SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (the "Second Amendment")
dated as of May 15, 2000, is to that Credit Agreement dated as of April 13, 1999
(as amended and modified from time to time, the "Credit Agreement"; terms used
but not otherwise defined herein shall have the meanings provided in the Credit
Agreement), by and among RACING CHAMPIONS, INC., an Illinois corporation
("RCI"), and RACING CHAMPIONS SOUTH, INC., a North Carolina corporation ("RCS"),
(each of RCI and RCS individually a "U.S. Borrower", collectively, the "U.S.
Borrowers"), RACING CHAMPIONS WORLDWIDE LIMITED, a corporation organized under
the laws of the United Kingdom (the "U.K. Borrower"; together with the U.S.
Borrowers, the "Borrowers"), the Guarantors identified therein, the several
banks and other financial institutions identified therein (the "Lenders") and
FIRST UNION NATIONAL BANK, a national banking association, as administrative
agent for the Lenders thereunder (in such capacity, the "Administrative Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Lenders have established a $175,000,000 secured credit
facility for the benefit of the Borrowers pursuant to the terms of the Credit
Agreement;
WHEREAS, the Borrowers have requested the waiver of the Lenders'
rights and remedies with respect to certain Events of Default which have
occurred and are continuing;
WHEREAS, the Borrowers and Lenders wish to amend the Credit Agreement
to modify certain provisions contained therein;
WHEREAS, the Lenders have agreed to the requested waiver and amendment
of the Credit Agreement on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
A. The Credit Agreement is amended in the following respects:
1. Section 2.1(a) is hereby amended by (i) deleting the text
"SIXTY MILLION DOLLARS ($60,000,000)" therein in its entirety and substituting
therefor "THIRTY-FIVE MILLION ($35,000,000)" and (ii) adding the following
provision at the end thereof: "Notwithstanding anything in the foregoing or to
the contrary, during the period May 15, 2000 through and including July 17,
2000, with regard to the Lenders collectively, the sum of the aggregate amount
of U.S. Revolving Loans made, plus the Dollar Equivalent of U.K. Revolving Loans
made, plus Swingline Loans made, plus LOC Obligations incurred shall not exceed
$16,000,000."
2. Section 2.10 is hereby amended by adding the following
provision at the end thereof: "Notwithstanding anything to the contrary set
forth in Section 2.1(d), 2.2(c), 2.4(d), the Notes or this Section 2.10, during
the period commencing on April 1, 2000 and ending on July 17, 2000, (i) interest
on the outstanding balance of all Obligations shall accrue and be payable at the
per annum rate equal to the LIBOR Rate plus two and three-quarters percent
(2.75%) and no Interest Period other than those in effect on May 15, 2000, may
consist of a period longer than one month in duration, and (ii) a waiver fee in
the form of additional interest on the outstanding balance of all Obligations
shall accrue and be payable at the per annum rate equal to one half of one
percent (0.50%)."
3. Article V is hereby amended by adding the following provision
as Section 5.17:
SECTION 5.17 DEPOSITORY ACCOUNTS. The U.S. Borrowers shall, and shall
cause the Guarantors to, maintain all of their deposit accounts into
which, cash, Cash Equivalents, collections of all accounts receivable
of the U.S. Borrowers and Guarantors, and other proceeds of Collateral
are deposited at The Northern Trust Company or other Lender acceptable
to the Administrative Agent from and after May 18, 2000.
4. Section 7.1(k) is hereby amended by deleting "." at the end of
such section and inserting "; or" in place of such period.
5. Section 7.1 is hereby amended by adding the following as
Section 7.1(l):
(l) Any of the U.S. Borrowers or the Guarantors shall fail
to perform, comply or observe Section 5.17 hereof.
A. Except as modified hereby, all of the terms and provisions of the
Credit Documents remain in full force and effect.
B. The Lenders hereby waive and agree, during the period commencing on
May 15, 2000 through and including July 17, 2000, not to exercise their rights
and remedies arising with respect to the occurrence of those Defaults and Events
of Default identified on SCHEDULE I attached hereto and made a part hereof.
Notwithstanding the preceding sentence, the imposition under Section 6.11(d) of
a bar against any repurchase by the Company of shares of its Capital Stock upon
the occurrence of a Default or Event of Default shall continue as if no waiver
had occurred, and no such repurchases shall be permitted. The Lenders hereby
reserve all of their rights and remedies under the terms of the Credit Agreement
and Credit Documents arising from the occurrence of a Default or Event of
Default and may exercise any or all of the same at any time (i) after the date
of this Second Amendment in the event any Default or Event of Default not
identified on SCHEDULE I shall occur or come to the knowledge of the
Administrative Agent and/or any Lender and (ii) from and after July 18, 2000
with respect to any Default or Event of Default whether or not identified on
SCHEDULE I.
