Document:

exv10w1

 

Exhibit 10.1

NOTE

			
	$25,000,000.00
	 	Chicago, Illinois

April 25, 2005

      For Value Received, the undersigned, Midwest Banc Holdings, Inc., a bank
holding company incorporated under the laws of the State of Delaware (“Borrower”), promises to pay
to the order of Lasalle Bank National Association, a national banking association, or the
holder hereof from time to time (“Lender”), at such place as may be designated in writing by
Lender, the principal sum of TWENTY-FIVE MILLION AND NO/100THS DOLLARS ($25,000,000.00), or so much
thereof as shall be advanced or readvanced with interest thereon as hereinafter provided. It is
contemplated that there will be advances and payments under this note (this “Note”) from time to
time, but no advances or payments under this Note (including payment in full of the unpaid balance
of principal hereof prior to maturity) shall affect or impair the validity or enforceability of
this Note as to future advances hereunder. This Note is issued pursuant to the terms of a Loan
Agreement of even date herewith by and between Borrower and Lender (the “Loan Agreement”). This
Note is a substitution and replacement for the original executed Note which was inadvertently lost,
misplaced or destroyed. All capitalized terms used but not defined herein shall have the
respective meanings ascribed to them in the Loan Agreement.

      Interest shall accrue on all sums as advanced and outstanding from time to time under this
Note and Loan Agreement as set forth in the Loan Agreement, and such interest shall be due and
payable on the last day of each March, June, September and December as set forth in the Loan
Agreement. All sums owing hereunder are payable in lawful money of the United States of America,
in immediately available funds.

      The outstanding principal balance of this Note, together with all accrued and unpaid interest,
shall be due and payable on the Maturity Date. Additional principal payments shall be made in
accordance with the provisions of the Loan Agreement.

      This Note is issued pursuant to the terms of the Loan Agreement and is secured by and entitled
to the benefits of, among other things, the Collateral Documents. In case an Event of Default (as
defined under any of the Loan Agreement, the Collateral Documents, or other Loan Document) shall
occur and be continuing (any of the foregoing being a “Event of Default” hereunder), the principal
of this Note together with all accrued interest thereon may, at the option of the holder hereof,
immediately become due and payable on demand; provided, however, that if any document related to
this Note provides for automatic acceleration of payment of sums owing hereunder, all sums owing
hereunder shall be automatically due and payable in accordance with the terms of that document.

      Unless otherwise provided in the Loan Agreement, all payments on account of the indebtedness
evidenced by this Note shall be first applied to the payment of costs and expenses of Lender which
are due and payable, then to past-due interest on the unpaid principal balance and the remainder to
principal.

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      Provided that no Event of Default then exists, this Note may be prepaid only upon those terms
and conditions set forth in the Loan Agreement.

      From and after the Maturity Date, or such earlier date as all sums owing on this Note become
due and payable by acceleration or otherwise, or after the occurrence of an Event of Default,
interest shall be computed on all amounts then due and payable under this Note at a “Default Rate”
equal to 2% per annum (based on a 360-day year and charged on the basis of actual days elapsed) in
excess of the interest rate otherwise accruing under this Note.

      If any attorney is engaged by Lender to enforce or defend any provision of this Note or any of
the other Loan Documents, or as a consequence of any Event of Default, with or without the filing
of any legal action or proceeding, then Borrower shall pay to Lender immediately upon demand all
attorneys’ fees and expenses as provided in the Loan Agreement.

      No previous waiver and no failure or delay by Lender in acting with respect to the terms of
this Note or any of the other Loan Documents shall constitute a waiver of any breach, default or
failure of condition under this Note, the Loan Agreement or any of the other Loan Documents or the
obligations secured thereby. A waiver of any term of this Note or any of the other Loan Documents
or of any of the obligations secured thereby must be made in writing and shall be limited to the
express written terms of such waiver. In the event of any inconsistencies between the terms of
this Note and the terms of any other document related to the Loan evidenced by this Note, the terms
of this Note shall prevail.

