FIRST AMENDMENT TO AMENDED AND RESTATED
REVOLVING LOAN AND SECURITY AGREEMENT
THIS FIRST 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 March
18, 1997, by and between THE ROACH 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 One South Wacker
Drive, Chicago, Illinois 60606 ("LENDER").
RECITALS
WHEREAS, Borrower and Lender entered into that certain Amended and
Restated Revolving Loan and Security Agreement dated as of March 5, 1997 (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, Guarantor has requested that Lender consent to Guarantor
incurring certain subordinated indebtedness pursuant to a private placement
offering of series 1997 10% subordinated convertible debentures (the
"DEBENTURES") in an aggregate amount of up to $7,000,000 (the "OFFERING");
WHEREAS, Lender's consent to the Offering is subject to, in part,
Borrower agreeing to amend the Loan Agreement to provide that an "Event of
Default" under the Debentures constitutes an Event of Default under the Loan
Agreement;
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.
AMENDMENT OF THE LOAN AGREEMENT
2.1. The following subsection shall be added as new subsection 11.1(O)
to the Loan Agreement:
(O) AN EVENT OF DEFAULT SHALL OCCUR OR EXIST PURSUANT TO ANY OF
THOSE CERTAIN SERIES 1997 10% SUBORDINATED CONVERTIBLE DEBENTURES ISSUED
BY TRO LEARNING, INC. IN AN AGGREGATE AMOUNT UP TO $7,000,000, AS THE
SAME MAY BE AMENDED, MODIFIED, REPLACED OR SUBSTITUTED FROM TIME TO TIME
(THE "DEBENTURES").
ARTICLE
3.
REPRESENTATIONS AND WARRANTIES
3.1. 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. 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;
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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
4.
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
5.
MISCELLANEOUS
5.1. 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.
5.2. Except as set forth in that certain letter to Lender from Sharon
Fierro dated March 18, 1997 and as otherwise specified herein, this Amendment
embodies the entire
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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.
5.3. 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.
5.4. 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 First Amendment
to Amended and Restated Revolving Loan and Security Agreement to be executed
and delivered as of the day and year written above.
THE ROACH ORGANIZATION, INC.
By:
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Name:
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Title:
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TRO LEARNING CANADA, INC.
By:
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Name:
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Title:
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SANWA BUSINESS CREDIT CORPORATION
By:
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Name:
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Title:
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AMENDMENT IS CONTINUED ON NEXT PAGE
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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 First 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
judgment from which no appeal could be taken and therein dismissed with
prejudice.
DATED: As of March 18, 1997
TRO LEARNING, INC.
By:
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Name:
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Its:
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(Amended and Restated Guaranty of Payment and
Performance dated as of March 5, 1997)
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