SECOND AMENDMENT TO AMENDED AND RESTATED
REVOLVING LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO AMENDED AND RESTATED REVOLVING LOAN AND SECURITY
AGREEMENT (together with all appendices, exhibits, schedules and attachments
hereto, collectively this "AMENDMENT") is made and entered into as of December
8, 1997, by and between THE ▇▇▇▇▇ ORGANIZATION, INC., a Delaware corporation
and TRO LEARNING (CANADA), INC., a corporation organized under the laws of
Canada (collectively, the "BORROWER") and SANWA BUSINESS CREDIT CORPORATION,
a Delaware corporation with its principal place of business at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("LENDER").
RECITALS
WHEREAS, Borrower and Lender entered into that certain Amended and
Restated Revolving Loan and Security Agreement dated as of March 5, 1997 by
and between Borrower and Lenders, as amended by that certain First Amendment
to Amended and Restated Revolving Loan and Security Agreement dated as of
March 18, 1997 (as so amended the "LOAN AGREEMENT") together with documents
ancillary thereto, including, without limitation that certain Amended and
Restated Guaranty of Payment and Performance dated as of March 5, 1997 made
by TRO Learning, Inc. ("GUARANTOR") in favor of Lender;
WHEREAS, there now exists Events of Default under the Loan Agreement due
to Borrower's failure to comply with the financial covenants set forth in
Sections 10.1(A) and (B) therein as of the last day of Borrower's 1997 fiscal
fourth (4th) quarter (the "COVENANT DEFAULTS"); and
WHEREAS, Borrower has requested that Lender waive the Covenant Defaults
and further amend the Loan Agreement as provided herein and Guarantor has
consented to such amendment.;
NOW THEREFORE, for and in consideration of the premises, the mutual
covenants hereinafter set forth and other good and valuable consideration,
the receipt and sufficiency of which the parties hereby acknowledge, the
parties hereby agree as follows:
ARTICLE
1.
RECITALS AND DEFINITIONS
1.1 Borrower represents and warrants that the foregoing recitals are
true and correct and constitute an integral part of this Amendment and
Borrower and Lender hereby agree that all of the recitals of this Amendment
are hereby incorporated herein and made a part hereof.
1.2 Unless otherwise defined herein or the context otherwise requires,
all capitalized terms used herein shall have the same meanings as ascribed to
them in the Loan Agreement.
ARTICLE
2.
WAIVER OF DEFAULTS
Subject to the compliance by Borrower with the terms contained herein,
Lender hereby unconditionally waives each of the Covenant Defaults and all of
Lender's remedies that would have been available to Lender had it not waived
the Covenant Defaults. Lender's waiver of the Covenant Defaults shall in no
way be deemed a waiver of forebearance of any other default, whether now
existing or hereafter arising or any other Event of Default under the Loan
Agreement or any related document or agreement executed in connection
therewith (including, without limitation, future breaches by the Borrower of
the operating profit covenant set forth in Section 10.1(B) of the Loan
Agreement).
ARTICLE
3.
AMENDMENT OF THE LOAN AGREEMENT
3.1. Borrower and Lender agree that, as of the date hereof and for so
long as any Liabilities remain outstanding, Borrower may no longer elect to
use the LIBOR Rate with respect to any Revolving Loans and, as such, the
Designated Rate for all Revolving Loans shall be the Base Rate. Accordingly,
all provisions in the Loan Agreement permitting Borrower's election of a
LIBOR Rate are hereby stricken. All other Loan Documents hereby are modified
accordingly.