      Except as otherwise provided in the Loan Agreement, Borrower expressly waives presentment,
demand, notice of dishonor, notice of default or delinquency, notice of acceleration, notice of
protest and nonpayment, notice of costs, expenses or losses and interest thereon, notice of late
charges, and diligence in taking any action to collect any sums owing under this Note or in
proceeding against any of the rights or interests in or to properties securing payment of this
Note. In addition, Borrower expressly agrees that this Note and any payment coming due hereunder
may be extended from time to time without in any way affecting the liability of any such party
hereunder.

      Time is of the essence with respect to every provision hereof. Any reference contained herein
to attorneys’ fees and expenses shall be deemed to be to reasonable fees and expenses and to
include all reasonable fees and expenses of in-house or staff attorneys and the reasonable fees and
expenses of any other experts or consultants.

      All agreements between Borrower, on the one part, and Lender, on the other part (including,
without limitation, this Note and the Loan Agreement, and any other documents securing all or any
part of the indebtedness evidenced hereby), are expressly limited so that in no event whatsoever
shall the amount paid or agreed to be paid to Lender exceed the highest lawful rate of interest
permissible under applicable law. If, from any circumstances whatsoever, fulfillment of any
provision hereof, the Loan Agreement or any other documents securing all or any part of the
indebtedness evidenced hereby at the time performance of such provisions shall be due, shall
involve exceeding the limit of validity prescribed by law which a court of competent jurisdiction
may deem applicable hereto, then, ipso facto, the obligation to be fulfilled shall be reduced to
the highest lawful rate of interest permissible under such applicable laws, and if, for any reason
whatsoever, Lender shall ever receive as interest an amount which would be

5

 

deemed unlawful under such applicable law, such interest shall be automatically applied to the
payment of the principal of this Note (whether or not then due and payable) and not to the payment
of interest or refunded to Borrower if such principal has been paid in full.

      Any notice which either party hereto may be required or may desire to give hereunder shall be
governed by the notice provisions of the Loan Agreement.

      This Note shall be governed by and construed in accordance with the internal laws of the State
of Illinois. Nothing herein shall be deemed to limit any rights, powers or privileges which Lender
may have pursuant to any law of the United States of America or any rule, regulation or order of
any department or agency thereof and nothing herein shall be deemed to make unlawful any
transaction or conduct by Lender which is lawful pursuant to, or which is permitted by, any of the
foregoing.

      To induce Lender to accept this Note and the other Loan Documents, Borrower irrevocably agrees
that all actions or proceedings in any way, manner, or respect, arising out of or from or related
to this Note shall be litigated only in courts having situs within Chicago, Illinois. Borrower
hereby consents and submits to the jurisdiction of any local, state, or federal court located
within said city. Borrower hereby irrevocably appoints and designates its Chief Financial Officer,
whose business address is 501 W. North Avenue, Melrose Park, Illinois 60160, or any other Person
having and maintaining a place of business in such state whom Borrower may from time to time
hereafter designate (having given five days’ written notice thereof to Lender) as Borrower’s true
and lawful attorney and duly authorized agent for acceptance of service of legal process. Borrower
agrees that service of such process upon such Person shall constitute personal service of such
process upon Borrower. Borrower hereby waives any right it may have to transfer or change the
venue of any litigation brought against Borrower by Lender.

      BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO
A TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH THIS NOTE OR ANY OF THE
OTHER LOAN DOCUMENTS, OR ANY OTHER STATEMENTS OR ACTIONS OF BORROWER OR LENDER. BORROWER
ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS NOTE AND IN THE MAKING OF THIS
WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS DISCUSSED THIS
WAIVER WITH SUCH LEGAL COUNSEL. BORROWER FURTHER ACKNOWLEDGES THAT (i) IT HAS READ AND UNDERSTANDS
THE MEANING AND RAMIFICATIONS OF THIS WAIVER, (ii) THIS WAIVER HAS BEEN REVIEWED BY BORROWER AND
BORROWER’S COUNSEL AND IS A MATERIAL INDUCEMENT FOR LENDER TO ENTER INTO THE LOAN DOCUMENTS, AND
(iii) THIS WAIVER SHALL BE EFFECTIVE AS TO EACH OF THE LOAN DOCUMENTS AS IF FULLY INCORPORATED
THEREIN.

6

 

      IN WITNESS WHEREOF, the undersigned has executed this Note or caused this Note to be executed
by its duly authorized representative as of the date first above written.

	 	 	 	 	 	 	 
	 	 	Midwest Banc Holdings, Inc.
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Daniel R. Kadolph
 
	

	 	 	 	 
	

	 	 	 	Name:
	 	Daniel R. Kadolph
	

	 	 	 	 	 	 
	

	 	 	 	Title:
	 	Senior Vice President and
	

	 	 	 	 	 	 
	

	 	 	 	 	 	Chief Financial Officer
	

	 	 	 	 	 	 

7

 

First Amendment to Loan Agreement

      This First Amendment to Loan Agreement (this “Amendment”), dated as of April 25,
2005, is entered into between Midwest Banc Holdings, Inc., (“Borrower”) a bank holding
company incorporated under the laws of the State of Delaware, and LaSalle Bank National
Association, a national banking association with its main office located in Chicago, Illinois
(“Lender”).

Recitals

      A. Borrower and Lender have previously entered into a loan agreement, dated as of April
8, 2004 (the “Original Loan Agreement”), in which Lender agreed to lend to Borrower an aggregate
principal amount of up to Twenty Five Million Dollars ($25,000,000).

      B. Borrower delivered to Lender a Note dated as of April 8, 2004, in the principal amount of
Twenty Five Million Dollars ($25,000,000) (the “Note”).

      C. In connection with the transactions contemplated under the Original Loan Agreement,
Borrower granted to Lender a security interest in 100% of the capital stock of each of Midwest Bank
and Trust Company and Midwest Bank of Western Illinois, each of which is chartered as an Illinois
state bank. (the “Pledge Agreement”)

      D. Borrower and Lender have agreed to extend the Maturity Date (as defined in the Original
Loan Agreement), from April 7, 2005, to April 30, 2006.

      Now, therefore, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:

Agreements

	 	1.  	All terms which are capitalized and used herein (which are not otherwise
specifically defined herein) shall be used in this Amendment as defined in the Loan
Agreement.
	 
	 	2.  	The definition of “Maturity Date” appearing in Section 1.1 of the Loan
Agreement shall be deleted and replaced in its entirety with the following:
	 
	 	“Maturity Date” shall mean April 30, 2006.”
	 
	 	3.  	The Note shall be amended and restated in its entirety by a substitute Note,
identical in all respects to the current Note, except for the revised date of the Note
and the elimination of the reference to the date on which interest payments shall
commence, all in the form attached hereto as Exhibit A. Upon the execution of the
amended and restated Note and delivery to Lender, Lender will destroy the current Note
and all of Lender’s rights under the destroyed Note shall thereafter be represented by
the substituted amended and restated Note. All references to the “Note” in the Loan
Agreement and the Pledge Agreement shall refer to the substituted amended and restated
Note.

8

 

	 	4.  	To induce Lender to execute and deliver this Amendment, Borrower hereby
represents to Lender that as of the date hereof and as of the time that this Amendment
becomes effective, and after taking into account the revisions set forth in this
Amendment, as follows:

	 	a.  	each of the representations and warranties set forth in the
Loan Agreement and the Pledge Agreement is true and correct;
	 
	 	b.  	Borrower is in full compliance with all of the terms and
conditions of the Loan Agreement and the Pledge Agreement and the other
documents delivered in connection therewith, and no Default has occurred under
the Loan Agreement or the Pledge Agreement (as defined in each such agreement)
or any document in connection therewith; and
	 
	 	c.  	no fact or circumstance exists that with the lapse of time, the
giving of notice or both would constitute such a Default.

