EX-10.25






Exhibit 10.25




	 	 	 
	Monarch Alternative Capital LP
	 	Glenview Capital Management, LLC
	535 Madison Avenue
	 	767 Fifth Avenue
	New York, NY 10022
	 	New York, NY 10153






July 28, 2008



COMMITMENT LETTER

$75 MILLION SENIOR SECURED CREDIT FACILITY



Haights Cross Operating Company

c/o Haights Cross Communications, Inc.

10 New King Street, Suite 102

White Plains, NY 10604

Attention: Paul J. Crecca, President and Chief Executive Officer




Ladies and Gentlemen:




     In accordance with our recent discussions, this letter, including Attachment A attached hereto
(the “Commitment Letter”), sets forth the terms and conditions pursuant to which Monarch
Alternative Capital LP (acting individually or through one or more of its affiliates or through one
or more investment funds for which it acts as investment advisor) (“Monarch”) and Glenview Capital
Management, LLC (acting individually or through one or more of its affiliates or one or more
investment funds for which it acts as investment advisor) (“Glenview”) (each a “Lender” and
collectively, the “Lenders”) are pleased to advise you of their several commitments to provide $75
million (the “Facility Amount”) of senior secured loans (the “Facility”) to Haights Cross Operating
Company (the “Company” or “you”) to refinance the Company’s existing senior secured term loan
indebtedness that matures on August 20, 2008 (the “Transaction”).



Commitment




     Monarch is pleased to advise you of its commitment to provide 50% of the amount of the
Facility and Glenview is pleased to advise you of its commitment to provide 50% of the amount of
the Facility. The obligations of each Lender are several and not joint. No Lender shall be
responsible for the failure of any other Lender to make a Term Loan (as defined in Attachment A
hereto) or payment required under this Commitment Letter. It is agreed that an entity appointed by
the Lenders under the Facility will act as the sole and exclusive administrative and collateral
agent and the Lenders will act as lead arrangers and syndication agents for the Facility and will
perform the duties and exercise the authority customarily performed and exercised by them in such
role. You agree that no other agents, co-agents, arrangers or book runners will be appointed, and
no other titles will be awarded and no compensation (other than that expressly contemplated by this
Commitment Letter) will be paid in connection with the Facility unless you and we shall so agree.
The funding of the Facility shall be a date on or before August 15, 2008 or a date mutually agreed
upon between you and us, but in any event shall not occur until all the conditions precedent set
forth herein and in Exhibit A have been satisfied or waived by the Lenders in their sole
discretion.



 









 





     Notwithstanding anything herein, prior to the Closing Date you may arrange to have other
financial institutions commit to provide financing in lieu of the Facility (the “Alternative Term
Loan Facility”). Your prior written notice (the “Alternative Term Loan Facility Election Notice”)
to us of your election to proceed with such other financial institutions in accordance with this
paragraph shall result in the termination of the commitments of each Lender hereunder to provide
the Facility.



Conditions Precedent




     The commitment of each Lender to fund the Facility is subject only to the following
conditions: (i) the satisfaction of the conditions precedent set forth in Attachment A (including
the negotiation, execution and delivery of definitive documentation with respect to the Facility
reflecting, among other things, the terms and conditions in this Commitment Letter), in a manner
reasonably acceptable to each Lender, and (ii) the existence of no circumstance in which any
covenant or agreement in this Commitment Letter is not complied with in any material respect or in
which any representation or warranty made by you in this Commitment Letter is not true and correct
in any material respect (in each case, as of the date such representation or warranty was made or
deemed to be made).



     You and we each agree to diligently pursue outstanding due diligence items and negotiate in
good faith to finalize loan documentation required for the Facility that is consistent with the
terms hereof following the execution and delivery of this Commitment Letter. Matters not covered
or made clear herein or in Attachment A are subject to mutual written agreement of the parties.



Costs, Fees and Expenses




     In consideration of this commitment and recognizing that, in connection herewith, the Lenders
are incurring costs and expenses (including, without limitation, reasonable and documented fees and
disbursements of counsel, filing and recording fees, costs and expenses of due diligence,
syndication, transportation, duplication, messenger, appraisal, audit, and consultant costs and
expenses), you hereby agree to pay or reimburse the Lenders for all such reasonable and documented
out-of-pocket costs and expenses (collectively, “Expenses”) upon the earlier to occur of: (i) the
Closing Date (as defined in Attachment A hereto) and (ii) on demand after the termination of this
Commitment Letter; provided that the Expenses shall not be payable to any Lender if such
Lender shall not have funded its commitment under this Commitment Letter in breach of its
obligations to so fund. In view of the imminence of the Closing Date, you hereby authorize
Lenders’ counsel to commence drafting and preparation of the material Credit Documentation (as
defined in Attachment A hereto) and confirm that you will reimburse Lenders’ counsel for all
Expenses in connection therewith. You also agree to pay to the Lenders all Expenses of the Lenders
(including, without limitation, reasonable fees and disbursements of counsel) incurred in
connection with the enforcement of any of its respective rights and remedies hereunder, in each
case, following demand therefor from a Lender. Concurrently with your acceptance of this
Commitment Letter, you also agree to pay the fees set forth on Annex A to Attachment A and a
non-refundable commitment fee of $750,000 (the “Fee”) to each Lender. You agree that, once paid,
all of the foregoing fees and expenses or any part thereof shall not be refundable under any
circumstances, regardless of whether the Transaction is consummated, and shall not be creditable
against any other amount payable in connection herewith or otherwise. Notwithstanding anything
herein contained to the contrary, at all times prior to the Closing Date, you shall not be required
to pay the Expenses of any Lender not an original signatory hereto, and, in any event, shall not be
required to pay for more than one counsel (except for fees and expenses of local counsel retained
by the Lenders from time to time in connection with perfecting the liens granted pursuant to the
Credit Documentation) for the Lenders as a group. In the event of any Lender’s failure to fund its
commitment under this Commitment Letter in breach of its obligation to so fund, nothing herein
shall prevent the Company from seeking a refund of any Expenses, the Fee and other such amounts
previously paid to the Lenders. Expenses associated with



