company shall have determined, with respect to such conversion, that the
Company and its Restricted Subsidiaries would have been in compliance, on a
Pro Forma Basis, with Sections 7.09, 7.10 and 7.11 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 Company, any Restricted
Subsidiary or an ERISA Affiliate, and each such plan for the five year period
immediately following the latest
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date on which the Company, any Restricted Subsidiary or an ERISA Affiliate
maintained, contributed to or had an obligation to contribute to such plan.
"Preferred Stock" shall mean and include the Existing Preferred
Stock and, once issued, any Additional Preferred Stock and any Permitted
Replacement Preferred Stock.
"Prescribed Forms" shall mean such duly executed form(s) or
statement(s), and in such number of copies, which may, from time to time, be
prescribed by law and which, pursuant to applicable provisions of (a) an income
tax treaty between the United States and the country of residence of the Bank
providing the form(s) or statement(s), (b) the Code, or (c) any applicable rule
or regulation under the Code, permit the Company to make payments hereunder for
the account of such Bank free of deduction or withholding of income or similar
taxes.
"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 Company during the Affected Period and any
reduction of Consolidated Debt during such Affected Period effected with the
proceeds received by the Company and/or its Restricted Subsidiaries of (A) the
issuance of common equity by the Company or (B) the sale of the capital stock or
other ownership interest of the Company 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) if prior to the
Conversion Date, the percentage obtained by dividing such Bank's Revolving Loan
Commitment (if
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any) by the Total Revolving Loan Commitment; and (ii) if the Conversion Date
has occurred, the percentage obtained by dividing such Bank's outstanding
Term Loans (if any) by the aggregate of all outstanding Term Loans, provided
that, if at any time of the determination of a Bank's "Pro Rata Share"
pursuant to (i), any Revolving Loan Commitments under this Agreement shall
have been terminated, Pro Rata Share shall be calculated with reference to
the amount of Revolving Loans outstanding rather than such Revolving Loan
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.
"Reference Banks" shall mean Chase, The Bank of New York and
Bankers Trust Company.
"Register" shall have the meaning provided in Section 1.05(a).
"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 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.
"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 Company and/or its Restricted Subsidiaries minus the
portion, if any, of such Net Cash Proceeds theretofore expended by the Company
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
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waived under subsection .13, .14, .16, .18, .19 or .20 of PBGC Regulation
Section 2615.
"Required Banks" shall mean Non-Defaulting Banks, the sum of whose
(i) at all times prior to the Conversion Date, Revolving Loan Commitments (or
after the termination thereof, the then total outstanding Revolving Loans)
constitute at least 51% of the Adjusted Total Commitment (or after the
termination thereof, the then total outstanding Revolving Loans of
Non-Defaulting Banks) and (ii) on, and at all times after the Conversion Date,
outstanding Term Loans constitute at least 51% of the then total outstanding
Term Loans of Non-Defaulting Banks.
"Restricted Subsidiaries" shall mean (x) all of the Subsidiaries
of the Company in existence on the Effective Date, including, without
limitation, Canadian Sailings Inc., (y) any Subsidiary owned (directly or
indirectly) by the Company 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 Company to the extent designated by the
Company as a Restricted Subsidiary hereunder by written notice to the
Administrative Agent; provided that the Company 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) at least 51% of the capital
stock of such newly-designated Restricted Subsidiary is owned by the Company
or one or more Wholly-Owned Restricted Subsidiaries and all of the applicable
provisions of Section 7.14 shall have been complied with in respect of such
newly-designated Restricted Subsidiary, (iii) the Company shall have
determined, with respect to such designation, that the Company and its
Restricted Subsidiaries would have been in compliance, on a Pro Forma Basis,
with Sections 7.09, 7.10 and 7.11 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 Company 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(a).
"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
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column entitled "Revolving Loan Commitment", as same may be reduced from
time to time pursuant to Sections 2.02, 2.03 and/or 8.
"Scheduled TL Repayment" shall have the meaning provided in Section
3.02(b).
"Scheduled TL Repayment Date" shall have the meaning provided in
Section 3.02(b).
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Section 6.01 Financials" shall mean the financial statements
delivered, or to be delivered, pursuant to Section 6.01(a) or (b).
"Senior Note Documents" shall mean and include each of the documents
and other agreements entered into by the Company 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 Company of any Senior Notes, 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.
"Senior Notes" shall mean and include the Company's (x) 10-5/8%
Senior Secured Notes due 2002, (y) 10-1/4% Senior Notes due 2004 and (z) 8-1/2%
Senior Notes due 2006, 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.
"Senior Preferred Stock" shall mean the Company's $2.875 Senior
Exchangeable Preferred Stock, 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.
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"Series B Preferred Stock" shall mean the Company's $11.625 Series B
Exchangeable Preferred Stock, 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 C Preferred Stock" shall mean the Company's Series C
Exchangeable Preferred Stock, 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.
"Specified Change of Control Event" shall mean a Change of Control
Event of the type described in clause (a) of the definition thereof.
"Subordinated Exchange Debentures" shall mean and include the
Company's (x) 11-1/2% Subordinated Debentures due 2004, (y) 11-5/8% Class B
Subordinated Exchange Debentures due 2005 and (z) 10% Subordinated Exchange
Debentures due 2008, in each case, in the form delivered to the Banks 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.
"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, provided that
Canadian Sailings Inc. shall be deemed to be a Subsidiary of the Company for all
purposes.
"Subsidiary Guarantor" shall mean (i) each Restricted Subsidiary in
existence on the Effective Date (other than Excluded Foreign Restricted
Subsidiaries) and (ii) each Restricted Subsidiary of the Company formed after
the Effective Date and each Excluded Domestic Restricted Subsidiary designated
as such by the Company, 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 Company 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
4.06.
"Taxes" shall have the meaning provided in Section 3.04.
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"Term Loan" shall mean each Revolving Loan that is converted into a
term loan on the Conversion Date pursuant to Section 1.01(b).
"Test Period" shall mean the four consecutive fiscal quarters of the
Company then last ended.
"Total Revolving Loan Commitment" shall mean, at any time prior to
the Conversion Date, the sum of the Revolving Loan Commitments of each of the
Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at any
time, the Total Revolving Loan Commitment at such time less the aggregate
principal amount of all Revolving Loans at such time.
"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.
"Unrestricted Subsidiary" shall mean (i) any Subsidiary of the
Company that is formed or acquired after the Effective Date, which is funded
through loans, advances and/ or capital contributions as permitted by, and in
compliance with, Section 7.05(d), provided that at the time of the initial loan,
advance or capital contribution by the Company or any Restricted Subsidiary to
such Subsidiary (x) the Company designates such Subsidiary as an Unrestricted
Subsidiary in a written notice to the Administrative Agent and (y) such
Subsidiary and the Company shall have entered into a tax sharing agreement in
form and substance reasonably satisfactory to the Required Banks, (ii) any
Restricted Subsidiary of the Company 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 7.02(c) or 7.02(j), as the
case may be, and (iii) each Subsidiary of
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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 7.05(d).
"Unrestricted Subsidiary Investment Limit" shall mean, at any time,
the sum of (i) $200,000,000, (ii) the Excess Cash Flow Amount at such time,
(iii) an amount equal to all cash or other payments received by the Company and
its Restricted Subsidiaries from Unrestricted Subsidiaries from dividends or
distributions after the Effective Date (provided that for purposes of this
clause (iii), cash and other payments received by a Partially-Owned Restricted
Subsidiary shall be added to the Unrestricted Subsidiary Investment Limit only
to the extent of the equity percentage ownership of the Company in such
Partially-Owned Restricted Subsidiary), plus (iv) an amount equal to the
aggregate net proceeds received by the Company from the issuance of equity
securities of the Company after the Effective Date, provided that if the net
proceeds from any such equity issuance are not utilized to make a loan or
advance to, or a cash capital contribution in, an Unrestricted Subsidiary
pursuant to Section 7.05(d) within 30 days following the date of such equity
issuance, then the net proceeds from such equity issuance shall no longer be
added to the Unrestricted Subsidiary Investment Limit.
"U.S. Dollars" and "$" shall mean freely transferable lawful money
of the United States of America.
"Wholly-Owned Restricted Subsidiary" shall mean any Restricted
Subsidiary of the Company 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.
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SECTION 10. The Administrative Agent.
10.01 Appointment. Each Bank hereby irrevocably designates and
appoints Chase as Administrative Agent of such Bank 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 10. 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 10 are solely for the
benefit of the Administrative Agent and the Banks, and neither the Company 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
Company or any of its Subsidiaries.
10.02 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 10.03.
10.03 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 Company, 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
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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 Company 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
Company or any of its Subsidiaries. The Administrative Agent shall not be
responsible to any Bank for the effectiveness, genuineness, validity,
enforceabil- ity, 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 Company 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.
10.04 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 Company), 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 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.
10.05 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
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Company 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.
10.06 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 Company 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 Company 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
Company 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 Company 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.
10.07 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 (i) if prior to the Conversion Date, dividing such
Bank's Revolving Loan Commitment by the Adjusted
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Total Commitment or (ii) if the Conversion Date has occurred, dividing the
outstanding principal amount of such Bank's Term Loans by (x) the total
aggregate principal amount of Term Loans less (y) any Term Loans of
Defaulting Banks, it being understood and agreed that references in clause
(i) above to Revolving Loan Commitments (as well as to the Adjusted Total
Commitment) at a time when any such Revolving Loan Commitment (or Adjusted
Total Commitment) has been terminated shall be references to such terminated
Revolving Loan Commitment (or Adjusted Total Commitment, as the case may be)
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 Company 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 solely 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 from the Company 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 10.07 shall
survive the payment of all Obligations.
10.08 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 Company
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.
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10.09 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.
10.10 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 Company (such approval not to be
unreasonably withheld), whereupon such successor agent shall 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 10 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 11. Miscellaneous.
11.01 Payment of Expenses, etc. The Company 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) 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
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 and each of the Banks thereunder (including, without
limitation, the reasonable fees and disbursements of counsel (including in-house
counsel) for the Administrative
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Agent 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
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 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 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).
11.02 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 is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Company 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 11.06(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.
11.03 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 Company, 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;
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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.
11.04 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 Company may 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 Company 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 and 3.04
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 Revolving Loan 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 Revolving Loan
Commitment shall not constitute a change in the terms of any Revolving Loan
Commitment and that an increase in any Revolving Loan Commitment shall be
permitted without the consent of any participant if such participant's
participation is not increased as a result thereof), (ii) release all or
substantially all of the Subsidiary Guarantors from the Subsidiary Guaranty
(except as expressly provided in the Credit Documents) or (iii) in each case
consent to the assignment or transfer by the Company or any other Subsidiaries
of the Company of any of its rights and obligations under this Agreement or any
other Credit Document except in accordance with the terms hereof and thereof.
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(b) Notwithstanding the foregoing, (x) any Bank may assign all or a
portion of its Loans and/or Revolving Loan Commitment and its rights and
obligations hereunder to its parent corporation and/or any affiliate of such
Bank which is at least 50% owned by such Bank and/or its parent company and (y)
with the consent of the Administrative Agent and the Company (which consents
shall not be unreasonably withheld, it being understood that the Company may
withhold its consent if the result of any such assignment is that the assigning
Bank and/or the assignee Bank will not have a pro rata exposure in this
Agreement and the Additional Credit Agreement), any Bank may assign all or a
portion of its Loans and/or Revolving Loan Commitment and its rights and
obligations hereunder to one or more commercial banks or other financial
institutions (including one or more Banks). No assignment pursuant to the
immediately preceding sentence shall (x) to the extent such transaction
represents an assignment to an institution other than one or more Banks
hereunder, be in an aggregate amount less than the minimum of $10,000,000 or (y)
so long as no Default or Event of Default then exists, reduce the Revolving Loan
Commitments and/or Term Loans 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 11.04(b) shall be effected by the assigning Bank and the assignee
Bank executing an Assignment and Assumption Agreement substantially in the form
of Exhibit F (appropriately completed). At the time of any such assignment, (i)
if such assignment occurs prior to the Conversion Date, Annex I shall be deemed
to be amended to reflect the Revolving Loan Commitments of the respective
assignee Bank (which shall result in a direct reduction to the respective
Revolving Loan Commitments of the assigning Bank) and of the other Banks, (ii)
the Administrative Agent shall record such assignment and the resultant effects
thereof on the Loans and/or Revolving Loan 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 the payment of a nonrefundable assignment fee in an aggregate amount
of $3,000 with respect to each such assignment (provided that in the event of
simultaneous assignments relating to this Agreement and the Additional Credit
Agreement, the fees for such assignments shall total $3,000). Each Bank and the
Company 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 11.04(b), the assigning Bank shall promptly notify
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the Company thereof. Nothing in this Section 11.04(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.
(c) Notwithstanding any other provisions of this Section 11.04, 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 Company to file a registration statement
with the SEC or to qualify the Loans under the "Blue Sky" laws of any State.
11.05 No Waiver; Remedies Cumulative. No failure or delay on the
part of the Administrative Agent or any Bank in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of dealing
between the Company and the Administrative Agent 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 or any Bank would otherwise have. No notice to or demand on the Company in
any case shall entitle the Company to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or the Banks to any other or further action in any
circumstances without notice or demand.
11.06 Payments Pro Rata. (a) The Administrative Agent agrees that
promptly after its receipt of each payment from or on behalf of the Company in
respect of any Obligations of the Company 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 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
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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 Company to such Banks in such amount as shall result in a
proportional 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 11.06(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.
11.07 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 Company
to the Banks); provided that except as otherwise specifically provided herein,
all computations determining compliance with Section 7, 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, 1995 historical financial statements delivered to the Banks
pursuant to Section 6.10(a); provided further, that in the event that the
Accounting Standards Executive Committee of the AICPA adopts the statement of
position (substantially in the proposed form as of the Effective Date) relating
to computer software developed or obtained for internal use, and the Company's
independent auditors concur with such accounting change as it relates to the
presentation of the Company's financial statements, then compliance with Section
8 will thereafter be determined giving effect to such statement of position.
(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.
11.08 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
-92-
<PAGE>
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
Company hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts. The
Company hereby further irrevocably waives any claim that any such courts lack
jurisdiction over the Company, 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 Company. The Company 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 Company, at
its address for notices pursuant to Section 11.03, such service to become
effective 30 days after such mailing. The Company 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 Company hereby represents and warrants
that its chief executive office is located at 745 Fifth Avenue, New York, New
York 10151, and the Company 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 Company
agrees that (x) prior to moving its chief executive office outside New York
City and (y) and if for any reason any designee, appointee and agent
previously appointed pursuant to this sentence shall cease to be available to
act as such, the Company 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 Company in any other jurisdiction.
(b) The Company 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.
11.09 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
-93-
<PAGE>
constitute one and the same instrument. A complete set of counterparts
executed by all the parties hereto shall be lodged with the Company and the
Administrative Agent.
11.10 Effectiveness. This Agreement shall become effective on the
date (the "Effective Date") on which the Company, the Administrative Agent
and each of the Banks 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 Company and
each Bank prompt written notice of the occurrence of the Effective Date.
11.11 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.
11.12 Amendment or Waiver. 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 Company 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 TL
Repayment Date or reduce the amount of any Scheduled TL Repayment 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 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
Revolving Loan 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 Revolving Loan 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 (except as expressly provided in the Credit Documents) and
(iii) amend, modify or waive any provision of this Section, or Section 1.10,
1.11, 3.04, 8.01, 10.07, 11.01, 11.02, 11.04, 11.06 or 11.07(b), (iv) reduce the
percentage specified in, or otherwise modify, the definition of, Required Banks,
or (v) 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
-94-
<PAGE>
accordance with the terms hereof or thereof. No provision of Section 11 may
be amended without the consent of the Administrative Agent.
11.13 Survival. All indemnities set forth herein including, without
limitation, in Sections 1.10, 1.11, 3.04, 10.07 or 11.01, shall survive the
execution and delivery of this Agreement and the making and repayment of the
Loans and the satisfaction of all other Obligations.
11.14 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 Company shall not be responsible for costs arising
under Sections 1.10, 1.11 or 3.04 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.
11.15 Confidentiality. Each of the Banks agrees that it will use its
best efforts not to disclose without the prior consent of the Company (other
than to 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) any information with respect to the Company or any of its
Subsidiaries which is furnished pursuant to this Agreement and which is
designated by the Company 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 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 Revolving Loan Commitments or any interest herein by such Bank, provided
that such prospective transferee agrees to be bound by the provisions of this
Section.
11.16 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
-95-
<PAGE>
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
-96-
<PAGE>
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
New York, NY 10151 K-III COMMUNICATIONS
CORPORATION
Telephone No.: (212) 745-0101
Telecopier No.: (212) 745-0199 By______________________________________
Attention: Beverly Chell, Esq. Title: Treasurer
THE CHASE MANHATTAN
BANK, N.A., Individually
and as Administrative Agent
By______________________________________
Title:
-97-
<PAGE>
BANKERS TRUST COMPANY,
Individually and as
Co-Syndication Agent
By______________________________________
Title:
THE BANK OF NEW YORK,
Individually and as
Co-Syndication Agent
By______________________________________
Title:
THE BANK OF NOVA SCOTIA,
Individually, as Canadian Lender
and as Documentation Agent
By______________________________________
Title:
BANK OF AMERICA NT&SA
By______________________________________
Title:
FLEET NATIONAL BANK
-98-
<PAGE>
By______________________________________
Title:
MIDLAND BANK plc,
NEW YORK BRANCH
By______________________________________
Title:
SOCIETE GENERALE
By______________________________________
Title:
THE INDUSTRIAL BANK OF
JAPAN, LIMITED
By______________________________________
Title:
ROYAL BANK OF CANADA
By______________________________________
Title:
CIBC INC.
By______________________________________
Title:
-99-
<PAGE>
LTCB TRUST COMPANY
By______________________________________
Title:
MELLON BANK, N.A.
By______________________________________
Title:
NATIONSBANK OF TEXAS, N.A.
By______________________________________
Title:
THE DAI-ICHI KANGYO BANK, LTD.,
NEW YORK BRANCH
By______________________________________
Title:
THE MITSUBISHI TRUST AND
BANKING CORPORATION
By______________________________________
Title:
-100-
<PAGE>
THE SAKURA BANK, LIMITED,
NEW YORK BRANCH
By______________________________________
Title:
TORONTO DOMINION (NEW YORK),
INC.
By______________________________________
Title:
CREDIT LYONNAIS
NEW YORK BRANCH
By______________________________________
Title:
BANK OF MONTREAL
By______________________________________
Title:
CAISSE NATIONALE DE
CREDIT AGRICOLE
By______________________________________
Title:
-101-
<PAGE>
THE SUMITOMO TRUST AND
BANKING CO., LTD.,
NEW YORK BRANCH
By______________________________________
Title:
UNION BANK OF CALIFORNIA, N.A.
By______________________________________
Title:
UNITED JERSEY BANK
By______________________________________
Title:
BANQUE PARIBAS
By______________________________________
Title:
By______________________________________
Title:
-102-
<PAGE>
CREDIT SUISSE
By______________________________________
Title:
By______________________________________
Title:
MERITA BANK LTD.
