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EXHIBIT 10.6
[EXECUTION COPY]
THE LIEN OF THE COLLATERAL AGENT IN RESPECT OF THE COLLATERAL GRANTED HEREUNDER
AND THE EXERCISE BY THE COLLATERAL AGENT OF ITS RIGHTS HEREUNDER WITH RESPECT TO
SUCH COLLATERAL IS SUBJECT TO THE TERMS OF THE INTERCREDITOR AGREEMENT REFERRED
TO BELOW.
PLEDGE AGREEMENT
This PLEDGE AGREEMENT (this "AGREEMENT"), dated as of July 7, 2003, is
entered into by and among MORTON'S RESTAURANT GROUP, INC., a Delaware
corporation ("COMPANY"), and each of Company's undersigned Subsidiaries (Company
and such Subsidiaries, each a "PLEDGOR", and individually and collectively, and
jointly and severally, "PLEDGORS") and THE BANK OF NEW YORK ("BNY"), as
collateral agent (together with its successor(s) thereto in such capacity,
"COLLATERAL AGENT") for the Trustee and Noteholders, in light of the following:
WHEREAS, Pledgors, certain other Subsidiaries of Company, Collateral Agent
and BNY, as Trustee ("TRUSTEE"), have entered into an Indenture, dated as of
July 7, 2003 (as amended, restated, supplemented or otherwise modified from time
to time, the "INDENTURE"), pursuant to which Company incurred indebtedness for
certain notes (such notes, together with all additional notes and all other
notes issued thereunder in exchange for such notes and additional notes, the
"NOTES") and the other Pledgors and such other Subsidiaries of Company have
guaranteed the payment of the Notes and the other Obligations thereunder;
WHEREAS, Company and Wells Fargo Foothill, Inc. (the "LENDER") have entered
into that certain Loan and Security Agreement dated as of July 7, 2003 (as
amended, restated, supplemented, replaced or otherwise modified from time to
time, the "LOAN AGREEMENT"), pursuant to which the Lender has agreed to make
credit extensions to the Company in an initial aggregate principal amount equal
to $15,000,000;
WHEREAS, Collateral Agent, Lender, Pledgors and such other Subsidiaries of
Company have entered into that certain Intercreditor and Lien Subordination
Agreement, dated as of July 7, 2003 (as amended, restated, supplemented,
replaced or otherwise modified from time to time, the "INTERCREDITOR
AGREEMENT"), which agreement, among other things, sets forth, as between the
Collateral Agent and the Lender, the relative priority of their respective Liens
in the Collateral and their rights with respect thereto;
WHEREAS, each Pledgor beneficially owns the specified Equity Interests
identified as Pledged Interests in the Persons identified as Issuers listed on
SCHEDULE A attached hereto (or any addendum thereto);
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WHEREAS, each Pledgor desires to secure its Guarantee under the Indenture
by granting to Collateral Agent, for its benefit and for the benefit of the
Trustee and the Noteholders, security interests in the Pledged Collateral as set
forth herein;
WHEREAS, each Pledgor (other than the Company) is a Subsidiary of the
Company and will benefit from the proceeds of the Notes; and
WHEREAS, to induce the Initial Purchaser to purchase the Notes, each
Noteholder to hold the Notes to be held by it and BNY to act in its capacities
as Trustee and Collateral Agent, each Pledgor desires to pledge, grant,
transfer, and assign to Collateral Agent, for its benefit and the benefit of the
Noteholders and the Trustee, a security interest in the Pledged Collateral (as
hereinafter defined) to secure the Secured Obligations (as hereinafter defined),
as provided herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations, and warranties set forth herein and for other good and valuable
consideration, the parties hereto agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
(a) DEFINITIONS. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to them in the Indenture. The
following terms, as used in this Agreement, shall have the following meanings:
"AGREEMENT" has the meaning set forth in the preamble hereto.
"CHIEF EXECUTIVE OFFICE" means the address of the chief executive office of
each Pledgor set forth on SCHEDULE B to this Agreement.
"BNY" has the meaning set forth in the preamble of this Agreement.
"CODE" means the Uniform Commercial Code as in effect from time to time in
the State of New York.
"COLLATERAL AGENT" has the meaning set forth in the preamble hereto.
"COMPANY" has the meaning set forth in the preamble hereto.
"DEFEASANCE" means, with respect to any obligation, the defeasance thereof
pursuant to a Legal Defeasance or Covenant Defeasance as described under Section
8.01 of the Indenture.
"DESIGNATED NUMBER" means, with respect to any Foreign Issuer, the largest
whole number of Equity Interests of such Foreign Issuer representing not greater
than sixty-five (65%) of all of the fully diluted issued and outstanding Equity
Interests of such Foreign Issuer (whether or not owned by Pledgor).
