EXHIBIT 10.16 (B)
SECOND AMENDMENT TO AMENDED AND RESTATED
CREDIT AGREEMENT (364 DAYS) AND CONSENT
THIS SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (364
DAYS) AND CONSENT, dated as of June 17, 2002 (this "AMENDMENT"), amends the
Amended and Restated Credit Agreement (364 Days), dated as of May 29, 2001 (as
heretofore amended, the "CREDIT AGREEMENT"), among NASCO INTERNATIONAL, INC., a
Wisconsin corporation (the "BORROWER"), the various financial institutions
parties thereto (collectively, the "LENDERS") and BANK OF AMERICA, N.A., as
administrative agent (the "AGENT") for the Lenders. Terms defined in the Credit
Agreement are, unless otherwise defined herein or the context otherwise
requires, used herein as defined therein.
WHEREAS, the parties hereto have entered into the Credit Agreement,
which provides for the Lenders to extend certain credit facilities to the
Borrower from time to time;
WHEREAS, the Borrower proposes to merge with and into The Aristotle
Corporation ("ARISTOTLE") pursuant to a Merger Agreement described in the Proxy
Statement - Prospectus of Aristotle dated May 15, 2002 (such merger being
referred to as the "MERGER"); and
WHEREAS, Triarco Arts & Crafts, Inc., American Educational Products,
Inc., Xxxxxxx Scientific, Inc. and Xxxxx Resources, Inc. shall be converted into
limited liability companies named Triarco Arts & Crafts LLC, American
Educational Products LLC, Xxxxxxx Scientific LLC, and Xxxxx Resources LLC,
respectively, organized in Delaware, Colorado, Colorado and Colorado,
respectively (such conversion being referred to as the "CONVERSION");
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the parties hereto agree as follows:
SECTION 1. AMENDMENTS. Effective as of the date hereof, the Credit
Agreement shall be amended as set forth in Section 1.1 through 1.6 hereof.
SECTION 1.1 ADDITIONAL DEFINITIONS. Section 1.1 of the Credit
Agreement is hereby amended by the addition of the following definitions in
proper alphabetical order:
"ASSUMED INCOME TAXES" means for any period, federal, state, local and
foreign taxes that would have been payable by the Borrower and its Pledged
Subsidiaries as a consolidated group, without giving effect to the Merger or any
income or expense related to Non-Pledged Assets.
"ASSUMED MANAGEMENT FEE AMOUNT" means $1,708,321 (minus any management
or similar fees paid to an Affiliate between January 1, 2002 and the effective
date of the Second Amendment hereto), during the 2002 Fiscal Year and thereafter
shall be the following amounts in the following Fiscal Years:
Fiscal Year Amount
----------- ------
2003 $1,810,821
2004 $1,919,470
2005 $2,034,638
2006 $2,156,176
"MAXIMUM AVAILABLE AMOUNT" means at any time, (i) the sum of, (A)
Non-Pledged Assets PLUS (B) Assumed Income Taxes after the effective date of the
Merger (less the amount of federal, state and local income taxes actually paid
by the Borrower and its Pledged Subsidiaries in said period) plus (c) the
Assumed Management Fee Amount MINUS (ii) the sum of (A) payments paid after the
date of the Merger in reliance on clause (i) of the PROVISO to the Section 7.2.6
PLUS (B) management fees paid in reliance upon clause (ii) of the parenthetical
phrase in Section 7.2.15 plus (C) tax sharing payments made to Holdings after
the effective date of the Merger in respect of tax obligations arising after the
effective date of the Merger.
"NON-PLEDGED ASSETS" mean $3,200,000 on the date hereof PLUS the
amount of any dividends, distributions or tax sharing payments to the Borrower
after the date hereof from Non-Pledged Subsidiaries.
"NON-PLEDGED SUBSIDIARY" means a Subsidiary other than a Pledged
Subsidiary.