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C. The Credit Parties hereby represent and warrant that (a) the
representations and warranties contained in Article III of the Credit Agreement,
as amended hereby are correct in all material respects on and as of the date
hereof as though made on and as of such date and after giving effect to the
amendments contained herein and (b) except as specifically identified on
SCHEDULE I, no Default or Event of Default exists under the Credit Agreement on
and as of the date hereof and after giving effect to the amendments contained
herein.
D. The Second Amendment shall become effective upon the satisfaction of
the following conditions precedent:
1. Execution of Second Amendment. The Administrative Agent shall
have received counterparts of this Second Amendment, executed by a duly
authorized offer of each party thereto.
2. Legal Opinion of Counsel. The Administrative Agent shall have
received an opinion of Reinhart, Boerner, Van Deuren, Xxxxxx & Xxxxxxxxxx, S.C.,
counsel for the Credit Parties, dated as of the date hereof and addressed to the
Administrative Agent and the Lenders, in form and substance satisfactory to the
Administrative Agent.
3. Transfer of Deposits. The Company shall have caused the U.S.
Borrowers and Guarantors to direct the withdrawal by no later than May 18, 2000,
of all amounts on deposit with financial institutions, brokerage houses, or
other Persons on the date of this Second Amendment and transfer the same to the
accounts referenced at A.3. above.
A. Each of the Credit Parties hereby acknowledges the right of the
Administrative Agent and each of the Lenders to, and agrees that the
Administrative Agent and each of the Lenders and/or their authorized
representatives (including, without limitation, any independent consultants
engaged by the Administrative Agent) may, visit and inspect any of the Credit
Parties' premises, books and records, receipts, correspondence and other data
relating to their respective businesses and/or the transactions evidenced by or
contemplated in the Credit Documents and the Collateral and to discuss their
affairs, finances, and accounts with their management personnel and independent
certified public accountants, which visit, inspection, and discussions shall be
at the Company's expense.
B. Each of the Credit Parties hereby reaffirms all of its obligations
and duties under the Credit Documents as amended including but not limited to
the Borrowers' obligations under the Credit Agreement and the Guarantors
obligations under the Credit Agreement.
C. The Company agrees to pay all reasonable costs and expenses in
connection with the preparation, execution and delivery of this Second
Amendment, including the reasonable fees and expenses of the Administrative
Agent's legal counsel, Sidley & Austin.
D. The Second Amendment may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original and it
shall not be necessary in making proof of this Second Amendment to produce or
account for more than one such counterpart.
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E. This Second Amendment and the Credit Agreement, as amended hereby,
shall be deemed to be contracts made under, and for all purposes shall be
construed in accordance with the laws of the State of North Carolina.
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this First Amendment to be duly executed and delivered as of the
date and year first above written.
U.S. BORROWERS: RACING CHAMPIONS, INC.,
--------------- an Illinois corporation
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
RACING CHAMPIONS SOUTH, INC.,
a North Carolina corporation
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
U.K. BORROWER: RACING CHAMPIONS WORLDWIDE
-------------- LIMITED,
a United Kingdom corporation
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
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GUARANTORS: RACING CHAMPIONS CORPORATION,
---------- a Delaware corporation
GREEN'S RACING SOUVENIRS, INC.,
a Virginia corporation
RCNA HOLDINGS, INC.,
a Delaware corporation
RACING CHAMPIONS ERTL, INC., F/K/A
THE ERTL COMPANY, INC.,
a Delaware corporation
DIECAST XXXXXXX.XXX, INC.,
a Delaware corporation
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
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ADMINISTRATIVE AGENT
---------------------
AND LENDERS: FIRST UNION NATIONAL BANK,
------------ as Administrative Agent and as a
Lender
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
6
XXXXXX TRUST AND SAVINGS BANK
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
7
BANKONE, NA, F/K/A THE FIRST
NATIONAL BANK OF CHICAGO
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
8
NORTHERN TRUST COMPANY
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
9
BANK OF AMERICA, N.A.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
10
COMERICA BANK
By:
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Name:
---------------------------------
Title:
--------------------------------
11
NATIONAL CITY BANK
By:
-----------------------------------
Name:
---------------------------------
Title:
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12
MICHIGAN NATIONAL BANK
By:
-----------------------------------
Name:
---------------------------------
Title:
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