EXHIBIT 10.1
[EXECUTION COPY]
AMENDMENT NO. 1
This AMENDMENT NO. 1, dated as of July 15, 2002 (this "Amendment"), is
made by and among WEEKLY READER CORPORATION, a Delaware corporation ("WRC"), and
COMPASSLEARNING, INC., a Delaware corporation (formerly known as JLC Learning
Corporation) ("CLI" and, together with WRC, the "Borrowers"), WRC MEDIA INC., a
Delaware corporation ("Holdings"), the Lenders signatory hereto, CREDIT SUISSE
FIRST BOSTON, as the syndication agent (the "Syndication Agent") for the
Lenders, and as the Lead Arranger and Sole Book Running Manager, and BANK OF
AMERICA, N.A., as administrative agent (in such capacity, the "Administrative
Agent") for the Lenders.
WHEREAS, the Borrowers, the various financial institutions party
thereto from time to time (each a "Lender" and, collectively, the "Lenders"),
the Syndication Agent, the Administrative Agent and General Electric Capital
Corporation, as the Documentation Agent for the Lenders, have heretofore entered
into an Amended and Restated Credit Agreement dated as of May 9, 2001 (as
heretofore amended, the "Credit Agreement"); and
WHEREAS, Holdings and the Borrowers desire to amend the Credit
Agreement to, among other things, revise certain financial covenants and allow a
newly-formed, wholly owned Restricted Subsidiary of Holdings to conduct certain
activities in accordance with the terms of the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Unless otherwise defined herein, capitalized terms defined in the
Credit Agreement shall have the same meanings when used in this Amendment. The
following additional terms, as used herein, shall have the following respective
meanings:
"Amendment" has the meaning set forth in the preamble hereof.
"First Amendment Effective Date" has the meaning set forth in Article
III hereof.
ARTICLE II
AMENDMENTS TO CREDIT AGREEMENT
Subject to the conditions and on the terms set forth herein, and in
reliance on the representations and warranties of Holdings and the Borrowers
contained herein, the Credit Agreement is hereby amended, as of the First
Amendment Effective Date, in accordance with this Article II.
Section 2.01 Amendments to Section 1.1.
(a) Section 1.1 of the Credit Agreement is hereby amended by inserting
the following definition in the appropriate alphabetical order:
"WRC Marketing Corp." means WRC Marketing Corp., a Delaware corporation
and a direct, wholly owned Domestic Subsidiary and Restricted Subsidiary of
Holdings.
(b) Section 1.1 of the Credit Agreement is hereby amended as follows:
(i) the definition of "Acquisition" is amended by deleting the
parenthetical at the end thereof and inserting in place thereof
"(provided that a Borrower, WRC Marketing Corp. or one of their
respective Subsidiaries is the surviving entity)";
(ii) the definition of "Change in Control" is amended by
re-lettering the existing clause (i) thereof as clause (j) and
inserting a new clause (i) to read "the failure of Holdings at any time
to directly own beneficially and of record on a fully diluted basis
100% of the outstanding Capital Securities of WRC Marketing Corp., such
capital Securities to be held free and clear of all Liens (other than
Liens granted under a Loan Document); or";
(iii) the definition of "Controlled Group" is amended by
inserting ", WRC Marketing Corp." immediately after "Holdings";
(iv) the definition of "Current Assets" is amended by
inserting "or WRC Marketing Corp." immediately after "Borrowers";
(v) the definition of "Disposition" is amended by deleting
"either of the Borrower's or their respective Subsidiaries' assets" and
inserting in place thereof "any assets of Holdings or any of its
Subsidiaries";
(vi) each of clauses (iv) and (v) of clause (b) of the
definition of "Excess Cash Flow" is amended by deleting "the Borrowers
and their respective Subsidiaries" and inserting in place thereof "the
Borrowers, WRC Marketing Corp. and their respective Subsidiaries";
(vii) clause (ii) of clause (b) of the definition of "Fixed
Charge Coverage Ratio" is amended by inserting "WRC Marketing Corp.,"
immediately before "the Borrowers and their respective Subsidiaries";
(viii) the definition of "Foreign Pledge Agreement" is amended
by deleting "either Borrower or any of its Subsidiaries" and inserting
in place thereof "either Borrower, WRC Marketing Corp. or any of their
respective Subsidiaries";
(ix) the definition of "Impermissible Qualification" is
amended by (A) deleting the words "Holdings or either Borrower" and
inserting in place thereof "Holdings, either Borrower or any of their
respective Subsidiaries" and (B) deleting the words "such Borrower" and
inserting in place thereof "a Borrower";
(x) the definition of "Interest Expense" is amended by
inserting ", WRC Marketing Corp." immediately before each of the two
iterations of "and their respective Subsidiaries)";
(xi) the definition of "Obligor" is amended by inserting ",
WRC Marketing Corp." immediately before "and each other Person";
(xii) (A) clause (c) of the definition of "Permitted Asset
Disposition" is amended by inserting "or WRC Marketing Corp."