"PLEDGED SUBSIDIARY" means each Subsidiary of the Borrower, the equity
interests of which are pledged pursuant to the Pledge Agreement.
SECTION 1.2 AMENDED DEFINITIONS. Section 1.1 of the Credit Agreement
is hereby amended by the deletion of the definitions of "Change of Control,"
"Consolidated Current Assets," "Consolidated Current Assets Level," Consolidated
Debt Service Coverage Ratio," "Consolidated Net Income," "Consolidated Net
Worth," "EBITDA", "Excess Cash Flow", and "Stated Maturity Date" and the
substitution of the following in proper alphabetical order:
"CHANGE IN CONTROL" means
(a) at any time when the aggregate principal amount of
Indebtedness outstanding hereunder exceeds $10,000,000, Xxxxxx Xxxxxx
and members of his family shall cease to own and control, individually
or in the aggregate, directly or through corporations controlled by
Xxxxxx Xxxxxx and members of his family, for any reason, free and
clear of all Liens, options or other encumbrances or rights (other
than any pledge of capital stock of Geneve granted in favor of a
commercial lender securing Indebtedness, which Indebtedness may not
exceed $10,000,000 in principal amount unless and until the
outstanding principal amount of all Loans is equal to or less than
$10,000,000, it being understood and agreed that foreclosure upon such
Lien shall constitute a "Change in Control"), at least 51% of the
outstanding shares of capital stock having ordinary voting power for
the election of directors of Geneve on a fully diluted basis, other
than by reason of death or legal incapacity, in which case a "Change
in Control" shall not be deemed to occur until the date which is six
months after such death or legal incapacity; or
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(b) the failure of Geneve to own and control, directly or
indirectly and free and clear of all Liens, options or other
encumbrances or rights, at least 51% of the outstanding shares of
capital stock having ordinary voting power for the election of
directors of the Borrower on a fully diluted basis.
"CONSOLIDATED CURRENT ASSETS" means, as of the close of any
month in each Fiscal Year, all amounts which, in accordance with GAAP
consistently applied, would be included as current assets on a
consolidated balance sheet of the Borrower (other than Non-Pledged
Assets) and each of its Pledged Subsidiaries at such time, but in any
event not including any cash or Cash Equivalent Investments.
"CONSOLIDATED CURRENT ASSETS LEVEL" means, as of the last day of
any Fiscal Quarter, the sum of (i) 80% of all amounts (but not
including Non-Pledged Assets) which, in accordance with GAAP
consistently applied, would be included as gross accounts receivable
on a consolidated balance sheet of the Borrower and each of its
Pledged Subsidiaries at such time plus (ii) 60% of all amounts (but
not including Non-Pledged Assets) which, in accordance with GAAP
consistently applied, would be included as gross inventory on a
consolidated balance sheet of the Borrower and each of its Pledged
Subsidiaries at such time.
"CONSOLIDATED DEBT SERVICE COVERAGE RATIO" means, as of the close
of any Fiscal Quarter, the ratio of:
(a) EBITDA computed for the four consecutive Fiscal Quarters
ending on the computation date
TO
(b) the sum of
(i) Consolidated Interest Expense of the Borrower and each of
its Subsidiaries computed for four consecutive Fiscal Quarters ending
on the computation date,
PLUS
(ii) Required Principal Payments as of such computation date.
"CONSOLIDATED INTEREST EXPENSE" means, for any Fiscal Quarter,
the aggregate interest expense of the Borrower and each of its Pledged
Subsidiaries or the Borrower and each of its Subsidiaries, as
applicable, for such Fiscal Quarter, as determined in accordance with
GAAP consistently applied, including, without limitation, all
commissions, discounts and other fees and charges owed with respect to
letters of credit and banker's acceptances and net costs under
interest rate swap or exchange agreements and the portion of any
obligation under capital leases allocable to interest expense but
excluding in any event any amounts payable under the Agent's Fee
Letter.