By______________________________________
Title:
SIGNET BANK
By______________________________________
Title:
THE SANWA BANK, LIMITED,
NEW YORK BRANCH
By______________________________________
Title:
BANK OF IRELAND,
GRAND CAYMAN BRANCH
By______________________________________
Title:
-103-
<PAGE>
THE YASUDA TRUST AND BANKING
CO., LTD., NEW YORK BRANCH
By______________________________________
Title:
-104-
<PAGE>
ANNEX I
LIST OF BANKS
Revolving Loan
Bank Commitment
- ---- --------------
The Chase Manhattan Bank, N.A. $ 20,000,000
Bankers Trust Company 15,000,000
The Bank of New York 15,000,000
The Bank of Nova Scotia 15,000,000
Bank of America NT&SA 12,000,000
Fleet National Bank 12,000,000
Midland Bank plc, New York Branch 12,000,000
Societe Generale 12,000,000
The Industrial Bank of
Japan, Limited 12,000,000
Royal Bank of Canada 10,000,000
CIBC Inc. 8,000,000
LTCB Trust Company 8,000,000
Mellon Bank, N.A. 8,000,000
NationsBank of Texas, N.A. 8,000,000
The Dai-Ichi Kangyo Bank, Ltd., 8,000,000
New York Branch
The Mitsubishi Trust and 8,000,000
Banking Corporation
The Sakura Bank, Limited, 8,000,000
New York Branch
Toronto Dominion (New York), Inc. 8,000,000
Credit Lyonnais 7,000,000
New York Branch
<PAGE>
ANNEX I
Page 2
Revolving Loan
Bank Commitment
- ---- --------------
Bank of Montreal 5,000,000
Caisse Nationale de Credit Agricole 5,000,000
The Sumitomo Trust and 5,000,000
Banking Co., Ltd.,
New York Branch
Union Bank of California, N.A. 5,000,000
United Jersey Bank 5,000,000
Banque Paribas 3,000,000
Credit Suisse 3,000,000
Merita Bank Ltd. 3,000,000
Signet Bank 3,000,000
The Sanwa Bank, Limited, 3,000,000
New York Branch
Bank of Ireland, Grand Cayman Branch 2,000,000
The Yasuda Trust and 2,000,000
Banking Co., Ltd., New York Branch
Total $250,000,000
============
<PAGE>
ANNEX II
BANK ADDRESSES
Bank Address
- ---- -------
The Chase Manhattan Bank, N.A. 1 Chase Manhattan Plaza
New York, New York 10081
Telephone No.: (212) 552-3993
Telecopier No.: (212) 552-0259
Attention: James R. Kuster
Bankers Trust Company One Bankers Trust Plaza
New York, New York 10006
Telephone No.: (212) 250-7199
Telecopier No.: (212) 250-7200
Attention: Jeff Bennett
The Bank of New York 1 Wall Street
16th Floor
New York, New York 10286
Telephone No.: (212) 635-8608
Telecopier No.: (212) 635-8595
Attention: Ted Ryan
Bank of Nova Scotia One Liberty Plaza,
26th Floor
New York, New York 10006
Telephone No.: (212) 225-5042
Telecopier No.: (212) 225-5090
Attention: Vincent Fitzgerald
Canadian Notice Office and Canadian
Payment Office:
International Banking Division
Loan Administration and Agency Services
44 Kings Street West, 14th Floor
Toronto, Ontario
Canada M5H 1H1
Telephone No.: (416) 866-
5901/2816/4089
Telecopier No.: (416) 866-5991
Attention: Wallace Yeung/
Nancy Buccat/Nancy Tong
<PAGE>
ANNEX II
Page 2
Bank of America NT&SA 335 Madison Avenue
5th Floor
New York, New York 10017
Telephone No.: (212) 503-8352
Telecopier No.: (212) 503-7173
Attention: Amy Trapp
Fleet National Bank 75 State Street
Boston, Massachusetts 02109
Telephone No.: (617) 346-3761
Telecopier No.: (617) 346-3777
Attention: Alex Ivanov
Midland Bank plc, 140 Broadway
New York Branch 5th Floor
New York, New York 10005
Telephone No.: (212) 658-2738
Telecopier No.: (212) 658-2586
Attention: Martin Brown
Societe Generale 1221 Avenue of the Americas
New York, New York 10020
Telephone No.: (212) 278-6852
Telecopier No.: (212) 278-6240
Attention: Elaine Khalil
The Industrial Bank of 245 Park Avenue
Japan, Limited 23rd Floor
New York, New York 10167
Telephone No.: (212) 309-6562
Telecopier No.: (212) 682-2870
Attention: Akira Yoshida
Royal Bank of Canada One Financial Square
New York, New York 10005-3531
Telephone No.: (212) 428-6288
Telecopier No.: (212) 428-6460
Attention: Barbara Meijer
CIBC Inc. 425 Lexington Avenue
6th Floor
New York, New York 10038
Telephone No.: (212) 856-3714
Telecopier No.: (212) 856-3558
Attention: Matt Jones
<PAGE>
ANNEX II
Page 3
LTCB Trust Company 165 Broadway
49th Floor
New York, New York 10006
Telephone No.: (212) 335-4991
Telecopier No.: (212) 608-2371
Attention: Chris Fahey
Mellon Bank, N.A. One Mellon Bank Center
Room 4440
Pittsburgh, Pennsylvania 15258
Telephone No.: (412) 234-3697
Telecopier No.: (412) 234-6375
Attention: Stephen Viehe
NationsBank of Texas, N.A. Communications Finance Division
901 Main Street, 64th Floor
Dallas, Texas 75202
Telephone No.: (214) 508-0517
Telecopier No.: (214) 508-9390
Attention: Tony Cacheria
The Dai-Ichi Kangyo Bank, Ltd., One World Trade Center
New York Branch New York, New York 10048
Telephone No.: (212) 432-6655
Telecopier No.: (212) 524-0579
Attention: Michael Wellington
The Mitsubishi Trust and 520 Madison Avenue
Banking Corporation 26th Floor
New York, New York 10022
Telephone No.: (212) 891-8425
Telecopier No.: (212) 593-4691
Attention: Anthony Rock
The Sakura Bank, Limited, 277 Park Avenue
New York Branch 45th Floor
New York, New York 10172
Telephone No.: (212) 756-6774
Telecopier No.: (212) 888-7651
Attention: Stephen Chan
Toronto Dominion (New York), 31 West 52nd Street
Inc. New York, New York 10019
Telephone No.: (212) 468-0731
Telecopier No.: (212) 262-1928
Attention: David Oliver
<PAGE>
ANNEX II
Page 4
with a copy to:
909 Fannin
Suite 1700
Houston, Texas 77010
Telephone No.: (713) 653-8242
Telecopier No.: (713) 951-9921
Attention: Jorge Garcia
Credit Lyonnais 1301 Avenue of the Americas
New York Branch New York, New York 10019
Telephone No.: (212) 261-7863
Telecopier No.: (212) 459-3176
Attention: Nick Bellamy
Bank of Montreal 430 Park Avenue
New York, New York 10022
Telephone No.: (212) 605-1426
Telecopier No.: (212) 605-1621
Attention: Allegra Griffiths
Caisse Nationale de Credit 520 Madison Avenue
Agricole New York, New York 10022
Telephone No.: (212) 418-2217
Telecopier No.: (212) 418-7004
Attention: John McCloskey
The Sumitomo Trust and 527 Madison Avenue
Banking Co., Ltd., New York, New York 10022
New York Branch Telephone No.: (212) 326-0716
Telecopier No.: (212) 418-4848
Attention: Mitchell Gervis
Union Bank of California, N.A. 445 South Figueroa Street
15th Floor
Los Angeles, California 90071
Telephone No.: (213) 236-5812
Telecopier No.: (213) 236-5747
Attention: Michael K. McShane
United Jersey Bank 25 East Salem Street
Hackensack, New Jersey 07602
Telephone No.: (201) 646-6189
Telecopier No.: (201) 343-6723
Attention: Bruce Gray
<PAGE>
ANNEX II
Page 5
Banque Paribas 787 Seventh Avenue
New York, New York 10019
Telephone No.: (212) 841-2126
Telecopier No.: (212) 841-2369
Attention: Errol Artzis
Credit Suisse 12 East 49th Street
Tower 49
New York, New York 10017
Telephone No.: (212) 238-5458
Telecopier No.: (212) 238-5439
Attention: J. Hamilton Crawford
Merita Bank Ltd. 437 Madison Avenue
New York, New York 10022
Telephone No.: (212) 318-9561
Telecopier No.: (212) 421-4420
Attention: Frank Maffei
Signet Bank 7799 Leesburg Pike
Suite 500
Falls Church, Virginia 22043
Telephone No.: (703) 714-5016
Telecopier No.: (703) 506-9712
Attention: John Slabaugh
The Sanwa Bank, Limited, New Park Avenue Plaza
York Branch 55 East 52nd Street
New York, New York 10055
Telephone No.: (212) 339-6204
Telecopier No.: (212) 754-1304
Attention: Shayn March
Bank of Ireland, Grand Cayman 640 Fifth Avenue
Branch New York, New York 10019
Telephone No.: (212) 397-1712
Telecopier No.: (212) 307-5559
Attention: Roger Burns
The Yasuda Trust & Banking Co., 666 5th Avenue
Ltd., New York Branch 8th Floor
New York, New York 10103
Telephone No.: (212) 373-5713
Telecopier No.: (212) 373-5796
Attention: Rohn M. Laudenschlager
<PAGE>
ANNEX III
SUBSIDIARIES
<PAGE>
ANNEX IV
LIENS
<PAGE>
ANNEX V
PART A. EXISTING DEBT
[To include existing Senior Notes and Non-Compete Notes]
PART B. EXISTING CONTINGENT OBLIGATIONS
<PAGE>
ANNEX VI
EXISTING PREFERRED STOCK
<PAGE>
Exhibit 10.4
================================================================================
CREDIT AGREEMENT
among
K-III COMMUNICATIONS CORPORATION,
CANADIAN SAILINGS INC.,
VARIOUS LENDING INSTITUTIONS,
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, N.A.,
AS ADMINISTRATIVE AGENT
------------------------------------------
Dated as of May 24, 1996
------------------------------------------
$1,250,000,000
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1. Amount and Terms of Credit............................. 1
1.01 Commitments............................................. 1
1.02 Minimum Borrowing Amounts, etc.......................... 6
1.03 Notice of Borrowing..................................... 6
1.04 Disbursement of Funds................................... 7
1.05 Register................................................ 9
1.06 Conversions............................................. 9
1.07 Pro Rata Borrowings..................................... 9
1.08 Interest................................................ 10
1.09 Interest Periods........................................ 11
1.10 Increased Costs, Illegality, etc........................ 12
1.11 Compensation............................................ 16
1.12 Change of Lending Office................................ 16
1.13 Tranche B Commitments................................... 17
SECTION 2. Letters of Credit...................................... 18
2.01 Letters of Credit....................................... 18
2.02 Minimum Stated Amount................................... 19
2.03 Letter of Credit Requests; Notices of Issuance.......... 19
2.04 Agreement to Repay Letter of Credit Drawings............ 19
2.05 Letter of Credit Participations......................... 20
2.06 Increased Costs......................................... 22
SECTION 3. Fees; Commitments...................................... 23
3.01 Fees.................................................... 23
3.02 Voluntary Reduction of Commitments...................... 24
3.03 Mandatory Reduction of Commitments, etc................. 25
SECTION 4. Payments............................................... 28
4.01 Voluntary Prepayments................................... 28
4.02 Mandatory Repayments.................................... 29
4.03 Method and Place of Payment............................. 32
4.04 Net Payments............................................ 32
(i)
<PAGE>
Page
----
SECTION 5. Conditions Precedent................................... 34
5.01 Execution of Agreement.................................. 34
5.02 No Default; Representations and Warranties.............. 34
5.03 Opinions of Counsel..................................... 34
5.04 Corporate Proceedings................................... 35
5.05 Existing Credit Agreements.............................. 35
5.06 Guaranties.............................................. 35
5.07 Notice of Borrowing; Letter of Credit Request........... 36
5.08 Payment of Fees, etc.................................... 36
5.09 Contribution Agreement.................................. 36
5.10 Existing Indebtedness Agreements........................ 36
SECTION 6. Representations, Warranties and Agreements............. 37
6.01 Corporate Status........................................ 37
6.02 Corporate Power and Authority........................... 37
6.03 No Violation............................................ 38
6.04 Litigation.............................................. 38
6.05 Use of Proceeds; Margin Regulations..................... 38
6.06 Governmental Approvals.................................. 39
6.07 Investment Company Act.................................. 39
6.08 Public Utility Holding Company Act...................... 39
6.09 True and Complete Disclosure............................ 40
6.10 Financial Statements; Financial Condition............... 40
6.11 Tax Returns and Payments................................ 41
6.12 Compliance with ERISA................................... 41
6.13 Subsidiaries............................................ 42
6.14 Intellectual Property................................... 42
6.15 Compliance with Statutes, etc........................... 43
SECTION 7. Affirmative Covenants.................................. 43
7.01 Information Covenants................................... 43
7.02 Books, Records and Inspections.......................... 46
7.03 Payment of Taxes........................................ 46
7.04 Corporate Franchises.................................... 46
7.05 Compliance with Statutes, etc........................... 47
7.06 ERISA................................................... 47
7.07 End of Fiscal Years; Fiscal Quarters.................... 48
7.08 Use of Proceeds......................................... 48
(ii)
<PAGE>
Page
----
7.09 Ownership of Subsidiaries............................... 48
7.10 Maintenance of Corporate Separateness................... 48
7.11 Canadian Borrower Capital Structure..................... 49
SECTION 8. Negative Covenants..................................... 49
8.01 Changes in Business..................................... 49
8.02 Consolidation, Merger, Sale or Purchase of Assets, etc.. 49
8.03 Liens................................................... 53
8.04 Indebtedness............................................ 55
8.05 Advances, Investments and Loans......................... 57
8.06 Contingent Obligations.................................. 59
8.07 Dividends, etc.......................................... 61
8.08 Transactions with Affiliates............................ 63
8.09 Fixed Charge Coverage Ratio............................. 63
8.10 Interest Coverage Ratio................................. 64
8.11 Leverage Ratio.......................................... 64
8.12 Issuance of Stock....................................... 65
8.13 Modifications of Certain Agreements, etc................ 65
8.14 Limitation on the Creation of Subsidiaries; Redesignation
of Partially-Owned Restricted Subsidiaries............ 66
8.15 Limitation on Payments Under the Non-Compete Notes...... 67
SECTION 9. Events of Default...................................... 68
9.01 Payments................................................ 68
9.02 Representations, etc.................................... 68
9.03 Covenants............................................... 68
9.04 Default Under Other Agreements.......................... 68
9.05 Bankruptcy, etc......................................... 69
9.06 ERISA................................................... 69
9.07 Guaranty................................................ 70
9.08 Judgments............................................... 70
9.09 Ownership............................................... 70
SECTION 10. Definitions............................................ 71
SECTION 11. The Administrative Agent..............................110
11.01 Appointment............................................110
11.02 Delegation of Duties...................................111
(iii)
<PAGE>
Page
----
11.03 Exculpatory Provisions.................................111
11.04 Reliance by Administrative Agent.......................112
11.05 Notice of Default......................................112
11.06 Non-Reliance on Administrative Agent and Other Banks...112
11.07 Indemnification........................................113
11.08 Administrative Agent in Its Individual Capacity........114
11.09 Holders................................................114
11.10 Resignation of the Administrative Agent; Successor
Agent................................................114
SECTION 12. Miscellaneous.........................................115
12.01 Payment of Expenses, etc...............................115
12.02 Right of Setoff........................................116
12.03 Notices................................................116
12.04 Benefit of Agreement...................................116
12.05 No Waiver; Remedies Cumulative.........................119
12.06 Payments Pro Rata......................................119
12.07 Calculations; Computations.............................120
12.08 Governing Law; Submission to Jurisdiction; Venue.......120
12.09 Counterparts...........................................121
12.10 Effectiveness..........................................122
12.11 Headings Descriptive...................................122
12.12 Amendment or Waiver....................................122
12.13 Survival...............................................123
12.14 Domicile of Loans......................................123
12.15 Confidentiality........................................123
12.16 Waiver of Jury Trial...................................124
(iv)
<PAGE>
ANNEX I List of Banks
ANNEX II Bank Addresses
ANNEX III Existing Letters of Credit
ANNEX IV Subsidiaries
ANNEX V Liens
ANNEX VI Existing Debt/Existing Contingent Obligations
ANNEX VII Existing Preferred Stock
EXHIBIT A -- Form of Notice of Borrowing
EXHIBIT B -- Form of Tranche B Assumption Agreement
EXHIBIT C-1 -- Form of Opinion of Simpson, Thacher & Bartlett
EXHIBIT C-2 -- Form of Opinion of Beverly C. Chell, Esq.
EXHIBIT C-3 -- Form of Opinion of Canadian Counsel
EXHIBIT C-4 -- Form of Opinion of White & Case
EXHIBIT D -- Form of Officer's Certificate
EXHIBIT E-1 -- Form of Subsidiary Guaranty
EXHIBIT E-2 -- Form of Company Guaranty
EXHIBIT F -- Form of Contribution Agreement
EXHIBIT G -- Form of Assignment and Assumption
Agreement
EXHIBIT H -- Form of Subsidiary Assumption Agreement
(v)
<PAGE>
CREDIT AGREEMENT, dated as of May 24, 1996, among K-III
COMMUNICATIONS CORPORATION, a Delaware corporation (the "Company"), CANADIAN
SAILINGS INC., a Canada corporation (the "Canadian Borrower"), the
lending institutions listed from time to time on Annex I hereto (each a "Bank"
and, collectively, the "Banks"), THE BANK OF NOVA SCOTIA, as the Canadian
Lender, 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, N.A., 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 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 Commitment severally agrees to
make, on the Initial Borrowing Date, a term loan or term loans (each a "Term
Loan" and, collectively, the "Term Loans") to the Company, which Term Loans (i)
shall be made pursuant to a single drawing, (ii) shall, at the option of the
Company, be Base Rate Loans or Eurodollar Loans, provided that all Term Loans
made as part of the same Borrowing shall, unless otherwise specifically provided
herein, consist of Term Loans of the same Type, (iii) shall equal for each Bank,
in initial aggregate principal amount, that amount which equals the Term Loan
Commitment of such Bank on the Initial Borrowing Date (before giving effect to
the termination thereof on such date pursuant to Section 3.03(d)). Once repaid,
Term Loans incurred hereunder may not be reborrowed.
(b) Subject to and upon the terms and conditions herein set forth,
each Bank with a Tranche A Revolving Loan Commitment severally agrees at any
time and
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from time to time on and after the Initial Borrowing Date and prior to the
Final Maturity Date, to make a revolving loan or revolving loans (each a
"Tranche A Revolving Loan" and, collectively, the "Tranche A Revolving
Loans") to the Company, which Tranche A Revolving Loans (i) shall, at the
option of the Company, be Base Rate Loans or Eurodollar Loans, provided that
all Tranche A Revolving Loans made as part of the same Borrowing shall,
unless otherwise specifically provided herein, consist of Tranche A 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, (y) the outstanding principal amount of Swingline
Loans at such time plus (z) the Dollar Equivalent of the outstanding
principal amount of Canadian Dollar Loans at such time, equals (1) if such
Bank is a Non-Defaulting Bank, the Adjusted Tranche A Commitment of such Bank
at such time and (2) if such Bank is a Defaulting Bank, the Tranche A
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, the
Dollar Equivalent of the aggregate principal amount of Canadian Dollar Loans
then outstanding and the aggregate amount of all Letter of Credit
Outstandings at such time, an amount equal to the Total Tranche A Revolving
Loan Commitment at such time.
(c) Subject to and upon the terms and conditions herein set forth,
each Bank with a Tranche B Revolving Loan Commitment severally agrees at any
time and from time to time on and after the Tranche B Assumption Date with
respect to such Bank and prior to the Final Maturity Date, to make a revolving
loan or revolving loans (each a "Tranche B Revolving Loan" and together with the
Tranche A Revolving Loans, the "Revolving Loans") to the Company, which Tranche
B Revolving Loans (i) shall, at the option of the Company, be Base Rate Loans or
Eurodollar Loans, provided that all Tranche B Revolving Loans made as part of
the same Borrowing shall, unless otherwise specifically provided herein, consist
of Tranche B 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 equals the Tranche B
Revolving Loan Commitment of such Bank 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 Company, which Swingline Loans (i)
shall be made and maintained as Base Rate
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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 Tranche
A Revolving Loans made by Non-Defaulting Banks then outstanding, the Dollar
Equivalent of the principal amount of all Canadian Dollar Loans then
outstanding and the Letter of Credit Outstandings at such time, an amount
equal to the Adjusted Total Tranche A Commitment then in effect (after giving
effect to any reductions to the Adjusted Total Tranche A 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 Tranche A 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 Tranche A 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 Tranche A Revolving Loan Commitment pro rata based on each Bank's
Adjusted Percentage (determined before giving effect to any termination of the
Tranche A 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 Tranche A Revolving Loan Commitment or Adjusted Total
Tranche A Commitment after any such Swingline Loans 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 Company), 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 Company 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
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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
Tranche A 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 Tranche A 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.
(f) Subject to and upon the terms and conditions herein set forth,
the Canadian Lender 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 Final
Maturity Date, a revolving loan or revolving loans (each a "Canadian Dollar
Loan" and, collectively, the "Canadian Dollar Loans") to the Canadian Borrower,
which Canadian Dollar Loans (i) shall, at the option of the Canadian Borrower,
be Base Rate Loans or Eurodollar Loans, provided that all Canadian Dollar Loans
made as part of the same Borrowing shall, unless otherwise specifically provided
herein, consist of Canadian Dollar Loans of the same Type, (ii) may be repaid
and reborrowed in accordance with the provisions hereof, (iii) shall not exceed
in Dollar Equivalent aggregate principal amount at any time outstanding, when
combined with the aggregate principal amount of all Tranche A Revolving Loans
made by Non-Defaulting Banks then outstanding, the aggregate principal amount of
all Swingline Loans then outstanding and the Letter of Credit Outstandings at
such time, an amount equal to the Adjusted Total Tranche A Commitment then in
effect (after giving effect to any reductions to the Adjusted Total Tranche A
Commitment on such date) and (iv) shall not exceed in Dollar Equivalent
aggregate principal amount at any time outstanding the Maximum Canadian Dollar
Amount. The Canadian Lender will not make a Canadian Dollar 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. On the date of the making of any Canadian Dollar Loan, the Canadian
Lender shall notify the Administrative Agent and the Canadian Borrower of the
Dollar Equivalent of such Borrowing of Canadian Dollar Loans on such date.
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<PAGE>
(g) On any Business Day, the Canadian Lender may, in its sole
discretion, give notice to the Banks that all outstanding Canadian Dollar
Loans shall be assigned to the Banks (provided that such notice shall be
deemed to have been automatically given upon the occurrence of an Event of
Default under Section 9.05). Each Bank with a Tranche A Revolving Loan
Commitment hereby irrevocably and unconditionally agrees that in the event
that any such notice is given or deemed given, such Bank shall purchase from
the Canadian Lender (without recourse or warranty other than that such
Canadian Dollar Loans are free and clear of any Liens) an assignment of the
outstanding Canadian Dollar Loans in an amount equal to such Bank's Adjusted
Percentage of such outstanding Canadian Dollar Loans in accordance with the
provisions of this Section 1.01(g). Any such purchase shall be made on the
second immediately succeeding Business Day, on which Business Day each such
Bank shall pay to the Administrative Agent for the account of the Canadian
Lender an amount equal to such Bank's Adjusted Percentage of all outstanding
Canadian Dollar Loans in Canadian Dollars and same day funds. If and to the
extent any such Bank shall not have so made its Adjusted Percentage of the
outstanding principal amount of the Canadian Dollar Loans available to the
Administrative Agent for the account of the Canadian Lender, such Bank agrees
to pay to the Administrative Agent for the account of the Canadian Lender,
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 Canadian Lender at the overnight Federal Funds rate.
All interest payable on the Canadian Dollar Loans shall be for the account of
the Canadian Lender 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. The failure
of any such Bank to make available to the Administrative Agent for the
account of the Canadian Lender its Adjusted Percentage of the outstanding
principal amount of Canadian Dollar Loans shall not relieve any other Bank of
its obligation hereunder to make available to the Administrative Agent for
the account of the Canadian Lender its Adjusted Percentage of the outstanding
principal amount of Canadian Dollar Loans on the date required, as specified
above, but no Bank shall be responsible for the failure of any other Bank to
make available to the Administrative Agent for the account of the Canadian
Lender such other Bank's Adjusted Percentage of any such payment. Each such
Bank hereby irrevocably agrees to purchase its Adjusted Percentage of the
outstanding Canadian Dollar Loans in the manner specified above and on the
date specified above notwithstanding (i) whether any conditions specified in
Section 5 are then satisfied, (ii) whether a Default or an Event of Default
has occurred and is continuing, (iii) the date of such purchase and (iv) any
reduction in the Total Tranche A Revolving Loan Commitment or Adjusted Total
Tranche A Commitment after any such Canadian Dollar Loans were made.
Notwithstanding the foregoing, to the
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extent any Bank determines that at the time of a purchase of Canadian Dollar
Loans pursuant to this Section 1.01(g), it is unable to obtain Canadian
Dollars with which to fund such purchase, it may, upon notice to the Canadian
Lender and the Administrative Agent, fund such purchase in U.S. Dollars in an
aggregate amount which the Canadian Lender determines, in its sole
discretion, is equivalent to what the Canadian Lender would have received if
such Bank had funded in Canadian Dollars.
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 15 Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Company desires to incur
Loans hereunder (excluding Swingline Loans, Canadian Dollar Loans, and Revolving
Loans incurred pursuant to a Mandatory Borrowing), it shall give the
Administrative Agent at its Notice Office, prior to 12:00 Noon (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
Sections 1.03(b)(i) and 1.03(c), 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, Tranche A
Revolving Loans or Tranche B 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.
(b) (i) Whenever the Company 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
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<PAGE>
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 Company irrevocably agreeing, by its incurrence of any
Swingline Loan, to the making of Mandatory Borrowings as set forth in such
Section.
(c) Whenever the Canadian Borrower desires to incur a Borrowing of
Canadian Dollar Loans hereunder, it shall give the Canadian Lender and the
Administrative Agent, prior to 12:00 Noon (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 of
Borrowing, except as otherwise expressly provided in Section 1.10, shall be
irrevocable and shall specify in each case (i) the date of such Borrowing (which
shall be a Business Day), (ii) the aggregate principal amount of the Canadian
Dollar Loan to be made pursuant to such Borrowing and (iii) 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.
(d) Without in any way limiting the obligation of either 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), the
Canadian Lender (in the case of a Borrowing of Canadian Dollar 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, the Canadian Lender or the Letter of Credit Issuer,
as the case may be, in good faith to be from the chairman, a vice chairman, the
president, a vice president, a treasurer, an assistant treasurer or the director
of treasury operations of such Borrower. In each such case, each Borrower hereby
waives the right to dispute the Administrative Agent's, Chase's, the Canadian
Lender'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
other than Canadian Dollar 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
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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 Company 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 Company 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 Company, 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 promptly notify the Company, and the Company shall immediately pay such
corresponding amount to the Administrative Agent. The Administrative Agent
shall also be entitled to recover from the Bank or the Company, 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 Company 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 rate or (y) if paid by the Company, 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 Company may have against any Bank as a result of any failure
by such Bank to make Loans hereunder.
(b) No later than 1:00 P.M. (New York time) on the date specified in
each Notice of Borrowing relating to Canadian Dollar Loans, the Canadian Lender
will make available to the Canadian Borrower such Canadian Dollar Loans
requested to be made on such date, in Canadian Dollars and in immediately
available funds at the Canadian Payment Office.
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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, Tranche A Revolving Loans, Tranche B
Revolving Loans, Swingline Loans and Canadian Dollar 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 Company or any Bank at any reasonable time and from time to
time upon reasonable prior notice.
(b) Each 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. Either 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 a 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 Company 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 respective Borrower by giving the
Administrative Agent at its Notice Office (and, in the case of any proposed
conversion of Canadian Dollar Loans, the Canadian Lender at the Canadian Notice
Office), prior to 12:00 Noon (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, Tranche A
Revolving Loans and Tranche B Revolving Loans under this Agreement shall be made
by the Banks pro rata on the basis of their Term Loan Commitments, Tranche A
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Revolving Loan Commitments or Tranche B Revolving Loan Commitments, as the case
may be, provided that all Borrowings of Tranche A Revolving Loans made pursuant
to a Mandatory Borrowing shall be incurred from the Banks with Tranche A
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 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 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 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).
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(f) The Administrative Agent, upon determining the interest rate for
any Borrowing of Eurodollar Loans for any Interest Period, shall promptly notify
the respective Borrower and the Banks thereof.
1.09 Interest Periods. At the time either 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 12:00 Noon (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 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 respective
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)
(available to the Canadian Lender in the case of the Canadian Dollar Loans),
nine or twelve month period. Notwithstanding anything to the contrary
contained above:
(i) 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 shall extend beyond the Final Maturity Date;
and
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(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 Company that such an election will
not be permitted as a result thereof.
If upon the expiration of any Interest Period, the respective 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, such 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 the Canadian Lender
in the case of Canadian Dollar Loans) 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 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
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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 each 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
Borrowers 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 a Borrower with respect to Eurodollar Loans
which have not yet been incurred shall be deemed rescinded by such Borrower,
(y) in the case of clause (ii) above, the Company (or, in the case of
Canadian Dollar Loans, each of the Company and the Canadian 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 respective 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 respective 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.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the respective Borrower
may (and in the case of
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a Eurodollar Loan affected pursuant to Section 1.10(a)(iii) the respective
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 respective
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 Company 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 Company, 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 Company'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),
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compensation or other action with respect to such event is not otherwise
requested generally by the other Banks, the Company 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 Tranche A Revolving Loan Commitment, the Canadian Lender
and the Letter of Credit Issuer, provided that (i) at the time of any
replacement 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, the Canadian Lender in the case of
clause (c) 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(g), which amount shall be paid to the Canadian
Lender, (d) 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 (e) 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
each 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
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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 Company (or, in the case of Canadian
Dollar Loans, each of the Company and the Canadian 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
respective 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 a Borrower; or (iv) as a
consequence of (x) any other default by a 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 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
(or Canada, in the case of Canadian Dollar Loans); 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 respective 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
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operation of any such Section. Nothing in this Section 1.12 shall affect or
postpone any of the obligations of either Borrower or the right of any Bank
provided in Sections 1.10, 2.06 or 4.04.