"DISPOSITION" shall have the meaning ascribed to the term Asset Sale in the
Indenture, and the words "Dispose" and "DISPOSAL" shall be interpreted
similarly.
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"DOMESTIC ISSUER" means, individually and collectively, each Issuer which
is not a Foreign Issuer.
"EQUITY INTERESTS" means all shares, units, options, warrants, interests,
participations, or other equivalents (regardless of how designated) of or in a
corporation, partnership, limited liability company, or equivalent entity,
whether voting or nonvoting, including general partner partnership interests,
limited partner partnership interests, common stock, preferred stock, or any
other "equity security" (as such term is defined in Rule 3a11-1 of the General
Rules and Regulations promulgated by the SEC under the Exchange Act).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
any successor statute.
"EXCLUDED EQUITY INTERESTS" means, with respect to any Issuer that is an
Affiliate of the Company, that portion of such Issuer's Equity Interests that
would otherwise constitute Pledged Collateral to the extent the greater of the
par value, book value as carried by the Pledgor that is the holder thereof or
the market value of any such Equity Interests is equal to or greater than 20% of
the aggregate principal amount at maturity of the Notes then outstanding.
"FOREIGN ISSUER" means, individually and collectively, any Subsidiary of
any Pledgor which is formed in a jurisdiction other than the United States or
any political subdivision thereof.
"FUTURE RIGHTS" means:
(a) with respect to each Domestic Issuer, (i) all Equity Interests
(other than Pledged Interests) of such Domestic Issuer, and all securities
convertible or exchangeable into, and all warrants, options, or other rights to
purchase, Equity Interests of such Domestic Issuer; (ii) to the extent of any
Pledgor's interest therein, all shares of, all securities convertible or
exchangeable into, and all warrants, options, or other rights to purchase Equity
Interests of any Person in which any Pledgor, after the date of this Agreement,
acquires a direct equity interest, irrespective of whether such Person is or
becomes a Subsidiary of any Pledgor; and (iii) the certificates or instruments
representing such additional Equity Interests, convertible or exchangeable
securities, warrants, and other rights and all dividends, cash, options,
warrants, rights, instruments, and other property or proceeds from time to time
received, receivable, or otherwise distributed in respect of or in exchange for
any or all of such Equity Interests; and
(b) with respect to each Foreign Issuer, (i) all Equity Interests
(other than Pledged Interests) of such Foreign Issuer, and all securities
convertible or exchangeable into, and all warrants, options, or other rights to
purchase, Equity Interests of such Foreign Issuer; (ii) to the extent of any
Pledgor's interest therein, all shares of, all securities convertible or
exchangeable into, and all warrants, options, or other rights to purchase Equity
Interests of any Person in which any Pledgor, after the date of this Agreement,
acquires a direct equity interest, irrespective of whether such Person is or
becomes a Subsidiary of any Pledgor; and (iii) the certificates or instruments
representing such additional Equity Interests, convertible or exchangeable
securities, warrants, and other rights and all dividends, cash, options,
warrants, rights, instruments, and other property or proceeds from time to time
received, receivable, or otherwise distributed in respect of or in exchange for
any or all of such Equity Interests,
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PROVIDED, HOWEVER, that Future Rights shall exclude (A) under the preceding
CLAUSES (b)(i), (b)(ii), and (b)(iii) any Future Rights to the extent and only
to the extent that their inclusion would cause the number of Equity Interests
pledged hereunder to exceed the Designated Number after giving effect to the
issuance of such Future Rights and any related issuances and (B) all Excluded
Equity Interests of each such Issuer.
"HOLDER" and "HOLDERS" have the respective meanings set forth in SECTION 3
of this Agreement.
"INDENTURE" has the meaning set forth in the recitals to this Agreement.
"INTERCREDITOR AGREEMENT" has the meaning set forth in the recitals to this
Agreement.
"ISSUER" means each of the Persons identified as an Issuer on SCHEDULE A
attached hereto (or any addendum thereto), and any successors thereto, whether
by merger or otherwise.
"LENDER" has the meaning set forth in the recitals to this Agreement.
"LOAN AGREEMENT" has the meaning set forth in the recitals to this
Agreement.
"NOTES" has the meaning set forth in the recitals to this Agreement.
"PERMITTED DISPOSITION" means a Disposition consummated in accordance with
the terms of Section 4.16 of the Indenture.
"PLEDGED COLLATERAL" and "COLLATERAL" mean the Pledged Interests, the
Future Rights, and the Proceeds, collectively.
