AMENDMENT NO. 5 AND CONSENT NO. 4
TO REVOLVING CREDIT AGREEMENT
     AMENDMENT NO. 5 AND CONSENT NO. 4 (this “Amendment”), dated as of August 9,
2005, 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 Waiver
No. 1, dated as of January 26, 2004, Amendment No. 2 and Waiver No. 2, dated as
of April 14, 2004, Amendment No. 3 and Consent No. 3, dated as of December 1,
2004 and Amendment No. 4 and Waiver No. 3 to Revolving Credit Agreement, dated
as of March 31, 2005 (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
its wholly owned Subsidiary, Chelsea House Publishers, LLC (“Chelsea House”),
intends to sell substantially all of its assets (“Chelsea House Assets”) to
Facts on File, Inc. (“Facts on File”) for a purchase price of approximately
$9,000,000, subject to adjustments for working capital and other items as
provided in, and otherwise on the terms and conditions of, an Asset Purchase
Agreement, to be dated on or about August 5, 2005, between Chelsea House and
Facts on File (the “Chelsea House Sale Agreement” and such sale, the “Chelsea
House Asset Sale” ).
     III. The Borrower has requested that the Required Lenders (a) amend the
Credit Agreement to consent to the Chelsea House Asset Sale, (b) amend
Section 7.2 of the Credit Agreement to permit the Borrower to guarantee the
obligations of Chelsea House under the Chelsea House Sale Agreement, (c) agree
to authorize the Administrative Agent, as Priority Debt Representative, to
direct the Collateral Trustee to release the Liens encumbering the Chelsea House
Assets upon the closing of the Chelsea House Asset Sale and (d) to amend
Section 7.1(b) of the Credit Agreement for the fiscal quarters ending June 30,
2005 and September 30, 2005.
     IV. The Administrative Agent and the Required Lenders have agreed to the
Borrower’s requests 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. Amendments.
          (a) Section 1 of the Credit Agreement is hereby amended by adding, in
appropriate alphabetical order, the following defined terms:
     “Amendment No. 5” shall mean Amendment No. 5 and Consent No. 4 to Revolving
Credit Agreement, dated as of August 5, 2005, among the Borrower, the Required
Lenders, the Administrative Agent and the Syndication Agent.
     “Amendment No. 5 Effective Date” shall mean August 9, 2005, provided that
the conditions set forth in Section 2 of Amendment No. 5 are satisfied on or
before August 10, 2005.
     “Chelsea House” shall have the meaning assigned to such term in the
Recitals of Amendment No. 5.
     “Chelsea House Asset Sale” shall have the meaning assigned to such term in
the Recitals of Amendment No. 5.
     “Chelsea House Assets” shall have the meaning assigned to such term in the
Recitals of Amendment No. 5.
     “Chelsea House Sale Agreement” shall have the meaning assigned to such term
in the Recitals of Amendment No. 5.
          (b) Section 7.1(b) of the Credit Agreement is hereby amended by
deleting, for the fiscal quarters ending June 30, 2005 and September 30, 2005,
the ratio “1.75:1.00” in the chart in such Section and by substituting therefor
the ratio “1.50:1.00.”
          (c) Section 7.2 of the Credit Agreement is hereby amended by deleting
the “and” at the end of clause (h), deleting the “.” at the end of clause
(i) and substituting therefor “; and”, and by adding the following clause (j):
     “(j) Guarantee Obligations of the Borrower of the obligations of Chelsea
House under the Chelsea House Sale Agreement.”
          (d) Section 7.5 of the Credit Agreement is hereby amended by deleting
the “and” at the end of clause (e), deleting the “.” at the end of clause
(f) and substituting therefor “; and” and adding the following clause (g):

2

--------------------------------------------------------------------------------

 

     “(g) the Chelsea House Asset Sale pursuant to the Chelsea House Sale
Agreement provided that the proceeds thereof are used by Chelsea House for
general limited liability company purposes or are distributed by Chelsea House
to the Borrower to use for general corporate purposes.”
     2. Conditions to Effectiveness.
          This Amendment shall be effective as of August 9, 2005, provided that
the following conditions are satisfied on or before August 10, 2005:
          (a) the Administrative Agent shall have received this Amendment
executed by a duly authorized signatory of the Borrower and each of the
Guarantors and by each of the Required Lenders;
          (b) the Administrative Agent shall have (i) received a copy of the
executed Chelsea House Sale Agreement certified to be true and complete by an
Authorized Officer of the Borrower and (ii) confirmed such that the executed
Chelsea House Sale Agreement is substantially in the form of the draft thereof,
dated July 26, 2005, without, in the reasonable judgment of the Administrative
Agent, material changes from such draft; and
          (c) the Administrative Agent shall have received such other documents
as the Administrative Agent may reasonably request.
     3. Miscellaneous
          (a) The Borrower hereby:
     (i) acknowledges and reaffirms its obligations under, and confirms the
validity and enforceability of, the Credit Agreement and the other Loan
Documents;
     (ii) represents and warrants that, after giving effect to this Amendment,
there exists no Default or Event of Default and no Default or Event of Default
will result from the consummation of the transactions described in this
Amendment; and
     (iii) represents and warrants that the representations and warranties
contained in the Credit Agreement (other than the representations and warranties
made as of a specific date) are true and correct in all material respects on and
as of the date hereof.
          (b) Each of the Guarantors, by signing this Amendment, hereby:

