Document:

Exhibit 4.1

 

THIRD SUPPLEMENTAL INDENTURE

 

This Third Supplemental Indenture is entered into as of May 10, 2012 (this “Supplemental Indenture”), by and among The Reader’s Digest Association, Inc., a Delaware corporation (“Issuer”), RDA Holding Co., a Delaware corporation (“Holdings”), each Subsidiary Guarantor under the Indenture referred to below, Wells Fargo Bank, National Association, as Trustee under the Indenture referred to below, and Wilmington Trust, National Association (successor by merger to Wilmington Trust FSB), as Collateral Agent under the Indenture referred to below.

 

W I T N E S S E T H:

 

WHEREAS, the Issuer, Holdings, the Subsidiary Guarantors, the Trustee and the Collateral Agent have heretofore executed and delivered an Indenture dated as of February 11, 2010 (as amended, supplemented, waived or otherwise modified, the “Indenture”), providing for the issuance of an aggregate principal amount of $525.0 million of Floating Rate Senior Secured Notes due 2017 of the Issuer (the “Notes”);

 

WHEREAS, Section 3.5(a) of the Indenture provides that the Issuer is required to make a Collateral Disposition Offer to all Holders of Notes to purchase the maximum principal amount of the Notes that may be purchased out of the Excess Collateral Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest to the date of purchase, in accordance with the procedures set forth in the Indenture in integral multiples of $1,000;

 

WHEREAS, the Issuer sold all of the assets related to its Allrecipes.com business pursuant to a Stock Purchase Agreement dated as of January 23, 2012;

 

WHEREAS, the Issuer desires to make a Collateral Disposition Offer using the Excess Collateral Proceeds from the sale of the Allrecipes.com business at an offer price of 95% of the principal amount of the Notes, plus accrued and unpaid interest to the date of purchase;

 

WHEREAS, Section 9.2 of the Indenture provides that the provisions in the Indenture dealing with Security Documents or application of trust moneys may be modified with the consent of the Holders of at least 75% in principal amount of Notes then outstanding;

 

WHEREAS, the Issuer solicited, and has received, consents from Holders representing at least 75% in principal amount of Notes then outstanding to certain amendments to the Indenture;

 

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Issuer, the Subsidiary Guarantors, the Trustee and the Collateral Agent mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

 

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ARTICLE I

 

AMENDMENTS

 

SECTION 1.1.   Defined Terms.  As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto are used herein as therein defined.  The words “herein,” “hereof” and “hereby” and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular section hereof.

 

SECTION 1.2.   Amendment to Section 1.1.     The following definition is hereby added to Section 1.1 (Definitions) of the Indenture in proper alphabetical order:

 

“Allrecipes Asset Sale” means the sale by the Issuer of the Allrecipes.com business, pursuant to the Stock Purchase Agreement by and among Meredith Corporation, Allrecipes.com, Inc. and The Reader’s Digest Association, Inc., dated as of January 23, 2012.

 

SECTION 1.3.   Amendment to Section 3.5.     The following paragraph shall be added to the end of Section 3.5(a) (Limitations on Sales of Assets and Subsidiary Stock):

 

Notwithstanding the foregoing provisions of the preceding paragraph, to the extent that Excess Collateral Proceeds relate to the Allrecipes Asset Sale, the Issuer may make the Collateral Disposition Offer at an offer price in cash in an amount equal to 95% (i.e., $950 per $1,000 principal amount of notes) of the principal amount of the Notes, plus accrued and unpaid interest to the date of purchase.

 

ARTICLE II

 

MISCELLANEOUS

 

SECTION 2.1.   Parties.  Nothing expressed or mentioned herein is intended or shall be construed to give any Person, firm or corporation, other than the Holders and the Trustee, any legal or equitable right, remedy or claim under or in respect of this Supplemental Indenture or the Indenture or any provision herein or therein contained.

 

SECTION 2.2.   Governing Law.  This Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York.

 

SECTION 2.3.   Continuing Agreement.                            Except as herein amended, all terms, provisions and conditions of the Indenture, all Exhibits thereto and all documents executed in connection therewith shall continue in full force and effect and shall remain enforceable and binding in accordance with their terms.

 

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SECTION 2.4.   Severability Clause.  In case any provision in this Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability.

 

SECTION 2.5.   Conflicts.     In the event of a conflict between the terms and conditions of the Indenture and the terms and conditions of the Supplemental Indenture, the terms and conditions of this Supplemental Indenture shall prevail.