"PLEDGED INTERESTS" means (a) with respect to each Domestic Issuer, all of
the Equity Interests identified as Pledged Interests of such Domestic Issuer on
Schedule A attached hereto (or any addendum thereto); and (b) with respect to
each Foreign Issuer, the Designated Number of Equity Interests identified as
Pledged Interests of such Foreign Issuer on Schedule A attached hereto (or any
addendum thereto); PROVIDED, HOWEVER, that "Pledged Interests" shall not include
any Excluded Equity Interests of any such Issuer.
"PLEDGOR" and "PLEDGORS" have the respective meanings set forth in the
preamble to this Agreement.
"PROCEEDS" means all proceeds (including proceeds of proceeds) of the
Pledged Interests and Future Rights including all: (a) rights, benefits,
distributions, premiums, profits, dividends, interest, cash, instruments,
documents of title, accounts, contract rights, inventory, equipment, general
intangibles, deposit accounts, chattel paper, and other property from time to
time received, receivable, or otherwise distributed in respect of or in exchange
for, or as a replacement of or a substitution for, any of the Pledged Interests,
Future Rights, or proceeds thereof (including any cash, Equity Interests, or
other securities or instruments issued after any recapitalization, readjustment,
reclassification, merger or consolidation with respect to the Issuers and any
security entitlements, as defined in the Code, with respect thereto); (b)
"proceeds," as such term is defined in the Code; (c) proceeds of any insurance,
indemnity,
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warranty, or guaranty (including guaranties of delivery) payable from time to
time with respect to any of the Pledged Interests, Future Rights, or proceeds
thereof; (d) payments (in any form whatsoever) made or due and payable to
Pledgor from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Pledged Interests,
Future Rights, or proceeds thereof; and (e) other amounts from time to time paid
or payable under or in connection with any of the Pledged Interests, Future
Rights, or proceeds thereof.
"RECORD" means information that is inscribed on a tangible medium or which
is stored in an electronic or other medium and is retrievable in perceivable
form.
"SEC" means the United States Securities and Exchange Commission and any
successor thereto.
"SECURED OBLIGATIONS" means, with respect to each Pledgor, all liabilities,
obligations, or undertakings owing by such Pledgor to Collateral Agent, the
Trustee or any Noteholder of any kind or description arising out of or
outstanding under, advanced or issued pursuant to, or evidenced by the
Indenture, the Notes, this Agreement, or any of the other Indenture Documents,
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, voluntary or involuntary, whether
now existing or hereafter arising, and including all interest, costs,
indemnities, fees (including attorneys fees), and expenses (including interest,
costs, indemnities, fees, and expenses that, but for the provisions of the
Bankruptcy Code, would have accrued irrespective of whether a claim therefor is
allowed) and any and all other amounts which such Pledgor is required to pay
pursuant to any of the foregoing, by law, or otherwise.
"SECURITIES ACT" has the meaning set forth in SECTION 9(c).
"TRUSTEE" has the meaning set forth in the preamble to this Agreement.
(b) CONSTRUCTION. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, references to
the singular include the plural, the terms "include" and "including" are not
limiting, and the term "or" has, except where otherwise indicated, the inclusive
meaning represented by the phrase "and/or." The words "hereof," "herein,"
"hereby," "hereunder," and other similar terms in this Agreement refer to this
Agreement as a whole and not to any particular provision of this Agreement.
Section, subsection, clause, schedule and exhibit references herein are to this
Agreement unless otherwise specified. All of the exhibits or schedules attached
to this Agreement shall be deemed incorporated herein by reference. Any
reference in this Agreement to any of the following documents includes any and
all alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements thereto or thereof, as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth therein): the Indenture, this Agreement, and
the other Indenture Documents. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against Collateral Agent, the
Trustee, any Noteholder, or any Pledgor, whether under any rule of construction
or otherwise. On the contrary, this Agreement has been reviewed by each Pledgor,
Collateral Agent, the Noteholders
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and the Trustee, and their respective counsel, and shall be construed and
interpreted according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of Collateral Agent, the Trustee, any
Noteholder and each Pledgor. Any reference herein to the payment in full of the
Secured Obligations shall mean the payment in full in cash of all Secured
Obligations other than contingent indemnification Secured Obligations. Any
reference herein to any Person shall be construed to include such Person's
successors and assigns. Any requirement of a writing contained herein shall be
satisfied by the transmission of a Record and any Record transmitted shall
constitute a representation and warranty as to the accuracy and completeness of
the information contained therein. In the event of any direct conflict between
the express terms and provisions of this Agreement and of the Indenture, the
terms and provisions of the Indenture shall control; PROVIDED, HOWEVER, that the
inclusion herein of additional obligations on the part of any Pledgor and
supplemental rights and remedies in favor of Collateral Agent, in each case with
respect to the Pledged Collateral, shall not be deemed a conflict with the
Indenture.