"CONSOLIDATED NET INCOME" means, for any period, all amounts
which, in conformity with GAAP consistently applied, would be included
under net income (but
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not including income derived from Non-Pledged Assets) on a
consolidated income statement of the Borrower and each of its Pledged
Subsidiaries for such period.
"CONSOLIDATED NET WORTH" means, at any time, all amounts which,
in accordance with GAAP consistently applied, would be included under
shareholders' equity on a consolidated balance sheet of the Borrower
and each of its Pledged Subsidiaries at such time; PROVIDED that, in
any event, such amounts are to be net of (i) amounts carried on the
books of the Borrower and each of its Subsidiaries for treasury stock
and (ii) Non-Pledged Assets.
"EBITDA" means, for any period, Consolidated Net Income for such
period PLUS to the extent deducted in determining such Consolidated
Net Income, Consolidated Interest Expense of the Borrower and its
Pledged Subsidiaries, income tax expense, depreciation and
amortization of the Borrower and its Pledged Subsidiaries for such
period; PROVIDED that for purposes of calculating EBITDA for any
Period, the consolidated net income of any Person acquired by the
Borrower or any Pledged Subsidiary during such period (plus, to the
extent deducted in determining such consolidated net income, interest
expense, income tax expense, depreciation and amortization of such
Person) shall be included on a PRO FORMA basis for such period
(assuming the consummation of each such acquisition and the incurrence
or assumption of any Indebtedness in connection therewith occurred on
the first day of such period, but adjusted to add back non-recurring
expenses (such as owner compensation) to the extent disclosed to and
approved by the Required Lenders) based upon (a) to the extent
available, (i) the audited consolidated balance sheet of such acquired
Person and its consolidated Subsidiaries as at the end of the fiscal
year of such Person preceding the acquisition of such Person and the
related audited consolidated statements of income, stockholders'
equity and cash flows for such fiscal year and (ii) any subsequent
unaudited financial statements for such Person for the period prior to
the acquisition of such Person so long as such statements were
prepared on a basis consistent with the audited financial statements
referred to above or (b) to the extent the items listed in CLAUSE (A)
are not available, such historical financial statements and other
information as is disclosed to, and approved by, the Required Lenders.
"EXCESS CASH FLOW" means, for any period, the remainder of
(a) Consolidated Net Income for such period,
PLUS
(b) to the extent deducted in determining such Consolidated
Net Income, income tax expense, depreciation and amortization for such
period,
PLUS
(c) any decrease in working capital during such period
PLUS
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(d) any non-cash charges
LESS
(e) the sum, without duplication of
(i) scheduled repayments of the loans under the Credit
Agreement (Five Year) made during such period pursuant to
Section 3.1.1 of such agreement,
PLUS
(ii) voluntary prepayments of the Loans pursuant to SECTION 3.1
during such period,
PLUS
(iii)cash payments made in such period with respect to Capital
Expenditures,
PLUS
(iv) all Assumed Income Taxes during such period,
PLUS
(v) any increases in working capital during such period.
"STATED MATURITY DATE" means June 16, 2003, as such date may be
extended pursuant to SECTION 3.4.
SECTION 1.3 FINANCIAL INFORMATION. Sections 7.1.1 of the Credit
Agreement is hereby amended by the addition of the following clauses (i) and
(j):
"(i) as soon as available and in any event within 60 days after
the end of each of the first three Fiscal Quarters of each Fiscal
Year of the Borrower and 90 days after the end of the last Fiscal
Quarter of each Fiscal Year of the Borrower, combined balance
sheets of the Borrower and its Pledged Subsidiaries as of the end
of such Fiscal Quarter, and combined statements of earnings and
cash flow of the Borrower and its Pledged Subsidiaries for such
Fiscal Quarter and for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal
Quarter, excluding Non Pledged Assets and any income related
thereto certified by the chief financial Authorized Officer of
the Borrower; and
(j) within 30 days after each month, a report identifying the
Non-Pledged Assets, income applicable to Non-Pledged Assets and
Assumed Income Taxes;"
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SECTION 1.4 NEGATIVE COVENANTS. Section 7.2.1, 7.2.2, 7.2.3, 7.2.5,
7.2.6, 7.2.7, 7.2.8, 7.2.9, 7.2.10, 7.2.15 and 7.2.16 of the Credit Agreement
are hereby amended to state in their entirety as follows:
"SECTION 7.2.1 BUSINESS ACTIVITIES. The Borrower will not, and
will not permit any of its Pledged Subsidiaries to, engage in any
business activity, other than the business of selling, primarily
through mail order and electronic means, teaching aids and equipment
to educators and specialized equipment and supplies to farmers,
ranchers, laboratories, hospitals and emergency services, and in the
financial services business and such activities as may be incidental
or directly related thereto.