immediately after "either Borrower" and (B) clause (e) of the
definition of "Permitted Asset Disposition" is amended by inserting ",
WRC Marketing Corp." immediately after "either of the Borrowers";
(xiii) the definition of "Pledged Subsidiary" is amended by
inserting ", WRC Marketing Corp." immediately after "either Borrower";
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(xiv) the definition of "Restricted Payment" is amended and
restated to read in its entirety as follows: "`Restricted Payment'
means (a) the declaration or payment of any dividend (other than
dividends payable solely in Capital Securities of either Borrower or
WRC Marketing Corp.) on, or the making of any payment or distribution
on account of, or setting apart assets for a sinking or other analogous
fund for, the purchase, redemption, defeasance, retirement or other
acquisition of any class of Capital Securities of either Borrower, WRC
Marketing Corp. or any Subsidiary or any warrants or options to
purchase any such Capital Securities, whether now or hereafter
outstanding, or the making of any other distribution in respect
thereof, either directly or indirectly, whether in cash or property,
obligations of either Borrower, WRC Marketing Corp. or any Subsidiary
or otherwise, (b) the exchange of the Capital Securities of either
Borrower for the Capital Securities of Holdings other than in
connection with a Permitted Equity Exchange or the exchange of the
Capital Securities of WRC Marketing Corp. for the Capital Securities of
Holdings, (c) the making of any Investment in Holdings by any of its
Subsidiaries, or (d) the payment of any Management Fee.";
(xv) the definition of "Secured Hedging Agreements" is amended
by (A) deleting "either Borrower or any of its Subsidiaries" and
inserting in place thereof "either Borrower, WRC Marketing Corp. or any
of their respective Subsidiaries" and (B) inserting ", WRC Marketing
Corp." immediately after "such Borrower";
(xvi) the definition of "Subsidiary" is amended by deleting
"the applicable Borrower" at the end thereof and inserting in place
thereof "Holdings, WRC Marketing Corp. or a Borrower, as applicable";
(xvii) the definition of "Subsidiary Guarantor" is amended by
deleting "Subsidiary of Holdings or the Borrowers" and inserting in
place thereof "Subsidiary of Holdings, the Borrowers or WRC Marketing
Corp.";
(xviii) the definition of "Subsidiary Guaranty" is amended by
deleting "Exhibit J or Section 7.1.8" and inserting in place thereof
"Exhibit J, or Section 7.1.8";
(xix) the definition of "Transaction Documents" is amended by
inserting ", WRC Marketing Corp." immediately after "Organic Documents
of each Borrower";
(xx) the definition of "Unrestricted Subsidiary" is amended by
inserting "(or, in the case of ChildU, for the Fiscal Quarter
immediately preceding the date of such designation)" immediately
following "designation" in the second proviso thereto; and
(xxi) the definition of "wholly owned" is amended by deleting
"either Borrower" and inserting in place thereof "Holdings, WRC
Marketing Corp. or a Borrower, as applicable".
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Section 2.02 Amendment to Section 2.1.3. Clause (a) of Section 2.1.3 of
the Credit Agreement is hereby amended by deleting "the applicable Borrower or
any of its Subsidiaries" and inserting in place thereof "the applicable Borrower
or any Subsidiary Guarantor".
