EXHIBIT 10.1
[EXECUTION COPY]
WAIVER AGREEMENT
This WAIVER AGREEMENT, dated as of December 29, 2003 (this
"Agreement"), is made by and among WEEKLY READER CORPORATION, a Delaware
corporation ("WRC"), COMPASSLEARNING, INC., a Delaware corporation ("CLI" and,
together with WRC, the "Borrowers"), WRC MEDIA INC., a Delaware corporation
("Holdings"), the Lenders signatory hereto, CREDIT SUISSE FIRST BOSTON (acting
through its Cayman Islands branch), 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.
W I T N E S S E T H:
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WHEREAS, Holdings, 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 subsequently amended or otherwise modified, the "Credit
Agreement"); and
WHEREAS, the Borrowers have requested the waiver of certain
covenants under the Credit Agreement identified below and, subject to the
terms and conditions set forth herein, the Administrative Agent, the
Syndication Agent and the Lenders party hereto are willing to grant such
waiver during the Waiver Period (defined below), but only on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Defined Terms. Unless otherwise defined herein,
capitalized terms used herein have the meanings assigned in the Credit
Agreement and the following terms shall have the following meanings:
"Claim" is defined in Section 4.4 of this Agreement.
"Effective Date" is defined in Section 5.1 of this Agreement
"Event of Termination" is defined in Section 3.1 of this Agreement.
"Expiration Date" means March 31, 2004.
"Termination Date" means the date on which an Event of Termination
occurs.
"Waiver Fee" is defined in Section 4.1 of this Agreement.
"Waiver Period" means the period beginning on the Effective Date and
ending on the earlier to occur of (i) the Expiration Date or (ii) the
Termination Date.
ARTICLE II
WAIVER
Section 2.1. Waiver. Subject to the terms and conditions hereof, the
Administrative Agent, the Syndication Agent and the Required Lenders hereby
agree to waive, during the Waiver Period, the obligation of Holdings and the
Borrowers to comply with the covenants set forth in Section 7.2.4 of the
Credit Agreement. The Administrative Agent, the Syndication Agent and the
Required Lenders further agree that, until the end of the Waiver Period, the
representation set forth in Section 6.6 of the Credit Agreement shall not be
deemed to be untrue as a result of facts or circumstances which have been
disclosed to the Lenders in writing on or before the date hereof, which, for
purposes hereof, shall include any disclosure made by Holdings or the
Borrowers in any regular or special reports or notices filed by them with the
SEC (it being agreed that nothing herein shall create any implication as to
whether or not such representation would have been true at any such times
prior to the date hereof absent the agreement set forth in this sentence).
ARTICLE III
EVENTS OF TERMINATION
Section 3.1. Events of Termination. Upon the occurrence of any of
the following events (each an "Event of Termination"), then, and in any such
event, the provisions of Article II of this Agreement shall immediately and
automatically terminate and thereafter such Article and the waiver granted
therein shall have no further force or effect:
(a) Holdings or any Borrower shall default in the observance or
performance of any agreement or covenant contained in this Agreement;
(b) the occurrence of an Event of Default (after giving effect to
this Agreement);
(c) during the Waiver Period the Borrowers shall make any Credit
Extension Request which, after giving effect to (i) the making of the
Credit Extension requested thereby and (ii) any payments or prepayments
of Revolving Loans or Swing Line Loans made, or any decreases in Letter
of Credit Outstandings effected, in each case during the Waiver Period
(but prior to the date of such Credit Extension Request) and calculated
without duplication, would cause the sum of (x) the aggregate outstanding
principal amount of all Revolving Loans and Swing Line Loans, plus (y)
the aggregate amount of all Letter of Credit Outstandings, to exceed
$26,000,000; and
(d) the consummation of a restructuring and/or refinancing of Total
Debt pursuant to terms and provisions mutually acceptable to Holdings, the
Borrowers, the Administrative Agent, the Syndication Agent and the Required
Lenders.
ARTICLE IV
AGREEMENTS
Section 4.1. Waiver Fee. Holdings and the Borrowers agree to pay to
the Administrative Agent on the Effective Date, for the account of each Lender
that executes and delivers to the Administrative Agent a counterpart of this
Agreement on or prior to 5:00 p.m., New York City time, on December 29, 2003,
a fee (the "Waiver Fee") equal to 0.125% of each such Lender's Percentage of
the Total Exposure Amount as of the Effective Date.
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Section 4.2. Payment of Fees and Expenses. Each Loan Party hereby
agrees to pay or reimburse the Administrative Agent on demand for all
reasonable fees and out-of-pocket expenses incurred in connection with the
preparation and execution of this Agreement, including, without limitation,
the reasonable fees and disbursements of counsel to the Administrative Agent.
Section 4.3. LIBOR Borrowings. Any term or provision of the Credit
Agreement or any other Loan Document to the contrary notwithstanding
(including, without limitation, Sections 2.3 and 2.4 of the Credit Agreement),
(i) Borrowings of LIBO Rate Loans made during the Waiver Period may only have
Interest Periods of a duration which does not exceed the earlier of (x) one
month and (y) March 31, 2004, and (ii) any Loans which, pursuant to Section
2.4 of the Credit Agreement are either continued as or converted into LIBO
Rate Loans at any time during the Waiver Period may only have Interest Periods
of a duration which does not exceed the earlier of (x) one month and (y) March
31, 2004.
