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EXHIBIT 99.1
RACING CHAMPIONS, INC.
CREDIT AGREEMENT
AMENDMENT NO. 3
This Agreement, dated as of June 11, 1998 (this "Agreement"), is among
Racing Champions Corporation, a Delaware corporation, the Subsidiaries of Racing
Champions Corporation set forth on the signature pages hereto, including Racing
Champions, Inc., an Illinois corporation, the Lenders under the Credit Agreement
(as defined below) and BankBoston, N.A., as Agent for itself and such Lenders.
The parties agree as follows:
1. Credit Agreement: Definitions. This Agreement amends the Amended and
Restated Credit Agreement dated as of June 17, 1997 among the parties hereto (as
in effect prior to giving effect to this Agreement, the "Credit Agreement").
Terms defined in the Credit Agreement as amended hereby (the "Amended Credit
Agreement") and not otherwise defined herein are used with the meaning so
defined.
2. Amendment of Credit Agreement. Effective upon the date all the
conditions set forth in Section 4 hereof are satisfied (the "Amendment Date"),
which conditions must be satisfied no later than June 30, 1998, the Credit
Agreement is amended as follows:
2.1. Amendment of Recitals. The Recitals of the Credit
Agreement are amended and restated to read in their entirety as
follows:
"Recitals: Pursuant to this Agreement, the Lenders
are extending to the Borrower a $12,000,000 revolving credit
facility, including a $1,500,000 Letter of Credit facility,
and a $25,000,000 term loan facility. All credit facilities
mature on June 30, 2003. These credit facilities are
guaranteed by the Company and the Company's Domestic
Subsidiaries and are secured by liens on substantially all the
assets (including stock of Subsidiaries) of the Company and
its Domestic Subsidiaries."
2.2. Amendment of Section 1.70. The definition of "Final
Maturity Date" in Section 1.70 of the Credit Agreement is amended to
read in its entirety as follows:
"1.70. "Final Maturity Date" means June 30,
2003."
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2.3. Amendment of Section 2.1.2. Section 2.1.2 of the Credit
Agreement is amended so that clause (a)(i) thereof reads in its
entirety as follows:
"(a)(i) $12,000,000 minus "
2.4. Amendment of Section 4.2. Section 4.2 of the Credit
Agreement is amended to read in its entirety as follows:
"4.2. Scheduled Required Prepayments. On the last
Banking Day of September 1998 and on each Payment Date
thereafter and on the Final Maturity Date, the Borrower will
pay to the Agent for the account of the Lenders as a
prepayment of the Term Loan the lesser of (a) the amount set
forth in the table below for such date or (b) the amount of
the Term Loan then outstanding.
Payment Date Amount
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September 1998 through June 1999 $1,000,000
September 1999 through June 2000 $1,125,000
September 2000 through June 2001 $1,250,000
September 2001 through June 2002 $1,375,000
September 2002 through Final Maturity Date $1,500,000"
2.5. Amendment of Section 4.6.1. Section 4.6.1 of the Credit
Agreement is amended by changing the references to "Section 4.2.1"
therein to "Section 4.2" .
2.6. Amendment of Section 6.9. Section 6.9 of the Credit
Agreement is amended by adding at the end thereof a new Section 6.9.12
to read in its entirety as follows:
"6.9.12. So long as immediately before and after
giving effect thereto no Default exists, the Company may
acquire Wheels Sports Group, Inc. through a reverse subsidiary
merger for aggregate consideration consisting of common stock
of the Company and the repayment of not more than $14,000,000
of Financing Debt; provided, however, that promptly after such
merger Wheels Sports Group, Inc. and its Subsidiaries (a)
shall become party to this Agreement, the Guarantee and
Security Agreement and the other applicable Credit Documents
as Guarantors and Obligors and (b) shall take all steps
reasonably requested by the Agent to grant to the Agent, and
to perfect, a security interest in all their assets to secure
the Credit Obligations."
2.7. Amendment of Exhibit 10.1. Exhibit 10.1 of the Credit
Agreement is amended to read in its entirety as set forth in Exhibit
10.1 hereto.
3. Representations and Warranties. Each of the Company and such of its
Subsidiaries as are party hereto jointly and severally represents and warrants
as follows:
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3.1. Legal Existence, Organization. Each of the Company and
its Subsidiaries is duly organized and validly existing and in good
standing under the laws of the jurisdiction of its organization, with
all power and authority, corporate, partnership or otherwise, necessary
(a) to enter into and perform this Agreement and the Amended Credit
Agreement and (b) to own its properties and carry on the business now
conducted or proposed to be conducted by it. Each of the Company and
the Subsidiaries has taken all corporate, partnership or other action
required to make the provisions of this Agreement and the Amended
Credit Agreement the valid and enforceable obligations they purport to
be.
3.2. Enforceability. Each of the Company and its Subsidiaries
has duly authorized, executed and delivered this Agreement. Each of
this Agreement and the Amended Credit Agreement is the legal, valid and
binding obligation of each of the Company and the Subsidiaries and is
enforceable against the Company and its Subsidiaries in accordance with
its terms.
3.3. No Legal Obstacle to Agreements. Neither the execution,
delivery or performance of this Agreement, nor the performance of the
Amended Credit Agreement, nor the consummation of any other transaction
referred to or contemplated by this Agreement, nor the fulfillment of
the terms hereof or thereof, has constituted or resulted in or will
constitute or result in:
(a) any breach or termination of any agreement, instrument,
deed or lease to which the Company or any of its Subsidiaries is a
party or by which it is bound, or of the Charter or By-laws of the
Company or any of its Subsidiaries;
(b) the violation of any law, judgment, decree or governmental
order, rule or regulation applicable to the Company or any of its
Subsidiaries;
(c) the creation under any agreement, instrument, deed or
lease of any Lien (other than Liens on the Credit Security which secure
the Credit Obligations) upon any of the assets of the Company or any of
its Subsidiaries; or
(d) any redemption, retirement or other repurchase obligation
of the Company or any of its Subsidiaries under any Charter, By-law,
agreement, instrument, deed or lease.
No approval, authorization or other action by, or declaration to or
filing with, any governmental or administrative authority or any other
Person is required to be obtained or made by the Company or any of its
Subsidiaries in connection with the execution, delivery and performance
of this Agreement or the performance of the Amended Credit Agreement,
or the consummation of the transactions contemplated hereby or thereby.
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3.4. Defaults. Immediately before and after giving effect to
the amendments set forth in Section 2 hereof, no Default will exist.
3.5. Incorporation of Representations and Warranties. The
representations and warranties set forth in Section 7 of the Amended
Credit Agreement are true and correct on the date hereof as if
originally made on and as of the date hereof.
4. Conditions. The effectiveness of this Agreement shall be subject to
the satisfaction of the following conditions, which conditions must be satisfied
prior to June 30, 1998 or this Agreement shall terminate:
4.1. Replacement Notes. The Borrower shall have duly
authorized, executed and delivered to each Lender replacement Notes
reflecting the Commitment amounts under the Amended Credit Agreement,
whereupon the existing Notes shall be automatically terminated and of
no further force or effect.
4.2. Legal Opinion. The Lenders shall have received from
Reinhart, Boerner, Van Deuren, Xxxxxx & Xxxxxxxxxx, S.C., special
counsel to the Company, their opinion with respect to the transactions
contemplated by this Agreement, which opinion shall be in form and
substance satisfactory to the Lenders. The Company authorizes and
directs its special counsel to furnish the foregoing opinion.
4.3. Officer's Certificate. The representations and warranties
of the Company and its Subsidiaries set forth or incorporated by
reference herein shall be true and correct as of the Amendment Date as
if originally made on and as of the Amendment Date; no Default shall
have occurred on or prior to the Amendment Date or hereby; and the
Agent shall have received a certificate to these effects signed by a
Financial Officer in the event the Amendment Date occurs after the date
hereof.
4.4. Proper Proceedings. This Agreement, each other Credit
Document and the transactions contemplated hereby and thereby shall
have been authorized by all necessary proceedings of each Obligor and
any of their respective Affiliates party thereto. All necessary
consents, approvals and authorizations of any governmental or
administrative agency or any other Person with respect to any of the
transactions contemplated hereby or by any other Credit Document shall
have been obtained and shall be in full force and effect. The Agent
shall have received copies of all documents, including certificates,
records of corporate and partnership proceedings and opinions of
counsel, which the Agent may have reasonably requested in connection
therewith, such documents where appropriate to be certified by proper
corporate, partnership or governmental authorities.
4.5. Payment of Fees. The Company shall have paid to the Agent
an upfront fee equal to $30,875 and all legal fees and expenses of the
Agent's counsel for which statements have been delivered on or prior to
the Amendment Date.
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5. General. The Amended Credit Agreement and all of the Credit
Documents are each confirmed as being in full force and effect. This Agreement,
the Amended Credit Agreement and the other Credit Documents referred to herein
or therein constitute the entire understanding of the parties with respect to
the subject matter hereof and thereof and supersede all prior and current
understandings and agreements, whether written or oral. Each of this Agreement
and the Amended Credit Agreement is a Credit Document and may be executed in any
number of counterparts, which together shall constitute one instrument, and
shall bind and inure to the benefit of the parties and their respective
successors and assigns, including as such successors and assigns all holders of
any Note. This Agreement shall be governed by and construed in accordance with
the laws (other than the conflict of law rules) of The Commonwealth of
Massachusetts.
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Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as an agreement under seal as of the
date first above written.
RACING CHAMPIONS CORPORATION
By /s/ Xxxxxx X. Xxxx
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Title: President
RACING CHAMPIONS, INC.
By /s/ Xxxxxx X. Xxxx
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Title: President
BANKBOSTON, N.A., for itself and as
Agent under the Credit Agreement
By /s/ C. Xxxxxx Xxxxxxxx
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Title: Vice President
LASALLE NATIONAL BANK
By /s/ A. Xxxxxx Xxxxx
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Loan Officer
SANWA BUSINESS CREDIT CORPORATION
By /s/ Xxxxxxx Xxxxxxxx
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Vice President
NORTHERN TRUST BANK
By /s/ Xxxxx X. Xxxx
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Senior Vice President
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EXHIBIT 10.1
PERCENTAGE INTERESTS
Approximate
Principal Amount Aggregate
Lender of Commitment Percentage Interest
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Revolving Term
Credit Loan
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BankBoston, N.A. $4,075,471.68 $8,490,565.99 33.9623%
LaSalle National Bank 2,264,150.95 4,716,981.14 18.8679%
Sanwa Business Credit 2,830,188.69 5,896,226.43 23.5849%
Corporation
Northern Trust Bank 2,830,188.69 5,896,226.43 23.5849%
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$12,000,000.00 $25,000,000 100.0000%
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