Section 2.03 Amendment to Section 2.6.2. Section 2.6.2 of the Credit
Agreement is hereby amended by deleting "Subsidiary of either such Borrower)" at
the end thereof and inserting in place thereof "Subsidiary Guarantor)".
Section 2.04 Amendments to Section 3.1.1. Each of clauses (e) and (f)
of Section 3.1.1 of the Credit Agreement is hereby amended by (i) deleting
"their or such Subsidiary's good faith intention" in the first proviso thereto
and inserting in place thereof "the good faith intention of such Borrower or
such Subsidiary", (ii) deleting "the Borrowers' and their respective
Subsidiaries' business activities in accordance with Section 7.2.1, and the
Borrowers or such Subsidiary" in the proviso thereof and inserting in place
thereof "the business activities of Holdings, either Borrower or any of their
respective Subsidiaries in accordance with Section 7.2.1, and Holdings, either
Borrower or such Subsidiary" and (iii) inserting "Holdings, either Borrower"
immediately after each of the two iterations of "the Borrowers" in the second
proviso thereto.
Section 2.05 Amendment to Section 6.8. Section 6.8 of the Credit
Agreement is hereby amended by (a) inserting ", WRC Marketing Corp." in the
first sentence thereof immediately after "Unrestricted Subsidiaries" and (b)
deleting "Each Borrower has no Subsidiaries, except those Subsidiaries" in the
second sentence thereof and inserting in place thereof "WRC Marketing Corp. and
the Borrowers have no Subsidiaries, except those Subsidiaries".
Section 2.06 Amendment to Section 7.1.3. Section 7.1.3 of the Credit
Agreement is hereby amended by deleting "each Borrower and its Subsidiaries may
be properly conducted at all times, unless such Borrower or such Subsidiary" and
inserting in place thereof "each Borrower, WRC Marketing Corp. and each of their
respective Subsidiaries may be properly conducted at all times, unless such
Borrower, WRC Marketing Corp. or such Subsidiary".
Section 2.07 Amendment to Section 7.1.4. Clause (a) of Section 7.1.4 of
the Credit Agreement is hereby amended by deleting "the Borrowers and their
Subsidiaries" and inserting in place thereof "the Borrowers, WRC Marketing Corp.
and their respective Subsidiaries".
Section 2.08 Amendment to Section 7.1.5. Section 7.1.5 is hereby
amended by deleting "Holdings, either Borrowers or any other Obligor's" and
inserting in place thereof "Holdings', either Borrowers' or any other
Obligor's".
Section 2.09 Amendments to Section 7.1.7. (a) Clause (a)(ii) of Section
7.1.7 of the Credit Agreement is hereby amended by deleting "general corporate
purposes of the Borrowers and their respective Subsidiaries" and inserting in
place thereof "general corporate purposes of the Borrowers, WRC Marketing Corp.
and their respective Subsidiaries"; and (b) clause (b) of Section 7.1.7 of the
Credit Agreement is hereby amended by deleting "and their Subsidiary Guarantors"
and inserting in its place ", WRC Marketing Corp. and the Subsidiary
Guarantors".
Section 2.10 Amendment to Section 7.1.8. Section 7.1.8 of the Credit
Agreement is hereby amended by (a) inserting ", WRC Marketing Corp." in the
first sentence thereof immediately after "leaseholds of either Borrower", (b)
inserting "Holdings, WRC Marketing Corp. or" in the second sentence thereof
immediately after "Domestic Subsidiary of", (c) deleting "neither of the
Borrowers or any of their Subsidiaries" in the first proviso to the third
sentence thereof and inserting in place thereof "none of the Borrowers, WRC
Marketing Corp., nor any of their respective Subsidiaries", and (d) deleting
"neither Borrower nor" and inserting "none of the Borrowers, WRC Marketing Corp.
or" in the second proviso to the third sentence thereof".