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any syndication process are further subject to the additional restrictions set forth in the
paragraph entitled “Syndication” set forth below.



Confidentiality




     This Commitment Letter is for your confidential use only and that neither their existence nor
the terms hereof will be disclosed by you to any person (other than to your officers, directors,
shareholders, employees, accountants, attorneys and other advisors, in each case, on a
“need-to-know” basis in connection with the Transaction and on a confidential basis) until accepted
by you as provided herein.



     Each Lender agrees that the contents of this Commitment Letter will not be disclosed to any
person prior to the time the Company discloses the same; provided however, each Lender may
disclose the contents and the terms hereof (A) to our officers, directors, shareholders, employees,
accountants, attorneys and other advisors, in each case, on a “need-to-know” basis in connection
with the Transaction and on a confidential basis (collectively, the “Advisors”), (B) pursuant to
the order of any court, legislative body or administrative agency or in any pending legal,
regulatory or administrative proceeding, or otherwise as required by applicable law, regulation or
legal process, (C) from and after the Syndication Commencement Date (as defined below), to
potential and actual assignees or participants and their respective Advisors, or (D) at such time
as its counsel advises that disclosure is required under applicable law.



Arm’s-Length Transaction




     In connection with all aspects of each transaction contemplated by this Commitment Letter, you
acknowledge and agree that: (i) the Facility is an arm’s-length commercial transaction between you
and your affiliates, on the one hand, and the Lenders, on the other hand, and you are capable of
evaluating and understanding and understand and accept the terms, risks and conditions of the
Transaction contemplated by this Commitment Letter; (ii) in connection with the process leading to
such transaction, the Lenders are and have been acting solely as principals and are not the
financial advisors or fiduciaries for you or any of your subsidiaries or affiliates, stockholders,
creditors or employees or any other party; (iii) neither of the Lenders has assumed nor will either
Lender assume an advisory or fiduciary responsibility in your or your subsidiaries’ or affiliates’
favor with respect to the Transaction contemplated hereby or the process leading thereto and
neither of the Lenders has any obligation to you or your subsidiaries or affiliates with respect to
the Transaction contemplated hereby except those obligations expressly set forth in this Commitment
Letter and the definitive loan documentation; (iv) the Lenders and their respective affiliates may
be engaged in a broad range of transactions that involve interests that differ from yours and your
subsidiaries and affiliates and the Lenders have no obligation to disclose any of such interests by
virtue of any advisory, agency or fiduciary relationship; and (v) the Lenders have not provided any
legal, accounting, regulatory or tax advice with respect to the Transaction contemplated hereby and
you have consulted your own legal, accounting, regulatory and tax advisors to the extent you have
deemed appropriate. You specifically acknowledge that each Lender or one of its affiliates is a
shareholder of the Company and that notwithstanding the foregoing, each Lender may act solely as an
arms-length creditor in connection herewith and that a designee of each Lender serves on the
Company’s board of directors. You hereby waive and release, to the fullest extent permitted by
law, any claims that you may have against the Lenders with respect to any breach or alleged breach
of fiduciary duty in connection with their participation in the transactions contemplated by this
Commitment Letter or the enforcement of their rights provided for herein.



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Information




     You hereby represent and covenant that: (i) all information (other than Projections, estimates
and information of a general industry or economic nature), provided to the Lenders by the Company
and any of its representatives in connection with the Transaction contemplated herein (the
“Information”), is or will be complete and correct in all material respects and does not or will
not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements contained therein, in light of the circumstances under which such statements
are made, not misleading as of the date provided or deemed to be provided to Lenders, and (ii) all
written financial information and projections, (“Projections”) made available to Lenders by you or
your representatives in connection with the Transaction have been or will be prepared in good faith
based upon assumptions believed to be reasonable at the time when made or deemed to be made. In
issuing this Commitment Letter, the Lenders are relying on the accuracy of the Information and, in
arranging and syndicating the Facility in accordance with this Commitment Letter, the Lenders may
use and rely on the Information, without independent verification thereof. You agree to supplement
the Information and any Projections previously or subsequently provided as is needed to reflect any
material change with respect to such Information or Projections, and you agree to promptly notify
us of any changes in circumstances that call into question the continued reasonableness of any
material assumption underlying any Projections previously furnished by or on behalf of the Company.



