THIRD AMENDMENT TO AMENDED AND RESTATED
REVOLVING LOAN AND SECURITY AGREEMENT
THIS THIRD 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 April
16, 1998, 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 and by that certain Second Amendment to Amended and Restated
Revolving Loan and Security Agreement dated as of December 8, 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; and
WHEREAS, Borrower has requested that Lender increase the Supplemental Over
Advance Facility 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 and 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.
AMENDMENT OF THE LOAN AGREEMENT
2.1 Subsection 2.2(C) to the Loan Agreement is deleted in its entirety and
the following is substituted therefor:
(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 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 $4,500,000
MAY, 1998 $4,500,000
JUNE, 1998 $4,500,000
JULY, 1998 $4,500,000
AUGUST, 1998 $3,500,000
BORROWER AGREES THAT THE AGGREGATE AMOUNT OF SUPPLEMENTAL OVER
ADVANCES MADE BY LENDER SHALL NEVER BE GREATER THAT 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 $4,500,000.
ARTICLE
3.
FEES
3.1 FACILITY FEE. Borrower shall pay to Lender a facility fee in the
amount of Thirty Thousand and no/100 Dollars ($30,000.00), which fee shall be
deemed fully earned and nonrefundable at the execution by Borrower of this
Amendement 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, amending and closing
of the Supplemental Over Advance Facility and the transactions contemplated by
this Amendement, including, but not limited to, administrative, out-of-pocket,
general overhead and
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lost opportunity costs, but not including any expenses for which Borrower has
agreed to reimburse Lender 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.
ARTICLE
4.
REPRESENTATIONS AND WARRANTIES
4.1 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:
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 by known to exist relating to any matter prior to the date hereof.
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ARTICLE
5.
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.
ARTICLE
6.
MISCELLANEOUS
6.1 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.
6.2 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.
6.3 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.
6.4 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.
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IN WITNESS WHEREOF, Borrower and Lender have caused this Third 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: Chief Financial Officer
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TRO LEARNING CANADA, INC.
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Title: Chief Financial Officer
--------------------------------
SANWA BUSINESS CREDIT CORPORATION
By:/s/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: VICE PRES
--------------------------------
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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 Third 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, and 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 judgment from which no appeal could be taken and therein dismissed with
prejudice.
DATED: As of April 16, 1998
TRO LEARNING, INC.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Its: Chief Financial Officer
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(Amended and Restated Guaranty of
Payment and Performance dated as of
March 5, 1997)
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