3.2. Section 1.24 of the Loan Agreement hereby is deleted and the
following substituted therefor:
1.24 "DESIGNATED RATE" SHALL MEAN, WITH RESPECT TO (i) REVOLVING
LOANS NOT CONSTITUTING ADVANCES MADE PURSUANT TO THE OVER ADVANCE FACILITY
OR SUPPLEMENTAL OVER ADVANCES, THE BASE RATE: (ii) REVOLVING LOANS
CONSTITUTING ADVANCES MADE PURSUANT TO THE OVER ADVANCE FACILITY, THE
FLUCTUATING RATE OF INTEREST EQUAL TO THE PRIME RATE PLUS TWO PERCENT (2%);
(iii) REVOLVING LOANS CONSTITUTING THE SUPPLEMENTAL OVER ADVANCES, A FIXED
RATE OF INTEREST EQUAL TO FIFTEEN PERCENT (15%) PER ANNUM; AND (iv) THE
TERM LOAN, THE TERM LOAN RATE.
3.3. The following subsection shall be added as new subsection 2.2(C)
to the Loan Agreement:
(C) SUBJECT TO THE PROVISIONS OF SECTION 2.2(A) AND IN ADDITION TO
THE OVER ADVANCE FACILITY, LENDER SHALL MAKE AVAILABLE TO BORROWER A
SUPPLEMENTAL OVER
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ADVANCE FACILITY (THE "SUPPLEMENTAL OVER ADVANCE FACILITY," EACH
SUPPLEMENTAL OVER ADVANCE BEING A "SUPPLEMENTAL OVER ADVANCE") AS FOLLOWS:
-----------------------------------------------
AGGREGATE
MONTH OVER ADVANCE AVAILABLE
-----------------------------------------------
DECEMBER, 1997 $1,000,000
-----------------------------------------------
JANUARY, 1998 $1,500,000
-----------------------------------------------
FEBRUARY, 1998 $2,500,000
-----------------------------------------------
MARCH, 1998 $3,500,000
-----------------------------------------------
APRIL, 1998 $3,500,000
-----------------------------------------------
MAY, 1998 $1,500,000
-----------------------------------------------
JUNE, 1998 $2,000,000
-----------------------------------------------
JULY, 1998 $2,000,000
-----------------------------------------------
AUGUST, 1998 $1,000,000
-----------------------------------------------
BORROWER AGREES THAT THE AGGREGATE AMOUNT OF SUPPLEMENTAL OVER
ADVANCES MADE BY LENDER SHALL NEVER BE GREATER THAN THE DOLLAR AMOUNT SET
FORTH IN THE ABOVE TABLE DURING EACH RESPECTIVE MONTH. THERE SHALL OCCUR
AN IMMEDIATE EVENT OF DEFAULT IN THE EVENT THAT THE AGGREGATE AMOUNT OF
SUPPLEMENTAL OVER ADVANCES EVER EXCEEDS THE RESPECTIVE DOLLAR AMOUNT SET
FORTH IN THE ABOVE TABLE. IN NO EVENT SHALL THE AGGREGATE AMOUNT OF
SUPPLEMENTAL OVER ADVANCES EVER EXCEED $3,500,000.
(D) ALL ADVANCES MADE PURSUANT TO THE OVER ADVANCE FACILITY AND/OR
THE SUPPLEMENTAL OVER ADVANCE FACILITY SHALL CONSTITUTE REVOLVING LOANS
HEREUNDER.