Syndication




     Following the first to occur of (i) the date upon which you inform the Lenders in writing of
your waiver of your right to pursue an Alternative Term Loan Facility, and (ii) on and after the
Closing Date (item (i) or (ii), whichever occurs first, the “Syndication Commencement Date”), the
Lenders may syndicate the Facility to additional lenders (provided that the additional lenders are
not identified in a list agreed upon between you and us) identified by Lenders with a corresponding
reduction in the Lenders’ share of the Facility. Subject to the timing restrictions above and
other restrictions set forth in this paragraph, the Lenders will manage all aspects of any
syndication, including the selection of potential lenders, the timing of all offers to potential
lenders, the acceptance of commitments, the amount offered and the compensation provided. However,
completion of the syndication in whole or in part is not a condition precedent to closing and is
not a condition to either Lender’s commitment. Until the Closing Date, the obligations of the
Lenders signatory to this Commitment Letter shall remain unchanged, such Lenders shall remain
solely responsible for the performance thereof and the funding of their respective commitments
hereunder, and all parties hereto shall continue to deal solely and directly with the Lenders
signatory hereto in connection with the Transaction. Any agreement pursuant to which any Lender
shall sell or assign part of its commitment shall provide that such Lender shall retain the sole
right and responsibility to exercise such Lender’s rights and enforce its obligations hereunder.



     You agree to take such commercially reasonable actions as the Lenders may reasonably request
from time to time, after the occurrence of the Syndication Commencement Date, to assist the Lenders
in forming a syndicate, including, without limitation, (i) using reasonable efforts to make senior
management, representatives and advisors of the Company available to prepare for and participate in
rating agency meetings, lender meetings and other communications with potential lenders at such
times and places as the Lenders may reasonably request, (ii) assisting in the preparation of
information memoranda for the Facility and other marketing materials to be used in connection with
the syndication thereof, including causing such information memoranda to conform to market
standards as reasonably determined by the Lenders, (iii) using your commercially reasonable efforts
to ensure that the syndication efforts of the Lenders benefit materially from the existing lending
and other financial relationships of the Company and its subsidiaries, and (iv) promptly providing
and causing your advisors to provide the Lenders with all information reasonably deemed necessary
by the Lenders to successfully complete the



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syndication of the Facility. Notwithstanding anything herein to the contrary, in no event
shall you be obligated to reimburse Lenders for any reasonable and documented expenses associated
with any syndication efforts unless: (x) such expenses are incurred from or after the Syndication
Commencement Date, (y) such expenses fall within one of the categories (i) through (iv) set forth
above, and (z) in any event, such expenses do not exceed $50,000 in the aggregate at any time.



     At the Lenders’ request, you agree to prepare versions of the information memoranda and other
marketing materials to be used in connection with the syndication that do not contain material
non-public information concerning the Company, its affiliates or their securities. In addition,
you agree that if requested by the Lenders to facilitate syndication, no information, documentation
or other data disseminated to prospective lenders in connection with the syndication of the
Facility, whether through an Internet website (including, without limitation, an IntraLinks
work-space), electronically, in presentations at meetings or otherwise, will contain any material
non-public information concerning the Company, its affiliates or their securities unless
specifically labeled “Private — Contains Non-Public Information”. The Lenders acknowledge that
the Company’s existing IntraLinks website does contain material non-public information not so
labeled.



     To ensure an orderly and effective syndication of the Facility, you agree that, other than in
connection with an Alternative Term Loan Facility, from the date hereof until the earlier of the
termination of the syndication as determined by the Lenders and 90 days following the date of
initial funding under the Facility, you will not, and will not permit any of your affiliates to,
syndicate or issue, attempt to syndicate or issue, announce or authorize the announcement of the
syndication or issuance of, or engage in discussions concerning the syndication or issuance of, any
debt facility, or debt or preferred equity security of the Company or any of its subsidiaries
(other than the indebtedness contemplated hereby), including any renewals or refinancings of any
existing debt facility, without the prior written consent of the Lenders, in each case, if such
actions could, in the judgment of the Lenders, be expected to interfere with the syndication of the
Facility.



     Your agreements under this section shall continue and survive until the completion of a
successful syndication of the Facility (as determined by the Lenders) notwithstanding the closing
of the Facility.



Indemnification




     You agree to indemnify and hold harmless the Lenders, and each of their respective affiliates
or investment funds for which it acts as investment advisor and each of their respective
affiliates’ respective officers, directors, partners, shareholders, trustees, controlling persons,
employees, agents, advisors, attorneys and representatives (each, an “Indemnified Party”) from and
against any and all claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable and documented fees and disbursements of counsel), that may be incurred by
or awarded against any Indemnified Party, in each case arising out of or in connection with or
relating to this Commitment Letter or the Transaction contemplated hereby, or any claim,
litigation, investigation or proceeding relating to any of the foregoing, regardless of whether any
Indemnified Party is a party thereto (except for any of the foregoing that are solely among
Indemnified Parties), and you shall reimburse each Indemnified Party upon demand for all legal and
other reasonable and documented expenses incurred by it in connection with investigating, preparing
to defend or defending, or providing evidence in or preparing to serve or serving as a witness with
respect to, any lawsuit, investigation, claim or other proceeding relating to any of the foregoing
(including, without limitation, in connection with the enforcement of the indemnification
obligations set forth herein), irrespective of whether the Transaction contemplated hereby is
consummated, except to the extent such claim, damage, loss, liability, or expense is found in a
final non-appealable judgment by a



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court of competent jurisdiction to have resulted solely from such Indemnified Party’s gross
negligence, willful misconduct or bad faith.