 

SECTION 2.6.   Ratification of Indenture; Supplemental Indentures Part of Indenture.  Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect.  This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby.  The Trustee makes no representation or warranty as to the validity or sufficiency of this Supplemental Indenture or with respect to the recitals contained herein, all of which recitals are made solely by the other parties hereto.

 

SECTION 2.7.   Counterparts.  The parties hereto may sign one or more copies of this Supplemental Indenture in counterparts, all of which together shall constitute one and the same agreement.

 

SECTION 2.8.   Headings.  The headings of the Articles and the sections in this Supplemental Indenture are for convenience of reference only and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written.

 

	
 
    	
THE READER’S DIGEST ASSOCIATION, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Paul R. Tomkins
    
	
 
    	
Name:
    	
Paul R. Tomkins
    
	
 
    	
Title:
    	
Executive Vice   President and Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
RDA HOLDING CO.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Paul R. Tomkins
    
	
 
    	
Name:
    	
Paul R. Tomkins
    
	
 
    	
Title:
    	
Executive Vice   President and Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EACH OF THE SUBSIDIARY GUARANTORS LISTED ON   EXHIBIT 1 HERETO
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ William Magill
    
	
 
    	
Name:
    	
William Magill
    
	
 
    	
Title:
    	
Authorized Signatory
    

 

[SIGNATURE PAGE]

[SUPPLEMENTAL INDENTURE]

 

 

	
 
    	
WELLS FARGO BANK, NATIONAL ASSOCIATION, as   Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Martin Reed
    
	
 
    	
 
    	
Name:
    	
Martin Reed
    
	
 
    	
 
    	
Title:
    	
Vice President
    
	
 
    	
 
    
	
 
    	
WILMINGTON TRUST, NATIONAL ASSOCIATION, as   Collateral Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Renee Kuhl
    
	
 
    	
 
    	
Name:
    	
Renee Kuhl
    
	
 
    	
 
    	
Title:
    	
Vice President
    

 

[SIGNATURE PAGE]
 [SUPPLEMENTAL INDENTURE]

 

 

EXHIBIT 1

 

Subsidiary Guarantors

 

Alex Inc.

Ardee Music Publishing, Inc.

Direct Entertainment Media Group, Inc.

Direct Holdings Americas Inc.

Direct Holdings Custom Publishing Inc.

Direct Holdings Customer Service, Inc.

Direct Holdings Education Inc.

Direct Holdings Libraries Inc.

Direct Holdings U.S. Corp.

Funk & Wagnalls Yearbook Corp.

Gareth Stevens, Inc.

Home Service Publications, Inc.

KitchenTek LLC

Pegasus Sales, Inc.

Pleasantville Music Publishing, Inc.

RDA Digital, LLC

R.D. Manufacturing Corporation

RD Large Edition, Inc.

RD Publications, Inc.

RDA Sub Co.

RDCL, Inc.

RDWR, Inc.

Reader’s Digest Children’s Publishing, Inc.

Reader’s Digest Consumer Services, Inc.

Reader’s Digest Entertainment, Inc.

Reader’s Digest Financial Services, Inc.

Reader’s Digest Latinoamerica S.A.

Reader’s Digest Sales and Services, Inc.

Haven Home Media, LLC

Reader’s Digest Young Families, Inc.

Reiman Manufacturing, LLC

Reiman Media Group, LLC

Retirement Living Publishing Company, Inc.

Saguaro Road Records, Inc.

Taste of Home Media Group, LLC

Taste of Home Productions, Inc.

Travel Publications, Inc.

W.A. Publications, LLC

WAPLA, LLC

Weekly Reader Custom Publishing, Inc.

World Almanac Education Group, Inc.

World Wide Country Tours, Inc.

WRC Media Inc.Exhibit 10.1

 

 

March 22, 2012

 

Richard D. Hockett, Jr., M.D.

11300 Geist Bay Court

Fortville, IN  46040

 

Re: Offer Letter

 

Dear Rick,

 

I am delighted to offer to you the position of Chief Medical Officer with CombiMatrix Molecular Diagnostics, Inc. (CMDX), reporting directly to me.

 

The purpose of this letter is to set forth the terms of your offer, which if you accept, will become your initial employment terms. You will be expected to perform various duties consistent with your position and according to the needs of the company.

 

Subject to your acceptance of the terms of this letter, your employment will start with CMDX on April 30, 2012 or earlier if possible.  Your employment will be on a full-time basis.

 

Compensation and Benefits

 

·                  You will be paid a base salary of $350,000 per year, paid on a bi-weekly basis and prorated for any period less than a full year, less applicable taxes.