SECTION 7.2.2 INDEBTEDNESS. The Borrower will not, and will not
permit any of its Pledged Subsidiaries to, create, incur, assume or
suffer to exist or otherwise become or be liable in respect of any
Indebtedness, other than, without duplication, the following:
(a) Indebtedness in respect of the Loans and other
Obligations;
(b) unsecured Indebtedness incurred in the ordinary course of
business (including open accounts extended by suppliers on normal
trade terms in connection with purchases of goods and services, but
excluding Indebtedness incurred through the borrowing of money and
Contingent Liabilities);
(c) Indebtedness of the Borrower and its Pledged Subsidiaries
in respect of Capitalized Lease Liabilities to the extent permitted in
Section 7.2.7;
(d) Indebtedness under the Credit Agreement (Five Year);
(e) Indebtedness of the Borrower comprising reimbursement
obligations in respect of letters of credit issued to support imported
merchandise purchased from time to time by the Borrower, provided that
the aggregate amount of all such letters of credit and, in turn, of
all such reimbursement obligations, shall not exceed $500,000;
(f) Indebtedness of the Borrower incurred in connection with
the Guaranty, dated as of April 16, 2001 in favor of J-Star
Industries, Inc. pursuant to which the Borrower has guaranteed the
obligations of NHI, LLC under the Environmental Remediation and
Indemnification Agreement, dated as of April 16, 2001, by and between
NHI, LLC and J-Star Industries, Inc. and the Environmental Escrow
Agreement, dated as of April 16, 2001, by and between NHI, LLC and
J-Star Industries, Inc; and
(g) Non-recourse Indebtedness of the Borrower secured only by
Non-Pledged Assets.
SECTION 7.2.3 LIENS. The Borrower will not, and will not permit
any of its Pledged Subsidiaries to, create, incur, assume or suffer to
exist any Lien
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upon any of its property, revenues or assets, whether now owned or
hereafter acquired, except:
(a) Liens securing payment of the Obligations and the
"Obligations" under the Credit Agreement (Five Year), granted pursuant
to any Loan Document;
(b) Other than with respect to the Mortgaged Real Property and
the Modesto Property (as to which the provisions of the Mortgage and
the Modesto Mortgage shall govern and control), liens for taxes,
assessments or other governmental charges or levies not at the time
delinquent or thereafter payable without penalty or being contested in
good faith by appropriate action and for which adequate reserves in
accordance with GAAP shall have been set aside on its books;
(c) Liens of carriers, warehousemen, mechanics, materialmen
and landlords incurred in the ordinary course of business for sums not
overdue or being contested in good faith by appropriate action and for
which adequate reserves in accordance with GAAP shall have been set
aside on its books;
(d) Liens incurred in the ordinary course of business in
connection with worker's compensation, unemployment insurance or other
forms of governmental insurance or benefits, or to secure performance
of tenders, statutory obligations, leases and contracts (other than
for borrowed money) entered into in the ordinary course of business or
to secure obligations on surety or appeal bonds;
(e) judgment Liens in existence less than 15 days after the
entry thereof or with respect to which execution has been stayed or
the payment of which is covered in full (subject to a customary
deductible) by insurance maintained with responsible insurance
companies;
(f) Liens to secure the reimbursement obligations permitted
under Section 7.2.2(e) on the merchandise financed with the letters of
credit described therein;
(g) Permitted Encumbrances (as defined in the Mortgage) with
respect to the Mortgaged Real Property and the Modesto Property; and
(h) Liens on Non Pledged Assets.
