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EXHIBIT 10.15
AMENDED AND RESTATED STOCK PLEDGE AGREEMENT
THIS AMENDED AND RESTATED STOCK PLEDGE AGREEMENT (this "Agreement") is
made as of January 22, 1997, by INTEGRITY INCORPORATED, a Delaware corporation
("Pledgor"), in favor of CREDITANSTALT CORPORATE FINANCE, INC. (the "Lender")
under the Loan Agreement referred to below.
W I T N E S S E T H :
WHEREAS, Pledgor has entered into a Loan and Security Agreement, dated as
of August 2, 1996 (as the same may be amended, modified or supplemented from
time to time, the "Loan Agreement"), pursuant to which the Lender agreed,
subject to the terms and conditions set forth therein, to make certain loans to
Pledgor in the aggregate principal amount of up to $19,000,000; and
WHEREAS, Pledgor owns all of the issued and outstanding shares of capital
stock ("Shares") of each of Pledgor's subsidiaries (each, a "Subsidiary" and
collectively, the "Subsidiaries"); and
WHEREAS, pursuant to a Stock Pledge Agreement dated as of August 2, 1996,
Pledgor pledged certain or all of the Shares to the Lender to secure Pledgor's
obligations to the Lender under the Loan Agreement and the other Loan
Documents; and
WHEREAS, Pledgor and the Lender desire to amend and restate the Stock
Pledge Agreement;
NOW, THEREFORE, in order to induce the Lender to continue to make Loans
subject to the terms and conditions of the Loan Agreement, and for other good
and valuable consideration, the receipt, adequacy and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. When used herein, the following terms shall have the
following respective meanings:
"Collateral" shall have the meaning given such term in Section 2
hereof.
"Event of Default" shall mean the occurrence of any one or more of
the following events:
(a) the occurrence of any Event of Default under, and as such term
is defined in, the Loan Agreement; or
(b) any of the Collateral shall be attached or levied upon or seized
in any legal proceedings, or held by virtue of any lien or distress, or
any other event or condition shall occur or exist which shall result in
the Lender no longer having a perfected, first priority security interest
in the Collateral, subject only to Permitted Liens; or
(c) default by the Pledgor in the observance or performance of any
covenant or agreement contained in this Agreement or any other Loan
Document to which Pledgor is a party; or
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(d) this Agreement ceases to be in full force and effect or Pledgor
renounces or disputes any of its obligations hereunder.
"Foreign Subsidiaries" shall mean Integrity Music Europe, Limited, a
U.K. private company, and Integrity Media Asia Pte Ltd, a Singapore
private company.
"Pledged Stock" shall have the meaning given such term in Section 2
hereof.
"Property Act" means the Conveyancing and Law of Property Act,
Chapter 61 of Singapore.
"Stock" shall mean all shares, options, interests, participations or
other equivalents (howsoever designated) of or in a corporation, whether
voting or non-voting, including, without limitation, common stock,
warrants, preferred stock, convertible debentures and all agreements,
instruments and documents convertible, in whole or in part, into any one
or more or all of the foregoing.
Except to the extent otherwise defined herein, all other capitalized terms
contained in this Agreement shall have the meanings ascribed to such terms in
the Loan Agreement.
2. Pledge. Pledgor hereby pledges, conveys, hypothecates, mortgages,
charges, assigns, sets over, delivers and grants to the Lender as security for
the payment and performance when due of all the Obligations, a security
interest in all of Pledgor's right, title and interest in and to the following,
whether now owned or hereafter acquired (collectively, the "Collateral"): (i)
all of the Shares and all additional Stock of each of the Subsidiaries (other
than the Foreign Subsidiaries) from time to time acquired by Pledgor in any
manner from and after the date hereof and (ii) all of the Shares of the Foreign
Subsidiaries set forth on Exhibit A attached hereto and incorporated herein by
reference and all additional Stock of each of the Foreign Subsidiaries from
time to time acquired by Pledgor in any manner from and after the date hereof
(the Shares pledged pursuant to clauses (i) and (ii) above being hereinafter
collectively referred to as the "Pledged Stock"), including, without
limitation, all stock rights, rights to subscribe, stock splits, stock
dividends, new securities and certificates, subscriptions, additions and
replacements declared or issued with respect to or on account of any Pledged
Stock, together with all proceeds thereof and all cash, additional securities
and other property at any time and from time to time receivable or otherwise
distributed in respect of or in exchange for any and all such Pledged Stock.
