EXHIBIT 10.12
AMENDMENT XX. 0 XXX XXXXXXX XX. 0
TO REVOLVING CREDIT AGREEMENT
AMENDMENT NO. 2 AND CONSENT NO. 2 (this "Amendment"), dated as of April
,2004, to the REVOLVING CREDIT AGREEMENT, dated as of August 20, 2003, by and
among HAIGHTS CROSS OPERATING COMPANY (the "Borrower"), the several lenders from
time to time parties thereto (the "Lenders"), BEAR XXXXXXX CORPORATE LENDING,
INC., as Syndication Agent (in such capacity, the "Syndication Agent"), and THE
BANK OF NEW YORK ("BNY"), as administrative agent for the Lenders (in such
capacity, the "Administrative Agent") as amended by Amendment No. 1 and Consent
No. 1, dated as of January 26, 2004 (and, as further amended from time to time,
the "Credit Agreement").
RECITALS
I. Unless defined herein, all capitalized terms used herein shall
have the meanings ascribed to them in the Credit Agreement.
II. The Borrower has advised the Administrative Agent and the
Lenders that the Borrower, Holdings, and Triumph Learning, LLC, a wholly owned
subsidiary of the Borrower (the "Buyer"), have entered into an Asset Purchase
Agreement (the "Buckle Down Purchase Agreement") pursuant to which the Buyer
will acquire (the "Buckle Down Acquisition") substantially all of the assets of
Buckle Down Publishing Company (the "Seller") for a purchase price consisting of
$24,000,000 in cash, 3,500 shares of Series C Preferred Stock of Holdings with a
liquidation preference of $1,000 per share and other consideration
(collectively, the "Buckle Down Consideration").
III. The amount of Buckle Down Consideration exceeds the
Consideration Cap permitted under the definition of "Permitted Acquisition" for
any single acquisition and for all acquisitions in any twelve month period and,
accordingly, neither the Borrower nor the Buyer may consummate the Buckle Down
Acquisition unless the Required Lenders consent thereto.
IV. The Borrower has requested that the Administrative Agent and
the Required Lenders (a) consent to the Buckle Down Acquisition and (b) amend
the definition of "Permitted Acquisitions" to permit certain other acquisitions
without the consent of the Required Lenders.
V. The Administrative Agent and the Required Lenders have agreed
to the Borrower's request on the terms and subject to the conditions set forth
in this Amendment.
Accordingly, in consideration of the covenants, conditions and
agreements hereinafter set forth, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
1. CONSENT.
(a) The Required Lenders hereby consent to the Buckle
Down Acquisition on the terms set forth in the Buckle Down Purchase Agreement.
(b) The Borrower acknowledges and agrees that as a result
of the consent by the Required Lenders to the Buckle Down Acquisition, neither
the Borrower nor any of its Subsidiaries may make any other acquisitions or
investments under the definition of the Permitted Acquisitions or otherwise
under the Credit Agreement in the twelve month period following the consummation
of the Buckle Down Acquisition, except (1) with the prior written consent of the
Required Lenders or (2) to the extent permitted under clause (c) of the
definition of "Permitted Acquisitions".
2. AMENDMENTS.
(a) Section 1 of the Credit Agreement is hereby amended
by adding in appropriate alphabetical order, the following defined terms:
"Acquisition EBITDA": for any period, Acquisition Net
Income for such period plus, without duplication and to the
extent reflected as a charge in the statement of such
Acquisition Net Income for such period, the sum of (a) income
tax expense or provision for income taxes, (b) interest
expense, amortization or write-off of financing costs, debt
discount and debt issuance costs and commissions, and
discounts and other fees and charges associated with
Indebtedness, (c) depreciation and amortization expense, (d)
amortization of intangibles (including, but not limited to,
goodwill and product development expenses) and organization
costs, and (e) any extraordinary charges or losses determined
in accordance with GAAP.
"Acquisition Net Income": for any period, the net
income (or loss) of the assets or Person to be acquired in an
Acquisition.
(b) Clause (b) of the definition of "Permitted
Acquisitions" is hereby amended by adding the following proviso at the end of
such clause:
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"and (iv) a statement of the Acquisition EBITDA for
the assets or Person to be acquired in an Acquisition for the
preceding twelve month period together with reasonably
detailed supporting calculations thereof;"
(c) Clause (c) of the definition of "Permitted
Acquisitions" is hereby amended by adding the following proviso at the end of
such clause:
"and provided further that, (A) if the consideration
for an Acquisition is comprised solely of the proceeds
received by Holdco from the issuance of the Initial Notes
which have been or will be contributed by Holdco to the
Borrower as equity and (B) if the assets or Person which are
the subject of the Acquisition have had a positive Acquisition
EBITDA for the immediately preceding twelve month period, the
Borrower or its Subsidiaries may make the applicable
Acquisition without regard to the Consideration Cap."
