Exhibit 10.1

SECOND AMENDMENT TO CREDIT AGREEMENT

          THIS AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into
as of July 1, 2009, by and between RENAISSANCE LEARNING, INC., a Wisconsin
Corporation (“Borrower”), and WELLS 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 “July 1,
2009” as the last day on which Bank will make advances under the Line of Credit,
and by substituting for said date “July 1, 2010,” with such change to be
effective upon the execution and delivery to Bank of a promissory note dated as
of July 1, 2009 (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 1.2 (c) is hereby renumbered to be 1.2 (d);

          3.           The following is hereby added to the Credit Agreement as
Section 1.2. (c):

          “(c)        Unused Commitment Fee. Borrower shall pay to Bank a fee
equal to one eighth of one percent (.125%) per annum (computed on the basis of a
360-day year, actual days elapsed) on the average daily unused amount of the
Line of Credit, which fee shall be calculated on a quarterly basis by Bank and
shall be due and payable by Borrower in arrears within ten (10) days after each
billing is sent by Bank.”

          4.           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.

          5.           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.

 

 

 

 

 

 

 

 

 

 

WELLS FARGO BANK,

RENAISSANCE LEARNING, INC.

 

NATIONAL ASSOCIATION

 

 

 

 

 

 

 

 

 

 

 

 

By: 

/s/ Mary T. Minch

 

 

By: 

/s/ Lisa Thomas

 

 

 

 

 

 

 

 

Title: Senior Vice President-Finance

 

Title: Relationship Manager

Chief Financial Officer and Secretary

 

 

 

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REVOLVING LINE OF CREDIT NOTE

 

 

 

$15,000,000.00

 

Green Bay, Wisconsin

 

 

July 1, 2009

          FOR VALUE RECEIVED, the undersigned RENAISSANCE LEARNING, INC.
(“Borrower”) promises to pay to the order of WELLS FARGO BANK, NATIONAL
ASSOCIATION (“Bank”) at its office at 1819 University Avenue, Green Bay,
Wisconsin, 54302 or at such other place as the holder hereof may designate, in
lawful money of the United States of America and in immediately available funds,
the principal sum of Fifteen Million Dollars ($15,000,000.00), or so much
thereof as may be advanced and be outstanding, with interest thereon, to be
computed on each advance from the date of its disbursement as set forth herein.

DEFINITIONS:

          As used herein, the following terms shall have the meanings set forth
after each, and any other term defined in this Note shall have the meaning set
forth at the place defined:

          (a)           “Business Day” means any day except a Saturday, Sunday
or any other day on which commercial banks in Wisconsin are authorized or
required by law to close.

          (b)           “Daily One Month LIBOR” means for any day, the rate of
interest equal to LIBOR then in effect for delivery for a one (1) month period.

          (c)           “Fixed Rate Term” means a period commencing on a
Business Day and continuing for 1 and 3 months, as designated by Borrower,
during which all or a portion of the outstanding principal balance of this Note
bears interest determined in relation to LIBOR; provided however, that no Fixed
Rate Term may be selected for a principal amount less than One Hundred Thousand
Dollars ($100,000.00); and provided further, that no Fixed Rate Term shall
extend beyond the scheduled maturity date hereof. If any Fixed Rate Term would
end on a day which is not a Business Day, then such Fixed Rate Term shall be
extended to the next succeeding Business Day.

          (d)           “LIBOR” means the rate per annum (rounded upward, if
necessary, to the nearest whole 1/8 of 1%) and determined pursuant to the
following formula:

 

 

 

 

 

LIBOR =

Base LIBOR

 

 

 

100% - LIBOR Reserve Percentage

                          (i)           “Base LIBOR” means the rate per annum
for United States dollar deposits quoted by Bank (A) for the purpose of
calculating effective rates of interest for loans making reference to LIBOR, as
the Inter-Bank Market Offered Rate, with the understanding that such rate is
quoted by Bank for the purpose of calculating effective rates of interest for
loans making reference thereto, on the first day of a Fixed Rate Term for
delivery of funds on said date for a period of time approximately equal to the
number of days in such Fixed Rate Term and in an amount approximately equal to
the principal amount to which such Fixed Rate Term applies, or (B) for the
purpose of calculating effective rates of interest for loans making reference to
the Daily One Month LIBOR Rate, as the Inter-Bank Market Offered Rate in effect
from time to time for delivery of funds for one (1) month in amounts
approximately equal to the principal amount of such loans. Borrower understands
and agrees that Bank may base its quotation of the Inter-Bank Market Offered
Rate upon such offers or other market indicators of the Inter-Bank Market as
Bank in its discretion deems appropriate including, but not limited to, the rate
offered for U.S. dollar deposits on the London Inter-Bank Market.

                           (ii)           “LIBOR Reserve Percentage” means the
reserve percentage prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for “Eurocurrency Liabilities” (as defined in
Regulation D of the Federal Reserve Board, as amended), adjusted by Bank for
expected changes in such reserve percentage during the applicable term of this
Note.