3. Representations and Warranties of Pledgor. Pledgor hereby represents
and warrants to the Lender as follows:
(a) Corporate Existence and Qualification. Pledgor is a corporation
duly organized, validly existing and in good standing under the laws of
the State of Delaware, and Pledgor is duly qualified as a foreign
corporation in good standing in the State of Alabama. Pledgor is duly
qualified as a foreign corporation in good standing in each other state
wherein the conduct of its business or the ownership of its property
requires such qualification except where the failure to maintain such
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qualification or good standing could not reasonably be expected to result
in a Material Adverse Effect;
(b) Authority; Valid and Binding Effect. Pledgor has the corporate
power and authority to execute, deliver and perform its obligations under
this Agreement and the Loan Documents to which it is a party, and has
taken all necessary and appropriate corporate action to authorize the
execution, delivery and performance of this Agreement and such Loan
Documents to which it is a party. This Agreement and the other Loan
Documents to which Pledgor is a party constitute the valid and legally
binding obligations of Pledgor, enforceable against Pledgor in accordance
with their respective terms except that enforceability may be limited by
bankruptcy, insolvency and other laws affecting creditor's rights
generally and except that the availability of certain remedies may be
limited by general principles of equity;
(c) No Conflict. The execution, delivery and performance by Pledgor
of this Agreement (a) are not in contravention of any provisions of
Applicable Law the violation of which might have a Material Adverse
Effect; (b) will not violate or result in a default under any agreement
or indenture to which the Pledgor is a party or by which Pledgor is
bound, the violation or default of which might have a Material Adverse
Effect; (c) do not contravene the Certificate of Incorporation or By-laws
of Pledgor; and (d) will not result in or require the creation or
imposition of any Lien on any of the property or assets of Pledgor other
than Liens in favor of the Lender created by this Agreement;
(d) Governmental Action. The execution, delivery and performance of
this Agreement do not require any registration with, consent or approval
of, or any notice to, or other action to, with or by any Governmental
Authority, the failure of which to obtain might have a Material Adverse
Effect, except for (i) filings, consents or notices which have been
obtained and a copy thereof furnished to Lender; and (ii) filings
necessary to perfect the Liens granted by this Agreement;
(e) Security Interest. This Agreement and the pledge of the
Collateral pursuant hereto create a valid and, together with and upon the
physical delivery of certificates evidencing the Pledged Stock to the
Lender, perfected first priority security interest in the Collateral in
favor of the Lender securing the payment of the Obligations, and all
filings and all other actions necessary or desirable to perfect such
security interest have been taken;
(f) Title. Pledgor is the legal and equitable owner of, and has the
complete and unconditional authority to pledge, the Collateral and holds
the same free and clear of any and all liens, claims, charges,
encumbrances and security interests of any nature whatsoever, except for
Permitted Liens; no effective financing statement or other instrument
similar in effect covering all or any part of the Collateral is on file
in any recording office, except such as may have been filed in favor of
the Lender relating to this Agreement; Pledgor has not granted or given
any proxy, power of attorney, option or right of first refusal with
respect to any of the Collateral except to the Lender; and Pledgor is not
a party to any agreement which restricts its right to vote, assign,
pledge, transfer or give a proxy or power of attorney with respect to any
of the Collateral or any interest therein;
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(g) Shares. Except as specifically set forth on Exhibit A hereto,
the Pledged Stock constitutes one hundred percent (100%) of the issued
and outstanding Shares of the Subsidiaries (other than the Foreign
Subsidiaries) and sixty-five percent (65%) of the issued and outstanding
Shares of the Foreign Subsidiaries, all of which Shares have been duly
authorized, are validly issued in full compliance with all applicable
securities laws and other Applicable Law, and are fully paid and
nonassessable; and there are no existing options, warrants or commitments
of any kind or nature or any outstanding securities or other instruments
convertible into shares of any class of voting stock of the Subsidiaries,
and no stock of the Subsidiaries is held in treasury of such
Subsidiaries; and
(h) No Violation of Securities Laws. Pledgor's execution and
delivery of this Agreement does not directly or indirectly violate or
result in a violation of any securities laws.