3. CONDITIONS TO EFFECTIVENESS.
(a) This Amendment shall be effective upon the
satisfaction of the following conditions:
(i) the Administrative Agent shall have received
this Amendment executed by a duly authorized signatories of the
Borrower and each of the Guarantors and by each of the Required
Lenders;
(ii) the Administrative Agent shall have received
a fully executed copy of the Buckle Down Purchase Agreement and the
documents delivered pursuant thereto, each certified to be true and
complete by an authorized signatory of the Borrower;
(iii) the Administrative Agent shall have
received, with respect to the Property to be acquired pursuant to the
Buckle Down Acquisition, such amendments, agreements and other items as
may be required under Section 6.10 of the Credit Agreement, and
(iv) the Administrative Agent shall have received
a certificate from an authorized signatory of the Borrower (1)
demonstrating that, with the exception of the amount of Buckle Down
Consideration, the Buckle Down Acquisition complies with the
requirements of the definition of Permitted Acquisition in the Credit
Agreement, (2) setting forth, with reasonably detailed supporting
calculations, the amount of each component of, and the aggregate amount
of, the Buckle Down Consideration, (3) certifying that the preferred
stock which Holdings is required to issue under the Buckle Down
Purchase Agreement
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is not "Disqualified Stock", and (4) demonstrating, to the satisfaction
of the Administrative Agent, that the Property to be acquired by the
Buyer pursuant to the Buckle Down Purchase Agreement will be acquired
free and clear of all Liens.
(b) The date on which all of the conditions set forth in
Section 3(a) are satisfied is referred to as the "Amendment No. 2 Effective
Date."
4. MISCELLANEOUS
(a) The Borrower hereby:
(i) acknowledges and reaffirms its obligations
under, and confirms the validity and enforceability of, the Credit
Agreement and the other Loan Documents;
(ii) represents and warrants that there exists no
Default or Event of Default and no Default or Event of Default will
result from the consummation of the transactions described in this
Amendment; and
(iii) represents and warrants that the
representations and warranties contained in the Credit Agreement (other
than the representations and warranties made as of a specific date) are
true and correct in all material respects on and as of the date hereof.
(b) Each of the Guarantors, by signing this Amendment,
hereby:
(i) acknowledges and consents to the execution
of this Amendment; and
(ii) acknowledges and reaffirms its obligations
under, and confirms the validity and enforceability of, the Guarantee
and Collateral Agreement and the other Loan Documents to which it is a
party.
(c) This Amendment may be executed in any number of
counterparts and by facsimile, each of which shall be an original and all of
which shall constitute one agreement. It shall not be necessary in making proof
of this Amendment to produce or account for more than one counterpart signed by
the party to be charged.
(d) This Amendment is being delivered in and is intended
to be performed in the State of New York and shall be construed and enforceable
in accordance with, and be governed by, the internal laws of the State of New
York without regard to principles of conflict of laws.
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(e) The Borrower agrees to pay the reasonable fees and
expenses of the Administrative Agent's counsel in connection with this
Amendment.
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HAIGHTS CROSS AMENDMENT NO. 2
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
BORROWER:
HAIGHTS CROSS OPERATING COMPANY
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
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Title: EVP & CFO
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HAIGHTS CROSS AMENDMENT NO. 2
GUARANTORS:
HAIGHTS CROSS COMMUNICATIONS, INC.
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Name: Xxxx X. Xxxxxx
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Title: EVP & CFO
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SUNDANCE/NEWBRIDGE
EDUCATIONAL PUBLISHING, LLC
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Name: Xxxx X. Xxxxxx
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Title: VP
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TRIUMPH LEARNING, LLC
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Name: Xxxx X. Xxxxxx
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Title: VP
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RECORDED XXXXX, XXX
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Name: Xxxx X. Xxxxxx
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Title: VP
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OAKSTONE PUBLISHING, LLC
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Name: Xxxx X. Xxxxxx
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Title: VP
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XXXXXXX XXXXX XXXXXXXXX XX. 0
XXXXXXX XXXXX PUBLISHERS, LLC
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Name: Xxxx X. Xxxxxx
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Title: VP
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THE CORIOLIS GROUP, LLC
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Name: Xxxx X. Xxxxxx
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Title: VP
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X X XXXXX LIMITED
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Name: Xxxx X. Xxxxxx
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Title: VP
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HAIGHTS CROSS AMENDMENT NO. 2
THE BANK OF NEW YORK,
Individually and as Administrative Agent
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Vice President
HAIGHTS CROSS AMENDMENT NO. 2
BEAR XXXXXXX CORPORATE LENDING, INC.,
Individually and as Syndication Agent
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
HAIGHTS CROSS AMENDMENT NO. 2
CIT LENDING SERVICES CORPORATION
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: Vice President