	 	5.  	Except as previously amended hereby, each of the Loan Agreement and the Pledge
Agreement is hereby ratified and confirmed and shall continue in full force and effect.
	 
	 	6.  	This Amendment shall become effective when Borrower and Lender shall have
executed it and thereafter shall be binding upon and inure to the benefit of Borrower
and Lender and their respective successors and assigns
	 
	 	7.  	This Amendment may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed will constitute
but one and the same instrument.

      In Witness Whereof, the parties hereto have caused this Amendment to be executed as
of the date first above written.

	 	 	 	 	 	 	 	 	 	 	 
	Midwest Banc Holdings, Inc.	 	LaSalle Bank National Association
	 
	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Daniel R. Kadolph
 	 	By:	 	/s/ Michael A. Tighe, Jr.
 
	

	 	 
	 	 	 	 
	

	 	Name:
	 	Daniel R. Kadolph
	 	 	 	Name:
	 	Michael A. Tighe, Jr.
	

	 	 	 	 
	 	 	 	 	 	 
	

	 	Title:
	 	Senior Vice President and
	 	 	 	Title:
	 	Vice President
	

	 	 	 	 
	 	 	 	 	 	 
	

	 	 	 	Chief Financial Officer	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 

9

 

Exhibit A

NOTE

			
	$25,000,000.00
	 	Chicago, Illinois

April 25, 2005

      For Value Received, the undersigned, Midwest Banc Holdings, Inc., a bank
holding company incorporated under the laws of the State of Delaware (“Borrower”), promises to pay
to the order of Lasalle Bank National Association, a national banking association, or the
holder hereof from time to time (“Lender”), at such place as may be designated in writing by
Lender, the principal sum of TWENTY-FIVE MILLION AND NO/100THS DOLLARS ($25,000,000.00), or so much
thereof as shall be advanced or readvanced with interest thereon as hereinafter provided. It is
contemplated that there will be advances and payments under this note (this “Note”) from time to
time, but no advances or payments under this Note (including payment in full of the unpaid balance
of principal hereof prior to maturity) shall affect or impair the validity or enforceability of
this Note as to future advances hereunder. This Note is issued pursuant to the terms of a Loan
Agreement of even date herewith by and between Borrower and Lender (the “Loan Agreement”). This
Note is a substitution and replacement for the original executed Note which was inadvertently lost,
misplaced or destroyed. All capitalized terms used but not defined herein shall have the
respective meanings ascribed to them in the Loan Agreement.

      Interest shall accrue on all sums as advanced and outstanding from time to time under this
Note and Loan Agreement as set forth in the Loan Agreement, and such interest shall be due and
payable on the last day of each March, June, September and December as set forth in the Loan
Agreement. All sums owing hereunder are payable in lawful money of the United States of America,
in immediately available funds.

      The outstanding principal balance of this Note, together with all accrued and unpaid interest,
shall be due and payable on the Maturity Date. Additional principal payments shall be made in
accordance with the provisions of the Loan Agreement.

      This Note is issued pursuant to the terms of the Loan Agreement and is secured by and entitled
to the benefits of, among other things, the Collateral Documents. In case an Event of Default (as
defined under any of the Loan Agreement, the Collateral Documents, or other Loan Document) shall
occur and be continuing (any of the foregoing being a “Event of Default” hereunder), the principal
of this Note together with all accrued interest thereon may, at the option of the holder hereof,
immediately become due and payable on demand; provided, however, that if any document related to
this Note provides for automatic acceleration of payment of sums owing hereunder, all sums owing
hereunder shall be automatically due and payable in accordance with the terms of that document.