2. PLEDGE. Each Pledgor hereby pledges, grants, transfers, and assigns to
Collateral Agent, for the benefit of Collateral Agent, the Noteholders and the
Trustee, a security interest in all of such Pledgor's right, title, and interest
in and to the Pledged Collateral in order to secure prompt repayment of any and
all of the Secured Obligations in accordance with the terms and conditions of
the Indenture Documents to which such Pledgor is a party, and in order to secure
prompt performance by such Pledgor of such Pledgor's covenants and duties under
each Indenture Document to which such Pledgor is a party. Anything contained in
this Agreement or any other Indenture Document to the contrary notwithstanding,
except for Permitted Dispositions, no Pledgor has any authority, express or
implied, to Dispose of any item or portion of the Pledged Collateral.
3. DELIVERY AND REGISTRATION OF PLEDGED COLLATERAL. Subject to the terms
of the Intercreditor Agreement:
(a) All certificates or instruments representing or evidencing the
Pledged Collateral shall be promptly delivered by each Pledgor to Collateral
Agent or Collateral Agent's designee pursuant hereto at a location designated by
Collateral Agent and shall be held by or on behalf of Collateral Agent pursuant
hereto, and shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance reasonably satisfactory to Collateral Agent. All
certificates or instruments representing or evidencing the Excluded Equity
Interests shall be promptly delivered by each Pledgor to Collateral Agent or
Collateral Agent's designee pursuant hereto at a location designated by
Collateral Agent and shall be held by or on behalf of Collateral Agent on behalf
of each such Pledgor. For the avoidance of doubt, if any certificate or
instrument representing any Pledged Collateral also represents any Excluded
Equity Interest, the Lien created hereunder shall only attach to the Equity
Interests evidenced thereby other than the Excluded Equity Interests.
(b) Upon the occurrence and during the continuance of an Event of
Default, Collateral Agent shall have the right, at any time in its discretion
and without notice to any Pledgor, to transfer to or to register on the books of
the Issuers (or of any other Person maintaining records with respect to the
Pledged Collateral) in the name of Collateral Agent or any of its nominees any
or all of the Pledged Collateral. In addition, Collateral Agent shall have the
right at any time to exchange certificates or instruments representing or
evidencing Pledged
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Collateral for certificates or instruments of smaller or larger denominations or
for certificates or instruments separately evidencing Equity Interests
constituting Pledged Collateral and Equity Interests constituting Excluded
Equity Interests.
(c) If, at any time and from time to time, any Pledged Collateral
(including any certificate or instrument representing or evidencing any Pledged
Collateral) is in the possession of a Person other than Collateral Agent
(including such Pledgor) (a "HOLDER") other than as the result of an action
taken by Collateral Agent, then the applicable Pledgor shall promptly, at
Collateral Agent's option, either cause such Pledged Collateral to be delivered
into Collateral Agent's possession, or (except in the case where such Holder is
such Pledgor) execute and deliver to such Holder a written
notification/instruction, and take all other steps necessary to perfect the
security interest of Collateral Agent in such Pledged Collateral, including
obtaining from such Holder a written acknowledgment that such Holder holds such
Pledged Collateral for Collateral Agent, all pursuant to the Code or other
applicable law governing the perfection of Collateral Agent's security interest
in the Pledged Collateral in the possession of such Holder. Each such
notification/instruction and acknowledgment shall be in form and substance
reasonably satisfactory to Collateral Agent.
(d) Any and all Pledged Collateral (including dividends, interest,
and other cash distributions) at any time received or held by any Pledgor shall
be so received or held in trust for Collateral Agent, shall be segregated from
other funds and property of such Pledgor and shall be forthwith delivered to
Collateral Agent in the same form as so received or held, with any necessary
endorsements; PROVIDED, that cash dividends or distributions received by any
Pledgor, if and to the extent they are not prohibited by the Indenture, may be
retained by such Pledgor in accordance with SECTION 4 and used in the ordinary
course of such Pledgor's business.
(e) If at any time and from time to time any Pledged Collateral
consists of an uncertificated security or a security in book entry form, then
the applicable Pledgor shall promptly cause such Pledged Collateral to be
registered or entered, as the case may be, in the name of Collateral Agent, or
otherwise cause the security interest held by Collateral Agent to be perfected
in accordance with applicable law.
4. VOTING RIGHTS AND DIVIDENDS. Subject to the terms of the Intercreditor
Agreement:
(a) So long as no Event of Default shall have occurred and be
continuing and any Pledgor shall not have received the written notice from
Collateral Agent described below in SECTION 4(b), such Pledgor shall be entitled
to exercise any and all voting and other consensual rights pertaining to the
Pledged Collateral applicable to it or any part thereof and any Excluded Equity
Interests held by it for any purpose not inconsistent with the terms of the
Indenture Documents.