3.3 Subsection 2.5(A)(i)(a) is hereby deleted in its entirety and the
following is substituted therefor:
(i) (a) SO LONG AS NO EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING, BORROWER SHALL PAY TO LENDER INTEREST ON ALL REVOLVING LOANS AT
THE APPLICABLE DESIGNATED RATE BASED ON THE OUTSTANDING PRINCIPAL BALANCE
OF THE REVOLVING LOANS; PROVIDED, HOWEVER, THAT UPON THE OCCURRENCE AND
DURING THE CONTINUATION OF AN EVENT OF DEFAULT, LENDER MAY, AT ITS OPTION,
RAISE THE INTEREST RATE CHARGES ON THE LIABILITIES TO THE DEFAULT RATE
WITH RESPECT TO THE LIABILITIES FROM THE DATE OF THE OCCURRENCE OF THE
DEFAULT UNTIL THE EARLIER OF (1) THE DEFAULT IS CURED OR WAIVED BY LENDER
OR (2) THE LIABILITIES ARE PAID IN FULL. NOTWITHSTANDING THE PROVISIONS OF
THE PREVIOUS SENTENCES, BORROWER SHALL RECEIVE A TEN (10) DAY PERIOD
(COMMENCING ON THE DATE OF THE OCCURRENCE OF SUCH APPLICATION OF THE
DEFAULT) TO CURE ANY NON-MONETARY DEFAULT BEFORE LENDER SHALL HAVE THE
RIGHT TO RAISE THE INTEREST RATE CHARGED ON THE LIABILITIES TO THE DEFAULT
RATE.
3.4 Section 2.7 of the Agreement is hereby deleted in its entirety and
the following is substituted therefor:
3
2.7 TERM OF AGREEMENT. THIS AGREEMENT SHALL BE IN EFFECT FROM
THE ORIGINATION DATE, THROUGH AND INCLUDING AUGUST 31, 1998 (THE "TERM"),
SUBJECT TO EARLIER TERMINATION BY LENDER UPON THE OCCURRENCE OF A DEFAULT
AS PROVIDED IN SECTION 11.1. UPON THE EFFECTIVE DATE OF TERMINATION, ALL
OF THE LIABILITIES SHALL BECOME IMMEDIATELY DUE AND PAYABLE WITHOUT
PRESENTMENT, NOTICE OR DEMAND, EXCEPT AS OTHERWISE PROVIDED HEREIN.
NOTWITHSTANDING ANY TERMINATION, UNTIL ALL OF THE LIABILITIES SHALL HAVE
BEEN FULLY PAID AND SATISFIED, LENDER SHALL BE ENTITLED TO RETAIN ITS
SECURITY INTEREST IN THE COLLATERAL, BORROWER SHALL CONTINUE TO REMIT
COLLECTIONS OF ACCOUNTS AND PROCEEDS OF COLLATERAL AS PROVIDED IN THIS
AGREEMENT, AND LENDER SHALL RETAIN ALL OF ITS RIGHTS AND REMEDIES UNDER
THIS AGREEMENT.
3.5 Subsections 10.1(A) and (B) are hereby deleted in their entirety
and the following are substituted therefor:
(A) RESERVED
(B) BORROWER SHALL MAINTAIN OPERATING PROFIT, MEASURED QUARTERLY
ON THE LAST DAY OF EACH FISCAL QUARTER OF BORROWER, AS FOLLOWS:
------------------------------------------------
------------------------------------------------
FIRST QUARTER: 1998 ($2,900,000)
------------------------------------------------
SECOND QUARTER: 1998 ($450,000)
------------------------------------------------
THIRD QUARTER: 1998 $2,550,000
------------------------------------------------
FOURTH QUARTER: 1998 $4,850,000
------------------------------------------------
------------------------------------------------
ARTICLE
4.
FEES
4.1. FACILITY FEE. Borrower shall pay to Lender a facility fee in the
amount of One Hundred Five Thousand and no/100 Dollars ($105,000.00), which
fee shall be deemed fully earned and nonrefundable at the execution by
Borrower of this Amendment and shall be paid concurrently with Borrower's
execution of this Amendment. Such fee shall compensate Lender for the
reasonable costs associated with the origination, structuring, processing,
approving and closing of the Supplemental Over Advance Facility and the
transactions contemplated by this Amendment, including, but not limited to,
administrative, out-of-pocket, general overhead and lost opportunity costs,
but not including any expenses for which Borrower has agreed to
4
reimburse Agent pursuant to any other provisions of this Amendment or any
other related agreement or document, such as, by way of example, reasonable
legal fees and expenses.