SECTION 7.2.5. INVESTMENTS. Subject to Section 7.2.18, the
Borrower will not, and will not permit any of its Pledged Subsidiaries
to, make, incur, assume or suffer to exist any Investment in any other
Person, except:
(a) Cash Equivalent Investments;
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(b) without duplication, Investments permitted as Indebtedness
pursuant to Section 7.2.2;
(c) without duplication, Investments permitted as Capital
Expenditures pursuant to Section 7.2.7;
(d) (i) Investments made prior to the Effective Date in its
Subsidiaries, (ii) from and after the Effective Date and in the
ordinary course of business, Investments by the Borrower in its
Pledged Subsidiaries in an aggregate amount not to exceed $3,000,000
at any one time outstanding, or by any such Pledged Subsidiary in any
of its Pledged Subsidiaries, by way of contributions to capital or
loans or advances and (iii) from and after the Effective Date,
Investments by the Borrower in Geneve in an aggregate amount not to
exceed $3,000,000 at any one time outstanding (provided, that all such
Investments shall be by way of loans to Geneve made by the Borrower
and evidenced by one or more promissory notes (each such promissory
note to be in form and substance reasonably satisfactory to the Agent)
duly executed and delivered in pledge to the Agent; and
(e) Investments by the Borrower made with Non Pledged Assets;
provided, however, that
(f) any Investment which when made complies with the
requirements of the definition of the term "Cash Equivalent
Investment" may continue to be held notwithstanding that such
Investment if made thereafter would not comply with such requirements;
and
(g) no Investment otherwise permitted by clause (b), (c) or
(d) shall be permitted to be made if, immediately before or after
giving effect thereto, any Default shall have occurred and be
continuing.
SECTION 7.2.6 RESTRICTED PAYMENTS, ETC. On and at all times after
the Effective Date subject to Section 7.2.18:
(a) the Borrower will not declare, pay or make any dividend or
distribution (in cash, property or obligations) on any shares of any
class of capital stock (now or hereafter outstanding) of the Borrower
or on any warrants, options or other rights with respect to any shares
of any class of capital stock (now or hereafter outstanding) of the
Borrower (other than dividends or distributions payable in its common
stock or warrants to purchase its common stock or splitups or
reclassifications of its stock into additional or other shares of its
common stock), or apply, or permit any of its Subsidiaries to apply,
any of its funds, property or assets to the purchase, redemption,
sinking fund or other retirement of, or agree or permit any of its
Subsidiaries to purchase or redeem, any shares of any class of capital
stock (now or hereafter outstanding) of, the Borrower, or warrants,
options or other rights with respect
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to any shares of any class of capital stock (now or hereafter
outstanding) of the Borrower;
(b) the Borrower will not prepay any other Indebtedness or
prepay or repay any Subordinated Debt, except as expressly permitted
under CLAUSE (D) of SECTION 7.2.2; and
(c) the Borrower will not, and will not permit any Subsidiary
to, make any deposit for any of the foregoing purposes;
PROVIDED, HOWEVER, that, (i) the Borrower may pay dividends or make
any distribution of up to the Maximum Available Amount; and (ii) in
any fiscal year the Borrower may pay a dividend up to an amount equal
to 50% of the Excess Cash Flow for the preceding Fiscal Year (so long
as the Borrower has first made the mandatory prepayment of the loans
under the Credit Agreement (Five Year) pursuant due to Section
3.1.2(d) therein)."