(b) Upon the occurrence and during the continuance of an Event of
Default, at the election of Collateral Agent, upon the receipt by a Pledgor of
written notice of such election by Collateral Agent, all rights of such Pledgor
to exercise the voting and other consensual rights or receive and retain cash
dividends or distributions that it would otherwise be entitled to exercise or
receive and retain in respect of the Pledged Collateral applicable to it, as
applicable
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pursuant to SECTION 4(a), shall cease, and all such rights shall thereupon
become vested in Collateral Agent, who shall thereupon have the sole right to
exercise such voting or other consensual rights and to receive and retain such
cash dividends and distributions subject to the terms of the Indenture. Upon the
receipt of such written notice, such Pledgor shall execute and deliver (or cause
to be executed and delivered) to Collateral Agent all such proxies and other
instruments as Collateral Agent may reasonably request for the purpose of
enabling Collateral Agent to exercise the voting and other rights which it is
entitled to exercise and to receive the dividends and distributions that it is
entitled to receive and retain pursuant to the preceding sentence. Following the
waiver or cure of any such Event of Default, Collateral Agent shall, upon the
reasonable request and at the expense of such Pledgor, execute and deliver
(without recourse, representation or warranty) to such Pledgor such agreements
or instruments as such Pledgor may reasonably request, to terminate such proxies
and other instruments. Upon any such election by Collateral Agent, such Pledgor
shall retain the right to (i) exercise all voting and other consensual rights
relating to all Excluded Equity Interests applicable to it so long as it
exercises any such voting or other consensual right in a manner identical to the
exercise by Collateral Agent of any such voting or other consensual right of the
Equity Interests (of the Issuer of such Excluded Equity Interests) constituting
Pledged Collateral applicable to such Pledgor and (ii) receive and retain cash
dividends and distributions that it would otherwise be entitled to exercise or
receive and retain in respect of the Excluded Equity Interests applicable to it
to the extent, and solely to the extent, that such cash dividends and
distributions are made on a pro rata basis with the Equity Interests (of the
Issuer of such Excluded Equity Interests) that constitute Pledged Collateral
applicable to such Pledgor
5. REPRESENTATIONS AND WARRANTIES. Each Pledgor represents, warrants, and
covenants to Collateral Agent as follows:
(a) Such Pledgor has taken all steps it deems necessary or
appropriate to be informed on a continuing basis of changes or potential changes
affecting the Pledged Collateral (including rights of conversion and exchange,
rights to subscribe, payment of dividends, reorganizations or recapitalization,
tender offers and voting rights), and such Pledgor agrees that none of
Collateral Agent, the Trustee or any Noteholder shall have any responsibility or
liability for informing such Pledgor of any such changes or potential changes or
for taking any action or omitting to take any action with respect thereto;
(b) All information herein or hereafter supplied to Collateral Agent
by or on behalf of such Pledgor in writing with respect to the Pledged
Collateral is, or in the case of information hereafter supplied will be, true
and correct in all material respects;
(c) Such Pledgor is and will be the sole legal and beneficial owner
of the Pledged Collateral (including the Pledged Interests and all other Pledged
Collateral acquired by such Pledgor after the date hereof) free and clear of any
adverse claim, Lien, or other right, title, or interest of any party, other than
the Liens held by Collateral Agent for the benefit of Collateral Agent, the
Noteholders and the Trustee and the Permitted Liens;
(d) This Agreement, the execution and delivery of the Indenture by
Collateral Agent and Trustee, and the delivery to Collateral Agent of the
Pledged Interests representing Pledged Collateral (or the delivery to all
Holders of the Pledged Interests representing Pledged
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Collateral of the notification/instruction referred to in SECTION 3 of this
Agreement), creates (subject to the Liens of the Administrative Agent, to the
extent specified in the Intercreditor Agreement) a valid, perfected, and first
priority security interest in one hundred percent (100%) of the Pledged
Interests which are in certificated form in favor of Collateral Agent for the
benefit of itself, the Trustee and the Noteholders, securing payment of the
Secured Obligations, and all actions necessary to achieve such perfection have
been duly taken (other than the delivery of the share certificates of Morton's
of Chicago Mauritius Holding Corp. held by Morton's of Chicago, Inc., which
Foreign Issuer such Pledgor is in the process of dissolving);
(e) SCHEDULE A to this Agreement is true and correct and complete in
all material respects as of the date hereof; without limiting the generality of
the foregoing, as of the date hereof: (i) except as set forth in SCHEDULE A, all
the Pledged Interests are in certificated form, and, except to the extent
registered in the name of Collateral Agent or its nominee pursuant to the
provisions of this Agreement, are registered in the name of the applicable
Pledgor; and (ii) the Pledged Interests as to each of the Issuers constitute at
least the percentage of all the fully diluted issued and outstanding Equity
Interests of such Issuer as set forth in SCHEDULE A to this Agreement;
(f) The Pledged Interests that are Equity Interests in general
partnerships, limited partnerships or limited liability companies (i) are not
dealt in or traded on securities exchanges or in securities markets, (ii) do not
have terms expressly providing that they are securities governed by Article 8 of
the Code, and (iii) are not investment company securities, and are not,
therefore, "securities" governed by Article 8 of the Code;
(g) There are no presently existing Future Rights owned by any
Pledgor as of the date hereof;
(h) The Pledged Interests have been duly authorized and validly
issued and are fully paid and nonassessable;
(i) Neither the pledge of the Pledged Collateral pursuant to this
Agreement nor the extensions of credit represented by the Secured Obligations
violates Regulation T, U or X of the Board of Governors of the Federal Reserve
System; and
(j) Each direct Subsidiary of each Pledgor is an Issuer of Pledged
Interests that have been pledged hereunder.
