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EXHIBIT 10.12
AMENDMENT NO. 2 AND CONSENT NO. 2
TO REVOLVING CREDIT AGREEMENT
AMENDMENT NO. 2 AND CONSENT NO. 2 (this "Amendment"), dated as of
April
,2004, to the REVOLVING CREDIT AGREEMENT,
dated as of August 20, 2003, by and
among HAIGHTS CROSS OPERATING COMPANY (the
"Borrower"), the several lenders from
time to time parties thereto (the
"Lenders"), BEAR STEARNS CORPORATE LENDING,
INC., as Syndication Agent (in such
capacity, the "Syndication Agent"), and THE
BANK OF NEW YORK ("BNY"), as administrative
agent for the Lenders (in such
capacity, the "Administrative Agent") as
amended by Amendment No. 1 and Consent
No. 1, dated as of January 26, 2004 (and,
as further amended from time to time,
the "Credit Agreement").
RECITALS
I.
Unless defined herein, all capitalized terms used herein shall
have the meanings ascribed to them in the
Credit Agreement.
II. The
Borrower has advised the Administrative Agent and the
Lenders that the Borrower, Holdings, and
Triumph Learning, LLC, a wholly owned
subsidiary of the Borrower (the "Buyer"),
have entered into an Asset Purchase
Agreement (the "Buckle Down Purchase
Agreement") pursuant to which the Buyer
will acquire (the "Buckle Down
Acquisition") substantially all of the assets of
Buckle Down Publishing Company (the
"Seller") for a purchase price consisting of
$24,000,000 in cash, 3,500 shares of Series
C Preferred Stock of Holdings with a
liquidation preference of $1,000 per share
and other consideration
(collectively, the "Buckle Down
Consideration").
III.
The amount of Buckle Down Consideration exceeds the
Consideration Cap permitted under the
definition of "Permitted Acquisition" for
any single acquisition and for all
acquisitions in any twelve month period and,
accordingly, neither the Borrower nor the
Buyer may consummate the Buckle Down
Acquisition unless the Required Lenders
consent thereto.
IV. The
Borrower has requested that the Administrative Agent and
the Required Lenders (a) consent to the
Buckle Down Acquisition and (b) amend
the definition of "Permitted Acquisitions"
to permit certain other acquisitions
without the consent of the Required
Lenders.
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V. The
Administrative Agent and the Required Lenders have agreed
to the Borrower's request on the terms and
subject to the conditions set forth
in this Amendment.
Accordingly, in consideration of the covenants, conditions and
agreements hereinafter set forth, and for
other good and valuable consideration,
the receipt and adequacy of which are
hereby acknowledged, the parties hereto
agree as follows:
1.
CONSENT.
(a) The
Required Lenders hereby consent to the Buckle
Down Acquisition on the terms set forth in
the Buckle Down Purchase Agreement.
(b) The
Borrower acknowledges and agrees that as a result
of the consent by the Required Lenders to
the Buckle Down Acquisition, neither
the Borrower nor any of its Subsidiaries
may make any other acquisitions or
investments under the definition of the
Permitted Acquisitions or otherwise
under the Credit Agreement in the twelve
month period following the consummation
of the Buckle Down Acquisition, except (1)
with the prior written consent of the
Required Lenders or (2) to the extent
permitted under clause (c) of the
definition of "Permitted Acquisitions".
2.
AMENDMENTS.
(a) Section 1
of the Credit Agreement is hereby amended
by adding in appropriate alphabetical
order, the following defined terms:
"Acquisition EBITDA": for any period, Acquisition Net
Income for such period plus, without duplication and to the
extent reflected as a charge in the statement of such
Acquisition Net Income for such period, the sum of (a) income
tax expense or provision for income taxes, (b) interest
expense, amortization or write-off of financing costs, debt
discount and debt issuance costs and commissions, and
discounts and other fees and charges associated with
Indebtedness, (c) depreciation and amortization expense, (d)
amortization of intangibles (including, but not limited to,
goodwill and product development expenses) and organization
costs, and (e) any extraordinary charges or losses determined
in accordance with GAAP.
"Acquisition Net Income": for any period, the net
income (or loss) of the assets or Person to be acquired in an
Acquisition.
(b) Clause (b)
of the definition of "Permitted
Acquisitions" is hereby amended by adding
the following proviso at the end of
such clause:
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"and (iv) a statement of the Acquisition EBITDA for
the assets or Person to be acquired in an Acquisition for the