1.13 Tranche B Commitments. At any time and from time to time on
and after the Effective Date and prior to June 30, 1999, the Company may
request one or more Banks or other lending institutions to assume a Tranche B
Revolving Loan Commitment and to make Tranche B Revolving Loans to the
Company as provided in Section 1.01(c) and, in the sole discretion of each
such Bank or other institution, any such Bank or other institution may agree
to so commit; provided that (i) no Default or Event of Default then exists,
(ii) the increase in the Total Tranche B Revolving Loan Commitment pursuant
to any such request shall be in an aggregate amount of at least $50,000,000
and (iii) after giving effect to each such increase, the Total Tranche B
Revolving Loan Commitment shall not exceed $250,000,000. The Company and each
such Bank or other lending institution (each an "Assuming Bank") which agrees
to commit to make Tranche B Revolving Loans shall execute and deliver to the
Administrative Agent a Tranche B Assumption Agreement substantially in the
form of Exhibit B (with the increase in, or in the case of a new Assuming
Bank, assumption of, such Bank's Tranche B Revolving Loan Commitment to be
effective upon delivery of such Tranche B Assumption Agreement to the
Administrative Agent). The Administrative Agent shall promptly notify each
Bank as to the occurrence of the Initial Tranche B Assumption Date and as to
each Additional Tranche B Assumption Date occurring thereafter. On each
Tranche B Assumption Date, (x) Annex I shall be deemed modified to reflect
the revised Tranche B Revolving Loan Commitments of such Banks, and (y) the
Company shall pay to each such Assuming Bank such up front fee (if any) as
may have been agreed between the Company and such Assuming Bank.
Notwithstanding anything to the contrary contained in this Agreement, in
connection with any increase in the Total Tranche B Revolving Loan Commitment
after the Initial Tranche B Assumption Date, the Company shall, in
coordination with the Administrative Agent and the Banks with Tranche B
Revolving Loan Commitments, repay outstanding Tranche B Revolving Loans of
certain Banks and, if necessary, incur additional Tranche B Revolving Loans
from other Banks, in each case so that such Banks participate in each
Borrowing of Tranche B Revolving Loans pro rata on the basis of their Tranche
B Revolving Loan Commitments (after giving effect to any increase thereof).
It is hereby agreed that any breakage costs of the type described in Section
1.11 incurred by the Banks in connection with the repayment of Tranche B
Revolving Loans contemplated by this Section 1.13 shall be for the account of
the Company.
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SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Company 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 Final Maturity Date to issue, for
the account of the Company and in support of (x) trade obligations of the
Company and/or its Restricted Subsidiaries and/or (y) on a standby basis, such
other obligations (contingent or otherwise) of the Company 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 Company
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, and each letter of credit described in Section 2.01(c), 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) $40,000,000 or (y) when
added to the aggregate principal amount of all Tranche A Revolving Loans made
by Non-Defaulting Banks and Swingline Loans and the Dollar Equivalent of the
aggregate principal amount of Canadian Dollar Loans then outstanding, the
Adjusted Total Tranche A 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 Final Maturity Date.
(c) Annex III 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
(including Existing Letters
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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 it
desires that a Letter of Credit be issued, the Company 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 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 Company 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 Company
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 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 Company 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 Company under this Section 2.04(a) or under
any other Section of this Agreement.
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(b) The Company'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 Company 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 Company 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 Tranche 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 Company
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 Tranche A 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
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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 Company 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 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.
(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
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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 Company 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 Company 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
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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 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 Company
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 Company 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 Company 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 Company absent manifest error, although the failure to
deliver any such certificate shall not release or diminish the Company's
obligations to pay additional amounts pursuant to this Section 2.06.
SECTION 3. Fees; Commitments.
3.01 Fees. (a) The Company 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 Company shall pay to the Administrative Agent for the
account of each Non-Defaulting Bank with a Tranche A Revolving Loan Commitment
pro rata on the basis of their respective Adjusted Percentages, a fee in respect
of each Letter of
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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
Tranche A Revolving Loan Commitment shall be terminated.
(c) The Company 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 Tranche A Revolving Loan Commitment shall be terminated.
(d) The Company 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 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 Company shall pay to the Administrative Agent, for its own
account, such other fees as have been agreed to in writing by the Company and
the Administrative Agent.
(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 Company
shall have the right, without premium or penalty, to terminate or partially
reduce the Total Unutilized Tranche A Revolving Loan Commitment and/or the Total
Unutilized Tranche B Revolving Loan Commitment; provided that (v) any such
termination or partial reduction shall apply to proportionately and permanently
reduce the Tranche A Revolving Loan Commitment or the Tranche B Revolving Loan
Commitment, as the case may be, of each of the Banks with such Commitments, (w)
any partial reduction pursuant to this Section 3.02 shall be in the amount of at
least $2,000,000, (x) the reduction to the Total Unutilized Tranche A Revolving
Loan Commitment shall in no case be in an amount which would cause the
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Tranche A Revolving Loan Commitment of any Bank to be reduced (as required by
the preceding clause (v)) by an amount which exceeds the remainder of (i) the
Aggregate Unutilized Tranche A Commitment of such Bank as in effect
immediately before giving effect to such reduction minus (ii) such Bank's
Adjusted Percentage of the sum of (A) the aggregate principal amount of
Swingline Loans then outstanding and (B) the Dollar Equivalent of the
aggregate principal amount of Canadian Dollar Loans then outstanding, (y)
each reduction to the Total Tranche A Revolving Loan Commitment pursuant to
this Section 3.02 shall reduce the then remaining Scheduled A Commitment
Reductions on a pro rata basis (based upon the then remaining principal
amount of each such Scheduled A Commitment Reduction) and (z) each reduction
to the Total Tranche B Revolving Loan Commitment pursuant to this Section
3.02 shall reduce the then remaining Scheduled B Commitment Reductions on a
pro rata basis (based upon the then remaining principal amount of each such
Scheduled B Commitment Reduction).
3.03 Mandatory Reduction of Commitments, etc. (a) The Total
Commitment (and the Term Loan Commitment, the Tranche A Revolving Loan
Commitment and the Tranche B Revolving Loan Commitment of each Bank) shall
terminate in its entirety on June 7, 1996 unless the Initial Borrowing Date has
occurred on or before such date.
(b) Subject to Sections 3.02 and 3.03(f), the Total Tranche A
Revolving Loan Commitment (and the Tranche A 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 A
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(f), a "Scheduled A Commitment Reduction"):
Scheduled A Commitment
Reduction Date Amount
---------------------- ------
June 30, 1999 $ 37,500,000
December 31, 1999 37,500,000
June 30, 2000 75,000,000
December 31, 2000 75,000,000
June 30, 2001 75,000,000
December 31, 2001 75,000,000
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June 30, 2002 75,000,000
December 31, 2002 75,000,000
June 30, 2003 75,000,000
December 31, 2003 75,000,000
June 30, 2004 75,000,000
(c) Subject to Sections 3.02 and 3.03(f), the Total Tranche B
Revolving Loan Commitment (and the Tranche B 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 B Commitment Reduction Date"), in
an amount equal to the product of (x) the Total Tranche B Revolving Loan
Commitment as of June 30, 1999 (immediately prior to giving effect to the
Scheduled B Commitment Reduction to occur on such date) multiplied by (y) the
percentage 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(f), a
"Scheduled B Commitment Reduction"):
Scheduled B Commitment
Reduction Date Percentage
---------------------- ----------
June 30, 1999 5%
December 31, 1999 5%
June 30, 2000 10%
December 31, 2000 10%
June 30, 2001 10%
December 31, 2001 10%
June 30, 2002 10%
December 31, 2002 10%
June 30, 2003 10%
December 31, 2003 10%
June 30, 2004 10%
(d) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Term Loan Commitment (and the Term Loan
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 on such
date).
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(e) 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 Company 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 Final Maturity Date.
(f) 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 Company, provided
that such notice may only be given while an Event of Default exists, and (z)
the date the Company or any of its Subsidiaries shall be required to make an
offer to purchase Senior Notes or any other Indebtedness of the Company or
its Restricted Subsidiaries (other than Indebtedness 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 Company 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 Term Loans shall be repaid in an aggregate
amount equal to 100% of the then Remaining Net Cash Proceeds from such Asset
Sale (with the Tranche A Facility Percentage of such Remaining Net Cash
Proceeds to be applied to reduce the Total Tranche A Revolving Loan
Commitment, the Tranche B Facility Percentage to be applied to reduce the
Total Tranche B Revolving Loan Commitment and the Term Loan Facility
Percentage to be applied as a repayment of the aggregate principal amount of
Term Loans). Each reduction to the Total Tranche A Revolving Loan Commitment
pursuant to this Section 3.03(f) shall reduce each of the remaining Scheduled
A Commitment Reductions on a pro rata basis (based upon the then remaining
amount of each such Scheduled A Commitment Reduction), and each reduction to
the Total Tranche B Revolving Loan Commitment pursuant to this Section
3.03(f) shall reduce each of the remaining Scheduled B Commitment Reductions
on a pro rata basis (based upon the then remaining amount of each such
Scheduled B Commitment Reduction).
(g) Each reduction to the Total Term Loan Commitment, the Total
Tranche A Revolving Loan Commitment and the Total Tranche B Revolving Loan
Commitment pursuant to this Section 3.03 shall be applied proportionately to
reduce the Term Loan Commitment, the Tranche A Revolving Loan Commitment or the
Tranche
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B Revolving Loan Commitment, as the case may be, of each Bank with such a
Commitment.
SECTION 4. Payments.
4.01 Voluntary Prepayments. Each Borrower shall have the right to
prepay the Loans incurred by it (and the Company on behalf of the Canadian
Borrower may, at its option, prepay the Canadian Dollar Loans incurred by the
Canadian Borrower), 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 Company or, in the case of any prepayment of Canadian
Dollar Loans, the Company or the Canadian 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, Tranche A Revolving Loans, Tranche B Revolving Loans,
Swingline Loans or Canadian Dollar 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 Company or the Canadian Borrower, as the case
may be, 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, Revolving Loans or
Canadian Dollar 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 (or to the Canadian Lender in the case
of Canadian Dollar Loans); (ii) (x) each partial prepayment of any Borrowing
(other than a Borrowing of Swingline Loans and Canadian Dollar 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 and (z) each partial
prepayment of any Borrowing of Canadian Dollar Loans shall be in an aggregate
principal amount of at least Can. $50,000 and, if greater, in an integral
multiple of Can. $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
pursuant to this Section 4.01 shall reduce the then remaining Scheduled TL
Repayments on a pro rata basis (based upon the then remaining principal amount
of each such Scheduled TL Repayment); and (iv) each prepayment in respect of any
Loans made pursuant to a Borrowing shall be applied pro rata among such Loans;
provided that at the Company's
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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 Tranche A Revolving Loans made by
Non-Defaulting Banks and Swingline Loans and the Dollar Equivalent of the
aggregate outstanding principal amount of Canadian Dollar 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 Tranche A
Commitment as then in effect, the Company shall repay on such date the principal
of Swingline Loans, and if no Swingline Loans are or remain outstanding, Tranche
A Revolving Loans of Non-Defaulting Banks in an aggregate amount equal to such
excess, and if no Tranche A Revolving Loans of Non-Defaulting Banks are or
remain outstanding thereafter, the Canadian Borrower shall (or, at its option,
the Company, on behalf of the Canadian Borrower, shall) repay on such date the
principal of Canadian Dollar Loans, in an aggregate amount equal to such excess.
If, after giving effect to the repayment of all outstanding Swingline Loans,
Tranche A Revolving Loans and Canadian Dollar Loans, the aggregate amount of
Letter of Credit Outstandings exceeds the Adjusted Total Tranche A Commitment
then in effect, the Company 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 Company 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
Tranche A Revolving Loans made by any Defaulting Bank exceeds the Tranche A
Revolving Loan Commitment of such Defaulting Bank, the Company shall repay the
Tranche A Revolving Loans of such Defaulting Bank in an amount equal to such
excess.
(iii) If on any date the aggregate outstanding principal amount of
Tranche B Revolving Loans made by any Bank exceeds the Tranche B Revolving Loan
Commitment of such Bank, the Company shall repay the Tranche B Revolving Loans
of such Bank in an amount equal to such excess.
(b) If on any date the Dollar Equivalent of the aggregate
outstanding principal amount of Canadian Dollar Loans (after giving effect to
all other repayments thereof on such date) exceeds the Maximum Canadian Dollar
Amount as then in effect,
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the Canadian Borrower shall repay on such date the principal of Canadian
Dollar Loans in an amount such that after giving effect to such repayment the
Dollar Equivalent of the aggregate outstanding principal amount of the
Canadian Dollar Loans is equal to or less than the Maximum Canadian Dollar
Amount.
(c) In addition to any other mandatory repayments pursuant to this
Section 4.02, the Company 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 TL Repayment Date"), the Term Loans 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 TL
Repayment"):
Scheduled TL Repayment Date Amount
--------------------------- ------
June 30, 2000 $25,000,000
December 31, 2000 25,000,000
June 30, 2001 25,000,000
December 31, 2001 25,000,000
June 30, 2002 25,000,000
December 31, 2002 25,000,000
June 30, 2003 25,000,000
December 31, 2003 25,000,000
June 30, 2004 50,000,000
(d) In the event that a Specified Change of Control Event occurs,
the Company shall repay all outstanding Term Loans 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 Company 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 shall be repaid at
the times, and in the amounts, provided in Section 3.03(f). The amount of each
principal repayment of Term Loans pursuant to this Section 4.02(e) shall be
applied to reduce each of the remaining Scheduled TL Repayments on a pro rata
basis (based upon the then remaining amount of each such Scheduled TL
Repayment).
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(f) Notwithstanding anything to the contrary contained in this
Agreement, (i) all then outstanding Loans under this Agreement shall be repaid
in full on the Final Maturity Date and (ii) all then outstanding Swingline Loans
shall be repaid in full on the Swingline Expiry Date.
(g) With respect to each repayment of Loans required by this Section
4.02, the Company (or, in the case of Canadian Dollar Loans, the Canadian
Borrower or the Company on behalf of the Canadian 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 Tranche A Revolving Loans pursuant to Section 4.02(a)(i) shall be
applied to the Tranche A Revolving Loans of a Defaulting Bank; and (iv)
repayments of Tranche A Revolving Loans of Defaulting Banks pursuant to Section
4.02(a)(ii) shall be applied pro rata among such Tranche A Revolving Loans. In
the absence of a designation by a 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) or (b) arising solely as a result of a reduction to
the Total Revolving Loan Commitment pursuant to Section 3.03(f) would result,
after giving effect to the procedures set forth above in this clause (g), in the
Company (or, in the case of Canadian Dollar Loans, the Canadian 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 Company (or, in the case of Canadian
Dollar Loans, the Canadian Borrower or the Company on behalf of the Canadian
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 respective 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
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the
respective 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 (or Canadian Dollars in the case
of Canadian Dollar Loans which have been assigned to the other Banks by the
Canadian Lender pursuant to Section 1.01(g)) at the Payment Office, provided
that payments in respect of Canadian Dollar Loans owing to the Canadian Lender
shall be made to the Canadian Lender 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 Canada at the Canadian Payment Office. Notwithstanding anything to the
contrary contained herein, any amounts owing or payments required to be made by
the Canadian Borrower hereunder, including, without limitation, pursuant to
Section 1.10, 1.11, 4.04 or 12.01, may, at the option of the Company, be paid by
the Company on behalf of the Canadian Borrower. 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 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. All payments made by each Borrower hereunder
will be made without setoff, counterclaim or other defense. Promptly upon
notice from any Bank to the respective Borrower, the Company (or, in the case
of Canadian Dollar Loans, each of the Company and the Canadian Borrower)
agrees to pay, prior to the date on which penalties attach thereto, all
present and future income, stamp and other taxes,
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levies, or costs and charges whatsoever imposed, assessed, levied or
collected on or in respect of any Canadian Dollar Loan of any Type, or in
respect of a Loan solely as a result of the interest rate being determined by
reference to the Eurodollar Rate, and/or the provisions of this Agreement
relating to the Eurodollar Rate, and/or the recording, registration,
notarization or other formalization of any thereof and/or any payments of
principal, interest or other amounts made on or in respect of a Canadian
Dollar Loan of any Type, or a Loan when the interest rate is determined by
reference to the Eurodollar Rate (all such taxes, levies, costs and charges
being herein collectively called "Taxes"); provided that Taxes shall not
include (x) taxes imposed on or measured by the overall net income or
receipts of the Administrative Agent or any Bank by the United States of
America or any political subdivision or taxing authority thereof or therein
or (y) taxes on or measured by the overall net income of any foreign office,
branch or subsidiary of the Administrative Agent or that Bank by any foreign
country or subdivision thereof in which the Administrative Agent's or that
Bank's office, branch or subsidiary is doing business. Each Borrower agrees
to also pay such additional amounts equal to increases in taxes payable by
that Bank described in the foregoing proviso which increases arise solely
from the receipt by that Bank of payments made by such Borrower described in
the immediately preceding sentence of this Section 4.04. Promptly after the
date on which payment of any such Tax is due pursuant to applicable law, the
respective Borrower will, at the request of that Bank, furnish to that Bank
evidence, in form and substance satisfactory to that Bank, that the
respective Borrower has met its obligation under this Section 4.04. Each
Borrower agrees to indemnify each Bank against, and reimburse each Bank on
demand for, any Taxes, as reasonably determined by that Bank in its good
faith. Such Bank shall provide the respective Borrower with appropriate
receipts for any payments or reimbursements made by such Borrower pursuant to
this Section 4.04. Notwithstanding the foregoing, each 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 (and shall not be required to make payments as otherwise
required in this Section on account of such deductions or withholdings)
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 for Federal income tax purposes or (ii) who has
the Prescribed Forms on file with the Company 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, provided that if a Borrower shall so
deduct or withhold any such taxes, it shall provide a statement to the
Administrative Agent and such Bank, setting forth the amount of such taxes so
deducted or withheld, the applicable rate and any other information or
documentation which the Administrative Agent or such Bank may reasonably
request for
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assisting the Administrative Agent or such Bank to obtain any allowable
credits or deductions for the taxes so deducted or withheld in the
jurisdiction or jurisdictions in which the Administrative Agent or such Bank
is subject to tax. Notwithstanding anything to the contrary contained herein,
the Company shall compensate each Bank for all losses, expenses, liabilities,
taxes (including, without limitation, Taxes) or other costs which any such
Bank may incur or sustain as a result of the Company paying any obligations
of the Canadian Borrower hereunder or under any other Credit Document, which
such Bank would not otherwise incur or sustain if the Canadian Borrower had
made any such payments instead of the Company paying such amounts on behalf
of the Canadian Borrower.
SECTION 5. Conditions Precedent. The obligation of each Bank to make
each Loan to the respective Borrower hereunder (including, without limitation,
the obligation of the Canadian Lender to make each Canadian Dollar Loan
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
(except as otherwise hereinafter indicated), to the satisfaction of the
following conditions:
5.01 Execution of Agreement. On or prior to the Initial Borrowing
Date, this Agreement shall have been executed and delivered in accordance with
Section 12.10.
5.02 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 (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.
5.03 Opinions of Counsel. On the Initial Borrowing Date, the
Administrative Agent shall have received opinions, addressed to each of the
Banks and dated 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
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matters incident to the transactions contemplated herein as the
Administrative Agent may reasonably request, (iii) from Aird & Berlis,
special Canadian counsel to the Canadian Borrower, which opinion shall cover
the matters contained in Exhibit C-3 and (iv) from White & Case, special
counsel to the Administrative Agent, which opinion shall cover the matters
contained in Exhibit C-4.
5.04 Corporate Proceedings. (a) On the Initial Borrowing Date, the
Administrative Agent shall have received from each of the Company, the Canadian
Borrower and each Subsidiary Guarantor, a certificate, dated the Initial
Borrowing Date, signed by the chairman, a vice chairman, the president, any
vice-president 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.
(b) On the Initial Borrowing Date, 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.
5.05 Existing Credit Agreements. On or prior to the Initial
Borrowing Date, the commitments under the Existing Credit Agreements shall have
been terminated, all loans thereunder shall have been repaid in full, together
with interest thereon, all letters of credit issued thereunder shall have been
terminated or incorporated hereunder as Letters of Credit, and all other amounts
owing pursuant to the Existing Credit Agreements shall have been repaid in full,
and the Administrative Agent shall have received evidence in form, scope and
substance satisfactory to it that the matters set forth in this Section 5.05
have been satisfied at such time.
5.06 Guaranties. (a) On the Initial Borrowing Date, each Subsidiary
Guarantor shall have duly authorized, executed and delivered a guaranty in the
form of Exhibit E-1 hereto (as amended, modified or supplemented from time to
time in
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accordance with the terms hereof and thereof, the "Subsidiary Guaranty"), and
the Subsidiary Guaranty shall be in full force and effect.
(b) On the Initial Borrowing Date, the Company shall have duly
authorized, executed and delivered a guaranty in the form of Exhibit E-2 hereto
(as amended, modified or supplemented from time to time in accordance with the
terms hereof and thereof, the "Company Guaranty"), and the Company Guaranty
shall be in full force and effect.
5.07 Notice of Borrowing; Letter of Credit Request. The
Administrative Agent (and, in the case of any Borrowing of Canadian Dollar
Loans, the Canadian Lender) 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.
5.08 Payment of Fees, etc. On the Initial Borrowing Date, 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.
5.09 Contribution Agreement. On the Initial Borrowing Date, the
Subsidiary Guarantors shall have entered into a contribution agreement in the
form of Exhibit F hereto (as amended, modified or 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.
5.10 Existing Indebtedness Agreements. On or prior to the Initial
Borrowing Date, 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 Company 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").
The acceptance of the benefits of each Credit Event shall constitute
a representation and warranty by the Company to each of the Banks that all of
the applicable conditions specified above exist as of the date of such Credit
Event. All of the certificates, legal opinions and other documents and papers
referred to in this
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Section 5, 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
Company 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 Company 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 Company and its Restricted Subsidiaries taken as a whole.
6.02 Corporate Power and Authority. Each of the Company 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. Each of the Company and each of its Restricted Subsidiaries has duly
executed and delivered 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'
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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 Company 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 upon any of
the property or assets of the Company 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 Company 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 ByLaws of
the Company or any of its Subsidiaries.
6.04 Litigation. There are no actions, suits or proceedings pending,
or, to the best knowledge of the Company, threatened, with respect to the
Company 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 Company 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 Company 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, Swingline Loans and
Canadian Dollar Loans shall be used for the purposes referred to in Section
6.05(a) above and for other general corporate and working capital purposes of
the Company and its Subsid-
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iaries (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 G, 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
Company may use the proceeds of Loans to purchase Margin Stock in compliance
with Regulations G, 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 Company, or of the Company
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 Company 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 Company 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 Company 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 Company 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.
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6.09 True and Complete Disclosure. (a) All factual information
(taken as a whole) heretofore or contemporaneously furnished by the Company or
any of its Subsidiaries in writing to the Administrative Agent and/or any Bank
on or before the Initial Borrowing 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.
6.10 Financial Statements; Financial Condition. (a) The consolidated
balance sheets of the Company and its Subsidiaries as at December 31, 1995 and
March 31, 1996 and the related consolidated statements of income and cash flows
of the Company 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, 1995 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 Company 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, 1996
statements, to normal year-end audit adjustments).
(b) Since December 31, 1995 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 Company 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).
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6.11 Tax Returns and Payments. Each of the Company 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 for which adequate reserves have been provided
in accordance with GAAP.
6.12 Compliance with ERISA. As of the Initial Borrowing Date,
there are no Plans and neither the Company 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,
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 Company 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 Company, 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 Company, any of its Restricted Subsidiaries or any ERISA
Affiliate exists or is likely to arise on account of any Plan; and the
Company 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) 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 Company 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 Company, 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
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material adverse effect on the condition (financial or otherwise),
operations, assets, liabilities or prospects of the Company 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 Company.