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Section 2.11 Amendment to Section 7.2.1. Section 7.2.1 of the Credit
Agreement is hereby amended by deleting clause (a) thereof and inserting in
place thereof "(a) its direct ownership of the Capital Securities of each of
WRC, CLI, WRC Marketing Corp., ChildU and ThinkBox and its indirect ownership of
the Capital Securities of each Subsidiary of WRC Marketing Corp., each Borrower,
ChildU and ThinkBox and".
Section 2.12 Amendments to Section 7.2.2. Section 7.2.2 of the Credit
Agreement is hereby amended as follows:
(a) clause (d)(i) thereof is amended by deleting "such
Borrower and its Subsidiaries" and inserting in place thereof "either
Borrower and their respective Subsidiaries";
(b) clause (e) thereof is amended by inserting ", WRC
Marketing Corp." immediately after "Indebtedness of the Borrowers";
(c) clause (e)(ii) thereof is amended by deleting each of the
two iterations of "such Borrower and its Subsidiaries" therein and
inserting in place thereof "a Borrower, WRC Marketing Corp. or their
respective Subsidiaries";
(d) clause (f)(i) thereof is amended by inserting "of
Holdings, WRC Marketing Corp. or either Borrower" immediately after
"either Borrower or a Domestic Subsidiary" and clause (f)(ii) is
amended by inserting "Foreign" immediately after "if incurred by a";
(e) clause (i) thereof is amended by inserting "or WRC
Marketing Corp." immediately after "either Borrower";
(f) clause (n) thereof is amended by inserting ", WRC
Marketing Corp." immediately after each of the two iterations of
"Holdings" therein; and
(g) clause (o) thereof is amended by deleting such clause and
inserting in place thereof "(o) other Indebtedness of the Borrowers,
WRC Marketing Corp. and their respective Subsidiaries (other than
Indebtedness of Foreign Subsidiaries owing to either Borrower, WRC
Marketing Corp. or any of their respective Domestic Subsidiaries) in an
aggregate amount at any time outstanding not to exceed $1,000,000.".
Section 2.13 Amendments to Section 7.2.3. Section 7.2.3 of the Credit
Agreement is hereby amended as follows:
(a) clause (k) thereof is amended by inserting ", WRC
Marketing Corp." immediately after "either Borrower";
(b) clause (l) thereof is amended by deleting "of any Borrower
or any of its Subsidiaries" and inserting in place thereof "any
Borrower, WRC Marketing Corp. or any of their respective Subsidiaries";
(c) clause (m) thereof is amended by deleting such clause and
inserting in place thereof "(m) banker's liens and rights of offset of
the holders of Indebtedness of the Borrowers, WRC Marketing Corp. or
their respective Subsidiaries on monies deposited by either Borrower,
WRC Marketing Corp. or any such Subsidiary with such holders of
Indebtedness in the ordinary course of business of either Borrower, WRC
Marketing Corp. or any such Subsidiary; and"; and
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(d) clause (n) thereof is amended by deleting such clause and
inserting in place thereof "(n) other Liens that do not, individually
or in the aggregate, attach to a material portion of the assets of the
Borrowers, WRC Marketing Corp. or any of their respective Subsidiaries
or the Capital Securities of either Borrower, WRC Marketing Corp. or
any of their respective Subsidiaries and do not secure obligations in
an aggregate amount in excess of $2,000,000.".
Section 2.14 Amendments to Section 7.2.4.