 

·                  You will receive a sign on bonus of $100,000, to be paid with your first full paycheck after you join the company.  In the event you terminate your employment with CMDX within twelve months following your date of hire, you will return the entire $100,000 to the company.  In the event you terminate your employment with CMDX between twelve and twenty four months from your date of hire, you will return $50,000 to the company.

 

·                  We will recommend to our board of directors that you be granted a stock option to purchase 100,000 shares of common stock of CombiMatrix Corporation with an exercise price equal to the closing price of the company’s common stock as of the date of the grant.  Such option will vest over four (4) years so as long as you continue to be employed by CMDX, with 25% of your shares scheduled to vest on each anniversary of the grant date.

 

·                  You will be eligible to participate in the 2012 Executive Bonus Plan, which we anticipate will be formally adopted by our Compensation Committee of our board of directors in May of 2012.  Under the proposed plan you will be able to earn 40% of your base compensation as a bonus; 20% in cash and approximately 20% in equity-based compensation. This bonus will be based upon achieving target revenue goals in the 2012 budget. Regarding the equity compensation component, you will be eligible to purchase up to 81,250 shares of common stock of CombiMatrix Corporation with an exercise price equal to the closing price of the company’s common stock as of the date of the grant.

 

Initial             

 

 

 

Such option will vest in three equal tranches over a three (3) year period.  Please note that under the proposed Executive Bonus Plan, should the company reach 115% of its 2012 goals, your bonus would increase to potentially 60% of your base salary (30% cash and approximately 30% in options to purchase up to 125,000 shares of common stock).

 

·                  CombiMatrix Diagnostics will pay to move your household goods from Indiana to California.  In addition, the company will reimburse you for the realtor commission on the sale of your house in Indiana.  Further, the company agrees to provide you a 1BR apartment for up to six months in Irvine until your family joins you in Southern California. Finally, the company will reimburse you for two house-hunting trips for your spouse.  Any of the foregoing expenses which are treated as compensation for tax purposes will be grossed up to negate the tax consequences of such reimbursement.

 

·                  You may participate in corporate benefits offered to employees of CMDX, subject to eligibility and other requirements of those plans. Our benefits include company-paid health, dental and vision insurance for you as an employee. CMDX supplements the cost of dependent health, dental and vision insurance.  You will also be eligible to participate in our 401K savings plan.

 

·                  Paid time-off [TBD], forty (40) hours of sick leave, six (6) company-paid holidays and two (2) floating holidays per year.

 

Business Expenses

 

CMDX will reimburse you for reasonable and actual travel and entertainment expenses you incur in connection with performing services for the company, pursuant to CMDX’s policy and applicable tax law and regulations. CMDX retains full discretion to determine whether, and to what extent, actual travel and entertainment expenses are reasonable and subject to reimbursement.

 

At-Will Employment

 

While we hope that our employment relationship is on-going and mutually rewarding, your employment with CMDX is at-will, which means that you may discontinue your employment with CMDX at any time, for any reason, and similarly, CMDX may terminate your employment at any time, for any reason. This at-will relationship may not be modified or changed during your employment with CMDX, except by written agreement between you and the President/CEO of CMDX. Nothing in this letter is intended to create any guarantee of employment for any specified period of time.

 

Conditions of Employment

 

This offer of employment is contingent on the following:

 

Initial             

 

 

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·                Employment Authorization. You must produce, within three working days of hire, documentation showing identity and eligibility to work in the United States.

 

·                Satisfactory Reference and Background Check. This offer is contingent upon receiving satisfactory references and an acceptable background check.

 

·                  Satisfactory Drug Screening. This offer is contingent upon successful completion of a post-offer drug screening test.

 

·                  Employee Agreements. This offer is contingent upon your completion of the New Hire Orientation where you will be asked to sign acknowledgments regarding company policy.

 

Rick, to say that I am excited to work side by side with you is an understatement!  I know we will have a productive and enjoyable working relationship.  Please feel free to call me if any clarification of this offer is needed.  Congratulations and welcome to the CMDX team!

 

Very truly yours,

 

 

	
/s/   R. Judd Jessup
    	
 
    
	
R.   Judd Jessup
    	
 
    
	
President   and CEO
    	
 
    
	
CombiMatrix   Corporation
    	
 
    

 

By my signature below and initialization of each page, I accept this offer of employment in accordance with the terms and conditions in this letter.

 

 

	
/s/   Richard Hockett
    	
 
    	
 
    
	
Richard   D, Hockett, Jr., M.D.
    	
 
    	
 
    

 

Initial             

 

 

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