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INTEREST:

          (a)           Interest. The outstanding principal balance of the Note
shall bear interest (computed on the basis of a 360-day year, actual days
elapsed) either (i) at a fluctuating rate per annum determined by Bank to be one
and one half percent (1.50%) above the Daily One Month LIBOR Rate in effect from
time to time, or (ii) at a fixed rate per annum determined by Bank to be one and
one half percent (1.50%) above LIBOR in effect on the first day of the
applicable Fixed Rate Term. When interest is determined in relation to the Daily
One Month LIBOR Rate, each change in the interest rate shall become effective
each Business Day that the Bank determines that Daily One Month LIBOR Rate has
changed. Bank is hereby authorized to note the date, principal amount and
interest rate applicable thereto and any payments made thereon on Bank’s books
and records (either manually or by electronic entry) and/or on any schedule
attached to this Note, which notations shall be prima facie evidence of the
accuracy of the information noted.

          (b)           Selection of Interest Rate Options. At any time any
portion of this Note bears interest determined in relation to LIBOR for a Fixed
Rate Term, it may be continued by Borrower at the end of the Fixed Rate Term
applicable thereto so that all or a portion thereof bears interest determined in
relation to the Daily One Month LIBOR Rate or to LIBOR for a new Fixed Rate Term
designated by Borrower. At any time any portion of this Note bears interest
determined in relation to the Daily One Month LIBOR Rate, Borrower may at any
time convert all or a portion thereof so that it bears interest determined in
relation to LIBOR for a Fixed Rate Term designated by Borrower. At such time as
Borrower requests an advance hereunder or wishes to select an interest rate
determined in relation to the Daily One Month LIBOR Rate or a Fixed Rate Term
for all or a portion of the outstanding principal balance hereof, and at the end
of each Fixed Rate Term, Borrower shall give Bank notice specifying: (i) the
interest rate option selected by Borrower; (ii) the principal amount subject
thereto; and (iii) for each LIBOR selection for a Fixed Rate Term, the length of
the applicable Fixed Rate Term. Any such notice may be given by telephone (or
such other electronic method as Bank may permit) so long as, with respect to
each LIBOR selection for a Fixed Rate Term, (A) if requested by Bank, Borrower
provides to Bank written confirmation thereof not later than three (3) Business
Days after such notice is given, and (B) such notice is given to Bank prior to
10:00 a.m. on the first day of the Fixed Rate Term, or at a later time during
any Business Day if Bank, at its sole option but without obligation to do so,
accepts Borrower’s notice and quotes a fixed rate to Borrower. If Borrower does
not immediately accept a fixed rate when quoted by Bank, the quoted rate shall
expire and any subsequent LIBOR request from Borrower shall be subject to a
redetermination by Bank of the applicable fixed rate. If no specific designation
of interest is made at the time any advance is requested hereunder or at the end
of any Fixed Rate Term, Borrower shall be deemed to have made a Daily One Month
LIBOR Rate interest selection for such advance or the principal amount to which
such Fixed Rate Term applied.

          (c)           Taxes and Regulatory Costs. Borrower shall pay to Bank
immediately upon demand, in addition to any other amounts due or to become due
hereunder, any and all (i) withholdings, interest equalization taxes, stamp
taxes or other taxes (except income and franchise taxes) imposed by any domestic
or foreign governmental authority and related in any manner to LIBOR, and (ii)
future, supplemental, emergency or other changes in the LIBOR Reserve
Percentage, assessment rates imposed by the Federal Deposit Insurance
Corporation, or similar requirements or costs imposed by any domestic or foreign
governmental authority or resulting from compliance by Bank with any request or
directive (whether or not having the force of law) from any central bank or
other governmental authority and related in any manner to LIBOR to the extent
they are not included in the calculation of LIBOR. In determining which of the
foregoing are attributable to any LIBOR option available to Borrower hereunder,
any reasonable allocation made by Bank among its operations shall be conclusive
and binding upon Borrower.

          (d)           Payment of Interest. Interest accrued on this Note shall
be payable on the last day of each month, commencing July 31, 2009.

          (e)           Default Interest. From and after the maturity date of
this Note, or such earlier date as all principal owing hereunder becomes due and
payable by acceleration or otherwise, or at Bank’s option upon the occurrence,
and during the continuance of an Event of Default, the outstanding principal
balance of this Note shall bear interest at an increased rate per annum
(computed on the basis of a 360-day year, actual days elapsed) equal to four
percent (4%) above the rate of interest from time to time applicable to this
Note.

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BORROWING AND REPAYMENT:

          (a)           Borrowing and Repayment. Borrower may from time to time
during the term of this Note borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions of this Note and of any document executed in connection with or
governing this Note; provided however, that the total outstanding borrowings
under this Note shall not at any time exceed the principal amount stated above.
The unpaid principal balance of this obligation at any time shall be the total
amounts advanced hereunder by the holder hereof less the amount of principal
payments made hereon by or for Borrower, which balance may be endorsed hereon
from time to time by the holder. The outstanding principal balance of this Note
shall be due and payable in full on July 1, 2010.