(a) Clause (a) of Section 7.2.4 of the Credit Agreement is
hereby amended and restated as follows:
"(a) Holdings and each Borrower will not permit the Leverage
Ratio as of the last day of any Fiscal Quarter occurring during any
period set forth below to be greater than the ratio set forth opposite
such period:
Period Leverage Ratio
------ --------------
Closing Date to 09/30/00 6.35:1.0
10/01/00 to 06/30/01 5.95:1.0
07/01/01 to 09/30/01 5.75:1.0
10/01/01 to 03/31/02 5.65:1.0
04/01/02 to 09/30/02 5.95:1.0
10/01/02 to 06/30/03 5.75:1.0
07/01/03 to 09/30/03 5.50:1.0
10/01/03 to 12/31/03 5.00:1.0
01/01/04 and thereafter 4.00:1.0"
(b) clause (b) of Section 7.2.4 of the Credit Agreement is
hereby amended and restated as follows:
"(b) Holdings and each Borrower will not permit the Fixed
Charge Coverage Ratio as of the last day of any Fiscal Quarter
occurring during any period set forth below to be less than the ratio
set forth opposite such period:
Fixed Charge
Period Coverage Ratio
------ --------------
Closing Date to 09/30/00 1.05:1.0
10/01/00 to 12/31/01 1.00:1.0
01/01/02 to 06/30/02 1.05:1.0
07/01/02 to 12/31/02 1.00:1.0
01/01/03 to 09/30/03 1.05:1.0
10/01/03 to 12/31/03 1.10:1.0
01/01/04 and thereafter 1.50:1.0"
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Section 2.15 Amendments to Section 7.2.5. Section 7.2.5 of the Credit
Agreement is hereby amended as follows:
(a) clause (d) thereof is amended by inserting ", WRC
Marketing Corp." immediately after "Borrowers";
(b) clause (e) thereof is amended by deleting "or by any
Restricted Subsidiary in other Restricted Subsidiaries" and inserting
in place thereof ", by any Restricted Subsidiary in other Restricted
Subsidiaries or by Holdings or either Borrower in WRC Marketing Corp."
and by inserting "or in WRC Marketing Corp." at the end of clause (ii)
thereof;
(c) clause (f) thereof is amended by (i) inserting ", WRC
Marketing Corp." immediately after "Investments made by the Borrowers"
and (ii) inserting "or WRC Marketing Corp., as applicable," at the end
of clause (A) thereof;
(d) clause (i) thereof is amended by deleting "either Borrower
or any Subsidiary" and inserting in place thereof "either Borrower, WRC
Marketing Corp. or any of their respective Subsidiaries"; and
(e) the proviso thereto is amended by designating clauses (l)
and (m) thereof as clauses (i) and (ii).
Section 2.16 Amendments to Section 7.2.6. Section 7.2.6 of the Credit
Agreement is hereby amended as follows:
(a) clause (a) thereof is amended by deleting such clause and
inserting in place thereof "(a) Restricted Payments made by
Subsidiaries to a Borrower or WRC Marketing Corp. or to a wholly owned
Restricted Subsidiary of a Borrower or of WRC Marketing Corp.";
(b) clause (b) thereof is amended by (i) deleting "the
Borrowers and the Subsidiaries" and inserting in place thereof "the
Borrowers, WRC Marketing Corp. and their respective Subsidiaries", (ii)
deleting "any Borrower or Subsidiary" in the proviso thereto and
inserting in place thereof "any Borrower, WRC Marketing Corp. or such
Subsidiary", (iii) deleting "another Borrower or Subsidiary" in the
proviso thereto and inserting in place thereof "another Borrower, WRC
Marketing Corp. or another Subsidiary" and (iv) deleting "such other
Borrower or Subsidiary" in the proviso thereto and inserting in place
thereof "such other Borrower, WRC Marketing Corp. or such other
Subsidiary";
(c) each of clauses (f) and (g) thereof are hereby amended by
inserting "or WRC Marketing Corp." immediately after "Restricted
Payments made by the Borrowers";
(d) each of clauses (c), (d) and (e) thereof are hereby
amended by inserting "or WRC Marketing Corp." immediately after "the
Borrowers"; and
(e) the proviso at the end of such Section is amended by
deleting "the Borrower" and inserting in place thereof "the Borrowers".
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Section 2.17 Amendment to Section 7.2.7. Section 7.2.7 is hereby
amended by deleting "the Borrowers and their respective Subsidiaries" and
inserting in place thereof "the Borrowers, WRC Marketing Corp. and their
respective Subsidiaries".
Section 2.18 Amendment to Section 7.2.8. Clause (b) of Section 7.2.8 is
hereby amended by inserting ", WRC Marketing Corp." immediately after "each
Borrower".