4. Covenants and Agreements of Pledgor. Pledgor covenants and agrees as
follows:
(a) Delivery of Certificates. Pledgor shall have delivered to the
Lender all certificates evidencing the Collateral, accompanied by
executed stock powers in blank, and by such other instruments or
documents as the Lender or its counsel may reasonably request;
(b) After Acquired Collateral Delivery. Promptly, and in any event
within ten (10) days after Pledgor acquires any additional Stock or
receives or is issued any Stock or other securities or property in
respect of any of the Collateral, whether or not for value paid for it,
Pledgor shall, subject to Section 5(a) hereof, (i) deliver such Stock or
other securities or property (including, but not limited to, any and all
certificates evidencing any such Stock or securities) to the Lender
together with stock powers or other appropriate instruments of transfer,
executed in blank, all to be held subject to the terms of this Agreement;
and (ii) execute and deliver such pledge agreements, security agreements,
financing statements or other instruments, documents or agreements as may
be necessary or appropriate to confirm, evidence or perfect the security
interests granted hereby; provided, however, that nothing contained in
this Section 4(b) shall require Pledgor to Pledge in excess of sixty-five
percent (65%) of the issued and outstanding Shares of any Foreign
Subsidiary;
(c) No New Stock. Except as permitted by the Loan Agreement,
Pledgor will not, subsequent to the date of this Agreement, cause or
permit the Subsidiaries to issue any Stock or securities convertible into
Stock, unless and except upon first having obtained the prior written
consent of the Lender;
(d) Taxes. Pledgor will pay all taxes, assessments and charges
levied, assessed or imposed upon the Collateral owned by it prior to the
date on which penalties attach thereto, except where the same may be
contested in good faith by appropriate proceedings and for which adequate
reserves have been established;
(e) No Transfer. Other than as permitted under Section 7.3 of the
Loan Agreement, Pledgor will not sell, assign, transfer or otherwise
dispose of all or any portion of the Collateral owned by Pledgor, or any
rights therein, without the prior written consent of the Lender;
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(f) No Amendments. Without the prior written consent of the Lender,
Pledgor will not approve or consent to any changes to the Certificate or
Articles of Incorporation or By-Laws of any Subsidiary which would in any
way impair or diminish the rights of the Lender hereunder;
(g) Right to Perform. In the event that Pledgor fails or refuses to
perform any of its obligations set forth herein, the Lender shall have
the right, without obligation, to do all things it deems necessary or
advisable to discharge the same, and any sums paid by the Lender, or the
cost thereof, including without limitation, attorneys' fees, shall
constitute Obligations, be secured by the Collateral and bear interest as
provided in the Loan Agreement until paid;
(h) No Obligation. Pledgor acknowledges and agrees that nothing
contained herein shall obligate the Lender or any Lender or impose a duty
upon the Lender or any Lender to assume any duties or obligations of
Pledgor with respect to any of the Collateral; and
(i) Further Assurances. Pledgor agrees at anytime and from time to
time, at Pledgor's expense, to execute and deliver all further
instruments and documents and to perform all acts and do all things that
may be reasonably necessary or desirable or that the Lender may request,
now or hereafter, to evidence, preserve or protect the creation,
attachment or perfection of the security interests herein granted to the
Lender or to enable the Lender to exercise and enforce its rights and
remedies hereunder with respect to the Collateral including, without
limitation, all action specified in Section 6 hereof. The obligations of
Pledgor under this Section 4(i) shall, with respect to Integrity Media
Asia Pte Ltd, be in addition to and not in substitution for the covenants
for any further assurance deemed to be included herein by virtue of the
Property Act.
5. Distributions; Etc.
(a) Right of Pledgor to Receive Distributions. So long as no Event
of Default exists hereunder or under the Loan Agreement, or would exist
upon the payment of the distribution amounts described in this Section
5(a), Pledgor shall have the right to receive cash distributions declared
and paid with respect to the Collateral owned by Pledgor, to the extent
such distributions are permitted by the Loan Agreement. Any and all
stock or liquidating distributions, other distributions in property,
return of capital or other distributions made on or in respect of
Collateral, whether resulting from a subdivision, combination or
reclassification of the outstanding capital stock of any Subsidiary or
received in exchange for Collateral or any part thereof or as a result of
any merger, consolidation, acquisition or other exchange of assets to
which any Subsidiary may be a party or otherwise, shall be and become
part of the Collateral pledged hereunder and, if received by Pledgor,
shall be received in trust, for the benefit of the Lender, shall be
segregated from other funds of Pledgor and shall be forthwith paid over
to the Lender as Collateral in the same form as so received (together
with any necessary endorsements.)