SECTION 7.2.7 CAPITAL EXPENDITURES, ETC. The Borrower will not,
and will not permit any of its Pledged Subsidiaries to, make or commit
to make Capital Expenditures in any Fiscal Year in excess of
$2,700,000 in the aggregate, except that the Borrower may make Capital
Expenditures financed with Non Pledged Assets.
SECTION 7.2.8 TAKE OR PAY CONTRACTS. The Borrower will not, and
will not permit any of its Pledged Subsidiaries to, enter into or be a
party to any arrangement for the purchase of materials, supplies,
other property or services if such arrangement by its express terms
requires that payment be made by the Borrower or such Pledged
Subsidiary regardless of whether such materials, supplies, other
property or services are delivered or furnished to it, unless the
aggregate amount payable under all such arrangements shall not exceed
$100,000 in any calendar year.
SECTION 7.2.9 CONSOLIDATION, MERGER, ETC. The Borrower will not,
and will not permit any of its Pledged Subsidiaries to, liquidate or
dissolve, consolidate with, or merge into or with, any other
corporation, or purchase or otherwise acquire all or substantially all
of the assets of any Person (or of any division thereof) except
(a) any such Pledged Subsidiary may liquidate or dissolve
voluntarily into, and may merge with and into, the Borrower or any
wholly-owned Pledged Subsidiary, and the assets or stock of any
Pledged Subsidiary may be purchased or otherwise acquired by the
Borrower or any Pledged wholly-owned Subsidiary;
(b) so long as no Default has occurred and is continuing or
would occur after giving effect thereto, the Borrower or any of its
Pledged Subsidiaries may purchase all or substantially all of the
assets of any Person, or acquire such Person by merger, if permitted
(without
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duplication) by Section 7.2.7 to be made as a Capital Expenditure
(provided that any amounts so expended shall count as Capital
Expenditures for purposes of Section 7.2.7); provided, that the
Borrower may purchase all or substantially all of the assets of any
Person (or of any division thereof) all of the assets of any Person
(or of any division thereof) financed solely with Non Pledged Assets.
SECTION 7.2.10 ASSET DISPOSITIONS, ETC. The Borrower will not, and
will not permit any of its Pledged Subsidiaries to, sell, transfer, lease,
contribute or otherwise convey, or grant options, warrants or other rights
with respect to, all or any part of its assets (including accounts
receivable and capital stock of Subsidiaries) to any Person, other than the
sale of inventory in the ordinary course of business, unless (a) permitted
by Section 7.2.6 or 7.2.9, (b) in addition to the exceptions provided in
the foregoing clause (a), the net book value of such assets, together with
the net book value of all other assets sold, transferred, leased,
contributed or conveyed by the Borrower or any of its Pledged Subsidiaries
pursuant to this clause (b) since the Effective Date, does not exceed
$250,000 or (c) such assets consist of Non Pledged Assets.
SECTION 7.2.15 MANAGEMENT FEES. The Borrower will not, and will not
permit any of its Pledged Subsidiaries to, pay management or similar fees
to any Affiliate (other than (i) payments by any of the Borrower's Pledged
Subsidiaries to the Borrower and (ii) payments not in excess of the Maximum
Available Amount) without the written approval of the Required Lenders."
SECTION 1.5 TAX SHARING PAYMENTS. Section 7.2.16 of the Credit Agreement is
hereby amended to state in its entirety as follows:
"SECTION 7.2.16 TAX SHARING PAYMENTS. The Borrower will not, and will
not permit any of its Pledged Subsidiaries to make, any tax sharing
payments to Holdings in excess of the Maximum Available Amount."
SECTION 1.6 INVESTMENT RESTRICTION AND COLLATERAL.