6.13 Subsidiaries. On the Initial Borrowing Date, the corporations
listed on Annex IV under the name of the Company are the only Subsidiaries of
the Company. Annex IV correctly sets forth, as of the Initial Borrowing Date,
the percentage ownership (direct and indirect) of the Company in each class of
capital stock of each of its Subsidiaries and also identifies the direct owner
thereof.
6.14 Intellectual Property. (a) The Company 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 condition (financial or otherwise), operations, assets,
liabilities or prospects of the Company and its Restricted Subsidiaries taken as
a whole.
(b) The Company 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 Company 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 Company and its Restricted Subsidiaries taken as a whole.
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(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 Company 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 Company and its Restricted Subsidiaries that are material to the Company and
its Restricted Subsidiaries taken as a whole.
6.15 Compliance with Statutes, etc. The Company 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 Company 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 Company and its Restricted Subsidiaries
taken as a whole.
SECTION 7. Affirmative Covenants. The Company 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 Company will furnish to each Bank:
(a) Annual Financial Statements. Within 100 days after the close of
each fiscal year of the Company, the consolidated balance sheets of each
of (A) the Company and its Subsidiaries and of (B) the Company 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 Company
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
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to the Administrative Agent, whose opinion shall not be qualified as to
the scope of audit or as to the status of the Company and its Subsidiaries
or of the Company 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
Company 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 Company (beginning with the
quarterly accounting period ending June 30, 1996) and, at the sole option
of the Company, 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 Company and its Subsidiaries and of (B)
the Company 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 Company
that they fairly present the financial condition of the Company and its
Subsidiaries or of the Company 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 Company, budgets of the Company and its Restricted
Subsidiaries in reasonable detail for each of the four fiscal quarters of
such fiscal year setting forth Consolidated EBITDA and consolidated sales
and setting forth, with appropriate discussion, the principal assumptions
upon which such budgets are based.
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(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, controller or chief accounting
officer of the Company (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 Company 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 Company 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 Company 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, controller or chief
accounting officer of the Company 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 Company 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
Company 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 Company 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 Company and its Restricted Subsidiaries taken as a whole,
or the ability of the Company 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 Company 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 Company or any
of its Subsidiaries.
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(g) Other Information. Promptly upon transmission thereof, copies of
any filings and registrations with, and reports to, the SEC by the Company
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.
7.02 Books, Records and Inspections. The Company will, and will
cause each of its Restricted Subsidiaries to, permit, upon notice to the chief
financial officer or other Authorized Officer of the Company, officers and
designated representatives of the Administrative Agent or the Required Banks to
visit and inspect any of the properties or assets of the Company and any of its
Restricted Subsidiaries in whomsoever's possession, and to examine the books of
account of the Company and any of its Restricted Subsidiaries and discuss the
affairs, finances and accounts of the Company 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 Company 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 Company or any of its Restricted Subsidiaries; provided that neither
the Company 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 Company 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 Company 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.
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7.05 Compliance with Statutes, etc. The Company 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 Company and its Restricted Subsidiaries
taken as a whole or on the ability of the Company 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 Company, 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 expected that a material liability
of the Company and its Restricted Subsidiaries and ERISA Affiliates, taken as
a whole, could result in connection therewith, the Company will deliver to
each of the Banks a certificate of the chief financial officer or other
Authorized Officer of the Company setting forth details as to such occurrence
and such action, if any, which the Company, 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 Company,
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 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
Company, 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 Company will deliver to such Bank a complete
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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 Company 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 Company 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 Company 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),
provided that the Company shall not be required to own a majority of the capital
stock of the Canadian Borrower so long as the Company continues to hold at least
as much of such capital stock as is held on the Effective Date.
7.10 Maintenance of Corporate Separateness. The Company will, and
will cause each of its Subsidiaries to, satisfy customary corporate formalities,
including the holding of regular board of directors' and shareholders' meetings
and the maintenance of corporate offices and records. Neither the Company 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 Company 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 Company and its Restricted Subsidiaries.
Finally, neither the Company 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
Company or any Restricted Subsidiary being ignored by any court of competent
jurisdiction, or in the assets and liabilities of the Company or any Restricted
Subsidiary being substantively consolidated with those of any Unrestricted
Subsidiary in a bankruptcy, reorganization or other insolvency proceeding.
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7.11 Canadian Borrower Capital Structure. The Company will, or will
cause K-III Directory Corporation, or any other domestic Wholly-Owned Restricted
Subsidiary of the Company to which all of the equity owned by the Company or any
of its Subsidiaries in the Canadian Borrower shall have been transferred (such
entity the "Replacement Canadian Parent"), to (i) continue to be the owner of
record of at least 25% of the issued and outstanding shares of common stock of
the Canadian Borrower, (ii) maintain in full force and effect the Voting Trust
Agreement, the Shareholders Agreement and the Canadian Borrower Management
Agreement, (iii) continue to own and hold the Convertible Subordinated Debenture
or to be the owner of record of all of the shares of common stock of the
Canadian Borrower issued upon the conversion thereof and (iv) otherwise maintain
the capital structure of the Canadian Borrower as is in effect on the Effective
Date.
SECTION 8. Negative Covenants. The Company 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 Company will not, and will not permit
any of its Restricted Subsidiaries to, engage in any businesses other than
Businesses, provided that the Company and its Restricted Subsidiaries may engage
in businesses other than a Business so long as the businesses engaged in by the
Company and its Restricted Subsidiaries, taken as a whole, consist substantially
of Businesses.
8.02 Consolidation, Merger, Sale or Purchase of Assets, etc. The
Company 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:
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(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 Company and/or its Restricted
Subsidiaries;
(b) the advances, investments and loans permitted pursuant to
Section 8.05;
(c) Asset Sales constituting 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 pursuant to any
Permitted Restricted Subsidiary Conversion) (x) is for fair market value,
as determined in good faith by management of the Company (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 Company 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 Company 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 Company and/or its
Restricted Subsidiaries pursuant to this Section 8.02(c) in any fiscal
year of the Company 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 Company 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
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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 Company,
after giving effect to such sale, transfer or disposition, the Company
shall own at least a majority of the capital stock of such Restricted
Subsidiary;
(d) Asset Sales constituting the disposition of the capital stock
owned by the Company and its Restricted Subsidiaries of Unrestricted
Subsidiaries;
(e) any Restricted Subsidiary may be merged or consolidated with or
into, or be liquidated into, the Company or any other Restricted
Subsidiary of the Company, or all or any part of its business, properties
and assets may be conveyed, leased, sold or otherwise transferred to the
Company or any other Restricted Subsidiary, provided that (v) in any such
merger or consolidation involving the Company, the Company 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 if after giving effect to such transfer the Net
Investments in Excluded Foreign Restricted Subsidiaries would exceed
$30,000,000 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 Company shall have determined,
with respect to such transaction, that the Company 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 Company 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);
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(g) so long as no Default or Event of Default exists or would result
therefrom, the Company 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 Company
and its Restricted Subsidiaries shall be in compliance with Section 8.01
hereof; (B) the Company shall have determined, with respect to such
acquisition, that, on a Pro Forma Basis, the Company 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 constitute 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 Company or any of its Restricted
Subsidiaries, its opposition to the consummation by the Company or such
Subsidiary of such acquisition;
(h) the Company 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 Company and/or its Restricted
Subsidiaries made in the ordinary course of business; and
(j) the Company 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 Company; (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 Company 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 Company or any of its
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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 Company and its Restricted Subsidiaries in any fiscal year shall
not exceed $25,000,000.
8.03 Liens. The Company 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 Company 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 Company 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 Company 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 Company 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 V, without giving effect
to any extensions or renewal thereof ("Permitted Liens");
(d) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 9.08;
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(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 Company 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 Company 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 Company or any of its Restricted Subsidiaries of any equipment or
goods in the normal course of business, provided that such payables shall
not constitute Indebtedness;
(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
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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 Company or any of its Restricted
Subsidiaries in the ordinary course of business;
(o) Liens created under this Agreement and/or the other Credit
Documents;
(p) Liens created under the Additional Credit Agreement and the
other Additional Facility Documents; and
(q) Liens not otherwise permitted hereunder which secure
Indebtedness, Contingent Obligations or other obligations (in each case
permitted hereunder) not exceeding (as to the Company and its Restricted
Subsidiaries) $20,000,000 in the aggregate at any time outstanding.
8.04 Indebtedness. The Company 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 and the other
Credit Documents;
(b) Indebtedness incurred pursuant to the Additional Credit
Agreement and the other Additional Facility Documents;
(c) Capitalized Lease Obligations of the Company and its Restricted
Subsidiaries; provided that the aggregate Capitalized Lease Obligations
under all Capital Leases outstanding at any one time shall not exceed
$50,000,000;
(d) Existing Indebtedness of the Company and its Restricted
Subsidiaries outstanding on the Effective Date and listed on Part A of
Annex VI 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);
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(f) Indebtedness evidenced by the Subordinated Exchange Debentures
after the issuance thereof in an aggregate principal amount not to exceed
$500,000,000 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 Company 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
Final 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 Company 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 the Securities Act of 1933, as amended, 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 Company then outstanding or if no similar
Indebtedness of the Company 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 Company shall have determined, with
respect to the incurrence of such Indebtedness, that the Company 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;
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(i) Indebtedness of the Company and its Restricted Subsidiaries
constituting Permitted Refinancing Debt; and
(j) additional Indebtedness of the Company 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 $150,000,000, provided that
the aggregate principal amount of such Indebtedness incurred by the
Subsidiary Guarantors (taken as a whole), when added to the aggregate
principal amount of Additional Indebtedness incurred 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 Company 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:
(a) the Company and its Restricted Subsidiaries may invest in cash
and Cash Equivalents;
(b) the Company 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 Company or such Restricted Subsidiary, as the
case may be;
(c) the Company 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 Company
(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 $30,000,000, and
(ii) no such Intercompany Loan may be made by the Company 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 Company and its Restricted Subsidiaries may make loans and
advances of cash to, or cash capital contributions in, any Unrestricted
Subsidiary of the Company; provided that (i) the sum of (A) the aggregate
amount of capital
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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 Company 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 Company 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 Company 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) the Company 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;
(h) Interest Rate Protection Agreements permitted by Section 8.06(e)
shall be permitted;
(i) investments by the Company 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 Company
shall have determined, in connection with any such investment, that the
Company and its Restricted Subsidiaries would have been in compliance, on
a Pro Forma Basis, with Sections 8.09, 8.10 and
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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 $30,000,000;
(j) the Company and its Restricted Subsidiaries may make loans and
advances to officers, employees and agents in the ordinary course of
business (i) constituting travel advances or (ii) otherwise equal in the
aggregate for the Company and its Restricted Subsidiaries, in the case of
all loans and advances pursuant to this clause (ii), to no more than
$10,000,000 at any one time outstanding less the principal amount of all
Contingent Obligations then outstanding pursuant to Section 8.06(i);
(k) the Company 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
Company, provided that (x) the aggregate amount of cash actually advanced
to all such management investors by the Company and its Restricted
Subsidiaries shall not exceed $10,000,000 at any time, and (y) the
aggregate principal amount of all such obligations, loans and advances
shall not exceed $25,000,000 at any one time outstanding; and
(l) advances, investments and loans not otherwise permitted
hereunder with an aggregate cost or principal amount, as the case may be,
not to exceed $25,000,000 at any time outstanding.
8.06 Contingent Obligations. The Company 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 Company 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 guarantied the indebtedness refinanced thereby or
(B) such Subsidiary Guarantor would have guarantied the indebtedness
refinanced thereby if it had been a Subsidiary of the Company while such
indebtedness was outstanding;
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(b) Contingent Obligations pursuant to the Guaranties;
(c) Contingent Obligations pursuant to the Additional Facility
Documents;
(d) Contingent Obligations in respect of the Letters of Credit;
(e) Contingent Obligations under Interest Rate Protection Agreements
with respect to the Loans, loans incurred under the Additional Credit
Agreement or any other floating rate Indebtedness of the Company and
its Restricted Subsidiaries otherwise permitted by this Agreement;
(f) Contingent Obligations pursuant to the Contribution Agreement;
(g) Contingent Obligations of the Company outstanding on the
Effective Date and listed on Part B of Annex VI hereto ("Existing
Contingent Obligations"), without giving effect to any subsequent
extension, renewal or refinancing thereof;
(h) the Company may become liable as guarantor with respect to any
Indebtedness, obligation or liability of any Subsidiary Guarantor to the
extent that such Indebtedness, obligation or liability is otherwise
permitted by this Agreement;
(i) the Company 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 $10,000,000 less the principal amount of all
loans and advances outstanding pursuant to Section 8.05(j); and
(j) 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 Company and all of its
Restricted Subsidiaries) in aggregate principal amount at any time
outstanding an amount equal to the lesser of (x) $30,000,000 and (y) when
added to the aggregate principal amount of Indebtedness outstanding under
Section 8.04(j) at such time, $150,000,000.
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8.07 Dividends, etc. The Company 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
Company 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 Company 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 Company may pay regularly accruing dividends on each
issuance of Preferred Stock through the issuance of additional shares of
such Preferred Stock, provided that the Company 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 Company may pay Dividends to the Company
or to any Wholly-Owned Restricted Subsidiary of the Company;
(c) any Partially-Owned Restricted Subsidiary may pay cash Dividends
to its stockholders, provided that the Company 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 (x) the Company may issue its Subordinated Exchange
Debentures in exchange for its Senior Preferred Stock in accordance with
the terms thereof, (y) the Company may issue its Subordinated Exchange
Debentures in exchange for its Series B Preferred Stock in accordance with
the terms thereof and (z) the Company may issue its Subordinated Exchange
Debentures in exchange for its Series C Preferred Stock in accordance with
the terms thereof, provided that in each such case, the Company shall have
determined, with respect to such issuance, that the Company 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;
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(e) the Company may exchange shares of its common stock in
replacement for shares of outstanding Preferred Stock;
(f) the Company 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 Company 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) $5,000,000 in any fiscal year or $15,000,000 in the aggregate after
the Effective Date and (ii) the amount of cash proceeds received by the
Company in respect of the issuance of common equity to management
investors on or after the Effective Date;
(h) the Company and its Subsidiaries may enter into transactions
permitted under Section 8.05(g);
(i) the Company 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 Company 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);
(k) so long as no Default or Event of Default exists at such time or
would result therefrom, the Company 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 Company does not
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exceed $25,000,000 and (y) the Company shall have determined, in
connection with such Dividend, that the Company 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 Company 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 Company shall have determined, in
connection with such Dividend, that the Company 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 Company 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 Company or any Restricted Subsidiary) other than
on terms and conditions substantially as favorable to the Company or such
Restricted Subsidiary as would be obtainable by the Company 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 Company 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 Company 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 Company 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 Company, its Restricted Subsidiaries and their respective Affiliates
shall be permitted to the extent so otherwise specifically permitted.
8.09 Fixed Charge Coverage Ratio. The Company will not permit the
ratio of (i) Consolidated EBITDA of the Company and its Restricted Subsidiaries
to (ii) Consolidated Fixed Charges of the Company and its Restricted
Subsidiaries, for any Test Period, to be less than 1.05 to 1.0.
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8.10 Interest Coverage Ratio. The Company will not permit the ratio
of (i) Consolidated EBITDA of the Company and its Restricted Subsidiaries to
(ii) Consolidated Interest Expense of the Company 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:
Period Ratio
------ -----
Effective Date to and including
June 30, 1999 1.80 to 1.00
July 1, 1999 to and including
June 30, 2000 2.00 to 1.00
July 1, 2000 to and including
June 30, 2001 2.25 to 1.00
July 1, 2001 and thereafter 2.50 to 1.00
8.11 Leverage Ratio. The Company will not permit the ratio (the
"Leverage Ratio") of (i) Consolidated Debt of the Company and its Restricted
Subsidiaries at any date of determination thereof to (ii) Consolidated EBITDA of
the Company 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, 1999 6.00 to 1.00
July 1, 1999 to and including
June 30, 2000 5.50 to 1.00
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July 1, 2000 to and including
June 30, 2001 5.00 to 1.00
July 1, 2001 and thereafter 4.50 to 1.00
8.12 Issuance of Stock. The Company 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 Company and its
Restricted Subsidiaries, to the extent permitted by Section 8.02, 8.03,
8.05, 8.07 or 8.13(b);
(b) issuances by Restricted Subsidiaries to the Company or to
Wholly-Owned Restricted Subsidiaries; and
(c) issuances by the Company 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 Final Maturity Date, (B) in no event shall such preferred stock
contain terms and conditions (including, without limitation, pay-in-kind
features, liquidation preferences, voting rights and exchange rights)
materially less favorable to the Company 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 Company shall have determined, in
connection with such issuance, that the Company 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 Company 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
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the Senior Notes, the Additional Facility Documents, the Preferred Stock,
the Subordinated Exchange Debentures, any Additional Indebtedness, any
Permitted Refinancing Debt, the Convertible Subordinated Debenture, the
Canadian Borrower Management Agreement, the Voting Trust Agreement, the
Shareholders Agreement, or any agreement related to any of the foregoing,
provided that (i) Permitted Amendments may be made to the Senior Notes,
the Additional Facility Documents, the Preferred Stock, any Permitted
Refinancing Debt, any Additional Indebtedness, any Subordinated Exchange
Debenture, and the documents governing the terms of any of the foregoing
and (ii) amendments or modifications may be made to the Canadian Borrower
Management Agreement which, in the aggregate or individually, would not
adversely affect the interests of any Bank under this Agreement or the
other Credit Documents (it being understood and agreed that the annual
fee payable to K-III Directory Corporation or the Replacement Canadian
Parent, if any, pursuant thereto may be amended or modified); 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 the Subordinated
Exchange Debentures and any Permitted Refinancing Debt previously issued
to refinance same may be (i) refinanced with (A) 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 (B) the proceeds from a common equity issuance by the Company or
an issuance by the Company of Additional Preferred Stock, in each case,
after the Effective Date or (ii) exchanged for Additional Preferred Stock
or non-redeemable common equity of the Company (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). In addition, the
Company 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 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 Company shall not, and shall not
permit any Subsidiary
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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 Company 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 Company 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
Company 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 Company guaranty any Indebtedness of the Company 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.
8.15 Limitation on Payments Under the Non-Compete Notes. The Company
will not, and will not permit any of its Subsidiaries to, make any payment
representing the principal of, or interest on, any Non-Compete Note at any time
when
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any Default or Event of Default exists or would exist immediately after giving
effect to such payment.
SECTION 9. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
9.01 Payments. (a) Either 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 either 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 Company shall (a) default in the due performance
or observance by it of any term, covenant or agreement contained in Section
7.08, 7.11(i), (iii) or (iv) 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 Company 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
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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 Company 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
principal amount of any one issue of such Indebtedness or Contingent Obligation
exceeds $7,500,000 or the aggregate amount of all such Indebtedness and
Contingent Obligations referred to in clauses (a) and (b) above exceeds
$15,000,000 at any one time; or
9.05 Bankruptcy, etc. The Company or any of its Restricted
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 Company or any of its Restricted Subsidiaries and the
petition is not controverted within 10 days, or is not dismissed within 60 days,
after 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 Company or any of its Restricted Subsidiaries; or the Company or
any of its Restricted 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 Company or any of its Restricted
Subsidiaries; or there is commenced against the Company or any of its Restricted
Subsidiaries any such proceeding which remains undismissed for a period of 60
days; or the Company or any of its Restricted Subsidiaries is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or the Company or any of its Restricted
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 Company or any of its Restricted Subsidiaries makes a
general assignment for the benefit of creditors; or any corporate action is
taken by the Company or any of its Restricted 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
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Company, 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 Company 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 Company, 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
Company 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 Judgments. One or more judgments or decrees shall be entered
against the Company or any of its Restricted Subsidiaries involving a liability
of $8,000,000 or more in the case of any one such judgment or decree or
$20,000,000 or more in the aggregate for all such judgments and decrees for the
Company and its Restricted 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
9.09 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 Company, take any or all of the
following actions,
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without prejudice to the rights of the Administrative Agent, the Letter of
Credit Issuer or any Bank to enforce its claims against the Company, 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
Company, 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 Company; (iii) terminate any
Letter of Credit which may be terminated in accordance with its terms; and (iv)
direct the Company to pay (and the Company 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 Company'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:
"Additional Credit Agreement" shall mean the credit agreement, dated
as of the date hereof, among the Company, various lending institutions, 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, N.A., as
Administrative Agent, as amended, modified, supplemented or extended from time
to time in accordance with the terms thereof and hereof.
"Additional Facility Amount" shall mean at any time, the aggregate
commitments then outstanding under the Additional Credit Agreement, provided
that, if at such time, the commitments under the Additional Credit Agreement
shall have terminated "Additional Facility Amount" shall mean, at such time, the
aggregate principal amount of loans outstanding under the Additional Credit
Facility at such time.
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"Additional Facility Documents" shall mean and include each of the
documents and other agreements entered into by the Company or any of its
Subsidiaries in connection with the Additional Credit Agreement (including,
without limitation, the Additional Credit Agreement and any guaranty or
guaranties relating thereto), 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.
"Additional Indebtedness" shall have the meaning provided in Section
8.04(h).
"Additional Preferred Stock" shall have the meaning provided in
Section 8.12(c).
"Additional Tranche B Assumption Date" shall mean the date on which
each Tranche B Assumption Agreement is delivered to the Administrative Agent
after the Initial Tranche B Assumption Date pursuant to Section 1.13 of this
Agreement.
"Adjusted Percentage" shall mean (x) at a time when no Bank
Default exists, for each Bank such Bank's Tranche A 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 Tranche A Revolving Loan Commitment at such
time by the Adjusted Total Tranche A Commitment at such time, it being
understood that all references herein to Tranche A Revolving Loan Commitments
and the Adjusted Total Tranche A Commitment at a time when the Total Tranche A
Revolving Loan Commitment or Adjusted Total Tranche A Commitment, as the case
may be, has been terminated shall be references to the Tranche A Revolving Loan
Commitments or Adjusted Total Tranche A 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 Tranche A Revolving Loans, Swingline
Loans and Canadian Dollar Loans at such time pursuant to Section 4.02(a) or
otherwise, the sum of (i) the aggregate outstanding principal amount of Tranche
A Revolving Loans of all Non-Defaulting Banks plus (ii) the aggregate
outstanding principal amount of Swingline Loans plus (iii) the Dollar
Equivalent of the aggregate outstanding principal amount of Canadian Dollar
Loans plus (iv) the Letter of Credit Outstandings, exceeds the Adjusted Total
Tranche A 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
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occurrence of the relevant Bank Default on which the sum of (i) the aggregate
outstanding principal amount of the Tranche A Revolving Loans of all
Non-Defaulting Banks plus (ii) the aggregate outstanding principal amount of
Swingline Loans plus (iii) the Dollar Equivalent of the aggregate outstanding
principal amount of Canadian Dollar Loans plus (iv) the Letter of Credit
Outstandings is equal to or less than the Adjusted Total Tranche A 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 Tranche A
Revolving Loans, or of Unpaid Drawings with respect to Letters of Credit or of
Swingline Loans or Canadian Dollar 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 either Borrower
as a preferential or similar payment in any bankruptcy or similar proceeding of
such 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 Tranche A Revolving Loans made by such Bank plus such Bank's new Adjusted
Percentage of the outstanding principal amount of Swingline Loans and Dollar
Equivalent of Canadian Dollar Loans and of Letter of Credit Outstandings
equalling such Bank's Tranche A Revolving Loan Commitment at such time.
"Adjusted Total Tranche A Commitment" shall mean at any time the
Total Tranche A Revolving Loan Commitment less the aggregate Tranche A Revolving
Loan Commitments of all Defaulting Banks.
"Adjusted Tranche A Commitment" for each Non-Defaulting Bank shall
mean at any time the product of such Bank's Adjusted Percentage and the Adjusted
Total Tranche A Commitment.
"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
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then most recently ended fiscal quarter of the Company 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 the sum of (x) such Bank's Tranche A Revolving Loan
Commitment at such time less the sum of (i) the aggregate outstanding principal
amount of all Tranche A Revolving Loans made by such Bank and (ii) such Bank's
Adjusted Percentage of the Letter of Credit Outstandings at such time and (y)
such Bank's Tranche B Revolving Loan Commitment at such time less the aggregate
outstanding principal amount of all Tranche B Revolving Loans made by such Bank.
"Aggregate Unutilized Tranche A Commitment" of any Bank at any time
shall mean the Aggregate Unutilized Revolving Loan Commitment of such Bank at
such
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time without giving effect to clause (y) of the definition of Aggregate
Unutilized Revolving Loan Commitment.