      Unless otherwise provided in the Loan Agreement, all payments on account of the indebtedness
evidenced by this Note shall be first applied to the payment of costs and expenses

10

 

of Lender which are due and payable, then to past-due interest on the unpaid principal balance
and the remainder to principal.

      Provided that no Event of Default then exists, this Note may be prepaid only upon those terms
and conditions set forth in the Loan Agreement.

      From and after the Maturity Date, or such earlier date as all sums owing on this Note become
due and payable by acceleration or otherwise, or after the occurrence of an Event of Default,
interest shall be computed on all amounts then due and payable under this Note at a “Default Rate”
equal to 2% per annum (based on a 360-day year and charged on the basis of actual days elapsed) in
excess of the interest rate otherwise accruing under this Note.

      If any attorney is engaged by Lender to enforce or defend any provision of this Note or any of
the other Loan Documents, or as a consequence of any Event of Default, with or without the filing
of any legal action or proceeding, then Borrower shall pay to Lender immediately upon demand all
attorneys’ fees and expenses as provided in the Loan Agreement.

      No previous waiver and no failure or delay by Lender in acting with respect to the terms of
this Note or any of the other Loan Documents shall constitute a waiver of any breach, default or
failure of condition under this Note, the Loan Agreement or any of the other Loan Documents or the
obligations secured thereby. A waiver of any term of this Note or any of the other Loan Documents
or of any of the obligations secured thereby must be made in writing and shall be limited to the
express written terms of such waiver. In the event of any inconsistencies between the terms of
this Note and the terms of any other document related to the Loan evidenced by this Note, the terms
of this Note shall prevail.

      Except as otherwise provided in the Loan Agreement, Borrower expressly waives presentment,
demand, notice of dishonor, notice of default or delinquency, notice of acceleration, notice of
protest and nonpayment, notice of costs, expenses or losses and interest thereon, notice of late
charges, and diligence in taking any action to collect any sums owing under this Note or in
proceeding against any of the rights or interests in or to properties securing payment of this
Note. In addition, Borrower expressly agrees that this Note and any payment coming due hereunder
may be extended from time to time without in any way affecting the liability of any such party
hereunder.

      Time is of the essence with respect to every provision hereof. Any reference contained herein
to attorneys’ fees and expenses shall be deemed to be to reasonable fees and expenses and to
include all reasonable fees and expenses of in-house or staff attorneys and the reasonable fees and
expenses of any other experts or consultants.

      All agreements between Borrower, on the one part, and Lender, on the other part (including,
without limitation, this Note and the Loan Agreement, and any other documents securing all or any
part of the indebtedness evidenced hereby), are expressly limited so that in no event whatsoever
shall the amount paid or agreed to be paid to Lender exceed the highest lawful rate of interest
permissible under applicable law. If, from any circumstances whatsoever, fulfillment of any
provision hereof, the Loan Agreement or any other documents securing all or any part of the
indebtedness evidenced hereby at the time performance of such provisions shall

11

 

be due, shall involve exceeding the limit of validity prescribed by law which a court of
competent jurisdiction may deem applicable hereto, then, ipso facto, the obligation to be fulfilled
shall be reduced to the highest lawful rate of interest permissible under such applicable laws, and
if, for any reason whatsoever, Lender shall ever receive as interest an amount which would be
deemed unlawful under such applicable law, such interest shall be automatically applied to the
payment of the principal of this Note (whether or not then due and payable) and not to the payment
of interest or refunded to Borrower if such principal has been paid in full.

      Any notice which either party hereto may be required or may desire to give hereunder shall be
governed by the notice provisions of the Loan Agreement.

      This Note shall be governed by and construed in accordance with the internal laws of the State
of Illinois. Nothing herein shall be deemed to limit any rights, powers or privileges which Lender
may have pursuant to any law of the United States of America or any rule, regulation or order of
any department or agency thereof and nothing herein shall be deemed to make unlawful any
transaction or conduct by Lender which is lawful pursuant to, or which is permitted by, any of the
foregoing.

