EXECUTION
COPY

 
90-DAY REVOLVING LOAN AGREEMENT
 
JPMorgan Chase Bank, N.A.
270 Park Avenue
New York, NY 10017
The Royal Bank of Scotland plc
101 Park Avenue
New York, NY 10178

 
September 25, 2006
 
The Reader’s Digest Association, Inc.
Reader’s Digest Road
Pleasantville, NY 10570-7000
 
Ladies and Gentlemen:

The Reader’s Digest Association, Inc. (the “Borrower”) has requested JPMorgan
Chase Bank, N.A. (“JPMCB”) and The Royal Bank of Scotland plc (“RBS” and,
together with JPMCB, the “Lenders”) to extend commitments under which the
Borrower may obtain loans (each such loan, a “Loan” and collectively, the
“Loans”) on a revolving credit basis on and after the date hereof and at any
time from time to time prior to the Maturity Date (as defined below) in an
aggregate principal amount outstanding at any time not to exceed $50,000,000.
The Lenders have agreed to make such Loans on the terms and subject to the
conditions set forth or incorporated by reference herein. The proceeds of the
Loans will be used for general corporate purposes.

 
SECTION 1.01. Defined Terms; Construction. Subject to the following sentence,
all capitalized terms used in, or incorporated by reference into, this Agreement
but not otherwise defined herein shall be defined as set forth in the Five-Year
Revolving Credit Agreement dated as of April 14, 2005 (as amended, restated,
supplemented or otherwise modified from time to time, the “Existing Five-Year
Credit Agreement”), among the Borrower, certain subsidiaries of the Borrower,
the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent
and collateral agent, but with the definitions in the Existing Five-Year Credit
Agreement being modified and construed in accordance with the following
sentence. All references in the Existing Five-Year Credit Agreement, including
in the schedules thereto (or in provisions and schedules incorporated herein
from the Existing Five-Year Credit Agreement or defined terms used in such
provisions and schedules) to (i) the “Lenders”, the “Required Lenders”, the
“Administrative Agent”, the “Collateral Agent” or the “Agents” shall be deemed
to be references to the Lenders party to this Agreement, (ii) the “Borrowers” or
the “Company” shall be deemed to be references to the Borrower (as defined
herein), (iii) any “Borrowing Subsidiary” or “Canadian Subsidiary” shall be
disregarded, (iii) the “Subsidiary Guarantors” shall be deemed to be references
to the subsidiaries of the Borrower identified as “Guarantors” on the signature
pages hereto, (iv) the “Loan Parties” shall be deemed to be references to the
Borrower and the Subsidiary Guarantors, (v) “the “Commitments” shall be deemed
to be references to the commitments of the Lenders hereunder (the initial
amounts of such Commitments being $25,000,000 for each Lender and $50,000,000 in
the aggregate for both Lenders), (vi) “Loans” shall be deemed to be references
to the Loans (as defined herein), (vii) “Interest Periods” shall be deemed to be
references to “Interest Periods” as defined in the Existing Five-Year Credit
Agreement, but without giving effect to references in such definition to
Interest Periods of three or six months’ duration and with Interest Periods
shorter than one month to be available subject to the consent of all the Lenders
to each such shorter Interest Period, (viii) “the date hereof” or “the date of
this Agreement” shall be deemed to be references to the date of this Agreement,
(ix) “this Agreement” or any “Loan Document” shall be deemed to be references to
this Agreement, (x) the “Maturity Date” shall be deemed to be November 30, 2006,
(xi) the “Transactions” shall mean the execution, delivery and performance of
this Agreement and the borrowings hereunder, (xii) the “Effective Date” shall be
deemed to be a reference to the date on which the obligations of the Lenders
under this Agreement shall become effective, and (xiii) Articles and Sections
shall be deemed to be references to such Articles and Sections as incorporated
by reference herein.
 

 
-1-

--------------------------------------------------------------------------------

 

SECTION 1.02. Commitments. Subject to the terms and conditions and relying on
the representations and warranties set forth or incorporated by reference
herein, each Lender severally agrees to make Loans to the Borrower, at any time
and from time to time on and after the date hereof and until the earlier of the
Maturity Date and the termination of the Commitments in accordance with the
terms hereof, in an aggregate principal amount outstanding at any time not to
exceed such Lender’s Commitment, as the same may be reduced from time to time
pursuant to the terms hereof; provided, however, that the Borrower shall not
request, and Lenders shall not be obligated to make, any such Loan if, at the
time of making such Loan, the aggregate Commitments (as defined in the Existing
Five-Year Revolving Credit Agreement) of the lenders under the Existing
Five-Year Credit Agreement shall exceed the aggregate Revolving Credit Exposures
(as defined in the Existing Five-Year Revolving Credit Agreement) of such
lenders. Within the limits of the preceding sentence, the Borrower may borrow,
pay or prepay and reborrow Loans on and after the date hereof and prior to the
Maturity Date, on the terms and subject to the conditions and limitations set
forth herein.