"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 3/8 of 1%,
provided that in the event that and for so long as 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 is less than 4.50:1, then the Applicable Commitment Fee
Percentage shall be 1/4 of 1% (it being understood that 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 Commitment Fee Percentage shall be reset in
accordance with the foregoing provisions of this definition), provided further,
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 the Applicable Commitment Fee Percentage would have been increased or
reduced to a percentage set forth above on the date that such Late Section 7.01
Financials were required to have been delivered (the "Required Delivery Date")
and (B) the Company 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 made based on
any such lower Applicable Commitment Fee Percentage, the Company 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 such 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 amounts so paid.
"Applicable Letter of Credit Fee Percentage" shall mean, at any
time, the Applicable Margin then in effect for Eurodollar 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
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(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):
Applicable Applicable
Eurodollar Base Rate
Debt/EBITDA Ratio Margin Margin
- ----------------- ------ ------
5.50:1 or Greater 1-1/2% 1/8 of 1%
Less than 5.50:1 but equal
to or greater than 5.00:1 1-1/8% 0%
Less than 5.00:1 but equal
to or greater than 4.50:1 7/8 of 1% 0%
Less than 4.50:1 but equal
to or greater than 4.00:1 5/8 of 1% 0%
Less than 4.00:1 1/2 of 1% 0%
; 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) a 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 respective Borrower shall pay in the form of a
supplemental
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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.
"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 Company and reasonably satisfactory to the Administrative Agent.
"Asset Sale" shall mean any sale, transfer or other disposition by
the Company or any of its Restricted Subsidiaries to any Person other than the
Company 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 Company of its capital
stock) of the Company 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(f), 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 $10,000,000).
"Authorized Officer" shall mean any officer of the Company
designated as such in writing to the Administrative Agent by the Company, 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 Company
determines in good faith (x) should be reserved for post-closing adjustments (to
the extent the Company delivers to the Banks a certificate signed by its chief
financial officer, controller or chief accounting officer as to such
determination) or
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(y) must be applied to repurchase Senior Notes pursuant to the Senior Note
Documents (to the extent the Company delivers to the Banks a certificate signed
by its chief financial officer, 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 Company 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 Company 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; provided that for purposes of references in this Agreement to
Canadian Dollar Loans, "Bank" shall include the Canadian Lender.
"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 assignment of Canadian Dollar Loans under Section 1.01(g) 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 Company that it does
not intend to comply with the obligations under Section 1.01(b), 1.01(c),
1.01(e), 1.01(g) 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 (i) in the case of Canadian
Dollar Loans, the Canadian Lender Prime Lending Rate as in effect from time to
time and (ii) in the case of Loans other than Canadian Dollar Loans, 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).
"BONY Term Loan Facility" shall mean the credit facility among the
Company, various lending institutions and The Bank of New York, as Agent,
providing for the making of term loans to the Company in an aggregate amount not
to exceed
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$150,000,000 outstanding at any time, as same may have been modified,
supplemented or amended from time to time pursuant to the terms thereof.
"Borrower" shall mean each of the Company and the Canadian Borrower.
"Borrowing" shall mean a borrowing of Loans under a single Tranche
from all Banks having Commitments with respect to such Tranche (or (x) from
Chase in the case of Swingline Loans and (y) from the Canadian Lender in the
case of Canadian Dollar 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) or (iii) 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 and (iii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Canadian Dollar Loans, any day which is a Business
Day described in clause (i) and which is also a day which is not in Toronto,
Canada a legal holiday or a day on which banking institutions are authorized by
law or other governmental actions to close.
"Canadian Borrower" shall have the meaning provided in the first
paragraph of this Agreement.
"Canadian Borrower Management Agreement" shall mean the Management
Agreement, dated as of March 9, 1994 between the Canadian Borrower and K-III
Directory Corporation, as amended to the Effective Date and as further amended,
modified or supplemented from time to time in accordance with the terms hereof
and thereof.
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"Canadian Dollar" and "Can.$" shall mean freely transferable lawful
money of Canada.
"Canadian Dollar Loan" shall have the meaning provided in Section
1.01(f).
"Canadian Lender" shall mean The Bank of Nova Scotia.
"Canadian Lender Prime Lending Rate" at any time shall mean the
higher of (i) the rate per annum designated by the Canadian Lender from time to
time (and in effect on such day) as its prime rate for Canadian Dollar
commercial loans made in Canada and (ii) one-half of one percent (1/2%) plus the
CDOR Rate from time to time (and in effect on such day), as advised by the
Canadian Lender to the Canadian Borrower and the Administrative Agent from time
to time. The Canadian Lender Prime Lending Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any customer.
The Canadian Lender may make commercial loans or other loans at rates of
interest at, above or below the Canadian Lender Prime Lending Rate.
"Canadian Notice Office" shall mean the office of the Canadian
Lender set forth as the Canadian Notice Office on Annex II hereto, or such other
office as the Canadian Lender may designate to the Company, the Administrative
Agent and the Banks from time to time.
"Canadian Payment Office" shall mean the office of the Canadian
Lender set forth as the Canadian Payment Office on Annex II hereto, or such
other office as the Canadian Lender may designate to the Company, the
Administrative Agent and the Banks from time to time.
"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.
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"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of the Company 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.
"CDOR Rate" shall mean that annual rate of interest equal to the
average "BA 1 Month" interest rates for Canadian Dollar denominated bankers'
acceptances displayed and identified as such on the "Reuters Screen CDOR Page"
(as defined in the International Swap and Derivatives Association, Inc.
definitions, as modified and amended from time to time) as of 10:00 A.M.,
Toronto, Ontario local time on any particular day and, if such day is not a
Business Day, then on the immediately preceding Business Day (as adjusted by the
Canadian Lender after 10:00 A.M., Toronto, Ontario local time to reflect any
error in a posted rate of interest or in the posted average annual rate of
interest). If such rates are not available on the Reuters Screen CDOR Page on
any particular day, then the CDOR Rate on that day shall be calculated as the
arithmetic
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mean of the 30 day rates applicable to Canadian dollar denominated banker's
acceptances quoted by four major Canadian Schedule I chartered banks as of
10:00 A.M., Toronto, Ontario local time on such day, or if such day is not a
Business Day, then on the immediately preceding Business Day. The four major
Canadian Schedule I chartered banks shall, unless the Canadian Borrower and the
Canadian Lender otherwise agree, be The Toronto-Dominion Bank, The Bank of Nova
Scotia, Royal Bank of Canada and Canadian Imperial Bank of Commerce. The
arithmetic average of any rates or quotations to be calculated hereunder shall
be rounded, if necessary, to the nearest 1/100,000 of one percent (.00001%),
with five one millionths of a percentage point rounded upwards. All dollar
amounts used in or resulting from any calculation based on the CDOR Rate will
be rounded to the nearest cent (with one-half of one cent rounded upwards).
"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) KKR
or one or more Affiliates of KKR shall cease to own (directly or indirectly) at
least 25% on a fully diluted basis of the economic and voting interest in the
Company's common stock or (c) any Person or "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934 , as amended)
becomes the "beneficial owner" (as defined in Rule 13d-3 of the Securities
Exchange Act of 1934, as amended) of more of the voting common stock of the
Company than that owned (directly or indirectly) by KKR and its Affiliates.
"Chase" shall mean The Chase Manhattan Bank, N.A. or any successor
thereto by merger.
"Chase Revolving Credit Facility" shall mean the amended and
restated credit facility among the Company, the Canadian Borrower, various
lending institutions, Bank of America NT&SA, The Bank of New York, The Bank of
Nova Scotia, Bankers Trust Company, Canadian Imperial Bank of Commerce and
Societe Generale, as Co-Agents, and Chase, as Administrative Agent, providing
for the making of revolving loans and the issuance of, and participation in,
letters of credit in an aggregate amount not to exceed $670,000,000 outstanding
at any time, as same may have been modified, supplemented or amended from time
to time pursuant to the terms thereof.
"Chase Term Loan Facility" shall mean the credit facility among the
Company, various lending institutions, Bank of America Illinois, The Bank of
Nova Scotia, Chemical Bank, Midland Bank plc and The Industrial Bank of Japan,
Limited, as Co-Agents, and Chase, as Administrative Agent, providing for the
making of term
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loans in an aggregate amount not to exceed $150,000,000 outstanding at any
time, as same may have been modified, supplemented or amended from time to time
pursuant to the terms thereof.
"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.
"Commitment" shall mean, at any time, for any Bank the sum of the
Term Loan Commitment, Tranche A Revolving Loan Commitment, and Tranche B
Revolving Loan Commitment of such Bank at such time.
"Commitment Fee" shall have the meaning provided in Section 3.01(a).
"Company" shall have the meaning provided in the first paragraph of
this Agreement.
"Company Guaranty" have the meaning provided in Section 5.06(b).
"Consolidated Capital Expenditures" shall mean, for any period, the
aggregate of all Capital Expenditures by the Company 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 Company 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 Company 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 Company 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
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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 Company and
its Restricted Subsidiaries, determined on a consolidated basis, other than
Indebtedness owing by the Company to any of its Restricted Subsidiaries or by
any of the Company's Restricted Subsidiaries to the Company or any other
Restricted Subsidiary of the Company, provided that, for purposes of this
definition, (x) only the principal amount of Indebtedness outstanding under the
Non-Compete Notes issued as of the date of determination (net of the amount of
any reduction to the amounts owed under such Non-Compete Notes made in
accordance with the terms of the Non-Competition Agreement referred to in the
definition of Non-Compete Notes) shall be included and (y) Indebtedness of any
Partially-Owned Restricted Subsidiary shall be included in
Consolidated Debt in an aggregate amount equal to the percentage equity
ownership of the Company 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 Company 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 Company 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 (vi), (viii) depreciation
expense and (ix) amortization expense, in the case of each of clauses (ii)
through (ix) 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
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determining Consolidated EBITDA for any period (x) the net income (or loss) 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 net income (or loss) of any related person, business, property or assets to
the extent not so acquired) by the Company 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 net income (or loss) 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 net income (or loss) 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 Company to represent the savings secured
by the Company 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 net income (or loss) of any person, business,
property or asset (other than an Unrestricted Subsidiary) sold or disposed of
by the Company 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 net income (or loss) of any Restricted Subsidiary that
is converted into an Unrestricted Subsidiary during such period (each, a
"Converted Unrestricted Subsidiary"), in each case based on the actual net
income (or loss) 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, but only to the extent of the equity
percentage ownership of the Company 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 (the
"Limited EBITDA Component") exceeds an amount equal to 15% of the aggregate
amount of Consolidated EBITDA of the Company 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,
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plus consolidated cash Dividend expense payable in respect of all Preferred
Stock and common stock of the Company, (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 and the loans outstanding under the Additional
Credit Agreement but excluding the Revolving Loans) and on the Non-Compete
Notes (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 Company 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 Company 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 Company and its
Restricted Subsidiaries determined on a consolidated basis with respect to all
outstanding Indebtedness of the Company 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 Company 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.
"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
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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
5.09.
"Conversion Value Amount" shall have the meaning set forth in the
definition of Permitted Restricted Subsidiary Conversion.
"Convertible Subordinated Debenture" shall mean the debenture issued
by the Canadian Borrower to K-III Directory Corporation, convertible into shares
of the Canadian Borrower's common stock at the option of K-III Directory
Corporation, as amended, modified or supplemented from time to time in
accordance with the terms hereof and thereof.
"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 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 Company, the Canadian Borrower and
each Subsidiary Guarantor.
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"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.
"Dividends" shall have the meaning provided in Section 8.07.
"Dollar Equivalent" shall mean, at any time of determination
thereof, the amount of U.S. Dollars which could be purchased with the same
amount of Canadian Dollars involved in such computation at the spot exchange
rate therefor as published in the New York edition of The Financial Times on the
date two Business Days prior to the date of any determination thereof for
purchase on such date, provided that if the New York edition of The Financial
Times is not published on such date, reference shall be made to such rate as set
forth in the most recently published New York edition of The Financial Times,
provided further, that if at any time the New York edition of The Financial
Times ceases to publish such exchange rates, the Dollar Equivalent shall be the
amount of U.S. Dollars which could be purchased with the amount of Canadian
Dollars involved in such computation at the spot rate therefor as quoted by the
Administrative Agent at approximately 11:00 A.M. (London time) on the date two
Business Days prior to the date of any determination thereof for purchase on
such date.
"EBITDA" shall mean, for any Restricted Subsidiary or business, for
any period, the portion of Consolidated EBITDA attributable to such Restricted
Subsidiary or business.
"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.
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"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Company or any Subsidiary of the Company 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 arithmetic average (rounded to the nearest 1/100
of 1%) of the offered quotation to first-class banks in the interbank Eurodollar
market by each Reference Bank (or by the Canadian Lender in the case of Canadian
Dollar Loans) for U.S. dollar deposits (or Canadian Dollar deposits in the case
of Canadian Dollar Loans) of amounts in same day funds comparable to the
outstanding principal amount of the Eurodollar Loan of such Reference Bank (or
the Canadian Lender, as the case may be) for which an interest rate is then
being determined with maturities comparable to the Interest Period to be
applicable to such Eurodollar Loan, determined as of 10:00 A.M. (New York time)
on the date which is 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); provided that if one or more of the Reference Banks fails to
provide the Administrative Agent with its aforesaid rate, then the Eurodollar
Rate in respect of Loans shall be determined based on the rate or rates provided
to the Administrative Agent by the other Reference Banks or Bank.
"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 Company and/or any of its Restricted Subsidiaries
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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 Company 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 Company (commencing with the fiscal quarter ended June 30, 1996) 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 Company 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.
"Excluded Domestic Restricted Subsidiary" shall mean any
Partially-Owned Restricted Subsidiary with respect to which the Company shall
have made a Non-Guarantor Designation in accordance with the provisions hereof.
"Excluded Foreign Restricted Subsidiaries" shall mean (i) Daily
Racing Form of Canada Ltd., a Canada corporation, (ii) Admirefruit Limited, a
U.K. corporation, (iii) Canadian Red Book, Inc., a Canada corporation, (iv) the
Canadian Borrower and (v) each Restricted Subsidiary of the Company 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 8.14(a), and Section 8.14(c), are satisfied with
respect to such Subsidiary.
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"Existing Contingent Obligations" shall have the meaning provided in
Section 8.06(g).
"Existing Credit Agreements" shall mean and include each of the
Chase Revolving Credit Facility, the Chase Term Loan Facility and the BONY 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 5.10.
"Existing Letter of Credit" shall have the meaning provided in
Section 2.01(c).
"Existing Preferred Stock" shall include preferred stock of the
Company issued prior to the Effective Date and listed on Annex VII 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.
"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 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 Company and the
Administrative Agent or such Bank, as the case may be.
"Final Maturity Date" shall mean June 30, 2004.
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"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 the Company and each Subsidiary Guarantor.
"Guaranty" shall mean the Company Guaranty and the 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.
"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.
"Information Memorandum" shall mean the Confidential Information
Memorandum dated April, 1996 and distributed to the Banks prior to the Effective
Date.
"Initial Borrowing Date" shall mean the date on or after the
Effective Date upon which the initial Borrowing of Loans hereunder occurs.
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"Initial Tranche B Assumption Date" shall mean the date on which the
first Tranche B Assumption Agreement is delivered to the Administrative Agent
pursuant to Section 1.13 of this Agreement.
"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
designed to protect the Company or any of its Subsidiaries against fluctuations
in interest rates.
"KKR" shall mean Kohlberg Kravis Roberts & Co., a Delaware limited
partnership.
"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.
"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.
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"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, Tranche A Revolving Loans, Tranche B Revolving Loans,
Canadian Dollar 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.
"Maximum Canadian Dollar Amount" shall mean $40,000,000.
"Maximum Exposure" shall mean, for any period, an amount equal to
the maximum amount of the sum of (i) the principal amount of all outstanding
Revolving Loans, (ii) the principal amount of all outstanding Swingline Loans,
(iii) the Dollar Equivalent of the principal amount of all outstanding Canadian
Dollar Loans and (iv) the Letter of Credit Outstandings, at any one time during
such period.
"Maximum Swingline Amount" shall mean $40,000,000.
"Minimum Borrowing Amount" shall mean (i) for Term Loans,
$3,000,000; (ii) for Revolving Loans, $3,000,000; (iii) for Canadian Dollar
Loans, Can. $50,000; and (iv) for Swingline Loans, $500,000.
"Minimum Retention Amount" shall mean, at any time, $10,000,000
multiplied by a fraction (i) the numerator of which shall be the sum of the
outstanding Term Loans plus the Total Revolving Loan Commitment at such time and
(ii) the denominator of which shall be the sum of $1,000,000,000 plus the Total
Tranche B Revolving Loan Commitment at such time.
"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)
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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 Company.
"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 Company 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 Company 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 Company 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 Company 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 Company 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 Tranche A Revolving Loan Commitment
and the Total Tranche B Revolving Loan Commitment during such period pursuant
to Section 3.03(f).
"Non-Compete Notes" shall mean the promissory notes issued by K-III
Holdings Corporation III pursuant to the Non-Competition Agreement, dated as of
June 17, 1991, among K-III Holdings Corporation III, News America Holdings
Incorporated and the other parties thereto in an aggregate principal amount not
to exceed $50,000,000, as such notes may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof.
"Non-Defaulting Bank" shall mean each Bank other than a Defaulting
Bank.
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"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 Company or any of its Restricted Subsidiaries, provided that
the reimbursement obligations of the Company or such Restricted Subsidiary with
respect to such letter of credit may be secured only to the extent permitted by
Section 8.03(q).
"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 Company 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 Company 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 Company shall have determined, with respect
to such designation, that the Company 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 Company 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
1 Chase Manhattan Plaza, New York, New York 10081, or such other office as the
Administrative Agent may designate to the Company and the Banks from time to
time.
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"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 Company to the extent that the Company 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 1 Chase Manhattan Plaza, New York, New York 10081, or such other office as
the Administrative Agent may designate to the Company 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 (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
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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 Company 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 Company or its Restricted Subsidiaries, subordination provisions) not
materially less favorable to the Company 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 Company 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
Company 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 Company 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.
"Permitted Restricted Asset Sale" shall mean any sale, transfer or
other disposition by the Company or any of its Restricted Subsidiaries (other
than the Canadian Borrower) 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
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other disposition by the Company of its capital stock) of the Company or such
Restricted Subsidiary; provided that the Company 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 Company 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 Company 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 Company of a Restricted Subsidiary (other than the Canadian
Borrower) of the Company as an Unrestricted Subsidiary of the Company 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 Company 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 Company shall have delivered to the
Administrative Agent the opinion of value of management of the Company 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 Company 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 Company shall have determined, with
respect to such conversion, that the Company 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 Company, any Restricted
Subsidiary or an ERISA Affiliate, and each such plan for the five year period
immediately following the latest date on which the Company, any Restricted
Subsidiary or an ERISA Affiliate maintained, contributed to or had an obligation
to contribute to such plan.
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"Preferred Stock" shall mean and include the Existing Preferred
Stock and, once issued, any Additional Preferred Stock and any Permitted
Replacement Preferred Stock.
"Prescribed Forms" shall mean such duly executed form(s) or
statement(s), and in such number of copies, which may, from time to time, be
prescribed by law and which, pursuant to applicable provisions of (a) an income
tax treaty between the United States and the country of residence of the Bank
providing the form(s) or statement(s), (b) the Code, or (c) any applicable rule
or regulation under the Code, permit the Company to make payments hereunder for
the account of such Bank free of deduction or withholding of income or similar
taxes.
"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 Company during the Affected Period and
any reduction of Consolidated Debt during such Affected Period effected with
the proceeds received by the Company and/or its Restricted Subsidiaries of (A)
the issuance of common equity by the Company or (B) the sale of the capital
stock or other ownership interest of the Company 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, the percentage obtained by dividing such Bank's outstanding Term Loans
(if any) by the aggregate of all outstanding Term Loans, (ii) with respect to
Tranche A Revolving Loans, the percentage obtained by dividing such Bank's
Tranche A Revolving Loan Commitment (if any) by the Total Tranche A Revolving
Loan Commitment and (iii) with
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respect to Tranche B Revolving Loans, the percentage obtained by dividing such
Bank's Tranche B Revolving Loan Commitment (if any) by the Total Tranche B
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.
"Reference Banks" shall mean Chase, The Bank of New York and
Bankers Trust Company.
"Register" shall have the meaning provided in Section 1.05(a).
"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 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.
"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 Company and/or its Restricted
Subsidiaries minus the portion, if any, of such Net Cash Proceeds theretofore
expended by the Company 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).
"Replacement Canadian Parent" shall have the meaning provided in
Section 7.11.
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"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 .13, .14, .16, .18, .19 or .20 of PBGC
Regulation Section 2615.
"Required Banks" shall mean Non-Defaulting Banks whose outstanding
Term Loans (or, if prior to the Initial Borrowing Date, Term Loan Commitments)
and outstanding Revolving Loan Commitments (or, if after the Total Revolving
Loan Commitment has been terminated, outstanding Revolving Loans and Adjusted
Percentages of Swingline Loans, Dollar Equivalent of Canadian Dollar Loans and
Letter of Credit Outstandings) constitute at least 51% of the sum of (i) all
outstanding Term Loans (or, if prior to the Initial Borrowing Date, Term Loan
Commitments) of Non-Defaulting Banks plus (ii) the Adjusted Total Tranche A
Commitment plus (iii) the Total Tranche B Revolving Loan Commitment less the
Tranche B Revolving Loan Commitments of all Defaulting Banks (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, Dollar
Equivalent of Canadian Dollar Loans and Letter of Credit Outstandings at such
time).
"Restricted Subsidiaries" shall mean (x) all of the Subsidiaries of
the Company in existence on the Effective Date, including, without
limitation, the Canadian Borrower, (y) any Subsidiary owned (directly or
indirectly) by the Company 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 Company to the extent designated by the
Company as a Restricted Subsidiary hereunder by written notice to the
Administrative Agent; provided that the Company 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) at least 51% of the capital
stock of such newly-designated Restricted Subsidiary is owned by the Company
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 Company shall have
determined, with respect to such designation, that the Company 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 Company or any Restricted Subsidiary of a
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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 each Tranche A Revolving Loan
Commitment and each Tranche B Revolving Loan Commitment with the Revolving Loan
Commitment of any Bank at any time to equal the sum of its Tranche A Revolving
Loan Commitment and Tranche B Revolving Loan Commitment at such time.
"Scheduled A Commitment Reduction" shall have the meaning provided
in Section 3.03(b).
"Scheduled A Commitment Reduction Date" shall have the meaning
provided in Section 3.03(b).
"Scheduled B Commitment Reduction" shall have the meaning provided
in Section 3.03(c).
"Scheduled B Commitment Reduction Date" shall have the meaning
provided in Section 3.03(c).
"Scheduled TL Repayment" shall have the meaning provided in Section
4.02(c).
"Scheduled TL 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).
"Senior Note Documents" shall mean and include each of the documents
and other agreements entered into by the Company 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
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Company 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 Company's (x) 10-5/8%
Senior Secured Notes due 2002, (y) 10-1/4% Senior Notes due 2004 and (z) 8-1/2%
Senior Notes due 2006, in each case, 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 Preferred Stock" shall mean the Company's $2.875 Senior
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 B Preferred Stock" shall mean the Company's $11.625 Series B
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 C Preferred Stock" shall mean the Company's Series C
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.
"Shareholders Agreement" shall mean the Shareholders Agreement,
dated as of March 9, 1994 among all holders of the capital stock of the Canadian
Borrower, as amended to the Initial Borrowing Date and as further amended,
modified or supplemented from time to time in accordance with the terms hereof
and thereof.
"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
Company's (x) 11-1/2% Subordinated Debentures due 2004, (y) 11-5/8% Class B
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Subordinated Exchange Debentures due 2005 and (z) 10% Subordinated Exchange
Debentures due 2008, 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, provided that the
Canadian Borrower shall be deemed to be a Subsidiary of the Company for all
purposes.
"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 Company formed after
the Initial Borrowing Date and each Excluded Domestic Restricted Subsidiary
designated as such by the Company, 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 Company 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
5.06(a).
"Swingline Expiry Date" shall mean the date which is five Business
Days prior to the Final Maturity Date.
"Swingline Loan" shall have the meaning provided in Section 1.01(d).
"Taxes" shall have the meaning provided in Section 4.04.
"Term Loan" shall have the meaning provided in Section 1.01(a).
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"Term 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 "Term Loan Commitment," as same may be reduced from time to time
pursuant to Sections 3.03 and/or 9.
