SINCE NOVEMBER 16, 2006, THERE HAS BEEN NO EVENT, CHANGE, EFFECT, DEVELOPMENT,
CONDITION OR OCCURRENCE THAT, INDIVIDUALLY OR IN THE AGGREGATE, HAS HAD OR COULD
REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE CHANGE;
(VII)
A CERTIFICATE SIGNED BY A RESPONSIBLE OFFICER OF HOLDINGS CERTIFYING THAT
SINCE JUNE 30, 2006 THERE HAS BEEN NO EVENT, CHANGE, EFFECT, DEVELOPMENT,
CONDITION OR OCCURRENCE WITH RESPECT TO WRC MEDIA, DIRECT HOLDINGS OR ANY OF
THEIR RESPECTIVE SUBSIDIARIES THAT, INDIVIDUALLY OR IN THE AGGREGATE, HAS HAD,
OR WOULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON THE
BUSINESS, OPERATIONS, PROPERTY OR FINANCIAL CONDITION OF READER'S DIGEST, WRC
MEDIA, DIRECT HOLDINGS AND THEIR RESPECTIVE SUBSIDIARIES, TAKEN AS A WHOLE.
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(VIII)
A CERTIFICATE (WHICH SHALL BE REASONABLY SATISFACTORY TO THE
ADMINISTRATIVE AGENT) ATTESTING TO THE SOLVENCY OF THE LOAN PARTIES (TAKEN AS A
WHOLE) AFTER GIVING EFFECT TO THE TRANSACTION, FROM THE TREASURER OF HOLDINGS;
(IX)
EXCEPT AS SET FORTH IN SECTION 6.17, EVIDENCE THAT ALL INSURANCE
(INCLUDING TITLE INSURANCE) REQUIRED TO BE MAINTAINED PURSUANT TO THE LOAN
DOCUMENTS HAS BEEN OBTAINED AND IS IN EFFECT AND THAT THE ADMINISTRATIVE AGENT
HAS BEEN NAMED AS LOSS PAYEE OR ADDITIONAL INSURED, AS APPROPRIATE, UNDER EACH
INSURANCE POLICY WITH RESPECT TO SUCH LIABILITY AND PROPERTY INSURANCE AS TO
WHICH THE ADMINISTRATIVE AGENT SHALL HAVE REASONABLY REQUESTED TO BE SO NAMED;
(X)
A COMMITTED LOAN NOTICE OR LETTER OF CREDIT APPLICATION, AS APPLICABLE,
RELATING TO THE INITIAL CREDIT EXTENSION; AND
(XI)
A CERTIFICATE SIGNED BY A RESPONSIBLE OFFICER OF THE COMPANY CERTIFYING
COMPLIANCE WITH THE CONDITIONS SET FORTH IN PARAGRAPHS (A) AND (B) OF
SECTION 4.02.
(B)
ALL FEES AND EXPENSES REQUIRED TO BE PAID HEREUNDER AND INVOICED BEFORE THE
CLOSING DATE SHALL HAVE BEEN PAID IN FULL IN CASH.
(C)
PRIOR TO OR SUBSTANTIALLY CONTEMPORANEOUSLY WITH THE INITIAL CREDIT
EXTENSION, (I) THE SPONSOR EQUITY CONTRIBUTIONS SHALL HAVE BEEN FUNDED IN FULL
IN CASH; AND (II) ACQUISITION CO SHALL HAVE RECEIVED (AS A COMMON EQUITY CAPITAL
CONTRIBUTION OR, IF OTHERWISE, ON TERMS AND CONDITIONS REASONABLY SATISFACTORY
IN ALL MATERIAL RESPECTS TO THE ADMINISTRATIVE AGENT) CASH PROCEEDS FROM THE
EQUITY CONTRIBUTION IN AN AGGREGATE AMOUNT, WHEN COMBINED WITH (X) THE AGGREGATE
VALUE OF THE COMPANY PREFERRED STOCK THAT IS ROLLED OVER IN CONNECTION WITH THE
TRANSACTIONS AND (Y) THE VALUE (WHICH SHALL BE CALCULATED NET OF THE FEES AND
EXPENSES OF THE COMPANY IN CONNECTION WITH THE WRC ACQUISITION AND THE DH
ACQUISITION IN EXCESS OF $15,000,000) OF THE EQUITY INTERESTS ISSUED BY HOLDINGS
TO THE SHAREHOLDERS OF WRC MEDIA AND DIRECT HOLDINGS AS CONSIDERATION FOR THE
WRC ACQUISITION AND THE DH ACQUISITION, RESPECTIVELY) IS EQUAL TO AT LEAST 29%
OF THE TOTAL CAPITALIZATION OF THE COMPANY.
(D)
THE ACQUISITION AND THE MERGER SHALL BE CONSUMMATED IN ACCORDANCE WITH THE
TERMS OF THE PURCHASE AGREEMENT WITHOUT WAIVER OR AMENDMENT OF ANY MATERIAL
PROVISIONS THEREOF (OTHER THAN ANY SUCH WAIVERS OR AMENDMENTS AS ARE NOT, TAKEN
AS A WHOLE, MATERIALLY ADVERSE TO THE LENDERS) UNLESS CONSENTED