FIRST AMENDMENT TO
AMENDED AND RESTATED SECURED CREDIT AGREEMENT
This FIRST AMENDMENT TO SECURED CREDIT AGREEMENT AND RELATED DOCUMENTS
(this "AMENDMENT"), dated as of March 24, 1999, is among THE ROACH
ORGANIZATION, INC., a Delaware corporation, TRO LEARNING (CANADA), INC., a
Canadian corporation ("TRO CANADA"; Roach and Tro Canada are hereinafter
referred to, collectively, as "BORROWERS" and individually, as a "BORROWER")
and FIRST SOURCE FINANCIAL LLP, an Illinois registered limited liability
partnership ("LENDER") (this and all other capitalized terms used herein are
defined in Section 1 of the Credit Agreement defined below).
R E C I T A L S:
A. Borrowers and Lender are parties to that certain Secured Credit
Agreement dated as of February 26, 1999, (the "CREDIT AGREEMENT"), subject to
the terms and conditions of which Lender has agreed to make loans and other
financial accommodations to Borrowers.
B. Borrower has requested and additional short-term overadvance in the
amount of $1,000,000, and Lender is willing to agree to such request subject
to the terms and conditions of this Amendment.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, and subject to the terms and conditions hereof,
Borrowers and Lender hereby agree as follows:
1. DEFINITIONS. All capitalized terms used but not elsewhere defined
in this Amendment shall have the respective meaning ascribed thereto in the
Credit Agreement.
2. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is amended as
follows:
2.01 The definition of "Overadvance Amount" appearing in Section 1.1 of
the Credit Agreement is hereby deleted and the following definition is
substituted in lieu thereof:
""OVERADVANCE AMOUNT" shall mean an amount equal to the sum of
(x) $1,500,000 (the "BASE OVERADVANCE") and (y) during the period beginning
March 24, 1999 and ending May 31, 1999, $1,000,000 (the "SPECIAL
OVERADVANCE")."
2.02. Sections 4.1 of the Credit Agreement is hereby deleted and the
following substituted in lieu thereof;
"SECTION 4.1 INTEREST RATES. Subject to SECTION 4.3,
Borrowers hereby jointly and severally promise to pay interest on the
outstanding principal
amount of each Loan for the period commencing on the date thereof until such
Loan is paid in full, at a rate per annum determined by reference to the
Prime Rate or the LIBOR Rate, respectively. The applicable basis for
determining the rate of interest shall be selected by Borrowers at the time a
borrowing is requested pursuant to SECTION 2.3 or at the time a Notice of
LIBOR Activity is given pursuant to SECTION 4.4, as the case may be. If on
any day any portion of any Loan is outstanding with respect to which notice
has not been given to Lender in accordance with the terms of this Agreement
specifying the basis for determining the rate of interest thereon, then for
that day, such portion of such Loan shall be a Prime Rate Loan and shall bear
interest at a rate determined by reference to the Prime Rate. Subject to
SECTION 4.3, each Prime Rate Loan and LIBOR Rate Loan shall bear interest at
a rate per annum determined as follows: (a) if it is a Prime Rate Loan, then
at the sum of the Prime Rate in effect from time to time PLUS (i) one percent
(1.0%) for Loans less than or equal to the Borrowing Base MINUS the Special
Overadvance as computed and determined from time to time and (ii) three
percent (3%) for all Loans greater than the Borrowing Base MINUS the Special
Overadvance as computed and determined from time to time, or (b) if it is a
LIBOR Rate Loan, then at the sum of the LIBOR Rate for the applicable
Interest Period PLUS three percent (3.0%)."
2.03. Section 4.2 of the Credit Agreement is hereby amended by
inserting a comma after the phrase "Prime Rate Loans" appearing therein.
3. CONDITIONS TO EFFECTIVENESS. The effectiveness of this Amendment
shall be subject to the satisfaction of all of the following conditions in a
manner, form and substance satisfactory to Lender:
(a) DELIVERY OF DOCUMENTS. The following shall have been delivered
to Collateral Agent, each duly authorized and executed:
(1) this Amendment;
(2) such other instruments, documents, certificates, consents,
waivers and opinions as Lender reasonably may request; and
(3) TRO Learning, Inc. shall have executed and delivered to
the Lender its consent to this Amendment in the form set forth below.
(b) PAYMENT OF SPECIAL OVERADVANCE FEE. The Borrowers shall have
paid to Lender a fee in the amount $25,000 for providing the Special
Overadvance. Lender and Borrowers agree such fee shall be paid from the
proceeds of a Loan which Borrowers hereby request Lender to make on the
date hereof.
(c) NO MATERIAL ADVERSE EFFECT. No Material Adverse Effect shall
have occurred since the date of the most recent financial statements for
Borrowers received by Lender.
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(d) PAYMENT OF COSTS. Borrowers shall have paid or caused to be
paid to Lender all out of pocket expenses of Lender relating to this
Amendment and the transactions contemplated herein, including, without
limitation, the expenses and reasonable fees of Lender's counsel.