4.2. AMENDMENT FEE. Borrower shall pay to Lender an amendment fee in
the amount of Fifty Thousand and no/100 Dollars ($50,000.00), which fee shall
be deemed fully earned and nonrefundable at the execution by Borrower of this
Amendment and shall be paid concurrently therewith. Such fee shall compensate
Lender for the reasonable costs associated with this Amendment and
documentation of the Supplemental Over Advance Facility. Such fee shall be
separate and distinct from the facility fee identified in Section 4.1 above.
4.3. SUCCESS FEES. Upon the occurrence of a "Sale Event" (defined
herein), Borrower shall pay to Lender a sales success fee (a "SALES SUCCESS
FEE") in an amount equal to the greater of (i) Two Hundred Thousand and
no/100 Dollars ($200,000) and (ii) the product of (x) 100,000 MULTIPLIED BY
(y) the excess, if any, of the "Market Price" (defined herein) of a share of
Guarantor's common stock as of the date of any Sale Event over the Market
Price of a share of common stock of Guarantor as of the date of this
Amendment. For purposes of this Section, the term "Market Price" for any day
shall mean the last sale price quoted in the NASDAQ system on such day the
term "Sale Event" shall mean: (A) the closing of any sale of securities of
Guarantor to a person if, after such sale, such person, other than the
persons who were Shareholders of Guarantor immediately prior to the
effectiveness of such transaction, would own or control securities which
possess in the aggregate the ordinary voting power to elect a majority of the
directors of Guarantor; or (B) the effectiveness of a merger, consolidation
or similar transaction involving Guarantor if, after such transaction, a
person in the aggregate, other than the persons who were shareholders of
Guarantor immediately prior to the effectiveness of such transaction, would
own or control securities which possess in the aggregate the ordinary voting
power to elect a majority of the surviving entity's directors; or (C) the
sale of all or substantially all of the assets of Guarantor to another entity
or person. Borrower shall pay to Lender a non-sales success fee (a "NON-SALES
SUCCESS FEE") in an amount equal to Two Hundred Thousand and No/100 Dollars
($200,000) in the event that a Sales Event has not occurred prior to the
earlier of (a) August 31, 1998, or (b) the date on which Lender accelerates
the Liabilities pursuant to Section 11.2 of the Loan Agreement. Each of the
Sales Success Fee and the Non-sales Success Fee shall be a Liability secured
by the Collateral and shall be payable within three days of its determination
and shall be separate and distinct from the fees identified in Sections 4.1
and 4.2 above.
ARTICLE
5.
REPRESENTATIONS AND WARRANTIES
5.1. Borrower hereby makes the following representations and
warranties to Lender, which representations and warranties shall constitute
the continuing covenants of Borrower and shall remain true and correct until
all of Borrower's liabilities are paid and performed in full:
5
a. The representations and warranties of Borrower contained in the
Loan Agreement are true and correct on and as of the date hereof as though
made on and as of such date:
b. Except for the Covenant Defaults, no Event of Default or
event which, but for the lapse of time or the giving of notice, or both,
would constitute an Event of Default under the Loan Agreement has occurred
and is continuing or would result from the execution and delivery of this
Amendment;
c. Borrower is in full compliance with all of the terms,
conditions and all provisions of the Loan Agreement and the other agreements;
d. This Amendment and all other agreements required hereunder to
be executed by Borrower and delivered to Lender, have been duly authorized,
executed and delivered on Borrower's behalf pursuant to all requisite
corporate authority and this Amendment and each of the other agreements
required hereunder to be executed and delivered by Borrower to Lender
constitute the legal, valid and binding obligations of Borrower enforceable
in accordance with their terms, except as enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to creditors' rights; and
e. Borrower hereby acknowledges and agrees that Borrower has no
defense, offset or counterclaim to the payment of said principal, interest,
fees or other liabilities and hereby waives and relinquishes any such
defense, offset or counterclaim and Borrower hereby releases Lender and its
respective officers, directors, agents, affiliates, successors and assigns
from any claim, demand or cause of action, known or unknown, contingent or
liquidated, which may exist or hereafter be known to exist relating to any
matter prior to the date hereof.