     You agree that no Indemnified Party shall have any liability (whether direct or indirect, in
contract, tort or otherwise) to the Company for or in connection with the Transaction contemplated
hereby, except to the extent such liability is found in a final non-appealable judgment by a court
of competent jurisdiction to have resulted solely from such Indemnified Party’s gross negligence,
willful misconduct, bad faith or breach of its contractual obligations under this Commitment
Letter. In no event, however, shall any Indemnified Party be liable on any theory of liability for
any special, indirect, consequential or punitive damages. You further agree that, without the
prior written consent of the Lenders, you will not enter into any settlement of any lawsuit, claim
or other proceeding arising out of this Commitment Letter or the Transaction contemplated hereby
unless such settlement (i) includes an explicit and unconditional release from the party bringing
such lawsuit, claim or other proceeding of all Indemnified Parties and (ii) does not include a
statement as to or an admission of fault, culpability, or a failure to act by or on behalf of any
Indemnified Party. No Indemnified Party shall be liable for any damages arising from the use by
unauthorized persons of any information made available to the Lenders by you or any of your
representatives through electronic, telecommunications or other information transmission systems
that is intercepted by such persons, except to the extent such interception is found in a final
non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified
Party’s gross negligence or willful misconduct or bad faith.



Governing Law, Etc.




     This Commitment Letter shall be governed by, and construed in accordance with, the law of the
State of New York. Each of the parties hereto irrevocably consents to the jurisdiction and venue
of the federal and/or state courts located within the City of New York. The parties hereto hereby
waive, to the fullest extent permitted by applicable law, any objection that they may now or
hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating
to the provisions of this Commitment Letter brought in any such court, and any claim that any such
suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
This Commitment Letter sets forth the entire agreement between the parties with respect to the
matters addressed herein and supersedes all prior communications, written or oral, with respect
hereto. This Commitment Letter may be executed in any number of counterparts, each of which, when
so executed, shall be deemed to be an original and all of which, taken together, shall constitute
one and the same letter. Delivery of an executed counterpart of a signature page to this letter by
fax shall be as effective as delivery of a manually executed counterpart of this letter. This
Commitment Letter is not assignable by you without our prior written consent. This Commitment
Letter is intended to be solely for the benefit of the parties hereto, the Indemnified Parties, and
their respective successors and assigns. Nothing herein, express or implied, is intended to or
shall confer upon any other third party any legal or equitable right, benefit, standing or remedy
of any nature whatsoever under or by reason of this Commitment Letter.



     The Lenders hereby notify you that, pursuant to the requirements of the USA Patriot Act, Title
III of Pub. L. 107-56 (signed into law October 25, 2001), as amended (the “Patriot Act”), they may
be required to obtain, verify and record information that identifies the Company, which information
includes its name, address and tax identification number and other information regarding it that
will allow the Lenders to identify it in accordance with the Patriot Act. You agree to provide the
Lenders with all documentation and other information required by bank regulatory authorities under
the Patriot Act and any other “know your customer” and anti-money laundering rules and regulations.



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Waiver of Jury Trial




     Each party hereto irrevocably waives all right to trial by jury in any action, proceeding or
counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this
letter or the Transaction contemplated by this letter or the actions of the Lenders or any of its
affiliates in the negotiation, performance, or enforcement of this Commitment Letter.



[Remainder of the Page Intentionally Left Blank]




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     Please indicate your acceptance of the provisions hereof by signing the enclosed copy of this
letter and returning it, together with the Fee (wiring instructions attached), to us at or before
5:00 PM (Eastern Time) on or before July 29, 2008. If you elect to deliver this letter by fax,
please arrange for the executed original to follow by next-day courier. All respective commitments
and undertakings of the Lenders under this Commitment Letter will expire at 5:00 PM (Eastern Time)
on July 29, 2008, unless you execute and return to us this Commitment Letter at or prior to such
time. Thereafter, all accepted commitments and undertakings of the Lenders will expire on the
earliest to occur of (i) your issuance of an Alternative Term Loan Facility Election Notice, (ii)
August 15, 2008, unless the Closing Date occurs on or prior thereto or unless otherwise agreed by
the parties hereto, and (iii) the consummation of the Transaction or any component thereof without
the use of the Facility or unless otherwise agreed to by the parties hereto in writing. In
addition, all accepted commitments and undertakings of the Lenders hereunder may be terminated by
the Lenders if you fail to perform your obligations hereunder on a timely basis. The provisions of
this Commitment Letter regarding Costs and Expenses, Confidentiality, Indemnity, Governing Law,
etc., and Waiver of Jury Trial as relating solely to this Commitment Letter shall remain in full
force and effect regardless of whether any definitive documentation for the Facility shall be
executed and delivered and notwithstanding the termination of this Commitment Letter or any
commitment or undertaking of the Lenders hereunder; provided, that on and after the Closing
Date, the “Indemnity” contained herein shall be superseded by any indemnification set forth in the
Credit Documentation. In addition, the provisions of this Commitment Letter regarding Syndication
shall survive the execution and delivery of any definitive documentation for the Facility. Except
as provided in the preceding sentence, your obligations hereunder shall automatically terminate and
be superseded by the provisions of the definitive loan documentation upon the initial funding
thereunder and the payment of all amounts owing at such time hereunder.



