FIRST AMENDMENT TO CREDIT AGREEMENT
Exhibit 10.1
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of November 5, 2008,
by and between RENAISSANCE LEARNING, INC., a Wisconsin (“Borrower”), and XXXXX FARGO BANK, NATIONAL
ASSOCIATION (“Bank”).
RECITALS
WHEREAS, Borrower is currently indebted to Bank pursuant to the terms and conditions of that
certain Credit Agreement between Borrower and Bank dated as of October 1, 2007, as amended from
time to time (“Credit Agreement”).
WHEREAS, Bank and Borrower have agreed to certain changes in the terms and conditions set
forth in the Credit Agreement and have agreed to amend the Credit Agreement to reflect said
changes.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree that the Credit Agreement shall be amended as follows:
1. Section 1.1 (a) is hereby amended by deleting “May 31, 2009” as the last day on which Bank
will make advances under the Line of Credit, and by substituting for said date “July 1, 2009,” with
such change to be effective upon the execution and delivery to Bank of a promissory note dated as
of November 5, 2008 (which promissory note shall replace and be deemed the Line of Credit Note
defined in and made pursuant to the Credit Agreement) and all other contracts, instruments and
documents required by Bank to evidence such change.
2. Section 1.1 (c) is hereby deleted in its entirety, and the following substituted therefor:
“(c) Borrowing and Repayment. Borrower may from time to time during the term of the
Line of Credit borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject
to all of the limitations, terms and conditions contained herein or in the Line of Credit Note;
provided however, that the total outstanding borrowings under the Line of Credit shall not at any
time exceed the maximum principal amount available thereunder, as set forth above or when
applicable the maximum principal amount deemed available by the Borrowing Base. Upon any request
by Borrower for an advance on the Line of Credit, such advances shall be subject to a Borrowing
Base established by Bank with eligible collateral and advance rates as set forth in the Addendum to
Third Party Security Agreement: Securities Accounts.”
3. Section 1.3 is hereby deleted in its entirety, and the following substituted
therefor:
“SECTION 1.3. COLLATERAL.
As security for all indebtedness and other obligations of Borrower to Bank subject hereto,
Borrower hereby grants to Bank security interests of first priority in all Borrower’s accounts
receivable and other rights to payment, general intangibles, inventory, equipment.
As security for all indebtedness and other obligations of Borrower to Bank subject hereto, Borrower
shall cause RL Investments, Inc. to grant to Bank security interests of first priority in
securities account # 00000000.
All of the foregoing shall be evidenced by and subject to the terms of such security agreements,
financing statements, deeds or mortgages, and other documents as Bank shall reasonably require, all
in form and substance satisfactory to Bank. Borrower shall pay to Bank immediately upon demand the
full amount of all charges, costs and expenses (to include fees paid to third parties and all
allocated costs of Bank personnel), expended or incurred by Bank in connection with any of the
foregoing security, including without limitation, filing and recording fees and costs of
appraisals, audits and title insurance.”
4. The following is hereby added to the Credit Agreement as Section 1.4:
“SECTION 1.4. GUARANTIES. The payment and performance of all indebtedness and other
obligations of Borrower to Bank shall be guaranteed jointly and severally by RL Investments, Inc.,
as evidenced by and subject to the terms of guaranties in form and substance satisfactory to Bank.”
5. Section 4.3 (c), (d), (e) and (f) are hereby deleted in its entirety, and the following
substituted therefore:
“(c) a Borrowing Base Certificate at the time of any request for an advance on
the Line of Credit and within 30 days after and as of each month end thereafter, so
long as any outstanding balance exists under the Line of Credit;
(d) not later than 30 days after and as of the end of each month a brokerage
statements for each Securities Account listed in Section 1.3. hereof;
(e) together with the financial statements submitted as per 4.3(a) and 4.3(b) above, a
compliance certificate, signed by the controller or vice president of the Borrower, demonstrating
in reasonable detail compliance (or noncompliance, as the case may be) with the terms and
conditions of the Credit Agreement, as amended from time to time;
(f) from time to time such other information as Bank my reasonably request.”
6. Section 4.9 is hereby deleted in its entirety, and the following substituted therefore:
“SECTION 4.9. FINANCIAL CONDITION. Maintain Borrower’s financial condition as follows using
generally accepted accounting principles consistently applied and used consistently with prior
practices (except to the extent modified by the definitions herein)”
(a) Operating Profit not less than $1,000,000.00 as of each fiscal quarter end, with
“Operating Profit” defined as operating revenues less operating expenses, excluding non-cash
impairment charges related to intangible assets.”
7. Except as specifically provided herein, all terms and conditions of the Credit Agreement
remain in full force and effect, without waiver or modification. All terms defined in the Credit
Agreement shall have the same meaning when used in this Amendment. This Amendment and the Credit
Agreement shall be read together, as one document.
8. Borrower hereby remakes all representations and warranties contained in the Credit
Agreement and reaffirms all covenants set forth therein. Borrower further certifies that as of the
date of this Amendment there exists no Event of Default as defined in the Credit Agreement, nor any
condition, act or event which with the giving of notice or the passage of time or both would
constitute any such Event of Default.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the day
and year first written above.
| XXXXX FARGO BANK, | ||
RENAISSANCE LEARNING, INC.
|
NATIONAL ASSOCIATION | |
By: /s/ Xxxx X. Xxxxx
|
By: /s/ Xxxx Xxxxxx | |
Title: Senior Vice President-Finance
|
Title: Relationship Manager | |
Chief Financial Officer and Secretary |