"Term Loan 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 outstanding at such time and the denominator
of which is equal to the sum of (w) the Total Tranche A Revolving Loan
Commitment at such time, (x) the Total Tranche B Revolving Loan Commitment at
such time, (y) the aggregate principal amount of Term Loans then outstanding and
(z) the Additional Facility Amount at such time; provided that if at any time of
the determination of Term Loan Facility Percentage, the Total Tranche A
Revolving Loan Commitment and/or the Total Tranche B Revolving Loan Commitment
shall have terminated, the Term Loan Facility Percentage shall be calculated
based upon the aggregate principal amount of Tranche A Revolving Loans or
Tranche B Revolving Loans, as the case may be, then outstanding.
"Test Period" shall mean the four consecutive fiscal quarters of the
Company then last ended.
"Total Commitment" shall mean, at any time, the sum of the Commit-
ments of each of the Banks.
"Total Revolving Loan Commitment" shall mean, at any time, the sum
of the Total Tranche A Revolving Loan Commitment and the Total Tranche B
Revolving Loan Commitment.
"Total Term Loan Commitment" shall mean, at any time, the sum of the
Term Loan Commitments of each of the Banks.
"Total Tranche A Revolving Loan Commitment" shall mean, at any time,
the sum of the Tranche A Revolving Loan Commitments of each of the Banks.
"Total Tranche B Revolving Loan Commitment" shall mean, at any time,
the sum of the Tranche B Revolving Loan Commitments of each of the Banks.
"Total Unutilized Tranche A Revolving Loan Commitment" shall mean,
at any time, (i) the Total Tranche A Revolving Loan Commitment at such time less
(ii) the sum of the aggregate principal amount of all Tranche A Revolving Loans
and
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Swingline Loans at such time, the Dollar Equivalent of the aggregate
principal amount of Canadian Dollar Loans at such time plus the Letter of Credit
Outstandings at such time.
"Total Unutilized Tranche B Revolving Loan Commitment" shall mean,
at any time, the Total Tranche B Revolving Loan Commitment at such time less the
aggregate principal amount of all Tranche B Revolving Loans at such time.
"Tranche" shall mean the respective facility and commitments
utilized in making Loans hereunder, with there being five separate Tranches,
i.e., Term Loans, Tranche A Revolving Loans, Tranche B Revolving Loans,
Swingline Loans and Canadian Dollar Loans.
"Tranche A Facility Percentage" shall mean, at any time, a fraction
(expressed as a percentage) the numerator of which is the Total Tranche A
Revolving Loan Commitment at such time and the denominator of which is equal to
the sum of (w) the Total Tranche A Revolving Loan Commitment at such time, (x)
the Total Tranche B Revolving Loan Commitment at such time, (y) the aggregate
principal amount of Term Loans then outstanding and (z) the Additional Facility
Amount at such time; provided that if at any time of the determination of
Tranche A Facility Percentage, the Total Tranche A Revolving Loan Commitment
and/or the Total Tranche B Revolving Loan Commitment shall have terminated,
Tranche A Facility Percentage shall be calculated based upon the aggregate
principal amount of Tranche A Revolving Loans or Tranche B Revolving Loans, as
the case may be, then outstanding.
"Tranche A Percentage" shall mean at any time for each Bank the
percentage obtained by dividing such Bank's Tranche A Revolving Loan Commitment
(if any) by the Total Tranche A Revolving Loan Commitment; provided that at any
time when the Total Tranche A Revolving Loan Commitment shall have been
terminated, each Bank's Tranche A Percentage shall be the percentage obtained by
dividing such Bank's Tranche A Revolving Loan Commitment (if any) immediately
prior to such termination by the Total Tranche A Revolving Loan Commitment
immediately prior to such termination.
"Tranche A Revolving Loan" shall have the meaning provided in
Section 1.01(b).
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"Tranche B Assumption Agreement" shall mean and include each Tranche
B Assumption Agreement in the form of Exhibit B attached hereto executed in
accordance with Section 1.13 hereof.
"Tranche A 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 "Tranche A Revolving Loan Commitment", as
same may be reduced from time to time pursuant to Sections 3.02, 3.03 and/or 9.
"Tranche B Assumption Date" shall mean and include the Initial
Tranche B Assumption Date and each Additional Tranche B Assumption Date.
"Tranche B Facility Percentage" shall mean, at any time, a fraction
(expressed as a percentage) the numerator of which is the Total Tranche B
Revolving Loan Commitment at such time and the denominator of which is equal to
the sum of (w) the Total Tranche A Revolving Loan Commitment at such time, (x)
the Total Tranche B Revolving Loan Commitment at such time, (y) the aggregate
principal amount of Term Loans then outstanding and (z) the Additional Facility
Amount at such time; provided that if at any time of the determination of
Tranche B Facility Percentage, the Total Tranche A Revolving Loan Commitment
and/or the Total Tranche B Revolving Loan Commitment shall have terminated,
Tranche B Facility Percentage shall be calculated based upon the aggregate
principal amount of Tranche A Revolving Loans or Tranche B Revolving Loans, as
the case may be, then outstanding.
"Tranche B Revolving Loan" shall have the meaning provided in
Section 1.01(c).
"Tranche B Revolving Loan Commitment" shall mean, with respect to
each Bank, initially zero, as same may be increased from time to time pursuant
to Section 1.13 and reduced from time to time pursuant to Sections 3.02, 3.03
and/or 9.
"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
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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) any Subsidiary of the
Company that is formed or acquired after the 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 Company or any Restricted Subsidiary to
such Subsidiary (x) the Company designates such Subsidiary as an Unrestricted
Subsidiary in a written notice to the Administrative Agent and (y) such
Subsidiary and the Company shall have entered into a tax sharing agreement in
form and substance reasonably satisfactory to the Required Banks, (ii) any
Restricted Subsidiary of the Company 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) $200,000,000, (ii) the Excess Cash Flow Amount at such time,
(iii) an amount equal to all cash or other payments received by the Company and
its Restricted Subsidiaries from Unrestricted Subsidiaries from dividends or
distributions after the Effective Date (provided that for purposes of this
clause (iii), cash and other payments received by a Partially-Owned Restricted
Subsidiary shall be added to the Unrestricted Subsidiary Investment Limit only
to the extent of the equity percentage ownership of the Company in such
Partially-Owned Restricted Subsidiary), plus (iv) an amount equal to the
aggregate net proceeds received by the Company from the issuance of equity
securities of the Company after the Effective Date, provided that if the net
proceeds from any such equity issuance are not utilized to make a loan or
advance to, or a cash capital contribution in, an Unrestricted Subsidiary
pursuant to Section 8.05(d) within 30 days
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following the date of such equity issuance, then the net proceeds from such
equity issuance shall no longer be added to the Unrestricted Subsidiary
Investment Limit.
"U.S. Dollars" and "$" shall mean freely transferable lawful money
of the United States of America.
"Voting Trust Agreement" shall mean the Voting Trust Agreement,
dated as of March 9, 1994 among all holders of the capital stock of the Canadian
Borrower, as amended to the Initial Borrowing Date and as further amended,
modified or supplemented from time to time in accordance with the terms hereof
and thereof.
"Wholly-Owned Restricted Subsidiary" shall mean any Restricted
Subsidiary of the Company 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 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 Company nor
any of its Subsidiaries shall have any rights as a third party
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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 Company or any of its Subsidiaries.
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 Company, 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 Company 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 Company
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 either 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.
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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 Company), 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 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 Company 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 Company 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,
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made its own appraisal of and investigation into the business, assets,
operations, property, financial and other condition, prospects and
creditworthiness of the Company 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 Company 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 Company 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 Tranche A
Revolving Loan Commitment, (y) such Bank's Tranche B Revolving Loan Commitment
and (z) the outstanding principal amount of such Bank's Term Loans by (ii) the
sum of (x) the Adjusted Total Tranche A Commitment, (y) the Total Tranche B
Revolving Loan Commitment less the Tranche B Revolving Loan Commitment of each
Defaulting Bank and (z) the total aggregate principal amount of Term Loans less
any outstanding Term Loans of Defaulting Banks, it being understood and agreed
that references herein to Tranche A Revolving Loan Commitments and Tranche B
Revolving Loan Commitments (as well as to the Adjusted Total Tranche A
Commitment and Total Tranche B 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 Company or any of its Subsidiaries; provided that
no
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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 solely
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 Company 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 Company 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 Company (such approval not to be
unreasonably withheld), whereupon such successor agent shall 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,
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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 Company 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) 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
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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, Canadian Dollar Loan, and/or
Letter of Credit) is hereby authorized at any time or from time to time,
without presentment, demand, protest or other notice of any kind to the
Company 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
a 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 neither Borrower may 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
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be those set forth in the agreement executed by such Bank in favor of the
participant relating thereto) and all amounts payable by either 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 without the consent of
any participant if such participant's participation is not increased as a
result thereof), (ii) release the Company from the Company 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
Company, the Canadian Borrower or any other Subsidiaries of the Company 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 its parent corporation and/or any affiliate of such Bank which is at least
50% owned by such Bank and/or its parent company and (y) with the consent of the
Administrative Agent and the Company, and, in the case of any assignment of
Tranche A Revolving Loans and/or Tranche A Revolving Loan Commitments, of the
Canadian Lender and the Letter of Credit Issuer (which consents in each case
shall not be unreasonably withheld, it being understood that the Company may
withhold its consent if the result of any such assignment is that the assigning
Bank and/or the assignee Bank will not have a pro rata exposure in this
Agreement and the Additional Credit Agreement), any Bank may assign all or a
portion of its Loans and/or Commitments and its rights and obligations hereunder
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to one or more commercial banks or other financial institutions (including one
or more Banks). No assignment pursuant to the immediately preceding sentence
shall (x) to the extent such transaction represents an assignment to an
institution other than one or more Banks hereunder, be in an aggregate amount
less than the minimum of $10,000,000 or (y) 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 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 the
payment of a nonrefundable assignment fee in an aggregate amount of $3,000 with
respect to each such assignment (provided that in the event of simultaneous
assignments relating to this Agreement and the Additional Credit Agreement, the
fees for such assignments shall total $3,000). Each Bank and the Company 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 12.04(b),
the assigning Bank shall promptly notify the Company 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. Notwithstanding anything to
the contrary contained herein, the Canadian Dollar Loans may be assigned to the
Banks as contemplated by Section 1.01(g). Except as specifically provided in the
immediately preceding sentence and in Section 1.01(g), the Canadian Lender shall
not assign any portion of its rights or obligations hereunder in respect of the
Canadian Dollar Loans, except an assignment of all of its rights and obligations
in respect of such Canadian Dollar Loans to one commercial bank or other
financial institution acceptable to the Administrative Agent, the Company and
the Canadian Borrower.
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(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 Company 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 either 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 either Borrower in any case shall
entitle such 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 a Borrower in
respect of any Obligations of such 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
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the respective Borrower to such Banks in such amount as shall result in a
proportional 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 Company 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, 1995 historical
financial statements delivered to the Banks pursuant to Section 6.10(a);
provided further, that in the event that the Accounting Standards Executive
Committee of the AICPA adopts the statement of position (substantially in the
proposed form as of the Effective Date) relating to computer software
developed or obtained for internal use, and the Company's independent
auditors concur with such accounting change as it relates to the presentation
of the Company's financial statements, then compliance with Section 8 will
thereafter be determined giving effect to such statement of position.
(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,
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and, by execution and delivery of this Agreement, each Borrower hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each Borrower
hereby further irrevocably waives any claim that any such courts lack
jurisdiction over such 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 such Borrower. Each 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 such Borrower,
at its address for notices pursuant to Section 12.03, such service to become
effective 30 days after such mailing. Each 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 Company hereby represents and warrants
that its chief executive office is located at 745 Fifth Avenue, New York, New
York 10151, and the Company 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 Company
agrees that (x) prior to moving its chief executive office outside New York
City and (y) and if for any reason any designee, appointee and agent
previously appointed pursuant to this sentence shall cease to be available to
act as such, the Company 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 either Borrower in any other jurisdiction.
(b) Each 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 Company
and the Administrative Agent.
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12.10 Effectiveness. This Agreement shall become effective on the
date (the "Effective Date") on which each Borrower, the Administrative Agent and
each of the Banks 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 each 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. 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 each 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 A
Commitment Reduction Date, any Scheduled B Commitment Reduction Date or
Scheduled TL Repayment Date or reduce the amount of any Scheduled A Commitment
Reduction, any Scheduled B Commitment Reduction or any Scheduled TL Repayment
(or any mandatory repayment arising as a result of any such Scheduled A
Commitment Reduction or any such Scheduled B 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 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 the Company from the
Company 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), (iii) 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), (iv) reduce the percentage specified in, or otherwise
modify, the definition of, Required Banks, (v) increase the Maximum Canadian
Dollar Amount or (vi) consent to the assignment or transfer by any Credit Party
of any of its rights and
-122-
<PAGE>
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. No provision relating to Canadian Dollar Loans may be
amended without the consent of the Canadian Lender.
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 Borrowers 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 Company (other
than to 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) any information with respect to the Company or any of its
Subsidiaries which is furnished pursuant to this Agreement and which is
designated by the Company 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 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.
-123-
<PAGE>
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.
-124-
<PAGE>
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
New York, NY 10151 K-III COMMUNICATIONS
CORPORATION
Telephone No.: (212) 745-0101
Telecopier No.: (212) 745-0199 By ___________________________________
Attention: Beverly Chell, Esq. Title: Treasurer
c/o K-III Communications CANADIAN SAILINGS INC.
Corporation
745 Fifth Avenue
New York, NY 10151 By ___________________________________
Title:
Telephone No.: (212) 745-0101
Telecopier No.: (212) 745-0199
Attention: Beverly Chell, Esq.
THE CHASE MANHATTAN
BANK, N.A., Individually
and as Administrative Agent
By __________________________________
Title:
<PAGE>
BANKERS TRUST COMPANY,
Individually and as
Co-Syndication Agent
By __________________________________
Title:
THE BANK OF NEW YORK,
Individually and as
Co-Syndication Agent
By __________________________________
Title:
THE BANK OF NOVA SCOTIA,
Individually, as Canadian Lender
and as Documentation Agent
By __________________________________
Title:
BANK OF AMERICA NT&SA
By __________________________________
Title:
FLEET NATIONAL BANK
By __________________________________
Title:
<PAGE>
MIDLAND BANK plc,
NEW YORK BRANCH
By __________________________________
Title:
SOCIETE GENERALE
By __________________________________
Title:
THE INDUSTRIAL BANK OF
JAPAN, LIMITED
By __________________________________
Title:
ROYAL BANK OF CANADA
By __________________________________
Title:
CIBC INC.
By __________________________________
Title:
LTCB TRUST COMPANY
<PAGE>
By __________________________________
Title:
MELLON BANK, N.A.
By __________________________________
Title:
NATIONSBANK OF TEXAS, N.A.
By __________________________________
Title:
THE DAI-ICHI KANGYO BANK, LTD.,
NEW YORK BRANCH
By __________________________________
Title:
THE MITSUBISHI TRUST AND
BANKING CORPORATION
By __________________________________
Title:
THE SAKURA BANK, LIMITED,
NEW YORK BRANCH
By __________________________________
Title:
<PAGE>
TORONTO DOMINION (NEW YORK),
INC.
By __________________________________
Title:
CREDIT LYONNAIS
NEW YORK BRANCH
By __________________________________
Title:
BANK OF MONTREAL
By __________________________________
Title:
CAISSE NATIONALE DE
CREDIT AGRICOLE
By __________________________________
Title:
THE SUMITOMO TRUST AND
BANKING CO., LTD.,
NEW YORK BRANCH
By __________________________________
Title:
<PAGE>
UNION BANK OF CALIFORNIA, N.A.
By __________________________________
Title:
UNITED JERSEY BANK
By __________________________________
Title:
BANQUE PARIBAS
By __________________________________
Title:
By __________________________________
Title:
CREDIT SUISSE
By __________________________________
Title:
By __________________________________
Title:
MERITA BANK LTD.
By __________________________________
<PAGE>
Title:
SIGNET BANK
By __________________________________
Title:
THE SANWA BANK, LIMITED,
NEW YORK BRANCH
By __________________________________
Title:
BANK OF IRELAND,
GRAND CAYMAN BRANCH
By __________________________________
Title:
THE YASUDA TRUST AND BANKING
CO., LTD., NEW YORK BRANCH
By __________________________________
Title:
<PAGE>
ANNEX I
LIST OF BANKS
Tranche A Tranche B
Revolving Loan Revolving Loan Term Loan
Bank Commitment Commitment Commitment
- ---- ---------- ---------- ----------
The Chase Manhattan Bank, N.A. $ 60,000,000 20,000,000
Bankers Trust Company 45,000,000 15,000,000
The Bank of New York 45,000,000 15,000,000
The Bank of Nova Scotia 45,000,000 15,000,000
Bank of America NT&SA 36,000,000 12,000,000
Fleet National Bank 36,000,000 12,000,000
Midland Bank plc,
New York Branch 36,000,000 12,000,000
Societe Generale 36,000,000 12,000,000
The Industrial Bank of
Japan, Limited 36,000,000 12,000,000
Royal Bank of Canada 30,000,000 10,000,000
CIBC Inc. 24,000,000 8,000,000
LTCB Trust Company 24,000,000 8,000,000
Mellon Bank, N.A. 24,000,000 8,000,000
NationsBank of Texas, N.A. 24,000,000 8,000,000
The Dai-Ichi Kangyo Bank, Ltd.,
New York Branch 24,000,000 8,000,000
The Mitsubishi Trust and
Banking Corporation 24,000,000 8,000,000
The Sakura Bank, Limited,
New York Branch 24,000,000 8,000,000
Toronto Dominion (New York), Inc. 24,000,000 8,000,000
Credit Lyonnais
New York Branch 21,000,000 7,000,000
Bank of Montreal 15,000,000 5,000,000
<PAGE>
ANNEX I
Page 2
Tranche A Tranche B
Revolving Loan Revolving Loan Term Loan
Bank Commitment Commitment Commitment
- ---- ---------- ---------- ----------
Caisse Nationale de Credit
Agricole 15,000,000 5,000,000
The Sumitomo Trust and
Banking Co., Ltd.,
New York Branch 15,000,000 5,000,000
Union Bank of California, N.A. 15,000,000 5,000,000
United Jersey Bank 15,000,000 5,000,000
Banque Paribas 9,000,000 3,000,000
Credit Suisse 9,000,000 3,000,000
Merita Bank Ltd. 9,000,000 3,000,000
Signet Bank 9,000,000 3,000,000
The Sanwa Bank, Limited,
New York Branch 9,000,000 3,000,000
Bank of Ireland,
Grand Cayman Branch 6,000,000 2,000,000
The Yasuda Trust and
Banking Co., Ltd.,
New York Branch 6,000,000 2,000,000
Total $750,000,000 $ 0 $250,000,000
============ ============ ============
<PAGE>
ANNEX II
BANK ADDRESSES
Bank Address
- ---- -------
The Chase Manhattan Bank, N.A. 1 Chase Manhattan Plaza
New York, New York 10081
Telephone No.: (212) 552-3993
Telecopier No.: (212) 552-0259
Attention: James R. Kuster
Bankers Trust Company One Bankers Trust Plaza
New York, New York 10006
Telephone No.: (212) 250-7199
Telecopier No.: (212) 250-7200
Attention: Jeff Bennett
The Bank of New York 1 Wall Street
16th Floor
New York, New York 10286
Telephone No.: (212) 635-8608
Telecopier No.: (212) 635-8595
Attention: Ted Ryan
Bank of Nova Scotia One Liberty Plaza,
26th Floor
New York, New York 10006
Telephone No.: (212) 225-5042
Telecopier No.: (212) 225-5090
Attention: Vincent Fitzgerald
Canadian Notice Office and Canadian
Payment Office:
International Banking Division
Loan Administration and Agency Services
44 Kings Street West, 14th Floor
Toronto, Ontario
Canada M5H 1H1
Telephone No.: (416) 866-5901/2816/4089
Telecopier No.: (416) 866-5991
Attention: Wallace Yeung/
Nancy Buccat/Nancy Tong
<PAGE>
ANNEX II
Page 2
Bank of America NT&SA 335 Madison Avenue
5th Floor
New York, New York 10017
Telephone No.: (212) 503-8352
Telecopier No.: (212) 503-7173
Attention: Amy Trapp
Fleet National Bank 75 State Street
Boston, Massachusetts 02109
Telephone No.: (617) 346-3761
Telecopier No.: (617) 346-3777
Attention: Alex Ivanov
Midland Bank plc, 140 Broadway
New York Branch 5th Floor
New York, New York 10005
Telephone No.: (212) 658-2738
Telecopier No.: (212) 658-2586
Attention: Martin Brown
Societe Generale 1221 Avenue of the Americas
New York, New York 10020
Telephone No.: (212) 278-6852
Telecopier No.: (212) 278-6240
Attention: Elaine Khalil
The Industrial Bank of 245 Park Avenue
Japan, Limited 23rd Floor
New York, New York 10167
Telephone No.: (212) 309-6562
Telecopier No.: (212) 682-2870
Attention: Akira Yoshida
Royal Bank of Canada One Financial Square
New York, New York 10005-3531
Telephone No.: (212) 428-6288
Telecopier No.: (212) 428-6460
Attention: Barbara Meijer
CIBC Inc. 425 Lexington Avenue
6th Floor
New York, New York 10038
Telephone No.: (212) 856-3714
Telecopier No.: (212) 856-3558
Attention: Matt Jones
<PAGE>
ANNEX II
Page 3
LTCB Trust Company 165 Broadway
49th Floor
New York, New York 10006
Telephone No.: (212) 335-4991
Telecopier No.: (212) 608-2371
Attention: Chris Fahey
Mellon Bank, N.A. One Mellon Bank Center
Room 4440
Pittsburgh, Pennsylvania 15258
Telephone No.: (412) 234-3697
Telecopier No.: (412) 234-6375
Attention: Stephen Viehe
NationsBank of Texas, N.A. Communications Finance Division
901 Main Street, 64th Floor
Dallas, Texas 75202
Telephone No.: (214) 508-0517
Telecopier No.: (214) 508-9390
Attention: Tony Cacheria
The Dai-Ichi Kangyo Bank, Ltd., One World Trade Center
New York Branch New York, New York 10048
Telephone No.: (212) 432-6655
Telecopier No.: (212) 524-0579
Attention: Michael Wellington
The Mitsubishi Trust and 520 Madison Avenue
Banking Corporation 26th Floor
New York, New York 10022
Telephone No.: (212) 891-8425
Telecopier No.: (212) 593-4691
Attention: Anthony Rock
The Sakura Bank, Limited, 277 Park Avenue
New York Branch 45th Floor
New York, New York 10172
Telephone No.: (212) 756-6774
Telecopier No.: (212) 888-7651
Attention: Stephen Chan
Toronto Dominion (New York), 31 West 52nd Street
Inc. New York, New York 10019
Telephone No.: (212) 468-0731
Telecopier No.: (212) 262-1928
Attention: David Oliver
<PAGE>
ANNEX II
Page 4
with a copy to:
909 Fannin
Suite 1700
Houston, Texas 77010
Telephone No.: (713) 653-8242
Telecopier No.: (713) 951-9921
Attention: Jorge Garcia
Credit Lyonnais 1301 Avenue of the Americas
New York Branch New York, New York 10019
Telephone No.: (212) 261-7871
Telecopier No.: (212) 459-3176
Attention: Nick Bellamy
Bank of Montreal 430 Park Avenue
New York, New York 10022
Telephone No.: (212) 605-1426
Telecopier No.: (212) 605-1621
Attention: Allegra Griffiths
Caisse Nationale de Credit 520 Madison Avenue
Agricole New York, New York 10022
Telephone No.: (212) 418-2217
Telecopier No.: (212) 418-7004
Attention: John McCloskey
The Sumitomo Trust and 527 Madison Avenue
Banking Co., Ltd., New York, New York 10022
New York Branch Telephone No.: (212) 326-0716
Telecopier No.: (212) 418-4848
Attention: Mitchell Gervis
Union Bank of California, N.A. 445 South Figueroa Street
15th Floor
Los Angeles, California 90071
Telephone No.: (213) 236-5812
Telecopier No.: (213) 236-5747
Attention: Michael K. McShane
United Jersey Bank 25 East Salem Street
Hackensack, New Jersey 07602
Telephone No.: (201) 646-6189
Telecopier No.: (201) 343-6723
Attention: Bruce Gray
<PAGE>
ANNEX II
Page 5
Banque Paribas 787 Seventh Avenue
New York, New York 10019
Telephone No.: (212) 841-2595
Telecopier No.: (212) 841-2369
Attention: Cindy Hewitt
Credit Suisse 12 East 49th Street
Tower 49
New York, New York 10017
Telephone No.: (212) 238-5458
Telecopier No.: (212) 238-5439
Attention: J. Hamilton Crawford
Merita Bank Ltd. 437 Madison Avenue
New York, New York 10022
Telephone No.: (212) 318-9561
Telecopier No.: (212) 421-4420
Attention: Frank Maffei
Signet Bank 7799 Leesburg Pike
Suite 500
Falls Church, Virginia 22043
Telephone No.: (703) 714-5016
Telecopier No.: (703) 506-9712
Attention: John Slabaugh
The Sanwa Bank, Limited, New Park Avenue Plaza
York Branch 55 East 52nd Street
New York, New York 10055
Telephone No.: (212) 339-6204
Telecopier No.: (212) 754-1304
Attention: Shayn March
Bank of Ireland, Grand Cayman 640 Fifth Avenue
Branch New York, New York 10019
Telephone No.: (212) 397-1712
Telecopier No.: (212) 307-5559
Attention: Roger Burns
The Yasuda Trust & Banking Co., 666 5th Avenue
Ltd., New York Branch 8th Floor
New York, New York 10103
Telephone No.: (212) 373-5713
Telecopier No.: (212) 373-5796
Attention: Rohn M. Laudenschlaeger
<PAGE>
ANNEX II
Page 6
<PAGE>
ANNEX III
EXISTING LETTERS OF CREDIT
<PAGE>
ANNEX IV
SUBSIDIARIES
<PAGE>
ANNEX V
LIENS
<PAGE>
ANNEX VI
PART A. EXISTING DEBT
[To include existing Senior Notes and Non-Compete Notes]
PART B. EXISTING CONTINGENT OBLIGATIONS
<PAGE>
ANNEX VII
EXISTING PREFERRED STOCK
<PAGE>
Exhibit 10.6
AMENDMENT NO. 1
TO
1992 STOCK PURCHASE AND OPTION PLAN
AMENDED AND RESTATED AS OF MARCH 5, 1997
The first K-III Communications Corporation 1992 Stock Option and
Purchase Plan (the "Plan") is hereby amended as follows:
BY ADDING CLAUSE (C) SECTION 1 TO READ AS FOLLOWS:
"(c) to provide incentives to members of the Board of Directors
who are not employees of the Corporation or its Subsidiaries ("Non-Employee
Directors")"; and
BY AMENDING CLAUSE (J) OF SECTION 2 TO READ AS FOLLOWS:
"(j) "Participant" means an Employee, a Non-Employee Director or
other person having a relationship with the Corporation or any of its
Subsidiaries, to whom one or more Grants have been made and such Grants have not
all been forfeited or terminated under the Plan"; and
BY AMENDING CLAUSES (A) AND (B) OF SECTION 3 TO READ AS FOLLOWS
"(a) The Plan shall be administered by the Committee. The Committee
may adopt its own rules of procedure, and the action of a majority of the
Committee taken at a meeting or the action of all members of the Committee taken
without a meeting by a writing signed by all members, shall constitute action by
the Committee. The Committee shall have the power and authority to administer,
construe and interpret the Plan to make rules for carrying out and to make
changes in such rules. Any such interpretations, rules, and administration
shall be consistent with the basis purposes of the Plan.