Article VII of the Credit Agreement is hereby amended by the addition of
the following section at the end:
"Section 7.2.18 INVESTMENT RESTRICTION. Notwithstanding any other
provisions of this Agreement, the Borrower will not, and will not
permit any of its Pledged Subsidiaries, to make, incur, assume or
suffer to exist any Investment in any Non Pledged Subsidiary except as
listed on Schedule 7.2.18. except that the Borrower may make
Investments in Non Pledged Subsidiaries financed solely with Non
Pledged Assets"
"Section 7.2.19 COLLATERAL DOCUMENTS. The Borrower will deliver such
amendments to the Security Agreement, Pledge
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Agreement, Subsidiary Pledge Agreement and Subsidiary Security
Agreement within fourteen days after the effective date of the
Second Amendment hereto as the Agent may deem reasonably
necessary to continue the security interests thereunder after
giving effect to the Merger and Conversion. The Borrower will
also deliver such amendments related to real estate collateral
documents within thirty days after the effective date of the
Second Amendment hereto as the Agent may deem reasonably
necessary to continue the security interests thereunder after
giving effect to the Merger and Conversion."
SECTION 2. CONSENT.
The Lenders hereby consent to the Merger and the Conversion,
notwithstanding any provisions of Sections 7.2.1 or 7.2.9 of the Credit
Agreement to the contrary. This Consent shall be limited to its terms and shall
constitute a waiver of any other rights that the Lenders may have under the Loan
Documents from time to time.
SECTION 3. CONDITIONS PRECEDENT. This Amendment shall become effective when
each of the conditions precedent set forth in this SECTION 2 shall have been
satisfied, and notice thereof shall have been given by the Agent to the Borrower
and the Lenders.
SECTION 3.1 RECEIPT OF DOCUMENTS. The Agent shall have received all of
the following documents duly executed, dated the date hereof or such other date
as shall be acceptable to the Agent, and in form and substance satisfactory to
the Agent:
(a) AMENDMENT. This Amendment, duly executed by the Borrower, the
Agent and the Lenders.
(b) ASSUMPTION. An assumption by Aristotle of the obligations of the
Borrower under the Credit Agreement and the Loan Documents in the form of
Exhibit A hereto.
(c) SECRETARY'S CERTIFICATE. A certificate of the secretary or an
assistant secretary of the Borrower, as to (i) resolutions of the Board of
Directors of the Borrower then in full force and effect authorizing the
execution, delivery and performance of this Amendment and each other
document described herein, and (ii) the incumbency and signatures of those
officers of the Borrower authorized to act with respect to this Amendment
and each other document described therein.
SECTION 3.2 COMPLIANCE WITH WARRANTIES, NO DEFAULT, ETC. Both before and
after giving effect to the effectiveness of this Amendment, the following
statements by the Borrower shall be true and correct (and the Borrower, by its
execution of this Amendment, hereby represents and warrants to the Agent and
each Lender that such statements are true and correct as at such times):
(a) the representations and warranties set forth in Article VI of the
Credit Agreement shall be true and correct with the same effect as if then
made (unless stated to
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relate solely to an earlier date, in which case such representations
and warranties shall be true and correct as of such earlier date); and
(b) no Default shall have then occurred and be continuing.
SECTION 3.3 MERGER. The Merger and the Conversion shall have been
completed and the Borrower shall have delivered a Certificate to the Agent to
that effect.
XXXXXX 0. REPRESENTATIONS AND WARRANTIES. To induce the Lenders and the
Agent to enter into this Amendment, the Borrower hereby represents and warrants
to the Agent and each Lender as follows:
SECTION 4.1 DUE AUTHORIZATION, NON-CONTRAVENTION, ETC. The execution,
delivery and performance by the Borrower of this Amendment and the completion of
the Merger and the Conversion are within the Borrower's corporate powers, have
been duly authorized by all necessary corporate action, and do not
(a) contravene the Borrower's Organic Documents;
(b) contravene any contractual restriction, law or governmental
regulation or court decree or order binding on or affecting the
Borrower; or
(c) result in, or require the creation or imposition of, any
Lien on any of the Borrower's properties.