3

--------------------------------------------------------------------------------

 

     (i) acknowledges and consents to the execution of this Amendment; and
     (ii) acknowledges and reaffirms its obligations under, and confirms the
validity and enforceability of, the Guarantee and Collateral Agreement and the
other Loan Documents to which it is a party.
          (c) This Amendment may be executed in any number of counterparts and
by facsimile, each of which shall be an original and all of which shall
constitute one agreement. It shall not be necessary in making proof of this
Amendment to produce or account for more than one counterpart signed by the
party to be charged.
          (d) This Amendment is being delivered in and is intended to be
performed in the State of New York and shall be construed and enforceable in
accordance with, and be governed by, the internal laws of the State of New York
without regard to principles of conflict of laws.
          (e) The Required Lenders hereby authorize the Administrative Agent, as
Priority Debt Representative, upon the satisfaction of the conditions set forth
in Section 2, to direct the Collateral Trustee to release the Chelsea House
Assets in accordance with Article IV of the Collateral Trust Agreement upon the
closing of the Chelsea House Asset Sale.
          (f) The Borrower agrees to pay the reasonable fees and expenses of the
Administrative Agent’s counsel in connection with this Amendment and any other
fees due to the Administrative Agent.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

4

--------------------------------------------------------------------------------

 

HAIGHTS CROSS AMENDMENT NO. 5
     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.

                      BORROWER:        
 
                    HAIGHTS CROSS OPERATING COMPANY    
 
               
 
  By:                          
 
      Name:   Paul J. Crecca    
 
      Title:   Executive Vice President and Chief Financial Officer    

 

--------------------------------------------------------------------------------

 

HAIGHTS CROSS AMENDMENT NO. 5

                      GUARANTORS:    
 
                    HAIGHTS CROSS COMMUNICATIONS, INC.    
 
               
 
  By:                          
 
      Name:   Paul J. Crecca    
 
      Title:   Executive Vice President and Chief Financial Officer    
 
                    SUNDANCE/NEWBRIDGE EDUCATIONAL PUBLISHING, LLC    
 
               
 
  By:                          
 
      Name:   Paul J. Crecca    
 
      Title:   Vice President    
 
                    TRIUMPH LEARNING, LLC      
 
  By:                          
 
      Name:   Paul J. Crecca    
 
      Title:   Vice President    
 
                    RECORDED BOOKS, LLC    
 
               
 
  By:                          
 
      Name:   Paul J. Crecca    
 
      Title:   Vice President    
 
                    OAKSTONE PUBLISHING, LLC    
 
               
 
  By:                          
 
      Name:   Paul J. Crecca    
 
      Title:   Vice President    

 

--------------------------------------------------------------------------------

 

HAIGHTS CROSS AMENDMENT NO. 5

                      CHELSEA HOUSE PUBLISHERS, LLC    
 
               
 
  By:                          
 
      Name:   Paul J. Crecca    
 
      Title:   Vice President    
 
                    THE CORIOLIS GROUP, LLC    
 
               
 
  By:                          
 
      Name:   Paul J. Crecca    
 
      Title:   Vice President    
 
                    W F HOWES LIMITED    
 
               
 
  By:                          
 
      Name:   Paul J. Crecca    
 
      Title:   Vice President    
 
                    OPTIONS PUBLISHING, LLC    
 
               
 
  By:                          
 
      Name:   Paul J. Crecca    
 
      Title:   Vice President    

 

--------------------------------------------------------------------------------

 

HAIGHTS CROSS AMENDMENT NO. 5

                      THE BANK OF NEW YORK,     as a Lender and as
Administrative Agent
 
               
 
  By:                          
 
      Name:        
 
      Title:  
 
Vice President    

 

--------------------------------------------------------------------------------

 

HAIGHTS CROSS AMENDMENT NO. 5

                      BEAR STEARNS CORPORATE LENDING,     INC., as a Lender and
as Syndication Agent
 
               
 
  By:                          
 
      Name:        
 
      Title:  
 
   
 
         
 
   

 

--------------------------------------------------------------------------------

 

HAIGHTS CROSS AMENDMENT NO. 5

                      CIT LENDING SERVICES CORPORATION,     as a Lender
 
               
 
  By:                          
 
      Name:        
 
      Title:  
 
   
 
         
 
   

 

--------------------------------------------------------------------------------

 

HAIGHTS CROSS AMENDMENT NO. 5

                      VAN KAMPEN SENIOR LOAN FUND
 
               
 
  By:                          
 
      Name:        
 
      Title: