THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
Exhibit
10.17
THIRD
AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
This
Third
Amendment to Amended and Restated Credit Agreement (herein, the “Amendment”)
is
entered into as of July 28, 2006 by and among RC2 Brands, Inc.
(“RC2 Brands”),
RC2 South, Inc. (“RC2S”),
Learning Curve International, Inc. (“LCI”),
The
First Years Inc. (“TFY”),
Racing
Champions Worldwide Limited (“RCWL”;
RC2 Brands, RC2S, LCI, TFY, and RCWL being referred to herein collectively
as the “Borrowers”),
Xxxxxx
X.X., as Administrative Agent, and the Lenders party hereto.
Preliminary
Statements
A. The
Borrowers, the Lenders and the Administrative Agent entered into an Amended
and
Restated Credit Agreement dated as of September 15, 2004 as heretofore
amended (the “Credit
Agreement”).
All
capitalized terms used herein without definition shall have the same meanings
herein as such terms have in the Credit Agreement.
B. The
Borrowers have requested that the Lenders modify the definition of the terms
“Applicable Margin” and “EBITDA”, provide for the ability of the Borrowers to
increase the aggregate Revolving Credit Commitments by $75,000,000 and make
certain other amendments to the Credit Agreement, and the Lenders are wiling
to
do so under the terms and conditions set forth in this Amendment.
NOW,
THEREFORE,
for good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION
1. Amendments.
Subject
to the satisfaction of the conditions precedent set forth in Section 2
below, the Credit Agreement shall be and hereby is amended as
follows:
1.1 Section 1
of the Credit Agreement shall be amended by inserting a new Section 1.17 to
read as follows:
“Section 1.17.
Increase in Revolving Credit Commitments.
The
Borrowers may from time to time in consultation with the Administrative Agent,
on any Business Day prior to the Revolving Credit Termination Date so long
as no
Event of Default exists, increase the aggregate amount of the Revolving Credit
Commitments by delivering a Commitment Amount Increase Request at least
10 Business Days prior to the desired effective date of such increase (the
“Commitment
Amount Increase”)
identifying the additional Revolving Credit Commitments for existing Lender(s)
agreeing to increase its/their Revolving Credit Commitment(s) (or identifying
one or more additional Lender(s) and the amount of its/their Revolving Credit
Commitment(s)); provided,
however,
that
(i) the aggregate of all Commitment Amount Increases shall not exceed
$75,000,000, (ii) the aggregate
amount
of
the Revolving Credit Commitments shall not at any time exceed $175,000,000,
(iii) any increase of the aggregate amount of the Revolving Credit
Commitments shall be in an amount not les than $25,000,000 and (iv) if the
Borrowers invite additional Lenders to join this Agreement, such additional
Lenders shall enter into such joinder agreements to give effect thereto as
the
Administrative Agent may reasonably request. The effective date of any
Commitment Amount Increase shall be agreed upon by the Borrowers and the
Administrative Agent. Upon the effectiveness thereof, the new Lender(s) (or,
if
applicable, existing Lender(s)) shall advance Revolving Loans, or the existing
Lenders shall make such assignments (which assignments shall not be subject
to
the requirements set forth in Section 13.12) of the outstanding Revolving
Loans and L/C Obligations to the Lenders providing the Commitment Amount
Increase so that, after giving effect to such assignments, each Lender
(including the Lenders providing the Commitment Amount Increase) will hold
Revolving Loans and L/C Obligations equal to its Revolver Percentage of al
outstanding Revolving Loans and L/C Obligations. It shall be a condition to
such
effectiveness that either no Eurodollar Loans be outstanding on the date of
such
effectiveness or the Borrowers pay any applicable breakage cost under
Section 1.12 incurred by any Lender resulting from the repayment of its
Revolving Loans. The Borrowers agree to pay any reasonable expenses of the
Administrative Agent relating to any Commitment Amount Increase. Notwithstanding
anything herein to the contrary, no Lender shall have any obligation to increase
its Revolving Credit Commitment and no Lender's Revolving Credit Commitment
shall be increased without its consent thereto, and each Lender may at its
option, unconditionally and without cause, decline to increase its Revolving
Credit Commitment.”
1.2 The
definitions of the terms “Applicable Margin” and “EBITDA” appearing in
Section 5.1 of the Credit Agreement shall be amended and restated in their
entirety to read, respectively, as follows:
““Applicable
Margin”
means,
with respect to Loans, Reimbursement Obligations, and the commitment fees and
letter of credit fees payable under Section 2.1 hereof until the first
Pricing Date, the rates per annum shown opposite Level I below, and
thereafter from one Pricing Date to the next the Applicable Margin means the
rates per annum determined in accordance with the following
schedule:
2
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LEVEL
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CASH
FLOW LEVERAGE RATIO FOR SUCH PRICING DATE
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APPLICABLE
MARGIN FOR BASE RATE LOANS AND REIMBURSEMENT OBLIGATIONS SHALL
BE:
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APPLICABLE
MARGIN FOR LETTER OF CREDIT FEE AND EURODOLLAR LOANS SHALL
BE:
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APPLICABLE
MARGIN FOR COMMITMENT FEE SHALL BE:
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IV
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Greater
than or equal to 1.75 to 1.0
|
0%
|
1.625%
|
0.35%
|
|
III
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Less
than 1.75 to 1.0, but greater than
or
equal to 1.25 to 1.0
|
0%
|
1.25%
|
0.30%
|
|
II
|
Less
than 1.25 to 1.0, but greater than
or
equal to 0.75 to 1.0
|
0%
|
1.00%
|
0.25%
|
|
I
|
Less
than 0.75 to 1.0
|
0%
|
0.75%
|
0.20%
|
For
purposes hereof, the term “Pricing
Date”
means,
for any fiscal quarter of the Borrowers ending on or after September 30,
30, 2006, the date on which the Administrative Agent is in receipt of the
Borrowers' most recent financial statements (and, in the case of the year-end
financial statements, audit report) for the fiscal quarter then ended, pursuant
to Section 8.5 hereof. The Applicable Margin shall be established based on
the Cash Flow Leverage Ratio for the most recently completed fiscal quarter
and
the Applicable Margin established on a Pricing Date shall remain in effect
until
the next Pricing Date. If the Borrowers have not delivered their financial
statements by the date such financial statements (and, in the case of the
year-end financial statements, audit report) are required to be delivered under
Section 8.5 hereof, until such financial statements and audit report are
delivered, the Applicable Margin shall be the highest Applicable Margin
(i.e.,
the Cash
Flow Leverage Ratio shall be deemed to be greater than 1.75 to 1.0). If the
Borrowers subsequently deliver such financial statements before the next Pricing
Date, the Applicable Margin established by such late delivered financial
statements shall take effect from the date of delivery until the next Pricing
Date. In al other circumstances, the Applicable Margin established by such
financial statements shall be in effect from the Pricing Date that occurs
immediately after the end of the fiscal quarter covered by such financial
statements until the next Pricing Date. Each determination of the Applicable
Margin made by the Administrative Agent in accordance with the foregoing shall
be conclusive and binding on the Borrowers and the Lenders if reasonably
determined.
“EBITDA”
means,
for any Person and with reference to any period, Net Income of such Person
and
its subsidiaries for such period plus
the sum
of al amounts deducted in arriving at such Net Income amount in respect of
(a) Interest Expense of such Person and its subsidiaries for such period,
(b) federal, state, and local income taxes for such period of such Person
and its subsidiaries for such period, (c) depreciation of fixed assets and
amortization of intangible
assets of such Person and its subsidiaries for such period, and
(d) non-cash expenses related to equity awards.”
3
1.3 Section 5.1
of the Credit Agreement shall be further amended by inserting, in the
appropriate alphabetical order, definitions of the terms “Commitment Amount
Increase” and “Commitment Amount Increase Request” to read, respectively, as
follows:
“Commitment
Amount Increase”
is
defined in Section 1.17 hereof.
“Commitment
Amount Increase Request”
means a
Commitment Amount Increase Request in the form of Exhibit I
hereto.”
1.4 The
Credit Agreement shall be further amended by inserting a new Exhibit I to
read as set forth on Annex A attached d hereto.
SECTION
2. Conditions
Precedent.
The
effectiveness of this Amendment is subject to the satisfaction of al of the
following conditions precedent:
2.1 The
Borrowers and the Lenders shall have executed and delivered this
Amendment.
2.2 The
Borrowers shall have paid to the Administrative Agent, for the account of the
Lenders, an amendment fee in an amount equal to 7.5 basis points on the
aggregate Revolving Credit Commitments and the outstanding principal balance
of
the Term Loans on the date hereof.
2.3 Legal
maters incident to the execution and delivery of this Amendment shall be
satisfactory to the Administrative Agent and its counsel.
Any
changes in pricing resulting from the amendment of the term “Applicable Margin”
as contemplated herein shall become effective upon the effectiveness of this
Amendment.
SECTION
3. Representations.
In
order
to induce the Lenders to execute and deliver this Amendment, the Borrowers
hereby represent to the Lenders that, as of the date hereof, the representations
and warranties set forth in Section 6 of the Credit Agreement are and shall
be and remain true and correct (except that the representations contained in
Section 6.5 shall be deemed to refer to the most recent financial
statements of the Company delivered to the Lenders) and the Borrowers are in
compliance with the terms and conditions of the Credit Agreement and no Default
or Event of Default has occurred and is continuing under the Credit Agreement
or
shall result after giving effect to this Amendment.
4
SECTION
4. Miscellaneous.
4.1 Except
as
specifically amended herein, the Credit Agreement shall continue in full force
and effect in accordance with its original terms. Reference to this specific
Amendment need not be made in the Credit Agreement, the Notes, or any other
instrument or document executed in connection therewith, or in any certificate,
letter or communication issued or made pursuant to or with respect to the Credit
Agreement, any reference in any of such items to the Credit Agreement being
sufficient to refer to the Credit Agreement as amended hereby.
4.2 This
Amendment may be executed in any number of counterparts, and by the different
parties on different counterpart signature pages, al of which taken together
shall constitute one and the same agreement. Any of the parties hereto may
execute this Amendment by signing any such counterpart and each of such
counterparts shall for al purposes be deemed to be an original. This Amendment
shall be governed by the internal laws of the State of Illinois.
[Signature
Pages Follow.]
5
This
Third Amendment to Amended and Restated Credit Agreement is entered into as
of
the date and year first above written.
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RC2 Brands,
Inc.
RC2 South,
Inc.
Learning
Curve International, Inc.
The
First Years, Inc.,
a
Massachusetts corporation
Racing
Champions Worldwide Limited
By /s/
Xxxxxx X.
Xxxxxxxxx
Name:
Xxxxxx X. Xxxxxxxxx
Title:
Chief Executive Officer of
RC2 Brands,
RC2S
and LCI, President of
TFY
and
Director of RCWL
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6
Accepted
and agreed to as of the date and year first above written.
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Xxxxxx
X.X., in
its individual capacity and as Administrative Agent
By /s/ Xxxxxxx
XxXxxxxxx
Name Xxxxxxx
XxXxxxxxx
Title Managing
Director
|
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National
City Bank of the Midwest
By
/s/ Xxxxxxxx
X.
Xxxxx
Name Xxxxxxxx
X. Xxxxx
Title Senior
Vice President
|
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U.S.
Bank National Association
By
/s/ Xxxxx
X.
Xxxxxx
Its Vice
President
|
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LaSalle
Bank National Association
By /s/ Xxxxxxx
X.
Xxxxx
Its First
Vice President
|
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Fifth
Third Bank (Chicago), a
Michigan Banking Corporation
By /s/ Xxx
Xxxxxxxxxxx
Name
Xxx
Xxxxxxxxxxx
Title
Vice
President
|
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The
Northern Trust Company
By /s/ Xxxxxx
Xxxxxxx
Its Officer
|
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7
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Associated
Bank, N.A.
By /s/ Xxxxxx
Xxxxxxxxx
Its Vice
President
|
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Charter
One Bank N.A.
By /s/ Xxxxx
Xxxxxxxx
Its Vice
President
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