SECTION 4.2 GOVERNMENT APPROVAL, REGULATION, ETC. All authorizations
and approvals and other actions by, and notices to and filings with, any
governmental authority or regulatory body or other Person required for the due
execution, delivery or performance by the Borrower of this Amendment or the
completion of the Merger and the Conversion shall have been made.
SECTION 4.3 VALIDITY, ETC. This Amendment constitutes the legal, valid
and binding obligation of the Borrower enforceable in accordance with its terms.
SECTION 4.4 PROFORMA FINANCIAL STATEMENTS. The proforma consolidating
financial statement of the Borrower and its Subsidiaries delivered to the Agent
dated as at December 31, 2001 as set forth in the Proxy Statement - Prospectus
of Aristotle dated May 15, 2002 fairly presents the financial condition of the
Borrower and its Subsidiaries giving effect to the Merger and Conversion.
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SECTION 5. MISCELLANEOUS.
SECTION 5.1 CONTINUING EFFECTIVENESS, ETC. This Amendment shall be
deemed to be an amendment to the Credit Agreement, and the Credit Agreement, as
amended hereby, shall remain in full force and effect and is hereby ratified,
approved and confirmed in each and every respect. After the effectiveness of
this Amendment in accordance with its terms, all references to the Credit
Agreement in the Loan Documents or in any other document, instrument, agreement
or writing shall be deemed to refer to the Credit Agreement as amended hereby.
SECTION 5.2 PAYMENT OF COSTS AND EXPENSES. The Borrower agrees to pay
on demand all expenses of the Agent (including the fees and out-of-pocket
expenses of counsel to the Agent) in connection with the negotiation,
preparation, execution and delivery of this Amendment.
SECTION 5.3 SEVERABILITY. Any provision of this Amendment which is
prohibited or unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Amendment
or affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 5.4 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 5.5 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.
SECTION 5.6 GOVERNING LAW. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS.
SECTION 5.7 SUCCESSORS AND ASSIGNS. This Amendment shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns.
13
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
NASCO INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------
Title: Vice President
BANK OF AMERICA, N.A.
By: /s/ Xxxx Xxxxxxxx
-----------------
Title: Vice President
BANK OF AMERICA, N.A., as Agent
By: /s/ Xxxxx Xxxxxxxx
------------------
Title: Vice President
BANK ONE, WISCONSIN
By Xxxx X. Xxxxx
-------------------------------
Title: First Vice President
---------------------------
S-1
Exhibit A
Assumption Agreement
_____________, 2002
TO: The Agent and the Lenders that
are parties to the Credit Agreement
referred to below
Please refer to the Amended and Restated Credit Agreement (364 Days) dated
as of May 29, 2001 (as amended or otherwise modified on or prior to the date
hereof, the "Credit Agreement") among NASCO International, Inc., as Borrower
(the "Borrower"), the commercial lending institutions party thereto and Bank of
America, N.A., as Administrative Agent (the "Agent"). This Assumption Agreement
is delivered pursuant to Section 3.1 of the Second Amendment to the Credit
Agreement.
The undersigned, The Aristotle Corporation, hereby (a) assumes all rights
and obligations of the Borrower under the Credit Agreement and the other Loan
Documents (as defined in the Credit Agreement), (b) acknowledges that it has
received a copy of the Credit Agreement and each of the other Loan Documents as
in effect on the date hereof and (c) acknowledges that it shall be bound by the
provisions of the Credit Agreement and the other Loan Documents (to the extent
the Borrower was party thereto) as if it were an original signatory thereto and
that all references to the "Borrower" in the Credit Agreement and each other
Loan Document shall hereafter be deemed to be references to The Aristotle
Corporation.
This Assumption Agreement shall be governed by, and construed in accordance
with, the laws of the State of Illinois applicable to contracts made and to be
performed entirely within such State.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this
Assumption Agreement as of the date and year first written above.
THE ARISTOTLE CORPORATION
By:______________________________
Name Printed:______________________
Title:_____________________________
A-1