ARTICLE
6.
RATIFICATION
Except as expressly amended hereby, the Loan Agreement and all other
agreements executed in connection therewith shall remain in full force and
effect. The Loan Agreement, as amended hereby, and all rights and powers
created thereby and thereunder or under such other agreements, are in all
respects ratified and confirmed. From and after the date hereof, the Loan
Agreement shall be deemed amended and modified as herein provided but, except
as so amended and modified, the Loan Agreement shall continue in full force
and effect and the Loan Agreement and this Amendment shall be read, taken and
construed as one and the same instrument. On and after the date hereof, the
term "Agreement" as used in the Loan Agreement and all other references to
the Loan Agreement therein, in any other instrument, document or writing
executed by Borrower or any guarantor or furnished to Lender by Borrower or
any guarantor in connection therewith or herewith shall mean the Loan Agreement
as amended by this Amendment.
6
ARTICLE
7.
MISCELLANEOUS
7.1 This Amendment may be signed in any number of counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
7.2 Except as otherwise specified herein, this Amendment embodies the
entire agreement and understanding between Lender and Borrower with respect
to the subject matter hereof and supersedes all prior agreements, consents
and understandings relating to such subject matter.
7.3 The headings in this Amendment have been inserted for convenience
only and shall be given no substantive meaning or significance in construing
the terms of this Amendment.
7.4 This Amendment shall inure to the benefit of Lender and its
successors and assigns and shall be binding upon and inure to the successors
and assigns of Borrower, except that Borrower may not assign any of its
rights in and to this Amendment.
IN WITNESS WHEREOF, Borrower and Lender have caused this Second Amendment
to Amended and Restated Revolving Loan and Security Agreement to be executed
and delivered as of the day and year written above.
THE ▇▇▇▇▇ ORGANIZATION, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Title: Senior Vice President
----------------------------------
TRO LEARNING CANADA, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Title: Senior Vice President
----------------------------------
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SANWA BUSINESS CREDIT CORPORATION
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
REAFFIRMATION OF AMENDED AND RESTATED
GUARANTY OF PAYMENT AND PERFORMANCE
THE UNDERSIGNED PARTY, as guarantor ("GUARANTOR") of the above Borrowers
pursuant to its Amended and Restated Guaranty of Payment and Performance (the
"GUARANTY") identified below, acknowledges the terms and conditions set forth
in this Second Amendment to Amended and Restated Revolving Loan and Security
Agreement and ratifies and reaffirms its guaranty obligations as set forth in
the Guaranty, as reaffirmed. To further induce Lender to enter into this
Amendment, Guarantor hereby represents and warrants to Lender that it
possesses no claims, defenses, offsets, recoupment or counterclaims of any
kind or nature against or with respect to the enforcement of the Loan
Agreement or any other Ancillary Agreement, each as amended by this
Amendment, or to the Guaranty (collectively, the "CLAIMS"), nor does
Guarantor have any knowledge of any facts that would or might give rise to
any Claims. If facts now exist which would or could give rise to any Claim
against or with respect to the enforcement of the Loan Agreement, any
Ancillary Agreement, or the Guaranty, Guarantor hereby unconditionally,
irrevocably and unequivocally waives and fully releases any and all such
Claims as if such Claims where the subject of a lawsuit, adjudicated to final
judgement from which no appeal could be taken and therein dismissed with
prejudice.
DATED: As of December 8, 1997
TRO LEARNING, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Its: Senior Vice President
-----------------------------------
(Amended and Restated Guaranty of Payment
and Performance dated as of March 5, 1997)
8
THE ▇▇▇▇▇ ORGANIZATION, INC.
AND
TRO LEARNING (CANADA), INC.
