SECOND AMENDMENT
TO
CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT ("Second
Amendment") is made and entered into as of this 30th day of March, 2002 by and
between INTEGRITY INCORPORATED, a Delaware corporation ("Existing Borrower"),
INTEGRITY PUBLISHERS, INC., a Delaware corporation ("Integrity Publishers"),
and LASALLE BANK NATIONAL ASSOCIATION (as "Administrative Agent" and "Lender").
WITNESSETH:
WHEREAS, pursuant to that certain Credit Agreement, dated as
of April 25, 2001, by and between the Existing Borrower and Lender, (the
"Credit Agreement"), Lender established in favor of Existing Borrower (i) a
line of credit in the amount of $6,000,000, (ii) a Term Loan A Facility in the
amount of $11,000,000; and (iii) a Term Loan B Facility in the amount of
$3,000,000; and
WHEREAS, Lender has agreed to the creation of Integrity
Publishers as a wholly-owned Domestic Subsidiary of Existing Borrower subject
to the terms and conditions hereafter set forth; and
WHEREAS, the Lender has agreed to the modification of certain
additional provisions contained in the Credit Agreement upon the terms and
conditions hereafter set forth.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements set forth herein and for other good and
valuable consideration, the mutuality, receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions. All capitalized terms not otherwise defined
herein shall have the meanings given to such terms in the Credit Agreement.
2. Amendments to Credit Agreement. Effective as of the date
hereof, Integrity Publishers shall, together with Existing Borrower on a joint
and several basis, constitute for all purposes under the Credit Agreement the
"Borrower". The Credit Agreement is hereby further amended as follows:
(a) The first paragraph of the Credit Agreement is
hereby amended and restated to read as follows:
"This Credit Agreement (this "Agreement") is made
and effective as of April 25, 2001, by and among INTEGRITY INCORPORATED, a
Delaware corporation ("Integrity"), INTEGRITY PUBLISHERS, INC., a Delaware
corporation ("Integrity Publishers;" Integrity and Integrity Publishers are
sometimes collectively referred to herein as "Borrower," jointly and severally)
and each financial institution that from time to time is a "Lender" hereunder
(collectively the "Lenders,") and LASALLE BANK NATIONAL ASSOCIATION
("Administrative Agent")."
(b) The first recital of the Credit Agreement is hereby
amended by substituting the figure "$6,400,000 for the figure "$11,000,000"
under subpart (b) thereof and by substituting the figure "$4,600,000" for the
figure "$3,000,000" under subpart (c) thereof.
(c) Section 1.1.3 of the Credit Agreement is hereby
deleted in its entirety and is hereby replaced with the following:
"1.1.3 Use of Proceeds. The funds advanced under
this Line of Credit Facility shall be used exclusively for (i) general working
capital requirements, (ii) the financing of up to $2,000,000 in the aggregate
of Permitted Acquisitions in accordance with Section 5.7, and (iii) the
financing of the start up of a publishing division of Borrower in accordance
with Section 5.8; provided, however, such funds shall not be used, directly or
indirectly, in any fashion for the benefit of Enlight, Celebration or Integrity
Music."
(d) Section 1.2.1 of the Credit Agreement is hereby
amended by deleting the provision therein in its entirety and substituting in
lieu thereof the following:
"provided, however, that, contemporaneously with the
execution of the Second Amendment, Borrower shall be permitted to draw down the
remaining undrawn portion of the Term Loan A Commitment."
(e) Subpart (b) of Section 1.2.2 of the Credit Agreement
is hereby deleted in its entirety and is hereby replaced with the following:
"(b) the remodeling and improvement of
Integrity's headquarters in Mobile, Alabama and other ordinary and reasonable
expenditures for furniture, fixtures and equipment.
(f) The table under Section 1.2.8.2 of the Credit
Agreement is hereby amended and restated in its entirety to
read as follows:
" Required Amount
Payment Date of Principal Payment
------------ --------------------
6/30/01 through 12/31/01 $500,000.00
3/31/02 through 3/31/06 $376,470.59"
(g) Section 1.2.8.3 of the Credit Agreement is hereby
amended by substituting the figure "$76,666.67" for the figure "$50,000".
(h) Section 3.8 of the Credit Agreement is hereby amended
by adding the following phrase to the end thereof:
and (4) the lease of Borrower's office space located in
Brentwood, Tennessee."
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(i) The table under Section 4.1.1 of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:
"Fiscal Quarters Ending Ratio
----------------------- -----
6/30/01 through 12/31/02 1.00:1.00
3/31/03 through 12/31/03 1.05:1.00
3/31/04 through 12/31/04 1.10:1.00
3/31/05 and thereafter 1.15:1.00
(j) Section 5.1 of the Credit Agreement is hereby amended
by substituting the figure "$4,600,000" for the figure "$3,000,000."
(k) Section 5.4 of the Credit Agreement is hereby amended
by adding the following phrase to the end thereof:
"and (d) demand loans to Integrity International
Subsidiaries not to exceed $250,000 in the aggregate that are
appropriately reflected on Integrity's financial records.
(l) Section 5.7(e) of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
"e. Equity interests of Integrity in Integrity
Publishers, Enlight (such investment not to exceed $250,000 in
the aggregate), Integrity Music and Celebration."
