INTANTO GROSSE NOVITA' POSITIVE :
Entry into a Material Definitive Agreement.
On November 9, 2011, The Princeton Review, Inc. and Penn Foster, Inc. (collectively, the “ Company ”) entered into a (i) second amendment to amended and restated credit agreement with the guarantors party thereto, the Lenders (as defined therein) and General Electric Capital Corporation as administrative agent (the “ Amendment to Credit Agreement ”), (ii) fourth amendment to senior subordinated note purchase agreement with the guarantors party thereto and the investment funds of Falcon Investment Advisors (“ Falcon ”) and Sankaty Advisors, LLC (“ Sankaty ”) (the “ Amendment to Senior Subordinated Note Purchase Agreement ”), and (iii) fourth amendment to securities purchase agreement with the guarantors party thereto and the investment funds of Falcon and Sankaty (the “ Amendment to Securities Purchase Agreement ” and together with the Amendment to Credit Agreement and the Amendment to Senior Subordinated Note Purchase Agreement, collectively, the “ Amendments ”).
The Amendments provide the Company with greater flexibility in maintaining covenant compliance by: (i) waiving maximum leverage ratio covenants through March 2012, and increasing limits through the remainder of 2012, (ii) waiving minimum fixed charge coverage ratios through December 2012, and (iii) lowering the minimum liquidity covenant requirement through maturity. In addition, the Amendments require the Company to maintain minimum adjusted EBITDA levels. In June 2012, the Company will be required to maintain minimum ratios of adjusted EBITDA to cash interest expense. The Amendments also eliminate the Company’s ability to repurchase shares of common stock from former employee stockholders, and to make future acquisitions and investments in strategic ventures.
Further, under the Amendment to Credit Agreement, the Company will incur an additional amendment fee of up to four percent (4%) of the outstanding loan balance at March 31, 2012 if it does not achieve certain specified objectives. The fee, if due, will be payable on April 1, 2013.
The foregoing summary of the Amendments, the Amendment to Senior Subordinated Note Purchase Agreement, and the Amendment to Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full texts of the Amendments, copies of which will be filed as exhibits to the Company’s next periodic report on Form 10-K.