6. FURTHER ASSURANCES.
(a) Each Pledgor agrees that from time to time, at the expense of
such Pledgor, it will promptly execute and deliver all further instruments and
documents, and take all further action that may be necessary or reasonably
desirable, or that Collateral Agent, on behalf of Collateral Agent, the
Noteholders and the Trustee, may request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable
Collateral Agent, on behalf of Collateral Agent, the Noteholders and the
Trustee, to exercise and enforce its rights and remedies hereunder with respect
to any Pledged Collateral. Without limiting the generality of the foregoing,
each Pledgor will: (i) at the request of Collateral Agent, mark conspicuously
each of its records pertaining to the Pledged Collateral with a legend, in form
and substance
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reasonably satisfactory to Collateral Agent, indicating that such Pledged
Collateral is subject to the security interest granted hereby; (ii) execute and
file such financing or continuation statements, or amendments thereto, and such
other instruments or notices, as may be necessary or reasonably desirable, or as
Collateral Agent may reasonably request, in order to perfect and preserve the
security interests granted or purported to be granted hereby; (iii) to the
extent held by such Pledgor, allow inspection of the Pledged Collateral and
books and records related thereto by Collateral Agent or Persons designated by
Collateral Agent, from time to time hereafter during normal business hours, or
at any time following the occurrence and during the continuance of an Event of
Default; and (iv) appear in and defend any action or proceeding that may affect
such Pledgor's title to the Pledged Collateral or Collateral Agent's security
interest in the Pledged Collateral.
(b) Each Pledgor hereby authorizes Collateral Agent, on behalf of
Collateral Agent, the Noteholders and the Trustee, to file one or more financing
or continuation statements, and amendments thereto, relative to all or any part
of the Pledged Collateral without the signature of such Pledgor where permitted
by law. A carbon, photographic, or other reproduction of this Agreement or any
financing statement covering the Pledged Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
(c) Each Pledgor will furnish to Collateral Agent, upon the request
of Collateral Agent: (i) a certificate executed by an authorized officer of such
Pledgor, and dated as of the date of delivery to Collateral Agent, itemizing in
such detail as Collateral Agent may request, the Pledged Collateral which, as of
the date of such certificate, has been delivered to Collateral Agent by such
Pledgor pursuant to the provisions of this Agreement; and (ii) such statements
and schedules further identifying and describing the Pledged Collateral and such
other reports in connection with the Pledged Collateral as Collateral Agent may
request.
7. COVENANTS OF PLEDGOR. Each Pledgor shall:
(a) Perform each and every covenant in the Indenture Documents
applicable to such Pledgor;
(b) At all times keep at least one complete set of its records
concerning substantially all of the Pledged Collateral at its Chief Executive
Office as set forth in SCHEDULE B hereto, and not change the location of its
Chief Executive Office or such records without giving Collateral Agent at least
fifteen (15) days prior written notice thereof;
(c) To the extent it may lawfully do so, use its best efforts to
prevent the Issuers from issuing Future Rights or Proceeds, except for cash
dividends and any other distributions, if any, that are not prohibited by the
terms of the Indenture to be paid or otherwise distributed by any Issuer to such
Pledgor and are made on a pro rata basis between Equity Interests constituting
Pledged Interests and Equity Interests constituting Excluded Equity Interests;
(d) Upon receipt by such Pledgor of any material notice, report, or
other communication from any of the Issuers or any Holder relating to all or any
part of the Pledged
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Collateral, deliver such notice, report or other communication to Collateral
Agent promptly, but in no event later than five (5) days following the receipt
thereof by such Pledgor; and
(e) Not permit any of the Issuers to: (i) authorize the amendment of
or amend the organic documents of such Issuer that is a general partnership,
limited partnership or limited liability company to provide that the Equity
Interests of such Issuer is governed by Article 8 of the Uniform Commercial Code
as adopted by the jurisdiction in which such Issuer is formed, or (ii) authorize
the issuance of or issue certificates evidencing any of the Equity Interests of
such Issuer that is a general partnership, limited partnership or limited
liability company without the prior written consent of Collateral Agent (such
consent not to be unreasonably withheld).