	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	MONARCH ALTERNATIVE CAPITAL LP	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael A. Weinstock	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:
	 	Managing Principal	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	GLENVIEW CAPITAL MANAGEMENT LLC	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Mark Horowitz	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:
	 	Chief Operating Officer and General Counsel
	 	 
	 

	 	 	 	 	 	 





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	ACCEPTED AND AGREED TO	 	 
	this 28th day of July, 2008	 	 
	 
	 	 	 	 
	HAIGHTS CROSS OPERATING COMPANY	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	By:

	 	/s/ Eugene Davis	 	 
	 

	 	 	 	 
	Name:

	 	Eugene Davis	 	 
	Title:

	 	Chairman of the Board of Directors
	 	 






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ATTACHMENT A TO COMMITMENT LETTER




SUMMARY OF TERMS AND CONDITIONS 




OF THE SENIOR SECURED CREDIT FACILITY




          Set forth below is a summary of the principal terms and conditions of the senior secured
credit facility and the documentation related thereto. Capitalized terms used and not otherwise
defined herein have the meanings set forth in the commitment letter to which this summary of terms
and conditions is attached and of which it forms a part (the “Commitment Letter”).




	 	 	 	 	 
	I.

	 	Parties	 	 
	 
	 	 	 	 
	 

	 	Borrower
	 	Haights Cross Operating Company, a Delaware corporation (the “Company” or the “Borrower”).
	 
	 	 	 	 
	 

	 	Guarantors
	 	Haights Cross Communications, Inc. (the “Parent”) and all of the Borrower’s direct and indirect subsidiaries (the “Guarantors”; the Borrower and the Guarantors, collectively, the “Credit Parties”).
	 
	 	 	 	 
	 

	 	Agent
	 	TBD by the Lenders (in such capacity, the “Agent”).
	 
	 	 	 	 
	 

	 	Lenders
	 	Monarch Alternative Capital LP and Glenview Capital, one or more of their respective affiliates or one or more investment funds for which it acts as investment advisor, and other lenders designated by Agent (collectively, the “Lenders”). For avoidance of doubt, the term “Lenders” set forth in this Attachment A shall not expand, and shall not be deemed to expand, the scope of the parties entitled to expense and fee reimbursemen
t and indemnity protection set forth in the Commitment Letter.
	 
	 	 	 	 
	II.

	 	Facility
	 	A term loan facility (the “Term Loan Facility”) in an aggregate principal amount equal to $75 million (the loans thereunder, the “Term Loan”). The Term Loan shall be repayable in quarterly principal installments of $187,500 each, continuing until and including December 31, 2010 (the “Term Loan Maturity Date”) on which date the unpaid balance of the Term Loan Facility and any accrued interest w
ould be due and payable in full.
	 
	 	 	 	 
	 

	 	Availability
	 	The Term Loan shall be made in a single drawing on the Closing Date.
	 
	 	 	 	 
	 

	 	Issue Price
	 	98% 
	 
	 	 	 	 
	III.

	 	Certain Payment Provisions	 	 
	 
	 	 	 	 
	 

	 	Interest Rates and Prepayment Fees
	 	As set forth on Annex A.






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	 	Optional Prepayments and
Commitment Reductions
	 	The Borrower may prepay the Term Loans, in whole
or in part, at any time or from time to time, subject to payment of the Prepayment Premiums set forth on Annex A.
	 
	 	 	 	 
	 

	 	Mandatory Prepayments
	 	An amount equal to (i) 100% of the net cash proceeds received by Borrower or any of its respective subsidiaries from the issuance of indebtedness after the Closing Date, other than agreed on customary exceptions for certain indebtedness permitted to be incurred under the Credit Documentation (as defined below) (ii) 100% of the net cash proceeds received from the sale or
other disposition of all or any part of the assets
of the Borrower or any of their respective
subsidiaries after the Closing Date (other than
sales of inventory in the ordinary course of
business), subject to agreed on customary
reinvestment rights and exceptions, (iii) 100% of
all casualty and condemnation proceeds received by
the Borrower or any of their respective
subsidiaries after the Closing Date, subject to
agreed on customary reinvestment rights and
exceptions, (iv) 100% of the net cash proceeds
from the issuance of equity securities by the
Borrower or any of their respective subsidiaries
(other than any such issuance to the Borrower or
any such subsidiaries and other items to be agreed
in the Credit Documentation); (v) 75% of excess
cash flow (as defined in the Credit Documentation)
of the Borrower and its respective subsidiaries,
and (vi) 100% of all tax refunds and other
extraordinary receipts (as defined in the Credit
Documentation) received by the Borrower or any of
its respective subsidiaries after the Closing
Date, subject to agreed on customary exceptions.
Application of such mandatory prepayments shall be
as set forth in the Credit Documentation (as
defined below).
	 