      To induce Lender to accept this Note and the other Loan Documents, Borrower irrevocably agrees
that all actions or proceedings in any way, manner, or respect, arising out of or from or related
to this Note shall be litigated only in courts having situs within Chicago, Illinois. Borrower
hereby consents and submits to the jurisdiction of any local, state, or federal court located
within said city. Borrower hereby irrevocably appoints and designates its Chief Financial Officer,
whose business address is 501 W. North Avenue, Melrose Park, Illinois 60160, or any other Person
having and maintaining a place of business in such state whom Borrower may from time to time
hereafter designate (having given five days’ written notice thereof to Lender) as Borrower’s true
and lawful attorney and duly authorized agent for acceptance of service of legal process. Borrower
agrees that service of such process upon such Person shall constitute personal service of such
process upon Borrower. Borrower hereby waives any right it may have to transfer or change the
venue of any litigation brought against Borrower by Lender.

      BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO
A TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH THIS NOTE OR ANY OF THE
OTHER LOAN DOCUMENTS, OR ANY OTHER STATEMENTS OR ACTIONS OF BORROWER OR LENDER. BORROWER
ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS NOTE AND IN THE MAKING OF THIS
WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS DISCUSSED THIS
WAIVER WITH SUCH LEGAL COUNSEL. BORROWER FURTHER ACKNOWLEDGES THAT (i) IT HAS READ AND UNDERSTANDS
THE MEANING AND RAMIFICATIONS OF THIS WAIVER, (ii) THIS WAIVER HAS BEEN REVIEWED BY BORROWER AND
BORROWER’S COUNSEL AND IS A MATERIAL INDUCEMENT FOR LENDER TO ENTER INTO THE LOAN DOCUMENTS, AND
(iii) THIS WAIVER SHALL BE EFFECTIVE AS TO EACH OF THE LOAN DOCUMENTS AS IF FULLY INCORPORATED
THEREIN.

12

 

      IN WITNESS WHEREOF, the undersigned has executed this Note or caused this Note to be executed
by its duly authorized representative as of the date first above written.

	 	 	 	 	 	 	 
	 	 	Midwest Banc Holdings, Inc.
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	 	 	 	 	 
	

	 	 	 	Name:	 	 
	

	 	 	 	 	 	 
	

	 	 	 	Title:	 	 
	

	 	 	 	 	 	 

13<PAGE>

                                                                   EXHIBIT 10.21

                               FIRST AMENDMENT TO
                                CREDIT AGREEMENT

     THIS FIRST AMENDMENT TO CREDIT AGREEMENT ("this Amendment") is dated as of
June 14, 2004 (the "Effective Date"), by and among BOOKS-A-MILLION, INC., a
Delaware corporation ("BAM"), and its wholly-owned subsidiaries AMERICAN
WHOLESALE BOOK COMPANY, INC., an Alabama corporation ("AWBC") and AMERICAN
INTERNET SERVICE, INC., an Alabama corporation ("AIS") and the wholly-owned
subsidiaries of AIS, BOOKSAMILLION.COM, INC., an Alabama corporation
("BAM.COM"), NETCENTRAL, INC., a Tennessee corporation ("NI"), and FAITHPOINT,
INC. an Alabama corporation ("FAITHPOINT"); BAM, AWBC, AIS, bam.com, NI and
FaithPoint are sometimes together referred to as the "INITIAL PARTICIPATING
ENTITIES"; the Initial Participating Entities, together with all Persons that
hereafter become Participating Entities, being hereafter sometimes together
referred to as the "BORROWERS"), BANK OF AMERICA, N.A., a national banking
association ("BOFA"), and the various lenders identified on the signature pages
hereto (collectively, the "LENDERS"); and BANK OF AMERICA, N.A., a national
banking association, as agent for the Lenders (the "AGENT").