(b) Holding Collateral; Exchanges. The Lender may hold any of the
Collateral, endorsed or assigned in blank, and may deliver any of the
Collateral to Pledgor for the purpose of
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making denominational exchanges or registrations or transfers or for such
other reasonable purpose in furtherance of this Agreement as the Lender
may deem desirable. The Lender shall have the right, if reasonably
necessary or desirable in order to perfect or maintain the perfection of
the Lien created hereby, without notice to Pledgor, to transfer to or
register in the name of the Lender or any of its nominees, any or all of
the Collateral; provided that notwithstanding the foregoing, until any
transfer of beneficial ownership with respect to the Collateral pursuant
to any exercise of remedies under Section 6 hereof, Pledgor shall continue
to be the beneficial owner of the Collateral. In addition, the Lender
shall have the right at any time to exchange certificates or instruments
representing or evidencing Collateral for certificates or instruments of
smaller or larger denominations.
(c) Termination of Pledgor's Right to Receive Distributions. Upon
and after the occurrence of any Event of Default and during the
continuation thereof, all rights of Pledgor to receive any cash
distributions pursuant to Section 5(a) hereof shall cease, and all such
rights shall thereupon become vested in the Lender and the Lender shall
have the sole and exclusive right to receive and retain the distributions
which Pledgor would otherwise be authorized to receive and retain
pursuant to Section 5(a) hereof. In such event, Pledgor shall pay over
to the Lender any distributions received by it with respect to the
Collateral and any and all money and other property paid over to or
received by the Lender pursuant to the provisions of this Section 5(c)
shall be retained by the Lender as Collateral hereunder and/or shall be
applied to the repayment of the Obligations in accordance with the
provisions hereof.
6. Remedies. Upon and after an Event of Default, the Lender shall have
the following rights and remedies:
(a) Set-Off. The right of Lender to set-off, without notice to
Pledgor, any and all deposits at any time credited by or due from Lender
to Pledgor whether in a general or special, time or demand, final or
provisional account or any other account or represented by a certificate
of deposit and whether or not matured or contingent.
(b) Secured Creditor. All of the rights and remedies of a secured
party under the Uniform Commercial Code of the state where such rights
and remedies are asserted, or under other applicable law all of which
rights and remedies shall be cumulative, and none of which shall be
exclusive, to the extent permitted by law, in addition to any other
rights and remedies contained in this Agreement.
(c) Right of Sale. The Lender may, without demand and without
advertisement, notice or legal process of any kind (except as may be
required by law), all of which Pledgor waives, at any time or times (i)
apply any cash distributions received by the Lender pursuant to Section
5(c) hereof to the Obligations; and (ii) if following such application
there remains outstanding any Obligations, sell the remaining Collateral,
or any part thereof, at public or private sale or at any broker's board
or on any securities exchange, for cash, upon credit or for future
delivery as the Lender shall deem appropriate. At any such sale, the
Collateral, or any portion thereof, to be sold may be sold in one lot as
an entirety or in separate parcels, as the Lender may (in its sole and
absolute discretion)
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determine. The Lender shall not be obligated to make any sale of the
Collateral if it shall determine not to do so, regardless of the fact that
notice of the sale of the Collateral may have been given. In case the
sale of all or part of the Collateral is made on credit or for future
delivery, the Collateral so sold may be retained by the Lender until the
sale price is paid by the purchaser or purchasers thereof, but the Lender
shall not incur any liability in case any such purchaser or purchasers
shall fail to take up and pay for the Collateral so sold and, in case of
any such failure, such Collateral may be sold again. At any sale or sales
made pursuant to this Section 6, the Lender may, to the maximum extent
permitted by Applicable Law, bid for and purchase, free from any claim or
right of whatever kind, including any equity of redemption, of Pledgor,
any such demand, notice, claim, right or equity being hereby expressly
waived and released, any or all of the Collateral offered for sale, and
may make any payment on the account thereof by using any claim for moneys
then due and payable to the Lender or any Lender by Pledgor as a credit
against the purchase price; and the Lender, upon compliance with the terms