Section 4.4 Release. Holdings and the Borrowers hereby release,
waive and forever relinquish all claims, demands, obligations, liabilities and
causes of action of whatever kind or nature (a "Claim"), whether known or
unknown, which any of them have, may have, or might assert at any time in the
future against any of the Administrative Agent, the Syndication Agent, the
Lenders or any of their respective Affiliates, participants, officers,
directors, employees, agents, attorneys, accountants, consultants, successors
and assigns, directly or indirectly, in connection with any circumstance,
action, transaction, failure to act or occurrence of any sort or type which
occurred on or before the Effective Date in connection with or otherwise
relating to the Credit Agreement or any other Loan Document, including,
without limitation, any such Claim arising out of, based upon, or in any
manner connected with (i) the Credit Agreement, any other Loan Document and/or
the administration thereof or the Obligations created thereby; (ii) any
discussions, commitments, negotiations, conversations or communications with
respect to the refinancing, restructuring or collection of any Obligations
related to the Credit Agreement, any other Loan Document and/or the
administration thereof or the Obligations created thereby, or (iii) any matter
related to the foregoing.
ARTICLE V
CONDITIONS TO EFFECTIVENESS
Section 5.1 Effectiveness. This Agreement shall become effective as
of the date (the "Effective Date") when each of the following conditions has
been satisfied; provided that such date shall occur on or before December 31,
2003 or this Agreement shall be void and of no further force or effect:
(a) receipt by the Administrative Agent of counterparts of this
Agreement, duly executed and delivered by Holdings, each Borrower, the
Administrative Agent, the Required Lenders and Lenders holding at least 51% of
the Revolving Loan Commitments (before giving effect to this Agreement);
(b) receipt by the Administrative Agent of counterparts of a duly
executed Affirmation and Acknowledgment to this Amendment, substantially in
the form of Annex I hereto and dated the date hereof, duly executed and
delivered by each of the Obligors other than Holdings and the Borrowers; and
(c) receipt by the Administrative Agent of (x) the Waiver Fee,
pursuant to Section 4.1 above, and (y) all other unpaid fees and out-of-pocket
expenses incurred in connection herewith or with the Credit Agreement,
including, without limitation, the reasonable fees and disbursements of
counsel to each of the Administrative Agent and the Syndication Agent, whether
pursuant to Section 4.2 hereof, Section 3.3, 11.3 or 11.4 of the Credit
Agreement or otherwise, to the extent then invoiced.
All corporate and legal proceedings and instruments and agreements
relating to the transactions contemplated by this Agreement or in any other
document delivered in connection herewith
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shall be satisfactory in form and substance to the Administrative Agent and
the Syndication Agent and their counsel, and the Administrative Agent and the
Syndication 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 may reasonably request in connection therewith,
such documents and papers where appropriate to be certified by proper
corporate or governmental authorities. The documents referred to in this
Article V shall be delivered to the Administrative Agent no later than the
Effective Date. The certificates and opinions required to be delivered
pursuant to this Article V, if any, shall be dated the Effective Date.
ARTICLE VI
INTERPRETATION
Section 6.1. Continuing Effect of the Credit Agreement. Holdings and
each Borrower hereby acknowledges and agrees that, except as otherwise
expressly provided herein, the Credit Agreement and each other Loan Document
shall continue to be and shall remain unchanged and in full force and effect
in accordance with its terms.
Section 6.2. No Agreement. Except as otherwise expressly provided
herein, nothing contained in this Agreement shall be construed or interpreted
to be (or is intended as) a waiver of any Default or Event of Default or any
other rights, powers, privileges or remedies that the Administrative Agent,
the Syndication Agent or the Lenders have or may have under the Credit
Agreement or any other Loan Documents on account of such Default or Event of
Default or otherwise. Each of Holdings and each Borrower hereby acknowledges
and agrees that, at the end of the Waiver Period, the provisions of Article II
hereof shall be of no further force or effect and the Administrative Agent,
the Syndication Agent and the Lenders shall be free, in accordance with the
Credit Agreement and the other Loan Documents, to declare the Loans and all
other amounts outstanding under the Credit Agreement and the other Loan
Documents to be due and payable and to exercise and enforce, or to take steps
to exercise and enforce, all other rights, powers, privileges and remedies
available to them under the Credit Agreement or any other Loan Document on
account of any Default or Event of Default (including, without limitation,
non-compliance with the covenants of the Credit Agreement identified in
Article II of this Agreement) as if this Agreement had not been entered into
by the parties hereto.
ARTICLE VII
MISCELLANEOUS
Section 7.1. Representations and Warranties. Holdings and each
Borrower hereby represents and warrants as of the date hereof that, after
giving effect to this Agreement, (a) no Default or Event of Default has
occurred and is continuing and (b) all representations and warranties of
Holdings and the Borrowers contained in the Credit Agreement or any other Loan
Document are true and correct in all material respects with the same effect as
if made on and as of such date.
Section 7.2. Counterparts. This Agreement may be executed by the
parties hereto in any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
Section 7.3. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS
(WITHOUT GIVING EFFECT TO ITS CONFLICT OF LAWS PRINCIPLES).
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
date first above written.
BORROWERS
WEEKLY READER CORPORATION
By:
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Name:
Title:
COMPASSLEARNING, INC.
By:
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Name:
Title:
HOLDINGS
WRC MEDIA INC.
By:
-----------------------------------
Name:
Title:
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LENDERS
(Name of Lender)
By:
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Name:
Title:
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CREDIT SUISSE FIRST BOSTON, acting through
its Cayman Islands branch, as Syndication
Agent and as a Lender
By:
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Name:
Title:
By:
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Name:
Title:
8
BANK OF AMERICA, as Administrative Agent and
as a Lender
By:
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Name:
Title:
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