                                    RECITALS

     A.   The Borrowers, the Lenders and the Agent have previously entered into
that certain Credit Agreement dated as of July 1, 2002 (together with any and
all amendments thereto, the "Credit Agreement"). Capitalized terms not otherwise
herein defined shall have the meanings given them in the Credit Agreement.

     B.   The Borrowers, the Lenders and the Agent now desire to amend the
definition of "Maturity Date" set forth in the Credit Agreement and to make the
other changes set forth in this Amendment.

                                    AGREEMENT

     NOW, THEREFORE, in consideration of the foregoing recitals and in further
consideration of the mutual agreements set forth herein, the Borrowers, the
Lenders and the Agent hereby agree as follows, with such agreements to become
effective as of the Effective Date:

     1.   RECITALS. The recitals herein above are hereby incorporated by this
reference as if fully set forth herein.

     2.   RULES OF CONSTRUCTION. This Amendment is subject to the rules of
construction set forth in Section 1.2 of the Credit Agreement.

<PAGE>

     3.   REPRESENTATIONS AND WARRANTIES OF BORROWERS. The Borrowers represent
and warrant to the Lenders and the Agent as follows:

          (a)  REPRESENTATIONS AND WARRANTIES IN CREDIT DOCUMENTS. All of the
     representations and warranties set forth in the Credit Documents are true
     and correct in all material respects on and as of the Effective Date,
     except to the extent that such representations and warranties expressly
     relate to an earlier date.

          (b)  NO DEFAULT. As of the Effective Date, the Borrowers are in
     compliance in all material respects with all the terms and provisions set
     forth in the Credit Documents on their part to be observed or performed,
     and, no Event of Default, nor any event that upon notice or lapse of time
     or both would constitute such an Event of Default, has occurred and is
     continuing.

          (c)  ORGANIZATIONAL DOCUMENTS. The articles of incorporation and
     bylaws of the Borrowers have not been modified or amended since July 1,
     2002.

     4.   AMENDMENTS TO CREDIT AGREEMENT.

          (a)  The defined term "Maturity Date" set forth in Section 1.1 of the
     Credit Agreement is hereby amended to read, in its entirety, as follows:

               ""MATURITY DATE" means July 1, 2007."

          (b)  Subparagraph (v) of Section 5.11 of the Credit Agreement is
     hereby amended to read, in its entirely, as follows:

               "(v) to re-acquire outstanding capital stock of BAM."

     5.   EXTENSION FEE. Borrowers shall pay to Agent for the account of each
Lender in accordance with its Pro Rata Share an extension fee for extending the
Revolving Credit Facility in an amount equal to one-tenth of one percent (10
basis points) of the Total Revolving Credit Commitment, including the Peak Usage
Tranche notwithstanding Section 2,5.1(g) of the Credit Agreement. The extension
fee shall be paid on the Effective Date and is nonrefundable.

     6.   CREDIT DOCUMENTS TO REMAIN IN EFFECT. Except as expressly amended
herein, the Credit Agreement and the other Credit Documents shall remain in full
force and effect in accordance with their respective terms.

     7.   NO NOVATION, ETC. Nothing contained in this Amendment shall be deemed
to constitute a novation of the terms of the Credit Documents, nor release any
party from liability for any of the Loans, nor affect any of the rights, powers
or remedies of the Lenders under the Credit Documents, nor constitute a waiver
of any provision thereof, except as specifically set forth in this Amendment.

     8.   REFERENCES IN CREDIT DOCUMENTS. Effective as of the Effective Date,
all references in the Credit Documents to the "Credit Agreement" shall refer to
the Credit

                                       2

<PAGE>

Agreement as amended by this Amendment, including but not limited to, the
extension of the Maturity Date, and as the Credit Agreement may be further
amended from time to time.

     9.   GOVERNING LAW, SUCCESSORS AND ASSIGNS, ETC. This Amendment shall be
governed by and construed in accordance with the laws of the State of Georgia
and shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.

