July 14, 2000
RACING CHAMPIONS, INC.
RACING CHAMPIONS SOUTH, INC.
RACING CHAMPIONS WORLDWIDE LIMITED
c/o Racing Champions Corporation
800 Roosevelt Road, Building C-320
Glen Ellyn, Illinois 60137
Re: Credit Facility under Credit Agreement dated as of April 13,
1999, as amended (the "Credit Agreement")
Gentlemen:
Reference is made to that certain Second Amendment to Credit Agreement
dated as of May 15, 2000 entered into among the "Borrowers", "Guarantors", the
"Lenders" and First Union National Bank, as "Administrative Agent" (each such
term being defined in the Credit Agreement), such Second Amendment to Credit
Agreement being referred to herein as the "Amendment".
Pursuant to Sections A and C of the Amendment, the Borrowers and
Lenders have agreed to a reduced maximum for certain Loans and Letter of Credit
obligations of the Borrowers and certain interest and fees through July 17, 2000
and the Lenders agreed to waive and not to exercise certain rights and remedies
under the Credit Agreement during the period commencing on May 15, 2000 through
and including July 17, 2000 (the "Waiver Period"), subject to the conditions set
forth in the Amendment.
The Borrowers have requested (a) an extension of the Waiver Period
through August 31, 2000 and (b) that the agreements set forth in Section C of
the Amendment pertain to any "Event of Default" or "Default" (each as defined in
the Credit Agreement) which may arise with respect to failure to comply with
financial covenants for the period ending June 30, 2000 to the same extent as if
set forth on Schedule I to the Amendment; and the Lenders hereby consent to
extension of the Waiver Period through August 31, 2000 and extension of the
benefit of the agreements in Section 3.C of the Amendment to the Event of
Default or Default described in clause (b) above; provided that (i) this letter
is executed and by each of the Lenders, Borrowers, Guarantors, and
Administrative Agent and delivered by facsimile transmission to Bryan Krakauer
and DeVerille Huston, Sidley & Austin, 312-853-7036 on or before July 14, 2000,
(ii) the period applicable under Section A of the Amendment be extended from
July 17, 2000 through August 31, 2000, and (iii) the Borrowers pay on July 17,
2000, to the Administrative Agent, for the account of the respective Lenders in
accordance with their pro rata shares of the "Commitments" based upon their
respective "Commitment Percentage" (each as defined in the Credit Agreement)
therein, a fee in the amount of one-eighth of one percent (0.125%) of the
Commitments outstanding as of July 17, 2000, which fee shall be in addition to,
and not in lieu of, all other interest and fees payable under the terms of the
Credit Agreement.
Except as expressly set forth above, (a) the execution and delivery of
this letter shall in no way affect any right, power or remedy of the
Administrative Agent or any Lender with respect to any Event of Default or
Default or constitute a waiver of any provision of the Credit Agreement or any
of the other "Credit Documents" (as defined in the Credit Agreement) and (b) the
Credit Agreement, other Credit Documents, and all other documents, instruments,
and agreements executed and/or delivered in connection therewith or pursuant
thereto shall remain in full force and effect and are hereby ratified and
confirmed.
This letter may be executed in one or more counterparts, each of which
shall be deemed an original and all of which shall constitute one and the same
document. Delivery of an executed counterpart of this letter by facsimile
transmission shall be effective as delivery of a manually executed counterpart
hereof.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF ILLINOIS.
<PAGE>
IN WITNESS WHEREOF, this letter has been duly executed and delivered
as of July 14, 2000.
FIRST UNION NATIONAL BANK HARRIS TRUST AND SAVINGS BANK
as Administrative Agent and a Lender
By /s/ Kent Davis By /s/ Mark W. Prescot
--------------------------------------- ---------------------------------
Name: Kent Davis Name: Mark W. Prescot
Title: Vice President Title: Vice President
BANKONE, NA, f/k/a The First National Bank THE NORTHERN TRUST COMPANY
of Chicago
By /s/ Kevin L. Gillen By /s/ Clark Delanois
--------------------------------------- ---------------------------------
Name: Kevin L. Gillen Name: Clark Delanois
Title: Vice President Title: Vice President
BANK OF AMERICA, N.A. COMERICA BANK
By /s/ William S. Richards Jr. By /s/ John L. Woods
--------------------------------------- ---------------------------------
Name: William S. Richards Jr. Name: John L. Woods
Title: Vice President Title: Assistant Vice President
NATIONAL CITY BANK MICHIGAN NATIONAL BANK
By /s/ Frank F. Pagura By /s/ Robert A. Mulderrig
--------------------------------------- ---------------------------------
Name: Frank F. Pagura Name: Robert A. Mulderrig
Title: Senior Vice President Title: Head of Asset Restructuring
Acknowledged, agreed and accepted this 14th day of July, 2000.
RACING CHAMPIONS, INC., RACING CHAMPIONS SOUTH, INC.,
an Illinois corporation a North Carolina corporation
By /s/ Curtis W. Stoelting By /s/ Curtis W. Stoelting
--------------------------------------- ---------------------------------
Name: Curtis W. Stoelting Name: Curtis W. Stoelting
Title: Title:
RACING CHAMPIONS WORLDWIDE LIMITED,
a United Kingdom corporation
By /s/ Curtis W. Stoelting
---------------------------------------
Name: Curtis W. Stoelting
Title:
2
<PAGE>
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 EXPRESS.COM, INC., a Delaware corporation
By /s/ Curtis W. Stoelting
---------------------------------
Name: Curtis W. Stoelting
Title:
3
