EXHIBIT 10.7
FIRST AMENDMENT
TO
SECURITY AND PLEDGE AGREEMENT
THIS FIRST AMENDMENT TO SECURITY AND PLEDGE AGREEMENT ("First
Amendment") is made and entered into as of this 28th day of June, 2002 by and
between INTEGRITY PUBLISHERS, INC., a Delaware corporation ("Grantor") and
LASALLE BANK NATIONAL ASSOCIATION as Administrative Agent (including any
successor, participant, assignee, pledgee or transferee thereof, "Administrative
Agent"), for itself and the Lenders (as defined in the Credit Agreement referred
to below).
WITNESSETH:
WHEREAS, pursuant to that certain Credit Agreement by and
among Borrower, Lenders and Administrative Agent dated as of April 25, 2001 (as
the same has been, and may be further, amended from time to time, "Credit
Agreement"), Grantor executed and delivered that certain Security and Pledge
Agreement, dated as of March 30, 2002 encumbering all of Grantor's tangible and
intangible personal property assets in favor of Administrative Agent (the
"Security Agreement"); and
WHEREAS, the State of Illinois adopted Revised Article 9 of
the Uniform Commercial Code, with an effective date of July 1, 2001 ("Revised
9"); and
WHEREAS, the Grantor and Administrative Agent seek to
maintain, continue and modify, as appropriate, the security interest granted in
the Security Agreement to comply with Revised 9.
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 Security Agreement.
2. Amendments to Security Agreement. The Security Agreement is hereby
amended as follows:
(a) The phrase "in accordance with Section 9-318(4) of the
UCC" set forth in the last paragraph of Section 1.1 shall be replaced with "in
accordance with Sections 9-406 and 9-408 of the UCC".
(b) The following provision is hereby added to Article 2 of
the Security Agreement:
"2.13 State of Organization; Federal Employer Identification
Number; Transferability. Grantor is organized in the State of Delaware
and has been so organized for the four month period preceding the date
of the Credit Agreement. Grantor's Federal Employer Identification
Number is 62-1866176. Grantor has rights in, or the power to transfer,
the Collateral."
(c) The following provisions are hereby added to Section 3.9
of the Security Agreement:
"(e) Grantor will promptly notify the Administrative Agent in
writing of any change (i) in its legal name or in any trade name used
to identify it in the conduct of its business or in the ownership of
its properties, (ii) in the location of its chief executive office,
principal place of business, any office in which it maintains books or
records relating to any of the Collateral owned or held by it or on its
behalf or any office or facility at which any such Collateral is
located (including the establishment of any such new office or
facility), (iii) in its identity or legal or organizational structure
or its jurisdiction of formation, or (iv) in its Federal Taxpayer
Identification Number. Grantor agrees not to effect or permit any
change referred to in the preceding sentence unless all filings have
been made under the UCC or otherwise that are required in order for the
Administrative Agent to continue at all times following such changes to
have a valid, legal and perfected security interest in all the
Collateral with the priority required hereby; and
(f) Grantor shall not permit any Equipment or Inventory to be
in the possession or control of any warehouseman, bailee, agent or
processor for a period of greater than thirty (30) consecutive days,
unless such warehouseman, bailee, agent or processor shall have been
notified of Administrative Agent's security interest and shall have
acknowledged and agreed in writing to hold such Equipment and Inventory
subject to Administrative Agent's security interest and the
instructions of the Administrative Agent and to waive and release any
lien held by it with respect to such Equipment and/or Inventory,
whether arising by operation of law or otherwise."
(d) Subpart gg of Section 6.3 of the Security Agreement is
hereby deleted in its entirety and is hereby replaced with the following:
"gg. "UCC" means the Uniform Commercial Code, as amended from time to
time, in effect in the State of Illinois or, if the laws of some other
jurisdiction otherwise dictates, then the Uniform Commercial Code, as
amended from time to time, as in effect in the jurisdiction whose laws
govern the interpretation of the relevant provisions of this Security
Agreement."
3. Conditions to Effectiveness. This First Amendment shall become
effective upon the effectiveness of the Third Amendment to Credit Agreement
entered into by and among Grantor, M2 Communications, LLC, Integrity Media, Inc.
and Administrative Agent, dated as of June 28, 2002.
4. Representations and Warranties. The Grantor hereby represents and
warrants as follows:
(a) This First Amendment and the Security Agreement, amended
hereby, constitute legal, valid and binding obligations of the Grantor and are
enforceable against the Grantor in accordance with their respective terms.
(b) Upon the effectiveness of this First Amendment, Grantor
hereby reaffirms all covenants, representations and warranties made in the
Security Agreement to the extent the same are not amended hereby and agrees that
all such covenants, representations and warranties shall be deemed to have been
remade as of the effective date of this First Amendment.
(c) No Event of Default has occurred and is continuing or
would exist after giving effect to this First Amendment.
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(d) The Borrowers have no defense, counterclaim or offset with
respect to the Security Agreement or any of the other Loan Documents.
(e) Grantor is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, and has all
organizational powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted, and
to execute and perform this First Amendment.
(f) The security interests granted to the Administrative Agent
in the Security Agreement, as amended hereby, continue to be valid, effective,
properly perfected, enforceable, and, are hereby ratified and confirmed in all
respects;
5. Effect on the Security Agreement.
(a) Upon the effectiveness of this First Amendment, each
reference in the Security Agreement to "this Agreement," "hereunder," "hereof,"
"herein" or words of like import shall mean and be a reference to the Security
Agreement as amended hereby.
(b) Except as specifically amended herein, the Security
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 First
Amendment shall not operate as a waiver of any right, power or remedy of
Administrative Agent, nor constitute a waiver of any provision of the Security
Agreement, the Loan Documents, or any other documents, instruments or agreements
executed and/or delivered under or in connection therewith.
6. Governing Law. This First 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 First Amendment are included
herein for convenience of reference only and shall not constitute a part of this
First Amendment for any other purpose.
8. Counterparts. This First 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 First Amendment has been duly
executed as of the day and year first written above.
INTEGRITY PUBLISHERS, INC.
By: /s/ Donald S. Ellington
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Name: Donald S. Ellington
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Title: Senior Vice President
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LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Margaret C. Dierkes
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Name: Margaret C. Dierkes
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Title: Commercial Banking Officer
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