SECTION 1.03. Incorporation by Reference. (a) The provisions of the following
Articles and Sections of the Existing Five-Year Credit Agreement are
incorporated herein by reference in their entirety, it being agreed that
(i) such provisions, including the defined terms used therein and the
definitions of such terms in the Existing Five-Year Credit Agreement, shall be
construed in accordance with Section 1.01 hereof, (ii) all references in such
provisions to notices, deliveries or payments to the Administrative Agent will
be deemed to refer to notices or deliveries given or made simultaneously to both
Lenders or to payments made simultaneously and ratably to both Lenders, and all
references in such provisions to notices to be given and actions to be taken by
the Administrative Agent will be deemed to refer to notices jointly given and
actions jointly taken by both Lenders and (iii) in the event of any
inconsistency between the provisions incorporated herein by reference and the
provisions expressly set forth herein, the provisions expressly set forth herein
shall control:

Article II: Sections 2.02, 2.03, 2.04(a) (except that such paragraph shall be
deemed to require that each Lender fund its Loans by wire transfer of funds to
the account specified by the Borrower in the Borrowing Request delivered
pursuant to Section 2.03 and the second sentence of such paragraph shall be
disregarded), 2.05 (other than paragraph (c) of such Section), 2.06 (other than
paragraph (d) of such Section), 2.07 (other than paragraph (b) of such Section),
2.08, 2.09, 2.10, 2.11, 2.14, 2.15, 2.16, 2.17, 2.18, 2.19, 2.20, 2.21 and
2.22(a) (with the references in Sections 2.11 and 2.14 to $10,000,000 being
deemed to be references to $5,000,000);
 
Article III: All Sections in Article III (other than Sections 3.01(d),
3.01(f)(ii) and (iii), 3.01(g) and 3.01(i), and with the references in Section
3.01(h)(iii)(A) and (B) being deemed to require, in lieu of resolutions of the
Board of Directors of the Borrower specifically authorizing the transactions
contemplated hereby, evidence satisfactory to the Lenders that the terms of this
Agreement are being approved by the chief executive officer of the Borrower
pursuant to a delegation of authority from the Board of Directors of the
Borrower, and that the execution and delivery of this Agreement have been
approved pursuant to such delegation of authority);
 

 
-2-

--------------------------------------------------------------------------------

 

Article IV: All Sections in Article IV (except that references to “June 30,
2004” and to “KPMG LLP” in Section 4.04 will be deemed to refer to June 30,
2006, and to Ernst and Young LLP, respectively, and Sections 4.04(a)(ii) and
4.14 shall be disregarded);
 
Article V: All Sections in Article V (other than Sections 5.09 and 5.10);
 
Article VI: All Sections in Article VI;
 
Article VII: All provisions of Article VII;
 
Article IX: Section 9.03 (other than the clause “, and without limiting the
provisions of Section 9.01,” in the first sentence thereof); and
 
Article X: Section 10.01(a) and (c) (with such paragraph (c) being deemed to
require that notices be sent to each Lender at the address for notices specified
in the Existing Five-Year Credit Agreement or at such other address as such
Lender shall specify by notice to the Borrower and the other Lender from time to
time), 10.02, 10.03, 10.05, 10.06, 10.07, 10.08, 10.09, 10.10, 10.14(a) and (d)
and 10.19.
 
(b) The Schedules attached to the Existing Five-Year Credit Agreement (other
than Schedule 2.01, which is replaced by Annex I hereto) will be deemed to be
attached hereto, with the terms used therein being defined as set forth herein.
 
SECTION 1.04. Additional Condition to Effectiveness. In addition to the
conditions to the effectiveness of this Agreement incorporated by reference from
the Existing Five-Year Credit Agreement, it shall be a condition to the
effectiveness of this Agreement that the “Covenant Effective Date” (as defined
in the Second Amendment and Consent dated on or about September 28, 2006, to the
Existing Five-Year Credit Agreement) shall have occurred or shall simultaneously
occur.

 
-3-

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the date first above
written.
 

JPMORGAN CHASE BANK, N.A., as a Lender,
 
 
by:
   
/s/ Randolph Cates
   
Name: Randolph Cates
Title: Vice President
 

THE ROYAL BANK OF SCOTLAND PLC, as a Lender,
 
 
by:
   
/s/ Andrew Wynn
   
Name: Andrew Wynn
Title: Managing Director
 

Accepted and Agreed to as of the date first appearing above:
 
THE READER’S DIGEST ASSOCIATION, INC., as Borrower,
           
by
/s/ William H. Magill
   
Name: William H. Magill
   
Title: Vice President and Treasurer
 

BOOKS ARE FUN, LTD., as a Guarantor,
           
by
/s/ William H. Magill
   
Name: William H. Magill
   
Title: Vice President and Treasurer
 

 
-4-

--------------------------------------------------------------------------------

 

QSP, INC., as a Guarantor,
           
by
/s/ William H. Magill
   
Name: William H. Magill
   
Title: Vice President and Treasurer
 

REIMAN MEDIA GROUP, INC., as a Guarantor,
           
by
/s/ William H. Magill
   
Name: William H. Magill
   
Title: Vice President and Treasurer
 

 
-5-

--------------------------------------------------------------------------------

 

Commitments
 
 

 
Lender
Allocation
   
JPMorgan Chase Bank, N.A.
$25,000,000.00
   
The Royal Bank of Scotland plc
$25,000,000.00
           
Total:
$50,000,000.00