(e) SATISFACTION OF LENDER'S COUNSEL. All legal matters incident to
the transactions contemplated hereby shall be reasonably satisfactory to
counsel for Lender.
The date on which all of the conditions set forth in this Paragraph 4 have
been satisfied (or waived by Lender) is referred to herein as the "Effective
Date."
4. REFERENCES. From and after the Effective Date, all references in the
Credit Agreement and the Related Documents to the Credit Agreement shall be
deemed to refer to the Credit Agreement, as amended hereby.
5. REPRESENTATIONS AND WARRANTIES. Borrowers hereby confirms to Lender
that the representations and warranties set forth in the Credit Agreement and
the Related Documents to which it is a party are true and correct as of the
date hereof, except to the extent such representations and warranties
expressly relate to an earlier date and except as disclosed in the schedules
attached to the most recent Notice Prime Rate Activity. Notice of LIBOR
Activity or LC Guaranty Request. Each Borrower represents and warrants to
Lender that (a) it has full power and authority to execute and deliver this
Amendment and to perform its obligations hereunder, (b) upon the execution
and delivery hereof, this Amendment will be valid, binding and enforceable
upon it in accordance with its terms, (c) the execution and delivery of this
Amendment does not and will not contravene, conflict with, violate or
constitute a default under (A) the organizational documents or operating
agreement of any Borrower or (B) any applicable law, rule, regulation,
judgment, decree or order of which such Borrower has knowledge or any
agreement, indenture or instrument to which such Borrower is a party or is
bound or which is binding upon or applicable to all or any portion of its
property, (d) no Unmatured Event of Default or Event of Default presently
exists and (e) no Material Adverse Effect has occurred since the date if the
last financial statements delivered by Borrowers to Lender.
6. COSTS AND EXPENSES. Borrowers agree, jointly and severally, to
reimburse Lender for all out of pocket expenses incurred in the preparation,
negotiation and execution of this Amendment and the consummation of the
transactions contemplated hereby, including, without limitation, the expenses
and fees of counsel for Lender.
7. NO FURTHER AMENDMENTS; RATIFICATION OF LIABILITY. Except as amended
hereby, the Credit Agreement and each of the Related Documents shall remain
in full force and effect in accordance with their respective terms. Each
Borrower hereby ratifies and confirms its liabilities, obligations and
agreements under the Credit Agreement and the Related
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Documents to which it is a party, all as amended by this Amendment, and the
liens and security interests created thereby, and each acknowledges that (a)
it has no defenses, claims or set-offs to the enforcement of such
liabilities, obligations and agreements, (b) Lender has fully performed all
obligations to Borrowers which it may have had or have on and as of the date
hereof and (c) other than as specifically set forth herein, Lender does not
waive, diminish or limit any term or condition contained in any of the Credit
Agreement or the Related Documents. Lender's agreement to the terms of this
Amendment or any other amendment of the Credit Agreement or Related Documents
shall not be deemed to establish or create a custom or course of dealing
among Lender and Borrowers. This Amendment and the documents executed and
delivered pursuant to this Amendment contain the entire agreement among
Lender and Borrowers with respect to the transactions contemplated by this
Amendment.
8. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which,
when taken together, shall constitute one and the same instrument.
9. FURTHER ASSURANCES. Each Borrower covenants and agrees that it
will at any time and from time to time do, execute, acknowledge and deliver,
or will cause to be done, executed, acknowledged and delivered, all such
further acts, documents and instruments as reasonably may be required by
Lender in order to effectuate fully the intent of this Amendment.
10. SEVERABILITY. If any term or provision of this Amendment or the
application thereof to any party or circumstance shall be held to be invalid,
illegal or unenforceable in any respect by a court of competent jurisdiction,
the validity, legality and enforceability of the remaining terms and
provisions of this Amendment shall not in any way be affected or impaired
thereby, and the affected term or provision shall be modified to the minimum
extent permitted by law so as most fully to achieve the intention of this
Amendment.
11. CAPTIONS. The captions in this Amendment are inserted for
convenience of reference only and in no way define, describe or limit the
scope or intent of this Amendment or any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment at Chicago, Illinois as of the day and year first above written.
THE ROACH ORGANIZATION, INC.
By: /s/ Steven R. Schuster
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Steven R. Schuster
Vice President
TRO LEARNING (CANADA), INC.
By: /s/ Steven Schuster
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Steven Schuster
Vice President
FIRST SOURCE FINANCIAL LLP
By: First Source Financial, Inc.
Its: Manager
By:
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Name:
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Title:
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GUARANTOR'S CONSENT
The undersigned, TRO Learning, Inc., has heretofore executed and
delivered to the Lender a Guaranty dated as of February 26, 1999 and hereby
consents to the Amendment to the Credit Agreement as set forth above and
confirms that its Guaranty and all of the undersigned's obligations
thereunder remain in full force and effect. The undersigned further agrees
that the consent of the undersigned to any further amendments to the Credit
Agreement shall not be required as a result of this consent having been
obtained, except to the extent, if any, required by the Guaranty referred to
above.
TRO LEARNING, INC.
/s/ Steven R. Schuster
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Steven R. Schuster
Vice President
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