	 	 	 	 
	IV.

	 	Collateral
	 	The obligations of each Credit Party in respect of
the Facility (including, without limitation, any
exposure of a Lender in respect of hedging
transactions incurred on behalf of any Credit
Party) will be secured by a first priority
perfected pledge of and lien upon (i) all notes
(subject to agreed upon minimum thresholds) owned
by the Credit Parties, (ii) all voting stock owned
by the Credit Parties in existing or future
domestic subsidiaries and not more than 66% of the
voting stock of their respective first tier
foreign subsidiaries, (iii) accounts receivable
and inventory and certain books and intangibles
(other than intellectual property) relating
thereto and products and proceeds thereof, and
(iv) substantially all other personal property
assets owned by the Credit Parties except
leasehold interests, immaterial






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	 	 	 	owned and real
property, vehicles and other assets agreed to by
the Agent where the cost of pledging is excessive
in relation to the value of the collateral to the
Lenders (subject to agreed upon minimum thresholds
and customary exclusions) including, all material
owned real property and certain mortgageable
leasehold interests to be agreed upon
(collectively, the assets specified in (i), (ii)
(iii) and (iv) are referred to herein as the
“Collateral”).
	 
	 	 	 	 
	 

	 	 	 	The pledges, liens and security interests of the
Lenders shall be subject to customary permitted
liens to be specified in the Credit Documentation.
	 
	 	 	 	 
	V.

	 	Use of Proceeds
	 	The proceeds of the Term Loan shall be in
repayment of the Borrower’s existing senior term
loan indebtedness under that certain Term Loan
Agreement dated as of August 20, 2003 among
Haights Cross Operating Company, as Borrower, the
several lenders party thereto, and Bear Stearns
Corporate Lending Inc., (“Bear Stearns”) as
Administrative Agent (the “Term Loan Agreement”).
	 
	 	 	 	 
	VI.

	 	Certain Conditions
	 	The availability of the Facility is subject to the
satisfaction or written waiver of conditions that
are customary for the Agent’s loans of this type,
including the following (the date of such
satisfaction of all such conditions, the “Closing
Date”):
	 
	 	 	 	 
	 

	 	 	 	(a) evidence satisfactory to the Agent that all
indebtedness outstanding under the Term Loan
Agreement has been previously or concurrently paid
off with proceeds of this Facility;
	 
	 	 	 	 
	 

	 	 	 	(b) evidence satisfactory to the Agent that all
indebtedness outstanding under the Borrower’s Term
Loan Agreement dated as of December 10, 2004 among
the Borrower, the several lenders party thereto
and Bear Stearns, as administrative agent, has
been previously or concurrently paid off;
	 
	 	 	 	 
	 

	 	 	 	(c) no circumstance shall have occurred since the
date hereof, which (i) has had, or could
reasonably be expected to have, a material adverse
effect on or change in the condition (financial or
otherwise), business, results of operation, assets
or liabilities of the Company and its subsidiaries
taken as a whole, or (ii) calls into question in
any material respect the Projections previously
supplied to the Agent or any of the material
assumptions on which such Projections were
prepared (either (i) or






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	 	 	 	(ii), a “MAC”);
	 
	 	 	 	 
	 

	 	 	 	(d) there shall not be any pending or written
threat of litigation or other proceedings (private
or governmental) with respect to the Transaction
contemplated by the Commitment Letter which, if
adversely decided, could reasonably be expected to
result in a MAC, and there shall not be any order
or injunction binding on the Credit Parties
interfering with their complying with their
obligations under the Credit Documentation in any
material respect, and the Credit Parties and the
Transaction contemplated by the Commitment Letter
shall be in compliance, in all material respects,
with all applicable foreign and federal, state and
local laws and regulations, including all
applicable environmental laws and regulations;
	 
	 	 	 	 
	 

	 	 	 	(e) the Agent shall have a valid and perfected
first priority liens and security interests in the
Collateral (with certain customary post-closing
exceptions to be agreed and subject to permitted
liens), all filings, recordations and searches
(including a recent lien, tax lien, judgment and
litigation search in each relevant jurisdiction
with respect to each Credit Party, which search
shall have revealed no liens on the assets of such
Credit Party except for liens permitted by the
Credit Documentation or liens to be discharged on
or prior to the Closing Date pursuant to
documentation reasonably satisfactory to the
Agent) reasonably necessary in connection with the
Collateral shall have been duly made, and all
filing and recording fees and taxes shall have
been duly paid, including in each case under, and
as required by, all applicable laws;
	 
	 	 	 	 
	 

	 	 	 	(f) each of the Credit Parties shall have provided
the documentation and other information to the
Agent and the Lenders that is required by
regulatory authorities under applicable “know your
customer” and anti-money laundering rules and
regulations, including, without limitation, the
Patriot Act;
	 
	 	 	 	 
	 

	 	 	 	(g) the Credit Parties shall have executed and
delivered definitive documentation with respect to
the Facility consistent with the terms hereof (the
“Credit Documentation”), that is reasonably
satisfactory to the Agent and Lenders;
	 