          (b)           Advances. Advances hereunder, to the total amount of the
principal sum stated above, may be made by the holder at the oral or written
request of (i) Steven A. Schmidt or Mary T. Minch, any one acting alone, who are
authorized to request advances and direct the disposition of any advances until
written notice of the revocation of such authority is received by the holder at
the office designated above, or (ii) any person, with respect to advances
deposited to the credit of any deposit account of Borrower, which advances, when
so deposited, shall be conclusively presumed to have been made to or for the
benefit of Borrower regardless of the fact that persons other than those
authorized to request advances may have authority to draw against such account.
The holder shall have no obligation to determine whether any person requesting
an advance is or has been authorized by Borrower.

          (c)           Application of Payments. Each payment made on this Note
shall be credited first, to any interest due and second, to the outstanding
principal balance hereof. All payments credited to principal shall be applied
first, to the outstanding principal balance of this Note which bears interest
determined in relation to the Daily One Month LIBOR Rate, if any, and second, to
the outstanding principal balance of this Note which bears interest determined
in relation to LIBOR, with such payments applied to the oldest Fixed Rate Term
first.

PREPAYMENT:

          (a)           Daily One Month LIBOR Rate. Borrower may prepay
principal on any portion of this Note which bears interest determined in
relation to the Daily One Month LIBOR Rate at any time, in any amount and
without penalty.

          (b)           LIBOR. Borrower may prepay principal on any portion of
this Note which bears interest determined in relation to LIBOR at any time and
in the minimum amount of One Hundred Thousand Dollars ($100,000.00); provided
however, that if the outstanding principal balance of such portion of this Note
is less than said amount, the minimum prepayment amount shall be the entire
outstanding principal balance thereof. In consideration of Bank providing this
prepayment option to Borrower, or if any such portion of this Note shall become
due and payable at any time prior to the last day of the Fixed Rate Term
applicable thereto by acceleration or otherwise, Borrower shall pay to bank
immediately upon demand a fee which is the sum of the discounted monthly
differences for each month from the month of prepayment through the month in
which such Fixed Rate Term matures, calculated as follows for each such month:

 

 

 

 

(i)

Determine the amount of interest which would have accrued each month on the
amount prepaid at the interest rate applicable to such amount had it remained
outstanding until the last day of the Fixed Rate Term applicable thereto.

 

 

 

 

(ii)

Subtract from the amount determined in (i) above the amount of interest which
would have accrued for the same month on the amount prepaid for the remaining
term of such Fixed Rate Term at LIBOR in effect on the date of prepayment for
new loans made for such term and in a principal amount equal to the amount
prepaid.

 

 

 

 

(iii)

If the result obtained in (ii) for any month is greater than zero, discount that
difference by LIBOR used in (ii) above.

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Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Borrower, therefore, agrees to pay the above-described prepayment
fee and agrees that said amount represents a reasonable estimate of the
prepayment costs expenses and /or liabilities of Bank. If Borrower fails to pay
any prepayment fee when due, the amount of such prepayment fee shall thereafter
bear interest until paid at a rate per annum two percent (2.00%) above the Daily
One Month LIBOR Rate in effect from time to time (computed on the basis of a
360-day year, actual days elapsed).

EVENTS OF DEFAULT:

          This Note is made pursuant to and is subject 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 (the “Credit Agreement”).

Any default in the payment or performance of any obligation under this Note, or
any defined event of default under the Credit Agreement, shall constitute an
“Event of Default” under this Note.

MISCELLANEOUS:

          (a)           Remedies. Upon, the occurrence of any Event of Default,
the holder of this Note, at the holder’s option, may declare all sums of
principal and interest outstanding hereunder to be immediately due and payable
without presentment, demand, notice of nonperformance, notice of protest,
protest or notices of dishonor, all of which are expressly waived by Borrower,
and the obligations, if any, of the holder to extend any further credit
hereunder shall immediately cease and terminate. Borrower shall pay to the
holder immediately upon demand the full amount of all payments, advances,
charges, costs and expenses, including reasonable attorneys’ fees (to include
outside counsel fees and all allocated costs of the holder’s in-house counsel),
expended or incurred by the holder in connection with the enforcement of the
holder’s rights and/or the collection of any amounts which become due to the
holder under this Note, and the prosecution or defense of any action in any way
related to this Note, including without limitation, any action for declaratory
relief, whether incurred at the trial or appellate level, in an arbitration
proceeding or otherwise, and including any of the foregoing incurred in
connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to Borrower or any other person or entity.

          (b)           Obligations Joint and Several. Should more than one
person or entity sign this Note as a Borrower, the obligations of each such
Borrower shall be joint and several.

          (c)           Governing Law. This Note shall be governed by and
construed in accordance with the laws of the State of Wisconsin.

          (d)           Business Purpose. Borrower represents and warrants that
all loans evidenced by this Note are for a business, commercial, investment, or
other similar purpose and not primarily for a personal, family or household use.

          IN WITNESS WHEREOF, the undersigned has executed this Note as of the
date first written above.

RENAISSANCE LEARNING, INC.

 

 

 

By: 

/s/ Mary T. Minch

 

 

Title: Senior Vice President-Finance

Chief Financial Officer and Secretary

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