EXHIBIT 10.26
SIXTH AMENDMENT
TO
CREDIT AGREEMENT
THIS SIXTH AMENDMENT TO CREDIT AGREEMENT ("Sixth Amendment")
is made and entered into as of this 31st day of March, 2003 by and between
INTEGRITY MEDIA, INC., a Delaware corporation (f/k/a Integrity Incorporated,
"Integrity Media"), INTEGRITY PUBLISHERS, INC., a Delaware corporation
("Integrity Publishers"), INTEGRITY DIRECT, LLC, a Delaware limited liability
company ("Integrity Direct"), M2 COMMUNICATIONS, L.L.C., a Tennessee limited
liability company ("M2 Communications;" Integrity Media, Integrity Publishers,
Integrity Direct and M2 Communications are hereinafter referred to as the
"Borrowers") 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 Borrowers and Lender, as amended by that
certain First Amendment to Credit Agreement dated as of June 15, 2001, that
certain Second Amendment to Credit Agreement dated as of March 30, 2002, that
certain Third Amendment to Credit Agreement dated as of June 28, 2002, that
certain Fourth Amendment to Credit Agreement dated as of December 31, 2002, and
that certain Fifth Amendment to Credit Agreement dated as of March 26, 2003
(collectively, the "Credit Agreement"), Lender made the Loan available to
Borrowers as more particularly described in the Credit Agreement; and
WHEREAS, the Lender has agreed to the modification of certain
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.
2.1 Section 4.1.1 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
"4.1.1. Minimum Fixed Charge Coverage Ratio. The ratio of
EBITDA minus Non-Financed Capital Expenditures for the most
recently ended four (4) fiscal quarters to Fixed Charges for
the most recently ended four (4) fiscal quarters, calculated
as of the last day of the last fiscal quarter, shall not be
less than the ratio specified below:
Fiscal Quarters Ending Ratio
(Rounded to the Nearest One One
hundredths
6/30/01 through 03/31/02 1.00:1.00
9/30/02 through 12/31/02 0.94:1.00
3/31/03 through 6/30/03 1.10:1.00
9/30/03 through 12/31/04 1.15:1.00
3/31/05 and thereafter 1.20:1.00"
2.2 The following paragraph is hereby added to Section
4.1 as follows:
"4.1.4 Minimum Availability. The Available Credit Portion
for Loans shall be equal to or greater than $1,000,000 at all
times.
2.3 The table under Section 5.1 of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:
"FISCAL YEAR AMOUNT
2001 $5,200,000
2002 $5,300,000
2003 $7,100,000
2004 $5,500,000
2005 $5,750,000
2006 $6,000,000
2007 $6,250,000"
2.4 Section 9.1 of the Credit Agreement is hereby
amended by adding in proper alphabetical position the following
definition:
"'Non-Financed Capital Expenditures' means, for any period,
Capital Expenditures, minus (but in no event by an amount
that is less than zero) the sum of Capital Expenditures
funded out of (1) the proceeds of any of the Loans, and (2)
other Indebtedness permitted by the terms of Section 5.2."
2.5 Section 9.1 of the Credit Agreement is hereby
amended by deleting the definition of "Borrowing Base" and replacing
the same with the following definition:
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"Borrowing Base" means (a) the sum of (i) eighty percent
(80%) of the net amount of Borrower's Eligible Accounts plus
(ii) fifty percent (50%) of the value, calculated at the
lower of cost or market, with cost determined on an average
cost basis, of Borrower's Eligible Inventory less (iii) such
reserves as the Administrative Agent in its reasonable
judgment deems necessary or appropriate from time to time,
minus (b) $1,000,000."
2.6 Section 9.1 of the Credit Agreement is hereby
amended by deleting the definition of "Fixed Charges" and replacing
the same with the following definition:
"Fixed Charges" means, at the time of any
determination, the sum of the following items (without
duplication) for Borrower during the relevant four
consecutive fiscal quarter period:
a. The amount of principal otherwise required
to be paid under this Agreement during such period, and
b. Plus the amount of principal paid or
required to be paid on other Funded Debt (i.e., Funded Debt
other than under this Agreement) during such period, and
c. Plus Interest Expense during such period,
and
d. Plus distributions permitted under Section
5.10 hereof paid or accrued for, without duplication, and
e. Plus cash taxes.