	 	 	 	 
	 

	 	 	 	(h) all material governmental and third party
approvals (including, with certain post-closing
exceptions to be agreed, landlords’ and other
consents) and consents including regulatory
approvals necessary or, in the






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	 	 	 	reasonable
discretion of Agent, advisable in connection with
the Transaction shall have been obtained and be in
full force and effect, without any action being
taken or threatened by any competent authority
that would restrain, prevent or otherwise impose
adverse conditions on the Transaction;
	 
	 	 	 	 
	 

	 	 	 	(i) the Agent shall have received such legal
opinions, documents and such other instruments as
are customary for Transaction of this type or as
it may reasonably request;
	 
	 	 	 	 
	 

	 	 	 	(j) the Agent shall have received a customary
solvency certificate from the chief financial
officer of the Borrower as to the solvency of the
Borrower and its subsidiaries (on a consolidated
basis) after giving effect to the transactions
contemplated hereby;
	 
	 	 	 	 
	 

	 	 	 	(k) all reasonable and documented fees and
expenses (including fees and expenses of counsel)
required to be paid to the Agent and the Lenders
on or before the Closing Date shall have been
paid, provided that Borrower shall not be required
to pay for more than one outside counsel for the
Lenders unless an actual conflict of interest
exists (except for fees and expenses of local
counsel retained by the Lenders from time to time
in connection with perfecting the liens granted by
the Credit Parties pursuant to the Credit
Documentation);
	 
	 	 	 	 
	 

	 	 	 	(l) all representations and warranties in the
Credit Documentation (including, without
limitation, the material adverse change and
litigation representations) shall be true and
correct on the Closing Date in all material
respects (to the extent not otherwise qualified by
materiality) other than those which specifically
relate to an earlier date; and
	 
	 	 	 	 
	 

	 	 	 	(m) there shall be no default or event of
default in existence at the time of, or after
giving effect to the making of, the Term Loan.






14









 






	 	 	 	 	 
	VII.

	 	Certain Documentation Matters
	 	The Credit Documentation will contain
representations, warranties, affirmative and
negative covenants, and events of default relating
to the Credit Parties and their subsidiaries
consistent with this summary of terms and
conditions and other customary terms reasonably
deemed appropriate by the Agent and Lenders
(subject to exceptions and carve-outs to be agreed
upon), including, without limitation:
	 
	 	 	 	 
	 

	 	Representations and Warranties
	 	Customary for transactions of this type, including
financial condition, no change, corporate
existence; compliance with law, power;
authorization; enforceable obligations, no
contractual or legal bar, litigation, no default,
ownership of property; liens, intellectual
property, taxes, federal regulations, labor
matters, ERISA, Investment Company Act; other
regulations, subsidiaries, use of proceeds,
environmental matters, accuracy of information,
security documents, solvency, Regulation H,
terrorism laws, no restricted junior payments,
material contracts and certain documents and
financial assistance.
	 
	 	 	 	 
	 

	 	Affirmative Covenants
	 	Customary for transactions of this type, including
delivery of financial statements, budgets and
other reports; maintenance of existence; payment
of taxes and claims; maintenance of properties;
maintenance of insurance; maintenance of books and
records; right of the Agent and the Lenders to
inspect books and records; participation in
meetings with the Agent and the Lenders;
compliance with laws; environmental reporting and
compliance; joinder of new subsidiaries; mortgages
on after-acquired material real estate assets;
interest rate protection; further assurances;
non-consolidation; establishment of satisfactory
cash management systems; conduct of business;
notice of defaults, material litigation and other
material events; and use of proceeds.
	 
	 	 	 	 
	 

	 	Negative Covenants
	 	Customary for transactions of this type, including
limitations on: incurrence of indebtedness
(including restrictions on the incurrence of
secured indebtedness) and hedging arrangements;
incurrence of liens and further negative pledges;
dividends (other than, in the absence of a
default, dividends to the Parent for regularly
scheduled debt service of the Parent’s existing
indebtedness), stock repurchases and redemptions;
investments; mergers, liquidations, dissolutions
and other fundamental changes; disposal of
subsidiary interests; sale and leaseback
transactions; transactions with shareholders and
affiliates; changes to line of business;
amendments or waivers with respect to other
indebtedness; changes in fiscal year;
modifications,






15









 






	 	 	 	 	 
	 

	 	 	 	amendments or waivers of the terms
of organizational documents or material contracts
in any manner materially adverse to the Lenders;
establishment of deposit accounts other than
blocked accounts for which the Agent has
“springing” control; prepayments of indebtedness;
and issuance of disqualified capital stock.
	 
	 	 	 	 
	 

	 	Financial Covenants
	 	Maximum Total Leverage Ratio and Minimum Interest
Coverage Ratio, to be tested on a cumulative basis
monthly beginning two full months after the
Closing Date for the first year after the Closing
Date and on a quarterly basis thereafter. EBITDA
to be computed by including amortization of
capitalized pre-publication costs, based on 115%
of the Projections. Maintenance of minimum
Unrestricted Cash and Cash Equivalents of $15
million.
	 