Section 2.19 Amendments to Section 7.2.9. (a) Section 7.2.9 of the
Credit Agreement is hereby amended by deleting "either Borrower, and each
Borrower will not" and inserting in place thereof "either Borrower or WRC
Marketing Corp. or any of its Subsidiaries, and each Borrower will not";
(b) clause (i) of Section 7.2.9 of the Credit Agreement is
hereby amended and restated to read as follows: "issue any Capital
Securities (whether for value or otherwise) to any Person other than
(A) to a Borrower, WRC Marketing Corp. or another wholly owned
Restricted Subsidiary or (B) in the case of WRC Marketing Corp. or a
Borrower, to Holdings";
(c) clause (ii) of Section 7.2.9 of the Credit Agreement is
hereby amended by deleting "Holdings, either Borrower or any
Subsidiary" and inserting in place thereof "Holdings, either Borrower
or any of their respective Subsidiaries"; and
(d) clause (A) of Section 7.2.9 of the Credit Agreement is
hereby amended by inserting "by CLI or WRC" at the beginning thereof.
Section 2.20 Amendments to Section 7.2.10. (a) Clause (a) of Section
7.2.10 of the Credit Agreement is hereby amended and restated as follows: "(a)
any Restricted Subsidiary of a Borrower or WRC Marketing Corp. may liquidate or
dissolve voluntarily into, and may merge with and into, either Borrower, WRC
Marketing Corp. or any other Restricted Subsidiary of a Borrower or WRC
Marketing Corp. (provided, however, that a Subsidiary Guarantor may only
liquidate or dissolve into, or merge with and into, either Borrower, WRC
Marketing Corp. or another Subsidiary Guarantor), and the assets or Capital
Securities of any Subsidiary may be purchased or otherwise acquired by either
Borrower, WRC Marketing Corp. or any other Restricted Subsidiary (provided,
however, that the assets or Capital Securities of any Subsidiary Guarantor may
only be purchased or otherwise acquired by either Borrower, WRC Marketing Corp.
or another Subsidiary Guarantor); provided, further, that in no event shall any
Pledged Subsidiary consolidate with or merge with and into (x) any Unrestricted
Subsidiary or (y) any other Subsidiary which is not another Pledged Subsidiary
unless after giving effect thereto, the Administrative Agent shall have a
perfected pledge of, and security interest in and to, at least the same
percentage of the issued and outstanding interests of Capital Securities (on a
fully diluted basis) of the surviving Person as the Administrative Agent had
immediately prior to such merger or consolidation in form and substance
satisfactory to the Administrative Agent and its counsel, pursuant to such
documentation and opinions as shall be necessary in the opinion of the
Administrative Agent to create, perfect or maintain the collateral position of
the Secured Parties therein;"; and
(b) Clause (c) of Section 7.2.10 of the Credit Agreement is
hereby amended by deleting each of the two iterations of "either
Borrower or any of its Subsidiaries" and inserting in place thereof
"either Borrower, WRC Marketing Corp. or any of their respective
Subsidiaries".
Section 2.21 Amendments to Section 7.2.12. Clause (a) of Section 7.2.12
of the Credit Agreement is hereby amended by deleting "such Borrower" and
inserting in place thereof "the applicable Obligor".
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Section 2.22 Amendments to Section 7.2.13. Section 7.2.13 of the Credit
Agreement is hereby amended by inserting "(A)" immediately before clause (i)
thereof and by inserting "or (B) is among any of WRC Marketing Corp., any
Borrower or any other Subsidiary; provided, that any transaction referred to in
this clause (B) involving any Subsidiary that is not a Subsidiary Guarantor
shall, as such transaction relates to such Subsidiary that is not a Subsidiary
Guarantor, be (i) on terms no less favorable to each Obligor party than it could
obtain in an arm's length transaction with a Person that is not an Affiliate and
(ii) of the kind that would be entered into by a prudent Person in the position
of such Obligor party with a Person that is not one of its Affiliates" at the
end of clause (ii) thereof.
Section 2.23 Amendment to Section 11.3. Section 11.3 of the Credit
Agreement is hereby amended by deleting "Xxxxx, Xxxxx & Xxxxx" and inserting in
place thereof "Mayer, Brown, Xxxx & Maw".