SUBSTITUTED PROMISSORY NOTE (TERM LOAN)
$3,000,000.00 December 8, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
FOR VALUE RECEIVED, THE ▇▇▇▇▇ ORGANIZATION, INC., a corporation organized
under the laws of the State of Delaware, and TRO LEARNING (CANADA), INC., a
corporation organized under the laws of Canada (collectively, "BORROWERS"),
promise to pay to the order of SANWA BUSINESS CREDIT CORPORATION, its
successors, designees or assigns ("LENDER"), at its offices at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, or at such other place or places as Lender
may from time to time designate in writing, the principal sum of Three
Million and no/100 Dollars ($3,000,000.00), payable as follows: payments of
interest only for six (6) months, commencing on the first day of June, 1997
and continuing on the first day of each month thereafter through and
including November 1, 1997, followed by consecutive monthly principal
payments of $50,000 each plus accrued and unpaid interest commencing on the
first day of December, 1997 and continuing on the first day of each month
thereafter and ending on the Maturity Date (as hereinafter defined). The
principal balance hereunder shall bear interest at the fixed rate of fifteen
percent (15%) per annum. The entire principal balance of this Note then
outstanding, plus all accrued and unpaid interest thereon, shall be due and
payable on August 31, 1998 (the "MATURITY DATE"), or such earlier date on
which said amount shall be due and payable on account of acceleration by
Lender. Notwithstanding the foregoing amortization schedule, all outstanding
principal, interest costs and expenses due hereunder shall be paid to Lender
upon termination of the Loan Agreement referred to below.
This Note was executed and delivered pursuant to that certain Second
Amendment to Amended And Restated Revolving Loan and Security Agreement dated
as the date hereof amending that certain Amended and Restated Loan and
Security Agreement dated as of March 18, 1997 between Borrower and Lender (as
amended, restated supplemented or modified from time to time, the "LOAN
AGREEMENT"), to which reference is hereby made for a statement of the terms
and conditions under which the loans evidenced hereby are to be repaid and
for a statement of remedies upon the occurrence of an "EVENT OF DEFAULT" as
defined therein. The Loan Agreement is incorporated herein by reference in
its entirety. All terms which are capitalized and used herein (which are not
otherwise specifically defined herein) and which are defined in the Loan
Agreement shall be used in this Note as defined in the Loan Agreement.
Borrowers further promise to pay to Lender interest on the outstanding
unpaid principal amount hereof, as provided in the Loan Agreement, from the
date hereof until payment in full hereof as determined in accordance with the
Loan Agreement; provided, however, that, upon the occurrence and during the
continuance of an Event of Default, Borrowers promise to pay to Lender
interest on the unpaid principal amount hereof at to the Default Rate
applicable to the Liabilities evidenced by this Note as determined in
accordance with the Loan Agreement. Interest shall be computed on the basis
of a 360-day year for the actual number of days elapsed.
In no contingency or event whatsoever shall the rate of interest paid by
Borrowers under this Note exceed the maximum amount permissible under any law
which a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines that Lender has
received interest hereunder in excess of the maximum amount permitted by such
law, (i) Lender shall apply such excess to any unpaid principal owed by
Borrowers to Lender or, if the amount of such excess exceeds the unpaid
balance of such principal, Lender shall promptly refund such excess interest
to Borrowers and (ii) the provisions hereof shall be deemed amended to
provide for such permissible rate. All sums paid, or agreed to be paid, by
Borrowers which are, or hereafter may be construed to be, compensation for
the use, forbearance or detention of money shall, to the extent permitted by
applicable law, be amortized, prorated, spread and allocated throughout the
full term of all such indebtedness until the indebtedness is paid in full.
This Note is secured by (i) the Loan Agreement and certain Ancillary
Agreements and Security Documents (as such terms are defined in the Loan
Agreement), and (ii) all security interests, liens and encumbrances
heretofore, now or hereafter granted to Lender by Borrowers.