of sale, may hold, retain and dispose of the Collateral without further
accountability therefor to the Pledgor or any third party. The Lender
shall be authorized at any sale (if, on the advice of counsel, it deems it
advisable to do so) to restrict the prospective bidders or purchasers to
Persons who will represent and agree that they are purchasing the
Collateral for their own account for investment and not with a view to the
distribution or resale thereof, and upon consummation of any sale the
Lender shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Collateral so sold. Each purchaser at
any sale shall hold the property sold absolutely free from any claim or
right on the part of Pledgor, and Pledgor hereby waives (to the extent
permitted by law) all rights of redemption, stay and/or appraisal which
Pledgor now has or may have at any time in the future under any rule of
law or statute now existing or hereafter enacted. The proceeds realized
from the sale of any Collateral shall be applied first to the costs,
expenses and attorneys' fees and expenses actually incurred by Lender for
collection and for acquisition, completion, protection, removal, sale and
delivery of the Collateral; second, to interest due upon any of the
Obligations; and third, to the principal of the Obligations. If any
deficiency shall arise, Pledgor shall remain liable to the Lender therefor
in accordance with the terms of the Loan Agreement. If any surplus shall
remain, the Lender shall pay such surplus to the Person legally entitled
thereto. The provisions of this Section 6(c) shall be qualified with
respect to Integrity Media Asia Pte Ltd. by the following: (1) the
restriction in Section 25 of the Property Act on the exercise of the
statutory power of sale shall not apply to any exercise by the Lender of
its power of sale or other disposal or of other powers conferred under
Section 24 of the Property Act which shall arise; (2) the statutory power
under Section 29 of the Property Act of appointing a receiver of the
Collateral or the income thereof, immediately upon any such default by the
Pledgor; (3) a writing by an officer or agent of the Lender in favor of a
purchaser that either or both of the foregoing such powers has arisen and
is exercisable shall be conclusive evidence of that fact; and (4) the
powers and protections conferred by this Agreement in relation to the
Collateral or any part thereof on the Lender shall be in addition to and
not in substitution for the powers and protections conferred on mortgagees
or chargees under the Property Act, which shall apply to the security
created by this Agreement except insofar as they are expressly or
impliedly excluded. Where there is any ambiguity or conflict between the
powers contained in the Property Act and those conferred by this Agreement
as aforesaid, then the terms of this Agreement shall prevail.
(d) Notice. Any notice required to be given by the Lender of a
sale, or other disposition of the Collateral or any other intended action
by the Lender, given to Pledgor in the manner specified in Section 9(i)
at least ten (10) days prior to the date of such intended action, shall
constitute
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commercially reasonable and fair notice thereof to Pledgor.
(e) Securities Laws. In view of the position of Pledgor in relation
to the securities now or hereafter included in the Collateral, or because
of other present or future circumstances, a question may arise under the
securities laws with respect to any disposition of the Collateral
permitted hereunder. Pledgor understands that compliance with the
securities laws may very strictly limit the course of the Lender's conduct
if the Lender attempts to dispose of all or any part of the Collateral and
may also limit the extent to which or the manner in which any subsequent
transferee of any Collateral may dispose of the same. The Pledgor will
not attempt to hold the Lender responsible for selling all or any part of
the Collateral at a price less than that available on any public or
private market, and Pledgor agrees that even if the Lender shall accept
the first offer received or does not approach more than one possible
purchaser such sale shall still be deemed commercially reasonable. Without
limiting the generality of the foregoing, Pledgor clearly understands and
agrees that the Lender shall be entitled to place all or any part of the
Collateral for private placement by an investment banking firm, that any
such investment banking firm may purchase all or any part of the
Collateral for its own account, and that the Lender shall be entitled to
place all or any part of the Collateral privately with a purchaser or
purchasers, notwithstanding the existence of a public or private market
upon which the quotations or sales prices may exceed substantially the
price at which the Lender sells.
7. Power of Attorney; Proxy.
(a) Appointment of the Lender as Pledgor's Attorney-In-Fact.