8. COLLATERAL AGENT AS EACH PLEDGOR'S ATTORNEY-IN-FACT.
(a) Each Pledgor hereby irrevocably appoints Collateral Agent, on
behalf of Collateral Agent, the Noteholders and the Trustee, as such Pledgor's
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor, Collateral Agent or otherwise, from time to time at
Collateral Agent's discretion, to take any action and to execute any instrument
that Collateral Agent, on behalf of Collateral Agent, the Noteholders and the
Trustee, may reasonably deem necessary or advisable to accomplish the purposes
of this Agreement, including: (i) upon the occurrence and during the continuance
of an Event of Default, to receive, endorse, and collect all instruments made
payable to such Pledgor representing any dividend, interest payment or other
distribution in respect of the Pledged Collateral or any part thereof to the
extent permitted hereunder and to give full discharge for the same and to
execute and file governmental notifications and reporting forms; (ii) to issue
any notifications/instructions Collateral Agent deems necessary pursuant to
SECTION 3 of this Agreement; or (iii) following the occurrence and during the
continuance of an Event of Default, to arrange for the transfer of the Pledged
Collateral on the books of any of the Issuers or any other Person to the name of
Collateral Agent or to the name of Collateral Agent's nominee.
(b) In addition to the designation of Collateral Agent as each
Pledgor's attorney-in-fact in SUBSECTION (a), each Pledgor hereby irrevocably
appoints Collateral Agent, on behalf of Collateral Agent, the Noteholders and
the Trustee, as such Pledgor's agent and attorney-in-fact with power to, if such
Pledgor refuses to, or fails timely to, make, execute and deliver any and all
documents and writings which may be necessary or appropriate for approval of, or
be required by, any regulatory authority located in any city, county, state or
country where such Pledgor or any of the Issuers engage in business, in order to
transfer or to more effectively transfer any of the Pledged Interests or
otherwise enforce the rights granted hereunder to Collateral Agent,, the
Noteholders and the Trustee, or Collateral Agent for the benefit thereof.
9. REMEDIES UPON DEFAULT. Upon the occurrence and during the continuance
of an Event of Default and subject to the terms of the Intercreditor Agreement:
(a) Collateral Agent, on behalf of Collateral Agent, the Noteholders
and the Trustee, may exercise in respect of the Pledged Collateral, in addition
to other rights and remedies provided for herein or otherwise available to it,
all the rights and remedies of a secured party on default under the Code
(irrespective of whether the Code applies to the affected items of Pledged
Collateral), and Collateral Agent, on behalf of Collateral Agent, the
Noteholders and the
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Trustee, may also without notice (except as specified below) sell the Pledged
Collateral or any part thereof in one or more parcels at public or private sale,
at any exchange, broker's board or at any of Collateral Agent's offices or
elsewhere, for cash, on credit or for future delivery, at such time or times and
at such price or prices and upon such other terms as Collateral Agent may deem
commercially reasonable, irrespective of the impact of any such sales on the
market price of such Pledged Collateral. To the maximum extent permitted by
applicable law, Collateral Agent may be the purchaser of any or all of the
Pledged Collateral at any such public sale and shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Pledged Collateral sold at any such public sale, to
use and apply all or any part of the Secured Obligations as a credit on account
of the purchase price of any Pledged Collateral payable at such sale. Each
purchaser at any such sale shall hold the property sold absolutely free from any
claim or right on the part of any Pledgor, and each Pledgor hereby waives (to
the extent permitted by law) all rights of redemption, stay, or appraisal that
it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. Each Pledgor agrees that, to the
extent notice of sale shall be required by law, at least ten (10) calendar days
notice to such Pledgor of the time and place of any public sale or the time
after which a private sale is to be made shall constitute reasonable
notification. Collateral Agent shall not be obligated to make any sale of
Pledged Collateral regardless of notice of sale having been given. Collateral
Agent may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned. To the maximum
extent permitted by law, each Pledgor hereby waives any claims against
Collateral Agent arising because the price at which any Pledged Collateral may
have been sold at such a private sale was less than the price that might have
been obtained at a public sale, even if Collateral Agent accepts the first offer
received and does not offer such Pledged Collateral to more than one offeree.