     10.  HEADINGS. The descriptive headings of the sections of this Amendment
are for convenient reference only and shall not be deemed to affect the meaning
or construction of any of the provisions hereof.

     11.  ENTIRE AGREEMENT. This Amendment constitutes the entire understanding
to date of the parties hereto regarding the subject matter hereof and supersedes
all prior and contemporaneous oral and written agreements of the parties thereto
with respect to the subject matter hereof.

     12.  SEVERABILITY. If any provision of this Amendment shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

     13.  COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which so executed shall be deemed an original, but all
such counterparts shall together constitute but one and the same instrument.

     14.  EFFECT OF THIS AMENDMENT. This Amendment amends and supplements the
Credit Agreement and shall be construed as if it is a part thereof for all
purposes.

                  [Remainder of page intentionally left blank]

                                       3

<PAGE>

     IN WITNESS WHEREOF, the Borrowers, the Lenders and the Agent have caused
this Amendment to be executed and delivered by their duly authorized
representatives on the dates set forth below their signature, to be effective as
of the Effective Date.

                                            BOOKS-A-MILLION, INC.

                                            By: /s/ Richard Wallington
                                                -----------------------------
                                                Richard Wallington
                                                Its: CFO

                                                Dated: June 29, 2004

                                            NETCENTRAL, INC.

                                            By: /s/ Richard Wallington
                                                -----------------------------
                                                Richard Wallington
                                                Its: CFO

                                                Dated: June 29, 2004

                                            AMERICAN INTERNET SERVICE, INC.

                                            By: /s/ Richard Wallington
                                                -----------------------------
                                                Richard Wallington
                                                Its: CFO

                                                Dated: June 29, 2004

                                            AMERICAN WHOLESALE BOOK
                                            COMPANY, INC.

                                            By: /s/ Richard Wallington
                                                -----------------------------
                                                Richard Wallington
                                                Its: CFO

                                                Dated: June 29, 2004

<PAGE>

                                            BOOKSAMILLION.COM, INC.

                                            By: /s/ Richard Wallington
                                                -----------------------------
                                                Richard Wallington
                                                Its: CFO

                                                Dated: June 29, 2004

                                            FAITHPOINT, INC.

                                            By: /s/ Richard Wallington
                                                -----------------------------
                                                Richard Wallington
                                                Its: CFO

                                                Dated: June 29, 2004

<PAGE>

                                            BANK OF AMERICA, N.A., AS AGENT

                                            By: /s/ Michael Brashler
                                                ----------------------------
                                                Vice President

                                                Dated: June 10, 2004

                                       6

<PAGE>

                                            BANK OF AMERICA, N.A., as a Lender

                                            By: /s/ William H. Powell
                                                ----------------------------
                                                William H. Powell
                                                Its: Senior Vice President

                                                Dated: June 14, 2004

                                       7
<PAGE>

                                            AMSOUTH BANK, AS A LENDER

                                            By: /s/ David A. Simmons
                                                -----------------------------
                                                David A. Simmons
                                                Its: Senior Vice President

                                                Dated: June 14, 2004

                                       8

<PAGE>

                                            SUNTRUST BANK, AS A LENDER

                                            By: /s/ David W. Penter
                                                ------------------------------
                                                David W. Penter
                                                Its: Managing Director

                                                Dated: June 14, 2004

                                       9

<PAGE>

                                            SOUTHTRUST BANK, AS A LENDER

                                            By: /s/ Kelly Peace
                                                -----------------------------
                                                Kelly Peace
                                                Its: Assistant Vice President

                                                Dated: June 11, 2004

                                       10

<PAGE>

                                            WELLS FARGO BANK, N.A., AS A LENDER

                                            By: /s/ Robert Louk
                                                -------------------------------
                                                Robert Louk
                                                Vice President

                                                Dated: June 15, 2004

                                       11

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