Pledgor irrevocably designates, makes, constitutes and appoints the
Lender (and all Persons designated by the Lender), as its true and lawful
attorney (and agent-in-fact) and the Lender, or the Lender's agent, may,
without notice to Pledgor, in the name of Pledgor or the Lender: (i) at
such time or times thereafter as the Lender or said agent, in its
discretion may determine, endorse the name of Pledgor upon any checks,
notes, acceptance, money orders, certificates, drafts or other forms of
payment of security that come into the Lender's possession; and (ii)
after the occurrence of an Event of Default, (1) transfer the Collateral
on the books of Pledgor with full power of substitution in the premises,
and (2) do all acts and things necessary, in the Lender's discretion, to
fulfill the obligations of Pledgor under this Agreement.
(b) Irrevocable Proxy. Upon the delivery from the Lender to Pledgor
following the occurrence of any Event of Default of notice affirmatively
assuming voting rights with respect to the Stock included in the
Collateral, the Lender, or its nominee, without notice or demand of any
kind to Pledgor, shall have the sole and exclusive right to exercise all
voting powers pertaining to any and all of the Collateral (and to give
written consents in lieu of voting thereon) and may exercise such power
in such manner as the Lender, in its sole discretion, shall determine.
THIS PROXY IS COUPLED WITH AN INTEREST AND IS IRREVOCABLE. The exercise
by the Lender of any of its rights and remedies under this Section shall
not be deemed a disposition of Collateral under Article 9 of the Uniform
Commercial Code nor an acceptance by the Lender of any of the Collateral
in satisfaction of any of the Obligations.
8. Release and Termination. Pledgor acknowledges and agrees that this
Agreement shall continue in full force and effect unless and until all
Obligations have been fully and irrevocably paid and
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performed and all financing arrangements between Pledgor and the Lender have
been terminated. After this Agreement has terminated, the Lender, at Pledgor's
expense, shall return all Collateral then in its possession and control to
Pledgor.
9. Miscellaneous.
(a) Modification of Agreement; Sale of Interest. This Agreement may
not be modified, altered or amended, except by an agreement in writing
signed by Pledgor and the Lender. Pledgor may not sell, assign or
transfer this Agreement or any portion thereof, including, without
limitation, Pledgor's rights, title, interests, remedies, powers, and/or
duties hereunder. Pledgor hereby consents to the Lender's assignment and
transfer of this Agreement including, without limitation, the Lender's
rights, title, interests, remedies, powers, and/or duties hereunder upon
the appointment of any successor to the Lender. Pledgor also hereby
consents to the assignment or transfer, at any time or times hereafter,
of the beneficial interests granted under this Agreement or of any
portion thereof, upon the participation, sale, assignment, transfer, or
other disposition by the Lender of Loans made by it, or any portion
thereof, in accordance with the Loan Agreement.
(b) Expenses. Pledgor will upon demand pay to the Lender the amount
of all reasonable expenses, including, without limitation, the reasonable
fees and expenses of its counsel, that the Lender may actually incur in
connection with (i) the administration of this Agreement, (ii) the
custody, preservation or sale of or the collection from, or other
realization upon, any of the Collateral, (iii) the exercise, enforcement
of any rights of the Lender hereunder, and/or (iv) the failure by Pledgor
to perform or observe any of the provisions hereof.
(c) Loan Document. This Agreement shall be construed as a Loan
Document and shall be subject to all of the benefits, terms and
conditions of the Loan Agreement with respect thereto.
(d) Waiver by the Lender. Each and every right and remedy granted
to the Lender under this Agreement, or any other document delivered
hereunder or in connection herewith or allowed it by law or in equity,
shall be cumulative and may be exercised from time to time. The failure
of the Lender, at any time or times hereafter, to require strict
performance of any provision of this Agreement by Pledgor, shall not
waive, affect or diminish any right of the Lender thereafter to demand
strict compliance and performance therewith. Any suspension or waiver by
the Lender of an Event of Default by Pledgor under this Agreement shall
not suspend, waive or affect any other Event of Default by Pledgor under
this Agreement, whether the same is prior or subsequent thereto and
whether of the same or of a different type. None of the undertakings,
agreements, warranties, covenants and representations of Pledgor
contained in this Agreement and no Event of Default hereunder shall be
deemed to have been suspended or waived by the Lender, unless such
suspension or waiver is by an instrument in writing signed by a duly
authorized representative of the Lender and directed to such Pledgor
specifying such suspension or waiver.
(e) Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement shall
be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions
of this Agreement.
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(f) Parties. This Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of Pledgor and the
Lender, for the benefit of the Lender. This provision, however, shall
not be deemed to modify Section 9(a) hereof.