For purposes of this calculation, Interest Expense includes
interest accrued under Capital Leases, and principal includes
principal obligations under Capital Leases.
2.7 Exhibit 4.2 (Compliance Certificate) of the Credit
Agreement is hereby deleted in its entirety and is hereby replaced
with Exhibit 4.2 attached hereto.
2.8 Exhibit 4.3.5 (Borrowing Base Certificate) of the Credit
Agreement is hereby deleted in its entirety and is hereby replaced
with Exhibit 4.3.5 attached hereto.
3. Conditions to Effectiveness. This Sixth Amendment shall be
deemed effective as of the date hereof, when and only when the Lender shall
have received (i) this Sixth Amendment duly executed by the Borrower, and (ii)
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.
4. Representations and Warranties. The Borrowers hereby
represent and warrant as follows:
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(a) This Sixth Amendment and the Credit Agreement, as
amended hereby, have been duly authorized and constitute legal, valid and
binding obligations of the Borrowers and are enforceable against the Borrowers
in accordance with their respective terms.
(b) Upon the effectiveness of this Sixth Amendment, the
Borrowers 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
Sixth Amendment, except to the extent such covenants, representations or
warranties expressly relate to an earlier date.
(c) No Event of Default or Default has occurred and is
continuing or would exist after giving effect to this Sixth Amendment.
(d) The Borrowers have no defense, counterclaim or
offset with respect to the Credit Agreement or any of the other Loan Documents.
5. Effect on the Credit Agreement.
(a) Upon the effectiveness of this Sixth 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
Sixth 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.
6. Governing Law. This Sixth 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.
7. Headings. Section headings in this Sixth Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Sixth Amendment for any other purpose.
8. Counterparts. This Sixth 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 Sixth Amendment has been duly executed as of
the day and year first written above.
INTEGRITY MEDIA, INC.
(f/k/a Integrity Incorporated)
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Secretary
INTEGRITY PUBLISHERS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Secretary
M2 COMMUNICATIONS, L.L.C.
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Secretary
INTEGRITY DIRECT, LLC
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Secretary
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: First Vice President
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EXHIBIT 4.2
FORM OF COMPLIANCE CERTIFICATE
EXHIBIT 4.3
Form of Borrowing Base Certificate
BORROWING BASE CERTIFICATE
INTEGRITY INCORPORATED
We refer to that certain Credit Agreement, dated as of April 25, 2001,
by and between the Borrowers and Lender, as amended by that certain First
Amendment to Credit Agreement dated as of June 15, 2001, that certain Second
Amendment to Credit Agreement dated as of March 30, 2002, that certain Third
Amendment to Credit Agreement dated as of June 28, 2002, that certain Fourth
Amendment to Credit Agreement dated as of December 31, 2002, and that certain
Fifth Amendment to Credit Agreement dated as of March 26, 2003 and that certain
Sixth Amendment to Credit Agreement dated as of March 31, 2003 (the "Loan
Agreement"). Each capitalized term contained herein and not otherwise defined
herein shall have the meaning given to such term in the Credit Agreement.
The undersigned hereby represents and warrants (i) that he is the
Senior Vice President of Administration and Finance of the Borrower, and (ii)
that the following information is true, correct and complete as of the last day
of __________ 2003:
A. Eligible Accounts
1. Total Accounts $ --
2. Less: Accounts due and unpaid more than 90 days
after the invoice date $ --
3. Less: Other Ineligible Accounts $ --
(International and Celebration Hymnal)
4. Total Eligible Accounts $ --
5. Advance Ratio 0.80
6. Total Availability $ --
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7. Availability all times during the reporting period has been at
least: US $1,000,000.00
B. Eligible Inventory
1. Total Inventory $ --
2. Less: Ineligible Inventory $ --
3. Total Eligible Inventory $ --
4. Advance Ratio 0.50
5. Total Availability $ --
C. Borrowing Base
1 Total Borrowing Base ((A.6 plus B.5) minus $1,000,000) $ --
-----------------
2 Outstanding Borrowings under subject facility $ --
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3 Outstanding Reserves $ --
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EXCESS AVAILABILITY $ --
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IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate as of the ______ day of ____________, 20__.
Xxxxxx X. Xxxxxxxxx
Integrity Media, Inc.
Senior Vice President Finance & Administration
Chief Financial Officer
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