ARTICLE III
CONDITIONS PRECEDENT TO EFFECTIVENESS
Section 3.01 Conditions. This Amendment (and the amendments contained
herein) shall become effective, subject to the last paragraph of this Article
III, on the date (the "First Amendment Effective Date") when each of the
conditions set forth in this Article III shall have been satisfied.
(a) Counterparts and Lender Consents. The Administrative Agent
shall have received counterparts of this Amendment executed on behalf
of Holdings, each Borrower and the Required Lenders.
(b) Affirmation and Acknowledgment. The Agents shall have
received, with counterparts for each Lender, a duly executed copy of
the Affirmation and Acknowledgment to this Amendment, substantially in
the form of Annex I hereto and dated the First Amendment Effective
Date, duly executed and delivered by each of the Obligors other than
Holdings and the Borrowers.
(c) Amendment Fee. The Agents shall have received, for the
account of each Lender that executes and delivers to the Agents a
counterpart of this Amendment on or prior to 5:00 p.m., New York time,
on July 15, 2002 (the "Fee Calculation Date"), an amendment fee equal
to 0.20% of each such Lender's Percentage of the Total Exposure Amount
as of the Fee Calculation Date.
(d) Other Costs and Expenses. The Agents shall have received
all fees, costs and expenses due and payable pursuant to Sections 3.3
and 11.3 of the Credit Agreement to the extent then invoiced.
All corporate and legal proceedings and instruments and agreements
relating to the transactions contemplated by this Amendment or in any other
document delivered in connection herewith shall be satisfactory in form and
substance to the Administrative Agent and its counsel, and the Administrative
Agent shall have received all information and copies of all documents and
papers, including records of corporate proceedings, governmental approvals, good
standing certificates and bring-down certificates, 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. The documents referred to in this Section shall be
delivered to the Administrative Agent no later than the First Amendment
Effective Date. The certificates and opinions referred to in this Section shall
be dated the First Amendment Effective Date.
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On the First Amendment Effective Date, the Credit Agreement will be
automatically amended to reflect the amendments thereto; provided that the
amendments thereto (other than those set forth in Sections 2.01(b)(xviii) and
(xx), 2.02, 2.03, 2.08, 2.14, 2.15(e), 2.16(e), 2.21 and 2.23) shall have no
force or effect until such time as Holdings causes WRC Marketing Corp. to become
a wholly owned Domestic Subsidiary and Restricted Subsidiary of Holdings and the
requirements of Section 7.1.8 of the Credit Agreement are satisfied with respect
to WRC Marketing Corp. (including the delivery of duly executed supplements to
the Subsidiary Guaranty and the Security and Pledge Agreement and such other
instruments and documents (including a legal opinion of counsel to Holdings) as
the Agents shall reasonably request). On and after the First Amendment Effective
Date, the rights and obligations of the parties hereto shall be governed by the
Credit Agreement as amended by this Amendment; provided that the rights and
obligations of the parties hereto with respect to the period prior to the First
Amendment Effective Date shall continue to be governed by the provisions of the
Credit Agreement. Once the First Amendment Effective Date has occurred, all
references to the Credit Agreement in any document, instrument, agreement, or
writing shall from and after the First Amendment Effective Date be deemed to
refer to the Credit Agreement as amended by this Amendment, and, as used in this
Amendment, the terms, "herein", "hereafter", "hereto", and words of similar
import shall mean, from and after the First Amendment Effective Date, this
Amendment. Promptly after the First Amendment Effective Date occurs, the
Administrative Agent shall notify the Borrowers and the Lenders of the First
Amendment Effective Date, and such notice shall be conclusive and binding on all
parties hereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Representations and Warranties. In order to induce the
Lenders to consent to the amendments contained herein and to enter into this
Amendment, each of Holdings and each Borrower, jointly and severally, represents
and warrants as set forth below:
(a) The amendment of the Credit Agreement effected pursuant to
this Amendment does not impair the validity, effectiveness or priority
of the Liens granted pursuant to any Loan Documents (the "Security
Documents"), and such Liens continue unimpaired with the same priority
to secure repayment of all Obligations, whether heretofore or hereafter
incurred. The amendment of the Credit Agreement effected pursuant to
this Amendment does not require that any new filings be made or other
action taken to perfect or to maintain the perfection of such Liens
other than filings to be made and other action to be taken with respect
to WRC Marketing Corp. and its Capital Securities. The position of the
Lenders with respect to such Liens, the Collateral (as defined in the
Security Documents) in which a security interest was granted pursuant
to the Security Documents and the ability of the Administrative Agent
to realize upon such Liens pursuant to the terms of the Security
Documents have not been adversely affected in any material respect by
the amendment of the Credit Agreement effected pursuant to this
Amendment or by the execution, delivery, performance or effectiveness
of this Amendment.
