EXHIBIT 10.8
FIRST AMENDMENT AND SECOND SUPPLEMENT
TO
SECURITY AND PLEDGE AGREEMENT
This First Amendment and Second Supplement to Security and
Pledge Agreement ("First Amendment and Second Supplement") is made and entered
into as of June 28, 2002 by and between INTEGRITY MEDIA, INC. (f/k/a Integrity
Incorporated), 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. Capitalized terms used herein but not defined herein are used with
the meanings given them in the Security Agreement.
WITNESSETH:
WHEREAS, the supplement described in this First Amendment and
Second Supplement is delivered pursuant to Section 1.4 of the Security and
Pledge Agreement dated as of April 25, 2001 by and between Grantor and
Administrative Agent (the "Security Agreement"); and
WHEREAS, pursuant to that certain Credit Agreement by and
among Grantor, 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 the Security Agreement; and
WHEREAS, Grantor, Administrative Agent, M2 Communications,
L.L.C., and Integrity Publishers, Inc. are entering into a certain Third
Amendment to Credit Agreement which necessitates the reaffirmation and
supplement described herein; 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. Reaffirmation. By executing and delivering this First
Amendment and Second Supplement, the undersigned hereby reaffirms and restates
the grant to the Administrative Agent for itself and the Lenders, as collateral
security for the full, prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of the Secured
Obligations, and hereby collaterally assigns, conveys, mortgages, pledges,
hypothecates and transfers to the Administrative Agent for itself and the
Lenders and grants to the Administrative Agent for itself and the Lenders a Lien
on and security interest in, all of its right, title and interest in, to and
under the Collateral, including without limitation all shares of capital stock,
membership interests and all other forms of equity or ownership rights and
interests, whether or not certificated, in Integrity Publishers, Inc., a
Delaware corporation, and M2 Communications, L.L.C., a Tennessee limited
liability company.
2. Supplement to Schedule. The information applicable to the
undersigned set forth on Schedule I hereto is hereby added to the information
set forth in Schedule 2.8 to the Security Agreement. The undersigned hereby
represents and warrants that each of the representations and warranties
contained in Article 2 of the Security Agreement applicable to it is true and
correct on and as of the date hereof as if made on and as of such date.
3. 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 63-0952549. 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:
"(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 Employer
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."
4. Conditions to Effectiveness. This First Amendment and
Second Supplement shall become effective upon the effectiveness of the Third
Amendment to Credit Agreement entered into by and among Grantor, M2
Communications, L.L.C., Integrity Publishers, Inc. and Administrative Agent,
dated as of June 28, 2002.
5. Representations and Warranties. The Grantor hereby
represents and warrants as follows:
(a) This First Amendment and Second Supplement 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 and Second
Supplement, 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
and Second Supplement.
(c) No Event of Default or Default has occurred and is
continuing or would exist after giving effect to this First Amendment and Second
Supplement.
(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 and Second Supplement.
(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;
6. Effect on the Security Agreement.
(a) Upon the effectiveness of this First Amendment and Second
Supplement, 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 and Second Supplement 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.
7. Governing Law. This First Amendment and Second Supplement
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.
8. Headings. Section headings in this First Amendment and
Second Supplement are included herein for convenience of reference only and
shall not constitute a part of this First Amendment and Second Supplement for
any other purpose.
9. Counterparts. This First Amendment and Second Supplement
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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, this First Amendment and Second
Supplement has been duly executed as of the day and year first written above.
INTEGRITY MEDIA, INC.
By: /s/ Donald S. Ellington
-------------------------------------------
Name: Donald S. Ellington
-----------------------------------------
Title: Senior Vice President
----------------------------------------
LASALLE BANK NATIONAL ASSOCIATION
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Margaret C. Dierkes
-------------------------------------------
Name: Margaret C. Dierkes
-----------------------------------------
Title: Commercial Banking Officer
----------------------------------------
SCHEDULE I
Schedule 2.8 [(a) filing locations and "debtor" names; (b) Items of
Collateral that must be Delivered]