<PAGE>
(b) The Committee may delegate to the Board of Directors its power
and authority to designate and make Grants to Participants who are Non-Employee
Directors and may delegate to the Chief Executive Officer and to other senior
officers of the Corporation its duties under the Plan subject to such conditions
and limitations as the Committee shall prescribe; and
<PAGE>
BY AMENDING SECTION 4 AND 5 TO READ AS FOLLOWS:
"4. The Committee may from time to time make Grants under the Plan to
such Employees, Non-Employee Directors, or other person having a relationship
with the Corporation or any of its Subsidiaries and in such form and having
such terms, conditions and limitations as the Committee may determine. Grants
may be granted singly, in combination or in tandem. The terms, conditions and
limitations of each Grant under the Plan shall be set forth in a Grant Agreement
in a form approved by the Committee consistent, however, with the terms of the
Plan; provided, however, such Grant Agreement shall contain provisions dealing
with the treatment of Grants in the event of the termination, death or
disability of a Participant, and may also include provisions concerning the
treatment of Grants in the event of a change of control of the Corporation.
5. From time to time, the Committee will determine the forms and amounts
of Grants to Participants. Grants shall be subject to such terms and
conditions, including without limitation, vesting and exercisability periods or
restrictions, and the effect on a Grant of a termination or change in employment
or service status of a Participant (including a termination or change by reason
of a sale of a subsidiary or division of the Corporation), as the Committee may
in its discretion determine. Such Grants may take the following forms in the
Committee's sole discretion"; and
Approved March 5, 1997 by the Board of Directors.
<PAGE>
Exhibit 10.23
K-III COMMUNICATIONS CORPORATION
DIRECTORS' DEFERRED COMPENSATION PLAN
<PAGE>
K-III COMMUNICATIONS CORPORATION
DIRECTORS' DEFERRED COMPENSATION PLAN
Table of Contents
ARTICLE I Definitions ........................................... 1
ARTICLE II Election to Defer ..................................... 1
ARTICLE III Deferred Compensation Accounts ........................ 2
ARTICLE IV Payment of Deferred Compensation ...................... 3
ARTICLE V Administration ........................................ 4
ARTICLE VI Amendment of Plan ..................................... 4
<PAGE>
ARTICLE I
DEFINITIONS
1.1 "Board" shall mean the Board of Directors of K-III Communications
Corporation.
1.2 "Director" shall mean a member of the Board of Directors of the Company
who is not an employee of the Company or any of its subsidiaries.
1.3 "Plan" shall mean this Deferred Compensation Plan for Directors as it may
be amended from time to time.
1.4 "Fees" shall mean amounts earned for serving as a member of the Board,
including any committees of the Board.
1.5 "Year" shall mean calendar year.
1.6 "Cash Account" shall mean the account created by the Company pursuant to
Article III of this Plan in accordance with an election by a Director to
receive deferred cash compensation under Article II hereof.
1.7 "Common Stock" shall mean the Common Stock of the Company.
1.8 "Company" means K-III Communications Corporation.
1.9 "Stock Account" shall mean the account created by the Company pursuant to
Article III of this Plan in accordance with an election by a Director to
receive stock compensation under Article II hereof.
1.10 "He", "Him" or "His" shall apply equally to male and female members of the
Board.
ARTICLE II
ELECTION TO DEFER
2.1 A Director may elect, on or before December 31 of any Year, to defer
payment of all or a specified part of all Fees earned during the Year
following such election and succeeding Years (until the Director ceases to
be a Director). Any person who shall become a Director during any Year,
and who was not a Director of the Company on the preceding December 31,
may elect, before the Director's term begins, to defer payment of all or a
specified part of such Fees earned during the remainder of such Year and
for succeeding Years. Any Fees deferred pursuant to this Paragraph shall
be paid to the Director at the time(s)
<PAGE>
and in the manner specified in Article IV hereof, in the form of cash or
Common Stock, or any combination thereof, as designated by the Director.
2.2 The election to participate in the plan and manner of payment shall be
designated by submitting a letter in the form attached hereto as Appendix
A to the Secretary of the Company.
2.3 The election shall continue from Year to Year unless the Director
terminates it by written request delivered to the Secretary of the Company
prior to the commencement of the Year for which the termination is first
effective.
ARTICLE III
DEFERRED COMPENSATION ACCOUNTS
3.1 The Company shall maintain separate memorandum accounts for the Fees
deferred by each Director.
3.2 The Company shall credit, on the date Fees become payable, to the Cash
Account of each Director the deferred portion of any Fees due the Director
as to which an election to receive cash has been made. Fees deferred in
the form of cash (and interest thereon) shall be held in the general funds
of the Company.
3.3 On the first day of each quarter, the Company shall credit the Cash
Account of each Director with interest calculated on the basis of the
balance in such account on the first day of each month of the preceding
quarter at the Company's average borrowing rate as in effect from time to
time.
3.4 The Company shall credit, on the date Fees become payable, the Stock
Account of each Director with the number of shares of Common Stock which
is equal to the deferred portion of any Fee due the Director as to which
an election to receive the Company Common Stock has been made, divided by
the Stock Value on the date such fees would otherwise have been paid.
"Stock Value" shall mean the closing price of the Company's Common Stock
as reported on the New York Stock Exchange Inc. ("NYSE") - Composite Tape
on the date otherwise have been paid (the "Stock Value" in question). If
the closing price is not available from the NYSE for the Common Stock on a
date in question, then the next preceding practicable date for which such
closing price is available shall be used.
3.5 The Company shall credit the Stock Account of each Director who has
elected to receive deferred compensation in the form of Common Stock with
the number shares of Common Stock equal to any cash dividends (or the fair
market value of dividends paid in property other than dividends payable in
Common Stock) payable on the number of shares of Common Stock represented
in each
<PAGE>
Director's Stock Account divided by the Stock Value on the dividend
payment date. Dividends payable in Common Stock will be credited to each
Director's Stock Account in the form of the right to receive Common Stock.
If adjustments are made to the outstanding shares of Common Stock as a
result of split-ups, recapitalizations, mergers, consolidations and the
like, an appropriate adjustment also will be made in the number of Shares
of Common Stock credited to the Director's Stock Account.
3.6 Common Stock shall be computed to three decimal places.
3.7 The right to receive Common Stock at a later date shall not entitle any
person to rights of a stockholder with respect to such Common Stock unless
and until shares of Common Stock have been issued to such person pursuant
to Article IV hereof.
3.8 The Company shall not be required to acquire, reserve, segregate, or
otherwise set aside shares of its Common Stock for the payment of its
obligations under the Plan, but shall make available as and when required
a sufficient number of shares of its Common Stock to meet the needs of the
Plan.
3.9 Nothing contained herein shall be deemed to create a trust of any kind or
any fiduciary relationship. To the extent that any person acquires a right
to receive payments from the Company under the Plan such right shall be
no greater than the right of any unsecured general creditor of the
Company.
ARTICLE IV
PAYMENT OF DEFERRED COMPENSATION
4.1 Subject to the second succeeding sentence, amounts contained in a
Director's Cash Account and/or Stock Account shall be distributed as the
Director's election (made pursuant to Paragraph 2.2 of Article II hereof)
shall provide. Distributions shall begin with the first day of the Year
following the Director's retirement or separation from the Board. Amounts
credited to a Director's Cash Account shall be paid in cash. Amounts
credited to a Director's Stock Account shall be paid, in the Company's
sole discretion, in the form of Common Stock or cash (determined by
multiplying the number of full shares in the Director's Stock Account by
the then Stock Value). A cash payment shall made with any final
installment for any fractions of a share of Common Stock remaining in the
Director's Stock Account. Such fractional share will be valued at the
Stock Value on the date of settlement. Any such shares will contain those
restrictive legends limiting their transferability as the Company's
counsel shall advise.
4.2 Each Director shall have the right to designate a beneficiary who is to
succeed to his right to receive payments hereunder in the event of death.
Any designated
<PAGE>
beneficiary shall receive payments in the same manner as the Director if
he had lived. In case of a failure of designation or the death of a
designated beneficiary without a designated successor, the balance of the
amounts contained in the Director's Cash Account and/or Stock Account
shall be payable in accordance with Section 4.1 to the Director's or
former Director's estate in full on the first day of the Year following
the Year in which he dies. No designation of beneficiary or change in
beneficiary shall be valid unless in writing signed by the Director and
filed with the Secretary of the Company.
ARTICLE V
ADMINISTRATION
5.1 The Company shall administer the Plan at its expense. All decisions made
by the Company with respect to issues hereunder shall be final and binding
on all parties.
5.2 Except to the extent required by law, the right of any Director or any
beneficiary to any benefit or to any payment hereunder shall not be
subject in any manner to attachment or other legal process for the debts
of such Director or beneficiary, and any such benefit or payment shall not
be subject to alienation, sale, transfer, assignment or encumbrance.
ARTICLE VI
AMENDMENT OF PLAN
6.1 The Plan may be amended, suspended or terminated in whole or in part from
time to time by the Board except that no amendment, suspension, or
termination shall apply to the payment to any Director or beneficiary of a
deceased Director of any amounts previously credited to a Director's Cash
Account or Stock Account.
<PAGE>
APPENDIX A
Date______________
__________________________
Corporate Secretary
K-III Communications Corporation
__________________________
_____________________, __________ _____
Dear Mr. ________________:
Pursuant to the K-III Communications Corporation Directors' Deferred
Compensation Plan, as amended to date (the "Plan"), I hereby elect to defer
receipt of all or a portion of my Director's fees commencing January 1, 199_ and
for succeeding calendar years in accordance with the percentages indicated
below.
I elect to have my Director's fees (and committee fees, if any)
credited as follows (fill in appropriate percentages for options a, b and c,
below):
(a) ________% of the aggregate Director's fees shall be credited
to my Cash Account as defined in the Plan;
(b) ________% of the aggregate Director's fees shall be credited
to my Stock Account as defined in the Plan;
(c) ________% of the aggregate Director's fees shall not be
deferred, but shall be paid to me directly as they accrue.
Further, I elect to receive the payments pursuant to the Plan (check
method desired, below):
_______ in one lump sum
________ in _______ equal annual installments
Further, I understand that my Cash Account and Stock Account shal1
become payable on the first day of January or as soon thereafter as is
practicable following my retirement or separation from the Board.
In the event of my death prior to receipt of all or any balance of
such fees and interest or dividends thereon so accumulated, I designate
_____________ as my beneficiary to receive the funds so accumulated.
Very truly yours,
<PAGE>
Exhibit 10.24
December 24, 1996
Mr. Harry A. McQuillen
President
K-III Magazine Corporation
717 Fifth Avenue, 10th Floor
New York, NY 10022
Dear Mr. McQuillen:
The purpose of this letter is to set forth the terms and conditions of the
employment agreement (the "Agreement") between you and K-III Communications
Corporation (the "Company").
1. SERVICES.
a. The Company hereby retains you, and you agree to be employed by the
Company in a full-time capacity as the Group President of the Company's Media
Group, as the same may be constituted from time to time and which, on the date
hereof, includes Consumer Magazines, Special Interest Magazines, Intertec
Publishing, Family and Leisure Magazines and Channel One (collectively, the
"Media Group") together with such other similar or higher executive duties that
you may be requested to perform during the term of this Agreement and to serve
as Executive Vice President or other office of the Company and any of its
subsidiaries to which you may be elected. You shall report directly to William
F. Reilly or, if William F. Reilly is no longer with the Company, the Chief
Executive Officer of the Company.
b. You shall devote substantially all of your attention, business time
and efforts to the business and affairs of the Company, provided that nothing
shall prohibit you from participating in charitable or educational activities or
the Board of Directors of other companies (provided such other companies do not
compete with the Company), which do not in the aggregate materially interfere
with the provision of services by you under this Agreement.
2. TERM
The Term of this Agreement shall commence on December 24, 1996 and shall
expire on December 31, 1999, unless earlier terminated in accordance with
Section 5 or extended in accordance with Section 7. For the purposes of this
Agreement,
<PAGE>
the "Expiration Date" shall mean December 31, 1999, unless the Term is extended
in accordance with Section 7.
3. COMPENSATION
a. Base Salary. You shall be paid in annual base salary equal to
$675,000, less applicable withholdings, payable bi-weekly in arrears, on the
Company's regular pay dates. Such base salary shall be subject to review
regarding increases from time to time during the Term and may be increased (but
not decreased) by the Company in its sole discretion.
b. Bonus. You shall continue to participate in the Short Term Senior
Executive Performance Plan and the Short Term Senior Executive Discretionary
Plan (together, the "Bonus Plans") on bases (i) at least as favorable to you as
your participation in the 1996 Bonus Plans as set forth on the bonus
participation letter previously forwarded to you, and (ii) in no event less
favorable than the bases of the participation therein of any of the Company's
executives holding positions then comparable to yours.
c. Executive Compensation Plans. You shall be eligible to participate in
the Company's Non-Qualified Stock Option Plan and Restoration Plan and such
other similar plans that may be in effect, for any of the Company's executives
holding positions comparable to yours, from time to time during the Term
(collectively, the "Executive Compensation Plans").
4. FRINGE BENEFITS AND EXPENSES
a. Fringe Benefits. During the term of this Agreement, the Company will
provide you with benefits commensurate with those provided to employees of the
Company generally and consistent with the benefits provided to you by the
Company in the past.
b. Expenses. The Company shall reimburse you for all reasonable and
customary travel (including providing you with an automobile) and entertainment
expenses incurred by you in the performance with your duties hereunder, such
expenses and reimbursements therefor to be consistent with the expenses incurred
by you and the reimbursements made to you prior to the date of this Agreement.
5. EARLY TERMINATION. This Agreement
a. shall terminate upon your death;
b. may be terminated by the Company on written notice to you upon your
"Permanent Disability";
2
<PAGE>
c. may be terminated by the Company on written notice to you for "Cause";
and
d. may be terminated by you on written notice to the Company for "Good
Reason"
e. may be terminated by the Company on written notice to you without
Cause.
f. As used herein, "Permanent Disability" shall mean a physical or mental
disability which renders you unable to perform your duties hereunder in a
reasonably professional manner provided you have failed to perform such duties
as a result of such disability for an aggregate period of six months in any 12
consecutive month period during the Term. Permanent Disability shall be
determined by the opinion of at least two of three doctors associated with major
hospitals in Manhattan practicing in the field to which the disability relates
and selected by the Company acting reasonably.
g. As used herein, "Cause" shall mean (i) any substantial breach or
non-observance of any of your material obligations as set forth herein, (after
reasonable advance written notice and a reasonable opportunity to cure such
breach or non-observance), (ii) the immoderate use of alcohol by you on a
habitual basis (after reasonable advance written notice and a reasonable
opportunity to cease such use), (iii) the illegal use of narcotics or drugs by
you on Company premises or while engaged in any business-related function or
which adversely affects your ability to perform services (after reasonable
advance written notice and a reasonable opportunity to cease such use), (iv)
willful and repeated absence from the business for any unreasonable period of
time, without leave; and (v) willful and repeated failure or refusal to perform
your duties hereunder which failure or refusal continues following reasonable
advance written notice to you specifying such failure or refusal and a
reasonable opportunity to cure such failure or refusal.
h. As used herein, "Date of Termination" shall mean the date of your
death or effective date of your termination under Sections 5(b), (c), (d), and
(e).
i. As used herein, "Good Reason" shall mean (i) diminution in position or
responsibility, authority or prestige, including, but not limited to, no longer
reporting directly to William F. Reilly, or, if he should leave the Company, the
Chief Executive Officer of the Company, provided that it shall not be a
diminution if (A) during 1997 any of the businesses in the Media Group discussed
with you by Mr. Reilly as a divestiture possibility during November and December
1996 is sold or (B) during any twelve consecutive month period (the "Fiscal
Year In Question") after 1997 the revenues or earnings before interest, taxes
and depreciation ("EBITDA") determined on a pro forma basis, assuming all sold
operations were sold and all acquisitions made were made at the beginning of the
Fiscal Year In Question, of the businesses over which you have managerial
supervision and control, shall be 20% less than the revenues or EBITDA for the
1997 calendar year determined on the same pro forma basis,
3
<PAGE>
(ii) relocation of your workplace outside of Manhattan, (iii) uncured breach of
this Agreement by the Company, provided that if the breach is immaterial you
must give the Company written notice of the breach and a 30 day period
subsequent to such notice to cure such breach, (iv) failure of a permitted
assignee of this Agreement to assume the Agreement, (v) following a Change in
Control (as hereinafter defined), failure to give increases, during each
consecutive 12 month period thereafter during the Term, in annual base salary
equal to at least seven (7%) percent.
6. COMPENSATION UPON TERMINATION. In the event that this Agreement shall
terminate:
a. Pursuant to Section 5(a) or (b), you or your estate shall be entitled
to receive (i) all accrued and unpaid annual base salary earned through the Date
of Termination plus an amount equal to one year's annual base salary at the rate
then in effect plus (ii) your target bonuses under the Bonus Plans for the
calendar year in which the Date of Termination occurs ("Termination Year Target
Bonuses") plus an amount equal to your Termination Year Target Bonuses
multiplied by a fraction, the numerator of which is the number of days from the
start of the calendar year during which the Date of Termination occurs and the
denominator of which is 365 plus (iii) all other amounts or benefits due under
any Executive Compensation Plans or fringe benefit plans in which you then
participate in accordance with the terms thereof then in effect.
b. Pursuant to Section 5(c), you shall be entitled to receive your
accrued and unpaid annual base salary through the Date of Termination plus any
amounts or benefits payable under the Bonus Plans, Executive Compensation Plans
or fringe benefit plans in which you then participate in accordance with the
terms thereof then in effect.
c. Pursuant to Section 5(d) or (e), you shall be entitled to receive (i)
your full annual base salary through the Expiration Date at the rate in effect
on the Date of Termination, plus (ii) your Target Bonuses, under all the Bonus
Plans then in effect, for the calendar year in which the Date of Termination
occurs together with your target bonus for any other bonus plans then in effect
(collectively, the "Bonus Amount") plus an amount equal to 105% of the Bonus
Amount for each succeeding calendar year or part thereof (on a pro rated basis)
through the Expiration Date, plus (iii) continuation of your participation in
all Executive Compensation Plans and fringe benefit plans then in effect
including medical and hospitalization insurance through the Expiration Date,
(iv) plus, if the termination occurs following a Change in Control or other
event that would subject the amounts payable under this subsection (c) to excess
parachute taxes or similar excise taxes under Section 280 G
4
<PAGE>
of the Internal Revenue Code, a tax gross-up payment in a sufficient amount so
that the amounts you retain of payments under clauses (i), (ii) and (iii) above
are no less than the amounts you would have retained after the payment of all
normal withholdings including normal income taxes but before the payment of
"excess parachute taxes" and similar excise taxes under Section 280 G of the
Internal Revenue Code that may be payable as a result of the Change in Control
or other such event having occurred prior to the Date of Termination and (vi)
all of your unvested benefits under "Executive Compensation Plans" including
unvested stock options shall vest in full and you shall have 365 days from the
Date of Termination to exercise any stock options you hold; provided, however
that in no event shall the amounts payable to you under clauses (i), (ii) and
(iii) above be less than the amounts payable under subsection (a), clauses (i),
(ii) and (iii) of this Section 6.
d. All payments under Section 6(c) shall be paid in a lump sum, less
applicable withholdings, within 15 days after the Date of Termination.
7. CHANGE IN CONTROL.
a. In the event of a Change in Control during the Term after December 31,
1996 and prior to January 1, 2000, the Term of this Agreement and your
employment hereunder shall be extended to a date which is the third anniversary
of the date on which the Change in Control occurs. In such event, the
Expiration Date shall be extended to the date upon which such third anniversary
occurs.
b. Notwithstanding anything contained herein to the contrary, on a Change
in Control, all then unvested stock options granted under any Executive
Compensation Plan shall vest.
c. For purposes hereof, "Change in Control" shall mean such time as (i) a
"person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934 (the "Act"), other than Kohlberg Kravis Roberts
& Co. ("KKR") and its affiliates (as that term in defined in the Act
("Affiliates"), becomes the "beneficial owner" (as defined in Rule 13d-3 under
the 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 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.
8. AGREEMENT NOT TO COMPETE
Through the earlier of (i) the Expiration Date or (ii) the Date of
Termination in the event this Agreement and your employment hereunder is
terminated under Section 5(d) or (e), you agree not to (A) accept employment
with or provide services to any person, firm or corporation that competes with
the Company or any of its subsidiaries
5
<PAGE>
in any of the Company's businesses over which you have had managerial
supervision and control during the term of your employment with the Company, or
(B) yourself or for and on behalf of any person, firm or corporation for which
you provide services, solicit for employment or hire any employee employed by
the Company or any of its subsidiaries during your last month of employment with
the Company in any of the Company's businesses over which you have had
managerial supervision and control during the term of your employment with the
Company. Nothing contained in this Section 8 shall prohibit you from owning
less than 5% of the equity securities of any company as a passive investor.
9. GOVERNING LAW. This Agreement shall be governed and interpreted and
enforced in accordance with the laws of the State of New York applicable to
agreements made and to be performed in the State of New York.
10. ARBITRATION. Both parties agree that any disputes under this
Agreement or in any way related to your employment with or separation from the
Company shall be heard and determined by an arbitrator selected in accordance
with the rules and procedures of the American Arbitration Association ("AAA") in
New York City and that the arbitrator's findings shall be final and binding on
both parties hereto. Both parties agree that punitive damages shall not be an
available remedy to a prevailing party in any arbitration hereunder. The party
that does not prevail in the arbitration shall pay all of the costs and fees of
AAA.