(g) Conflict of Terms. Except as otherwise provided in this
Agreement by specific reference to the applicable provision of the Loan
Agreement, if any provision contained in this Agreement is in conflict
with, or inconsistent with, any provision in the Loan Agreement, the
provision contained in the Loan Agreement shall govern and control.
(h) Waivers by Pledgor. Except as otherwise provided for in this
Agreement, Pledgor hereby waives (i) presentment, demand and protest and
notice of presentment, protest, default, non-payment, maturity, release,
compromise, settlement, extension or renewal of any or all commercial
paper, accounts, contract rights, documents, instruments, chattel paper
and guaranties at any time held by the Lender on which Pledgor may in any
way be liable and hereby ratifies and confirms whatever the Lender may do
in this regard; (ii) any bond or security which might be required by any
court prior to allowing the Lender to exercise the Lender's remedies; and
(iii) the benefit of all valuation, appraisement and exemption laws.
(i) Notices. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been
given or made when (i) delivered to Borrower in the manner set forth in
Section 12.7 of the Loan Agreement, in the case of notices to Pledgor; and
(ii) delivered to the Lender in the manner set forth in Section 12.7 of
the Loan Agreement in the case of notices to the Lender.
(j) Survival. All representations, warranties and covenants made
herein shall survive the execution and delivery of all of this Agreement
and the other Loan Documents. The terms and provisions of this Agreement
shall continue in full force and effect until all of the Obligations have
been paid in full and the Lender has terminated the Loan Agreement in
writing, whichever last occurs; provided, further, that Pledgor's
obligations under Section 9(b) shall survive the repayment of the
Obligations and the termination of this Agreement.
(k) Time of the Essence. Time is of the essence in this Agreement.
(l) Section Titles. The section titles contained in this Agreement
are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties
hereto.
(m) Reinstatement. This Agreement shall continue to be effective,
or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any of the Obligations is rescinded or must otherwise be
restored or returned by Lender upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization Pledgor, or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
custodian, trustee or similar officer for, Pledgor or any part of its
respective property, or otherwise, all as though such payments had not
been made.
(n) Counterparts. This Agreement may be executed in two (2) or more
counterparts,
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each of which when fully executed shall be an original and all of said
counterparts taken together, shall constitute one and the same agreement.
Any signature page to this Agreement may be witnessed by a telecopy or
facsimile of any original signature page and any signature page of any
counterpart hereof may be appended to any other counterpart hereof to form
a completely executed counterpart hereof.
(o) GOVERNING LAW; JURISDICTION. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. PLEDGOR HEREBY (A) SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN
NEW YORK CITY FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT; (B) AGREES THAT SECTIONS 5-1401 AND 5-1402 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK SHALL APPLY TO THIS
AGREEMENT; AND (C) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE REGARDING THE
LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND
ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
(p) WAIVER OF JURY TRIAL. AFTER REVIEWING THIS PROVISION
SPECIFICALLY WITH ITS COUNSEL, PLEDGOR HEREBY KNOWINGLY, INTELLIGENTLY
AND INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LEGAL PROCEEDING BASED ON OR ARISING OUT OF,
UNDER, IN CONNECTION WITH, OR RELATING TO THIS AGREEMENT, ANY OF THE
OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY, THE TRANSACTIONS
CONTEMPLATED HEREBY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF PLEDGOR OR THE
LENDER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER MAKING
THE LOANS TO PLEDGOR.
________________
Initials
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IN WITNESS WHEREOF, Pledgor has caused its duly authorized officers to set
their respective hands and the seal of the Pledgor as of the date first above
written.
"Pledgor"
INTEGRITY INCORPORATED
a Delaware corporation
By: /s/ Michael Coleman
--------------------------------
Name:
Title:
Attest: /s/
----------------------------
Name:
Title:
[CORPORATE SEAL]
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EXHIBIT A
Percentage of
Number of Class of Certificate Outstanding
Subsidiary Shares Shares No. Capital Stock
---------- ------ ------ --- ------------
1. Integrity Music, Inc. 1,000 Common 1 100%
2. Integrity at Home Incorporated 100 Common 1 100%
3. Integrity Distribution
Company, Inc. 100 Common 1 100%
4. Integrity Music Europe Limited 650 Ordinary 8 65%
5. Integrity Media Asia Pte Ltd 195,000 Ordinary 4 65%