(b) Each such Obligor reaffirms as of the First Amendment
Effective Date such Person's respective covenants and agreements
contained in the Credit Agreement and each Security Document to which
such Person is a party, including, in each case, as such covenants and
agreements may be modified by this Amendment. Each such Obligor further
confirms that each such Loan Document to which such Person is a party
is and shall continue to be in full force and effect and the same are
hereby ratified, approved and confirmed in all respects, except that
upon the occurrence of the First Amendment Effective Date, all
references in such Loan Documents to the "Credit Agreement", "Loan
Documents", "thereunder", "thereof", "therein" or words of like or
similar import shall mean and be a reference to the Credit Agreement
and the Loan Documents as amended hereby.
10
(c) Both before and immediately after giving effect to this
Amendment, the representations and warranties set forth in Article VI
of the Credit Agreement and each other Loan Document are, in each case,
true and correct in all material respects with the same effect as if
then made (unless stated to relate solely to an earlier date, in which
case such representations and warranties shall be true and correct in
all material respects as of such earlier date).
Section 4.02 Validity, etc. This Amendment constitutes the legal, valid
and binding obligation of the Obligors party hereto enforceable in accordance
with its terms subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
Section 4.03 No Default. Both immediately before and after giving
effect to this Amendment, no Default has occurred and is continuing.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01 Ratification of and References to the Credit Agreement.
This Amendment shall be deemed to be an amendment to the Credit Agreement, and
the Credit Agreement, as amended hereby, is hereby ratified, approved and
confirmed in each and every respect. Other than as specifically provided herein,
this Amendment shall not operate as a waiver or amendment of any right, power or
privilege of any Agent or any Lender under the Credit Agreement or any other
Loan Document or of any other term or condition of the Credit Agreement or any
other Loan Document, nor shall the entering into of this Amendment preclude any
Agent and/or any Lender from refusing to enter into any further waivers or
amendments with respect thereto.
Section 5.02 Headings. The various headings of this Amendment are
inserted for convenience only and shall not affect the meaning or interpretation
of this Amendment or any provisions hereof.
Section 5.03 Execution in Counterparts. This Amendment may be executed
by the parties hereto in several counterparts, each of which shall be deemed to
be an original and all of which shall constitute together but one and the same
agreement. A counterpart hereof executed and delivered by facsimile shall be
effective as an original.
Section 5.04 Successors and Assigns. This Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
Section 5.05 Governing Law; Entire Agreement. THIS AMENDMENT SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK. This Amendment and the other Loan Documents constitute the
entire understanding among the parties hereto with respect to the subject matter
hereof and supersede any prior agreements, written or oral, with respect
thereto.
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IN WITNESS WHEREOF, the signatories hereto have caused this Amendment
to be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
WEEKLY READER CORPORATION
By:
----------------------------
Name:
Title:
COMPASSLEARNING, INC.
By:
----------------------------
Name:
Title:
WRC MEDIA INC.
By:
----------------------------
Name:
Title:
S-1
LENDERS:
------------------------------------
(Name of Lender)
By:
----------------------------
Name
Title:
S-2
CREDIT SUISSE FIRST BOSTON, as Syndication
Agent and as a Lender
By:
----------------------------
Name:
Title:
BANK OF AMERICA, N.A., as Administrative
Agent and as a Lender
By:
----------------------------
Name:
Title:
S-3
ANNEX I
AFFIRMATION AND ACKNOWLEDGMENT
