Exhibit 10.1 to Renaissance Learning, Inc. Form 10-Q for quarterly period ended June 30, 2009



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

	
 

	
 

	
 













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. 







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. 







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. 













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