(m) Section 5.8(c) of the Credit Agreement is hereby
amended by inserting at its beginning the phrase "except for Enlight
and Integrity Publishers,"
(n) Section 5.9 of the Credit Agreement is hereby amended
by adding the following phrase to the end thereof:
"and (e) Integrity Publishers use of the office
space leased by Integrity and located in Brentwood,
Tennessee."
(o) Section 5.12 of the Credit Agreement is hereby
restated to read as follows:
"5.12 Integrity Publishers. Integrity shall not sell,
transfer or otherwise dispose of any of the equity of
Integrity Publishers or Enlight, nor permit its total
investment in Integrity Publishers or Enlight, whether in the
form of equity, loans, advances or otherwise, to at any time
exceed $5,000,000 with respect to Integrity Publishers and
$250,000 with respect to Enlight."
(p) Section 9.1 of the Credit Agreement is hereby amended
to restate the definition of "Borrower" as follows:
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"Borrower" means, collectively, Integrity and
Integrity Publishers, jointly and severally.
(q) Section 9.1 of the Credit Agreement is hereby amended
by adding the following proviso to the end of the definition of "Borrowing
Base:"
"provided, however, that no more than $2,000,000
shall be advanced under the Line of Credit on account of the
Eligible Accounts of Integrity Publishers and no more than
$1,000,000 shall be advanced under the Line of Credit on
account of the Eligible Inventory of Integrity Publishers."
(r) Section 9.1 of the Credit Agreement is hereby amended
by substituting the figure "$6,400,000" for the figure "$11,000,000" in the
definition of "Term Loan A Commitment and by substituting the figure
"$4,600,000" for the figure "$3,000,000" in the definition of "Term Loan B
Commitment".
(s) Section 9.1 of the Credit Agreement is hereby amended
by adding the following new definitions in appropriate alphabetical order:
"Enlight" means Enlight, Inc., a Tennessee corporation.
"Integrity" means Integrity Incorporated, a Delaware
corporation.
"Integrity International Subsidiary" means any wholly-owned
Subsidiary of Integrity that is not a Domestic Subsidiary.
"Integrity Publishers" means Integrity Publishers, Inc., a
Delaware corporation.
3. Amended and Restated Schedules. The Schedules attached to the
Credit Agreement are hereby amended and restated in the forms attached hereto.
4. Integrity Worship Ministries. Administrative Agent hereby
agrees, at the expense of Borrower, to release its lien on the trademark
"Integrity Worship Ministries" and shall provide such documentation as the
Borrower may reasonably request in order to effectuate such release.
5. Conditions to Effectiveness. This Second Amendment shall
become effective as of March 30, 2002, when and only when the Lender shall have
received (i) this Second Amendment duly executed by the Borrower, (ii) payment
of all outstanding legal fees and costs of Lender, including those incurred in
connection with this Second Amendment, (iii) such of the Loan Documents
identified under Section 2.1.2 of the Credit Agreement as the Administrative
Agent may require, and (iv) such other certificates, instruments, documents,
agreements and opinions of counsel as may be required by Lender or its counsel,
each of which shall be in form and substance satisfactory to Lender and its
counsel; and
6. Representations and Warranties. The Existing Borrower and
Integrity Publishers hereby represent and warrant as follows:
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(a) This Second Amendment and the Credit Agreement, as
amended hereby, have been duly authorized and constitute legal, valid and
binding obligations of the Existing Borrower and Integrity Publishers and are
enforceable against the Existing Borrower and Integrity Publishers in accordance
with their respective terms.
(b) Upon the effectiveness of this Second Amendment, the
Existing Borrower and Integrity Publishers hereby reaffirm all covenants,
representations and warranties made in the Credit Agreement and agree that all
such covenants, representations and warranties shall be deemed to have been
remade as of the effective date of this Second Amendment.
(c) No Event of Default or Default has occurred and is
continuing or would exist after giving effect to this Second Amendment.
(d) The Existing Borrower and Integrity Publishers have
no defense, counterclaim or offset with respect to the Credit Agreement or any
of the other Loan Documents.
7. Effect on the Credit Agreement.
(a) Upon the effectiveness of this Second Amendment, each
reference in the Credit Agreement to "this Agreement," "hereunder," "hereof,"
"herein" or words of like import shall mean and be a reference to the Credit
Agreement as amended hereby.
(b) Except as specifically amended herein, the Credit
Agreement, the Loan Documents, and all other documents, instruments and
agreements executed and/or delivered in connection therewith, shall remain in
full force and effect, and are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Second Amendment shall not operate as a waiver of any right, power or remedy of
Administrative Agent or Lender, nor constitute a waiver of any provision of the
Credit Agreement, the Loan Documents, or any other documents, instruments or
agreements executed and/or delivered under or in connection therewith.
8. Governing Law. This Second Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns and shall be governed by and construed in accordance with the laws
of the State of Illinois.
9. Headings. Section headings in this Second Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Second Amendment for any other purpose.
10. Counterparts. This Second Amendment may be executed by the
parties hereto in one or more counterparts, each of which taken together shall
be deemed to constitute one and the same instrument.
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IN WITNESS WHEREOF, this Second Amendment has been duly executed as of
the day and year first written above.
INTEGRITY INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Secretary, Treasurer and
Chief Financial Officer
INTEGRITY PUBLISHERS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Secretary and Treasurer
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
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