	 	 	 	 
	 

	 	Events of Default
	 	The Credit Documentation shall contain customary
events of default (subject to materiality
thresholds and grace periods customary for credit
facilities of this type) including, without
limitation, the following: nonpayment; cross
defaults; breach of certain covenants; breach of
representations; other defaults under Credit
Documentation; certain material contracts;
bankruptcy and insolvency events; material
judgments; dissolution; ERISA events; change of
control; and invalidity of guarantees and security
documents. There shall not be a MAC event of
default.
	 
	 	 	 	 
	VIII.

	 	Miscellaneous	 	 
	 
	 	 	 	 
	 

	 	Requisite Lenders
	 	Lenders holding at least a majority of the total
Loans and commitments under the Facility, with
certain amendments requiring the consent of
Lenders holding a greater percentage (or all) of
the total Loans and commitments under the Facility
and amendments prior to completion of the primary
syndication of the Facility (as determined by the
Agent) also requiring the consent of the Agent.
	 
	 	 	 	 
	 

	 	Assignments and Participations
	 	The Credit Documentation shall provide that any
Lender shall be permitted to assign its rights and
obligations under the Facility, or any part
thereof, to any person or entity without the
consent of the Credit Parties. Each Lender shall
be permitted to grant participations in such
rights and obligations, or any part thereof, to
any person or entity without the consent of the
Credit Parties. Pledges of Loans in accordance
with applicable law shall be permitted without
restriction. Promissory notes shall be issued
under the Facility only upon request.






16









 






	 	 	 	 	 
	 

	 	Expenses and Indemnification
	 	The Borrower shall pay (i) all reasonable and
documented out-of-pocket expenses of the Agent and
the Lenders associated with the syndication of the
Facility and the preparation, negotiation,
execution and delivery of the Credit Documentation
and any amendment or waiver with respect thereto
(including, the reasonable and documented
out-of-pocket fees, disbursements and other
charges of counsel and the allocated cost of
internal counsel), (ii) all reasonable and
documented out-of-pocket expenses of having the
Loans rated by one or more rating agencies, and
(iii) all reasonable and documented out-of-pocket
expenses of the Agent and the Lenders (including
the fees, disbursements and other charges of
counsel and the allocated cost of internal
counsel) and all reasonable and documented
out-of-pocket fees, disbursements and other
charges of one counsel (subject to conflict of
interests) of the Lenders, in each case in
connection with the enforcement of the Credit
Documentation.
	 
	 	 	 	 
	 

	 	 	 	The Agent and the Lenders (and their affiliates
and their respective officers, directors,
employees, advisors and agents) will be
indemnified and held harmless against, any loss,
liability, cost or expense incurred in respect of
the Facility or the use or the proposed use of
proceeds thereof (except to the extent resulting
from the gross negligence or willful misconduct of
the indemnified party).
	 
	 	 	 	 
	 

	 	Yield Protection, Taxes and Other
Deductions
	 	The Credit Documentation will contain yield
protection provisions, customary for facilities of
this nature, protecting the Lenders in the event
of unavailability of LIBOR, breakage losses,
reserve and capital adequacy requirements. All
payments are to be free and clear of any present
or future taxes, withholdings or other deductions
whatsoever.
	 
	 	 	 	 
	 

	 	Governing Law and Forum
	 	State of New York.
	 
	 	 	 	 
	 

	 	Counsel to the Agent, Monarch and
Glenview
	 	Weil, Gotshal & Manges LLP.






17









 





Annex A




Interest and Certain Fees




	 	 	 
	Interest Rate

	 	Loans comprising each borrowing bear interest at
a rate per annum equal to the LIBOR Rate plus
the Applicable Margin.
	 
	 	 
	 

	 	As used herein:
	 
	 	 
	 

	 	The “LIBOR Rate” means the rate per annum,
determined by Agent in accordance with its
customary procedures, at which dollar deposits
are offered to major banks in the London
interbank market, adjusted by the reserve
percentage prescribed by governmental
authorities as determined by Agent. The LIBOR
Rate shall be available for interest periods of
1, 2, or 3 months.
	 
	 	 
	 

	 	The “Applicable Margin” means 8.5%.
	 
	 	 
	 

	 	There shall be a minimum LIBOR Rate requirement
of 3.50% per annum.
	 
	 	 
	Interest Payment Dates

	 	On the last day of each relevant interest period.
	 
	 	 
	Default Rate

	 	At any time when an event of default has
occurred and is continuing, all amounts
outstanding under the Facility shall bear
interest at 2.0% above the interest rate
otherwise applicable thereto.
	 
	 	 
	Rate Basis

	 	All per annum rates shall be calculated on the
basis of a year of 360 days and the actual
number of days elapsed.
	 
	 	 
	Prepayment Premiums

	 	All optional and mandatory prepayments of the
Term Loan (other than any mandatory prepayment
made pursuant to clauses (ii), (iii), (v) and
(vi) of the “Mandatory Prepayments” section of
this Attachment A), shall be subject to an early
termination fee equal to (i) 2.0% of the amount
of such prepayment in the first year after the
Closing Date and (ii) 1.0% of the amount of such
prepayment in the second year after the Closing
Date. From and after the end of the second year
after the Closing Date, no early termination
fees shall be payable.
	 
	 	 
	Agent and Collateral Agent Fees

	 	TBD







18