Except as otherwise provided in the Loan Agreement, Borrowers waive
presentment, demand and protest, notice of protest, notice of presentment and
all other notices and demands in connection with the enforcement of Lender's
rights hereunder, except as specifically provided and called for by this Note
or the Loan Agreement, and hereby consents to, and waives notice of the
release, addition, or substitution, with or without consideration, of any
collateral or of any person liable for payment of this Note. Any failure of
Lender to exercise any right available hereunder or otherwise shall not be
construed as a waiver of the right to exercise the same or as a waiver of any
other right at any other time.
Whenever in this Note reference is made to Lender or Borrowers, such
reference shall be deemed to include, as applicable, a reference to their
respective successors and assigns and, in the case of Lender, any
Participants to which it has sold or assigned its commitment to make the Term
Loan pursuant hereto. The provisions of this Note shall be binding upon and
shall inure to the benefit of such successors, assigns and Participants.
Borrowers' successors and assigns shall include without limitation, a
receiver, trustee or debtor in possession of or for Borrowers.
The loan evidenced hereby has been made, and this Note has been
delivered, at Chicago, Illinois and shall be governed by and construed in
accordance with the internal laws (as opposed to the conflicts of laws
provisions) of the State of Illinois. BORROWERS HEREBY (i) WAIVE ANY RIGHT TO
A TRIAL BY JURY IN ANY ACTION TO ENFORCE OR DEFEND ANY MATTER ARISING FROM OR
RELATED TO THIS NOTE, THE LOAN AGREEMENT, THE ANCILLARY AGREEMENTS OR THE
SECURITY DOCUMENTS; (ii) IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY STATE
OR FEDERAL COURT LOCATED IN ▇▇▇▇ COUNTY, ILLINOIS, OVER ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY MATTER ARISING FROM OR RELATING TO THIS
NOTE, THE LOAN AGREEMENT, THE ANCILLARY AGREEMENTS OR THE SECURITY DOCUMENTS;
(iii) IRREVOCABLY WAIVE, TO THE FULLEST EXTENT BORROWERS MAY EFFECTIVELY DO
SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF ANY SUCH ACTION
2
OR PROCEEDING; (iv) AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION
BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW; AND (v) AGREE
NOT TO INSTITUTE ANY LEGAL ACTION OR PROCEEDING AGAINST LENDER OR ANY OF
LENDER'S DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR PROPERTY, CONCERNING ANY
MATTER ARISING OUT OF OR RELATING TO THIS NOTE, THE LOAN AGREEMENT, THE
ANCILLARY AGREEMENTS OR THE SECURITY DOCUMENTS IN ANY COURT OTHER THAN ONE
LOCATED IN ▇▇▇▇ COUNTY, ILLINOIS. NOTHING IN THIS PARAGRAPH SHALL AFFECT OR
IMPAIR LENDER'S RIGHT TO SERVE LEGAL PROCESS IN ANY MANNER PERMITTED BY LAW
OR LENDER'S RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST BORROWERS OR
THEIR PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.
Wherever possible each provision of this Note shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Note shall be prohibited by or invalid under such law, such
provision shall be ineffective to the extent of such prohibition or provision
invalidity, without invalidating the remainder of or the remaining such
provisions of this Note.
This Note amends and restates in its entirety and shall be substituted
for that certain Promissory Note dated as of May 9, 1997 in the original
principal amount of $3,000,000.00 made by Borrower to the order of Lender.
This Note represents a continuation of obligations evidenced by said note and
shall not be deemed to be a novation of the indebtedness evidenced thereby
for a payment of such indebtedness and the making of a new loan by Lender.
THE ▇▇▇▇▇ ORGANIZATION, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------
Title: Senior Vice President
---------------------
TRO LEARNING (CANADA), INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------
Title: Senior Vice President
---------------------
3