11. NOTICES. Any notice required or desired to be served, given or
delivered hereunder shall be in writing, and shall be deemed to have been
validly served, given or delivered (i) five business days after deposit in the
United States mails, with proper postage prepaid, whether by air, first class,
registered or certified mail, (ii) one business day after being deposited with
an overnight courier with all charges prepaid, or (iii) when delivered, if
hand-delivered by messenger, all of which shall be properly addressed to the
party to be notified and sent to the address indicated as follows:
If to the Company: K-III Communications Corporation
745 Fifth Avenue
New York, NY 10151
Attn: General Counsel
If to you: To address first above written
or to such other address as such party may specify to the other in writing in
accordance with the provisions hereof.
6
<PAGE>
12. MISCELLANEOUS.
a. Waiver by either party of a breach of any provision of this Agreement
by the other party shall not operate or be construed as a waiver of any
subsequent breach by such waiving party.
b. This Agreement shall not be assignable by either party except that the
Company may assign its rights and obligations hereunder to any of its
subsidiaries, provided that such assignment shall not result in any change in
the terms of this Agreement and Company shall remain secondarily liable for its
obligations hereunder.
c. This instrument contains the entire agreement and understanding of the
parties hereto except for such further provisions as may be set forth in the
By-laws or Certificate of Incorporation of the Company. It may not be changed
except by an agreement in writing signed by you and the Company.
d. If any term, condition or provision of this Agreement shall be
declared, to any extent, invalid or unenforceable, the remainder if the
Agreement, other than the term, condition or provision held invalid or
unenforceable, shall not be affected thereby and shall be considered in full
force and effect and shall be valid and be enforced to the fullest extent
permitted by law.
e. The captions set forth in this Agreement are used solely for
convenience or reference and shall not control or affect the meaning or
interpretation of any of the provisions.
f. This Agreement may be signed in any number of counterparts each of
which shall be deemed an original.
If you are in agreement with the foregoing, please sign the enclosed
copy of this Agreement and return a copy to the undersigned.
K-III COMMUNICATIONS CORPORATION
By:
--------------------------------
Title: Chairman
AGREED TO AND ACCEPTED:
- -----------------------------------
Harry A. McQuillen
7
<PAGE>
Exhibit 10.25
December 24, 1996
Mr. Jack L. Farnsworth
President
K-III Information Group
717 Fifth Avenue, 10th Floor
New York, NY 10022
Dear Mr. Farnsworth:
The purpose of this letter is to set forth the terms and conditions of the
employment agreement (the "Agreement") between you and K-III Communications
Corporation (the "Company").
1. SERVICES.
a. The Company hereby retains you, and you agree to be employed by the
Company in a full-time capacity as the Group President of the Company's
Information Group, as the same may be constituted from time to time and which,
on the date hereof, includes Daily Racing Form, Haas Publishing, K-III
Directories, Nelson Publications, Bacon's and Westcott Communications
(collectively, the "Information Group") together with such other similar or
higher executive duties that you may be requested to perform during the term of
this Agreement and to serve as Vice President or other office of the Company and
any of its subsidiaries to which you may be elected. You shall report directly
to William F. Reilly or, if William F. Reilly is no longer with the Company, the
Chief Executive Officer of the Company.
b. You shall devote substantially all of your attention, business time
and efforts to the business and affairs of the Company, provided that nothing
shall prohibit you from participating in charitable or educational activities or
the Board of Directors of other companies (provided such other companies do not
compete with the Company), which do not in the aggregate materially interfere
with the provision of services by you under this Agreement.
2. TERM
The Term of this Agreement shall commence on December 24, 1996 and shall
expire on December 31, 1999, unless earlier terminated in accordance with
Section 5 or extended in accordance with Section 7. For the purposes of this
Agreement,
<PAGE>
the "Expiration Date" shall mean December 31, 1999, unless the Term is extended
in accordance with Section 7.
3. COMPENSATION
a. Base Salary. You shall be paid in annual base salary equal to
$550,000, less applicable withholdings, payable bi-weekly in arrears, on the
Company's regular pay dates. Such base salary shall be subject to review
regarding increases from time to time during the Term and may be increased (but
not decreased) by the Company in its sole discretion.
b. Bonus. You shall continue to participate in the Short Term Senior
Executive Performance Plan and the Short Term Senior Executive Discretionary
Plan (together, the "Bonus Plans") on bases (i) at least as favorable to you as
your participation in the 1996 Bonus Plans as set forth on the bonus
participation letter previously forwarded to you, and (ii) in no event less
favorable than the bases of the participation therein of any of the Company's
executives holding positions then comparable to yours.
c. Executive Compensation Plans. You shall be eligible to participate in
the Company's Non-Qualified Stock Option Plan and Restoration Plan and such
other similar plans that may be in effect, for any of the Company's executives
holding positions comparable to yours, from time to time during the Term
(collectively, the "Executive Compensation Plans").
4. FRINGE BENEFITS AND EXPENSES
a. Fringe Benefits. During the term of this Agreement, the Company will
provide you with benefits commensurate with those provided to employees of the
Company generally and consistent with the benefits provided to you by the
Company in the past.
b. Expenses. The Company shall reimburse you for all reasonable and
customary travel (including providing you with an automobile) and entertainment
expenses incurred by you in the performance with your duties hereunder, such
expenses and reimbursements therefor to be consistent with the expenses incurred
by you and the reimbursements made to you prior to the date of this Agreement.
5. EARLY TERMINATION. This Agreement
a. shall terminate upon your death;
b. may be terminated by the Company on written notice to you upon your
"Permanent Disability";
2
<PAGE>
c. may be terminated by the Company on written notice to you for "Cause";
and
d. may be terminated by you on written notice to the Company for "Good
Reason"
e. may be terminated by the Company on written notice to you without
Cause.
f. As used herein, "Permanent Disability" shall mean a physical or mental
disability which renders you unable to perform your duties hereunder in a
reasonably professional manner provided you have failed to perform such duties
as a result of such disability for an aggregate period of six months in any 12
consecutive month period during the Term. Permanent Disability shall be
determined by the opinion of at least two of three doctors associated with major
hospitals in Manhattan practicing in the field to which the disability relates
and selected by the Company acting reasonably.
g. As used herein, "Cause" shall mean (i) any substantial breach or
non-observance of any of your material obligations as set forth herein, (after
reasonable advance written notice and a reasonable opportunity to cure such
breach or non-observance), (ii) the immoderate use of alcohol by you on a
habitual basis (after reasonable advance written notice and a reasonable
opportunity to cease such use), (iii) the illegal use of narcotics or drugs by
you on Company premises or while engaged in any business-related function or
which adversely affects your ability to perform services (after reasonable
advance written notice and a reasonable opportunity to cease such use), (iv)
willful and repeated absence from the business for any unreasonable period of
time, without leave; and (v) willful and repeated failure or refusal to perform
your duties hereunder which failure or refusal continues following reasonable
advance written notice to you specifying such failure or refusal and a
reasonable opportunity to cure such failure or refusal.
h. As used herein, "Date of Termination" shall mean the date of your
death or effective date of your termination under Sections 5(b), (c), (d), and
(e).
i. As used herein, "Good Reason" shall mean (i) diminution in position or
responsibility, authority or prestige, including, but not limited to, no longer
reporting directly to William F. Reilly, or, if he should leave the Company, the
Chief Executive Officer of the Company, provided that it shall not be a
diminution if (A) during 1997 any of the businesses in the Information Group
discussed with you by Mr. Reilly as a divestiture possibility during November
and December 1996 is sold or (B) during any twelve consecutive month period
(the "Fiscal Year In Question") after 1997 the revenues or earnings before
interest, taxes and depreciation ("EBITDA") determined on a pro forma basis,
assuming all sold operations were sold and all acquisitions made were made at
the beginning of the Fiscal Year In Question, of the businesses over which you
have managerial supervision and control, shall be 20% less than the revenues or
EBITDA for the 1997 calendar year determined on the same pro forma basis,
3
<PAGE>
(ii) relocation of your workplace outside of Manhattan, (iii) uncured breach of
this Agreement by the Company, provided that if the breach is immaterial you
must give the Company written notice of the breach and a 30 day period
subsequent to such notice to cure such breach, (iv) failure of a permitted
assignee of this Agreement to assume the Agreement, (v) following a Change in
Control (as hereinafter defined), failure to give increases, during each
consecutive 12 month period thereafter during the Term, in annual base salary
equal TO at least seven (7%) percent.
6. COMPENSATION UPON TERMINATION. In the event that this Agreement shall
terminate:
a. Pursuant to Section 5(a) or (b), you or your estate shall be entitled
to receive (i) all accrued and unpaid annual base salary earned through the Date
of Termination plus an amount equal to one year's annual base salary at the rate
then in effect plus (ii) your target bonuses under the Bonus Plans for the
calendar year in which the Date of Termination occurs ("Termination Year Target
Bonuses") plus an amount equal to your Termination Year Target Bonuses
multiplied by a fraction, the numerator of which is the number of days from the
start of the calendar year during which the Date of Termination occurs and the
denominator of which is 365 plus (iii) all other amounts or benefits due under
any Executive Compensation Plans or fringe benefit plans in which you then
participate in accordance with the terms thereof then in effect.
b. Pursuant to Section 5(c), you shall be entitled to receive your
accrued and unpaid annual base salary through the Date of Termination plus any
amounts or benefits payable under the Bonus Plans, Executive Compensation Plans
or fringe benefit plans in which you then participate in accordance with the
terms thereof then in effect.
c. Pursuant to Section 5(d) or (e), you shall be entitled to receive (i)
your full annual base salary through the Expiration Date at the rate in effect
on the Date of Termination, plus (ii) your Target Bonuses, under all the Bonus
Plans then in effect, for the calendar year in which the Date of Termination
occurs together with your target bonus for any other bonus plans then in effect
(collectively, the "Bonus Amount") plus an amount equal to 105% of the Bonus
Amount for each succeeding calendar year or part thereof (on a pro rated basis)
through the Expiration Date, plus (iii) continuation of your participation in
all Executive Compensation Plans and fringe benefit plans then in effect
including medical and hospitalization insurance through the Expiration Date,
(iv) plus, if the termination occurs following a Change in Control or other
event that would subject the amounts payable under this subsection (c) to excess
parachute taxes or similar excise taxes under Section 280 G
4
<PAGE>
of the Internal Revenue Code, a tax gross-up payment in a sufficient amount so
that the amounts you retain of payments under clauses (i), (ii) and (iii) above
are no less than the amounts you would have retained after the payment of all
normal withholdings including normal income taxes but before the payment of
"excess parachute taxes" and similar excise taxes under Section 280 G of the
Internal Revenue Code that may be payable as a result of the Change in Control
or other such event having occurred prior to the Date of Termination and (vi)
all of your unvested benefits under "Executive Compensation Plans" including
unvested stock options shall vest in full and you shall have 365 days from the
Date of Termination to exercise any stock options you hold; provided, however
that in no event shall the amounts payable to you under clauses (i), (ii) and
(iii) above be less than the amounts payable under subsection (a), clauses (i),
(ii) and (iii) of this Section 6.
d. All payments under Section 6(c) shall be paid in a lump sum, less
applicable withholdings, within 15 days after the Date of Termination.
7. CHANGE IN CONTROL.
a. In the event of a Change in Control during the Term after December 31,
1996 and prior to January 1, 2000, the Term of this Agreement and your
employment hereunder shall be extended to a date which is the third anniversary
of the date on which the Change in Control occurs. In such event, the
Expiration Date shall be extended to the date upon which such third anniversary
occurs.
b. Notwithstanding anything contained herein to the contrary, on a Change
in Control, all then unvested stock options granted under any Executive
Compensation Plan shall vest.
c. For purposes hereof, "Change in Control" shall mean such time as (i) a
"person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934 (the "Act"), other than Kohlberg Kravis Roberts
& Co. ("KKR") and its affiliates (as that term in defined in the Act
("Affiliates"), becomes the "beneficial owner" (as defined in Rule 13d-3 under
the 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 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.
8. AGREEMENT NOT TO COMPETE
Through the earlier of (i) the Expiration Date or (ii) the Date of
Termination in the event this Agreement and your employment hereunder is
terminated under Section 5(d) or (e), you agree not to (A) accept employment
with or provide services to any person, firm or corporation that competes with
the Company or any of its subsidiaries
5
<PAGE>
in any of the Company's businesses over which you have had managerial
supervision and control during the term of your employment with the Company, or
(B) yourself or for and on behalf of any person, firm or corporation for which
you provide services, solicit for employment or hire any employee employed by
the Company or any of its subsidiaries during your last month of employment with
the Company in any of the Company's businesses over which you have had
managerial supervision and control during the term of your employment with the
Company. Nothing contained in this Section 8 shall prohibit you from owning
less than 5% of the equity securities of any company as a passive investor.
9. GOVERNING LAW. This Agreement shall be governed and interpreted and
enforced in accordance with the laws of the State of New York applicable to
agreements made and to be performed in the State of New York.
10. ARBITRATION. Both parties agree that any disputes under this
Agreement or in any way related to your employment with or separation from the
Company shall be heard and determined by an arbitrator selected in accordance
with the rules and procedures of the American Arbitration Association ("AAA") in
New York City and that the arbitrator's findings shall be final and binding on
both parties hereto. Both parties agree that punitive damages shall not be an
available remedy to a prevailing party in any arbitration hereunder. The party
that does not prevail in the arbitration shall pay all of the costs and fees of
AAA.
11. NOTICES. Any notice required or desired to be served, given or
delivered hereunder shall be in writing, and shall be deemed to have been
validly served, given or delivered (i) five business days after deposit in the
United States mails, with proper postage prepaid, whether by air, first class,
registered or certified mail, (ii) one business day after being deposited with
an overnight courier with all charges prepaid, or (iii) when delivered, if
hand-delivered by messenger, all of which shall be properly addressed to the
party to be notified and sent to the address indicated as follows:
If to the Company: K-III Communications Corporation
745 Fifth Avenue
New York, NY 10151
Attn: General Counsel
If to you: To address first above written
or to such other address as such party may specify to the other in writing in
accordance with the provisions hereof.
6
<PAGE>
12. MISCELLANEOUS.
a. Waiver by either party of a breach of any provision of this Agreement
by the other party shall not operate or be construed as a waiver of any
subsequent breach by such waiving party.
b. This Agreement shall not be assignable by either party except that the
Company may assign its rights and obligations hereunder to any of its
subsidiaries, provided that such assignment shall not result in any change in
the terms of this Agreement and Company shall remain secondarily liable for its
obligations hereunder.
c. This instrument contains the entire agreement and understanding of the
parties hereto except for such further provisions as may be set forth in the
By-laws or Certificate of Incorporation of the Company. It may not be changed
except by an agreement in writing signed by you and the Company.
d. If any term, condition or provision of this Agreement shall be
declared, to any extent, invalid or unenforceable, the remainder if the
Agreement, other than the term, condition or provision held invalid or
unenforceable, shall not be affected thereby and shall be considered in full
force and effect and shall be valid and be enforced to the fullest extent
permitted by law.
e. The captions set forth in this Agreement are used solely for
convenience or reference and shall not control or affect the meaning or
interpretation of any of the provisions.
f. This Agreement may be signed in any number of counterparts each of
which shall be deemed an original.
If you are in agreement with the foregoing, please sign the enclosed
copy of this Agreement and return a copy to the undersigned.
K-III COMMUNICATIONS CORPORATION
By:
---------------------------------
Title: Chairman
AGREED TO AND ACCEPTED:
- --------------------------------
Jack L. Farnsworth
<PAGE>
EXHIBIT 11
K-III COMMUNICATIONS CORPORATION AND SUBSIDIARIES
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------
<S> <C> <C> <C>
1996 1995 1994
-------------- -------------- --------------
Loss applicable to common shareholders.......................... $ (35,482) $ (104,413) $ (67,362)
-------------- -------------- --------------
-------------- -------------- --------------
Weighted average common shares.................................. 128,781,518 113,218,711 101,171,427
Incremental shares for stock options(1)......................... -- 252,050 504,100
Incremental shares for common share issuances(1)................ -- 133,478 1,967,141
Incremental shares for stock options(2)......................... 1,226,114 1,473,259 --
-------------- -------------- --------------
Weighted average common and common equivalent shares
outstanding(2)................................................ 130,007,632 115,077,498 103,642,668
-------------- -------------- --------------
-------------- -------------- --------------
Loss per common and common equivalent share..................... $ (.27) $ (.91) $ (.65)
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>
- ------------------------
(1) Represents the incremental shares for non-qualified options granted to
purchase common stock and common stock issued within one year prior to the
initial filing of the registration statement for the initial public offering
at an exercise price or purchase price below the initial offering price of
$10.00 per share.
(2) The effect of the assumed exercise of stock options which were issued in
periods prior to the one-year period prior to the initial filing of the
registration statement is not included in the weighted average number of
common stock shares outstanding for 1994 because the effect is antidilutive.
<PAGE>
EXHIBIT 12
K-III COMMUNICATIONS CORPORTION AND SUBSIDIARIES
DEFICIENCY OF EARNINGS TO FIXED CHARGES
AND DEFICIENCY OF EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------
<S> <C> <C> <C>
1996 1995 1994
ACTUAL ACTUAL ACTUAL
---------- ----------- -----------
Earnings before fixed charges:
Net income (loss)......................................................... $ 8,044 $ (75,435) $ (41,403)
Income tax benefit........................................................ (53,300) (59,600) (42,100)
---------- ----------- -----------
Loss before income tax benefit.............................................. (45,256) (135,035) (83,503)
Interest expense and amortization of deferred financing costs............... 129,168 108,972 81,431
Interest portion of rental expenses......................................... 10,510 8,129 7,991
---------- ----------- -----------
Earnings (loss) before fixed charges........................................ 94,422 (17,934) 5,919
---------- ----------- -----------
Fixed charges:
Interest expense and amortization of
deferred financing costs................................................ 129,168 108,972 81,431
Interest portion of rental expenses....................................... 10,510 8,129 7,991
---------- ----------- -----------
Total fixed charges..................................................... 139,678 117,101 89,422
---------- ----------- -----------
Deficiency of earnings to fixed charges..................................... (45,256) (135,035) (83,503)
Preferred stock dividends................................................... (43,526) (28,978) (25,959)
---------- ----------- -----------
Deficiency of earnings to fixed charges and preferred stock dividends....... $ (88,782) $ (164,013) $ (109,462)
---------- ----------- -----------
---------- ----------- -----------
</TABLE>
<PAGE>
Exhibit 21
LIST OF SUBSIDIARIES
<TABLE>
<CAPTION>
Jurisdiction of Percentage of
Name Incorporation Parent Ownership
============================================================================================================
<S> <C> <C> <C>
K-III Prime Corporation Delaware K-III Communications Corporation 100%
Intertec Publishing Corporation Delaware K-III Prime Corporation 100%
Newbridge Communications, Inc. Delaware K-III Prime Corporation 100%
K-III Directory Corporation Delaware K-III Prime Corporation 100%
R.E.R. Publishing Corporation New York K-III Directory Corporation 100%
Intermodal Publishing Corporation, Ltd. New York K-III Directory Corporation 100%
Weekly Reader Corporation Delaware K-III Prime Corporation 100%
K-III Reference Corporation Delaware K-III Prime Corporation 100%
Funk & Wagnalls Yearbook Corp. Delaware K-III Reference Corporation 100%
Krames Communications Incorporated Delaware K-III Prime Corporation 100%
K-III Holdings Corporation III Delaware K-III Prime Corporation 100%
Daily Racing Form, Inc. Delaware K-III Holdings Corporation III 100%
DRF Finance, Inc. Delaware Daily Racing Form, Inc. 100%
Daily Racing Form of Canada Ltd. Canada Daily Racing Form, Inc. 100%
K-III Magazine Corporation Delaware K-III Holdings Corporation III 100%
K-III Magazine Finance Corporation Delaware K-III Magazine Corporation 100%
Nelson Information, Inc. Delaware K-III Prime Corporation 100%
The Katharine Gibbs Schools, Inc. Delaware K-III Prime Corporation 100%
The Katharine Gibbs School of Montclair, Inc. New Jersey The Katharine Gibbs Schools, Inc. 100%
The Katharine Gibbs School of Norwalk, Inc. Connecticut The Katharine Gibbs Schools, Inc. 100%
The Katharine Gibbs School of Piscataway, Inc. New Jersey The Katharine Gibbs Schools, Inc. 100%
The Katharine Gibbs School of Providence, Inc. Rhode Island The Katharine Gibbs Schools, Inc. 100%
K-III KG Corporation - Massachusetts Massachusetts The Katharine Gibbs Schools, Inc. 100%
K-III KG Corporation - Melville New York The Katharine Gibbs Schools, Inc. 100%
K-III KG Corporation - New York New York The Katharine Gibbs Schools, Inc. 100%
Paramount Publishing, Inc. California Intertec Publishing Corporation 100%
Canadian Sailings, Inc. Canada K-III Directory Corporation 25% Direct
100% Beneficial
Ownership
Musical America Publishing, Inc. Delaware K-III Directory Corporation 100%
K-III HPC, Inc. Delaware K-III Prime Corporation 100%
Haas Publishing Companies, Inc. Delaware K-III HPC, Inc. 100%
Stagebill, Inc. Delaware K-III Magazine Corporation 100%
Lifetime Learning Systems, Inc. Delaware Weekly Reader Corporation 100%
Channel One Communications Corporation Delaware K-III Prime Corporation 100%
Admirefruit Limited United Kindgdom Intertec Publishing Corporation 100%
Intertec Market Reports, Inc. Delaware Intertec Publishing Corporation 100%
Intertec Presentations, Inc. Colorado Intertec Publishing Corporation 100%
MH West, Inc. California Intertec Market Reports, Inc. 100%
PJS Publications, Inc. Delaware K-III Magazine Corporation 100%
Symbol of Excellence Publishers, Inc. Alabama PJS Publications, Inc. 100%
Argus Publishers, Corporation California K-III Magazine Corporation 100%
Bacon's Information, Inc. Delaware K-III Prime Corporation 100%
Canadian Red Book, Inc. Canada Intertec Publishing Corporation 100%
McMullen Argus Publishing, Inc. California K-III Magazine Corporation 100%
American Heat Video Productions, Inc. Missouri Westcott Communications, Inc. 100%
ASTN, Inc. Delaware Westcott Communications, Inc. 100%
A WEP Company California Western Empire Publications, Inc. 100%
Bankers Consulting Company Missouri Westcott Communications, Inc. 100%
Data Book, Inc. Georgia Haas Publishing Companies, Inc. 100%
The Electronics Source Book, Inc. Delaware Intertec Publishing Corporation 100%
Excellence in Training Corporation Delaware Westcott Communications, Inc. 100%
Gareth Stevens, Inc. Wisconsin K-III Reference Corporation 100%
IDTN Leasing Corporation Delaware Westcott Communications, Inc. 100%
Industrial Training Systems Corporation New Jersey Westcott Communications, Inc. 100%
Law Enforcement Television Network, Inc. Delaware LETN, Inc. 100%
Law Enforcement Television Network, Inc. Texas Westcott Communications, Inc. 100%
Lockert Jackson & Associates Washington Westcott Communications, Inc. 100%
Straight Down, Inc. California Western Empire Publications, Inc. 100%
Tel-A-Train, Inc. Delaware Westcott Communications, Inc. 100%
TI-IN Acquisition Corporation Texas Westcott Communications, Inc. 100%
Tunnell Publications, Inc. Texas Intertec Publishing Corporation 100%
Westcott Communications, Inc. Texas K-III Prime Corporation 100%
Westcott Communications Michigan, Inc. Michigan Westcott Communications, Inc. 100%
Westcott ECI, Inc. Texas Westcott Communications, Inc. 100%
Western Empire Publications, Inc. Delaware McMullen Argus Publishing, Inc. 100%
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 36,655
<SECURITIES> 0
<RECEIVABLES> 273,119
<ALLOWANCES> 39,516
<INVENTORY> 52,743
<CURRENT-ASSETS> 376,519
<PP&E> 204,620
<DEPRECIATION> 81,797
<TOTAL-ASSETS> 2,552,215
<CURRENT-LIABILITIES> 421,224
<BONDS> 1,565,686
442,729
0
<COMMON> 779,882
<OTHER-SE> (692,368)
<TOTAL-LIABILITY-AND-EQUITY> 2,552,215
<SALES> 1,374,449
<TOTAL-REVENUES> 1,374,449
<CGS> 337,065
<TOTAL-COSTS> 337,065
<OTHER-EXPENSES> 951,483
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 125,506
<INCOME-PRETAX> (45,256)
<INCOME-TAX> (53,300)
<INCOME-CONTINUING> 8,044
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,044
<EPS-PRIMARY> (0.27)
<EPS-DILUTED> 0
</TABLE>