(b) Each Pledgor hereby agrees that any sale or other disposition of
the Pledged Collateral conducted in conformity with reasonable commercial
practices of banks, insurance companies, or other financial institutions in the
State of New York in disposing of property similar to the Pledged Collateral in
a transaction of a similar type shall be deemed to be commercially reasonable.
(c) Each Pledgor hereby acknowledges that the sale by Collateral
Agent of any Pledged Collateral pursuant to the terms hereof in compliance with
the Securities Act of 1933 as now in effect or as hereafter amended, or any
similar statute hereafter adopted with similar purpose or effect (the
"SECURITIES Act"), as well as applicable "Blue Sky" or other state securities
laws may require strict limitations as to the manner in which Collateral Agent
or any subsequent transferee of the Pledged Collateral may dispose thereof. Each
Pledgor acknowledges and agrees that in order to protect Collateral Agent's
interest it may be necessary to sell the Pledged Collateral at a price less than
the maximum price attainable if a sale were delayed or were made in another
manner, such as a public offering under the Securities Act. No Pledgor has any
objection to sale in such a manner and agrees that Collateral Agent shall have
no obligation to obtain the maximum possible price for the Pledged Collateral so
long as the sale is conducted in a commercially reasonable manner. Without
limiting the generality of the foregoing, each Pledgor agrees that, upon the
occurrence and during the continuation of an Event of Default, Collateral Agent
may, subject to applicable law, from time to time attempt to sell all
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or any part of the Pledged Collateral by a private placement, restricting the
bidders and prospective purchasers to those who will represent and agree that
they are purchasing for investment only and not for distribution. In so doing,
Collateral Agent may solicit offers to buy the Pledged Collateral or any part
thereof for cash, from a limited number of investors deemed by Collateral Agent,
in its reasonable judgment, to be institutional investors or other responsible
parties who might be interested in purchasing the Pledged Collateral. If
Collateral Agent shall solicit such offers and so long as the sale is conducted
in accordance with applicable law, then the acceptance by Collateral Agent of
one of the offers shall be deemed to be a commercially reasonable method of
disposition of the Pledged Collateral.
(d) If Collateral Agent shall determine to exercise its right to sell
all or any portion of the Pledged Collateral pursuant to this Section, each
Pledgor agrees that, upon request of Collateral Agent, such Pledgor will, at its
own expense:
(i) use its best efforts to execute and deliver, and cause the
Issuers and the directors and officers thereof to execute and deliver, all such
instruments and documents, and to do or cause to be done all such other acts and
things, as may be necessary or, in the opinion of Collateral Agent, advisable to
register such Pledged Collateral under the provisions of the Securities Act, and
to cause the registration statement relating thereto to become effective and to
remain effective for such period as prospectuses are required by law to be
furnished, and to make all amendments and supplements thereto and to the related
prospectuses which, in the opinion of Collateral Agent, are necessary or
advisable, all in conformity with the requirements of the Securities Act and the
rules and regulations of the Securities and Exchange Commission applicable
thereto;
(ii) use its best efforts to qualify the Pledged Collateral under
the state securities laws or "Blue Sky" laws and to obtain all necessary
governmental approvals for the sale of the Pledged Collateral, as requested by
Collateral Agent;
(iii) cause the Issuers to make available to their respective
security holders, as soon as practicable, an earnings statement which will
satisfy the provisions of Section 11(a) of the Securities Act;
(iv) execute and deliver, or cause the officers and directors of
the Issuers to execute and deliver, to any Person, entity or governmental
authority as Collateral Agent may choose, any and all documents and writings
which, in Collateral Agent's reasonable judgment, may be necessary or
appropriate for approval, or be required by, any regulatory authority located in
any city, county, state or country where such Pledgor or the Issuers engage in
business, in order to transfer or to more effectively transfer the Pledged
Interests or otherwise enforce Collateral Agent's rights hereunder; and
(v) do or cause to be done all such other acts and things as may
be necessary to make such sale of the Pledged Collateral or any part thereof
valid and binding and in compliance with applicable law.
Each Pledgor acknowledges that there is no adequate remedy at law for failure by
it to comply with the provisions of this Section and that such failure would not
be adequately compensable in
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damages, and therefore agrees that its agreements contained in this Section may
be specifically enforced.
(e) EACH PLEDGOR EXPRESSLY WAIVES TO THE MAXIMUM EXTENT PERMITTED BY
LAW: (i) ANY CONSTITUTIONAL OR OTHER RIGHT TO A JUDICIAL HEARING PRIOR TO THE
TIME COLLATERAL AGENT DISPOSES OF ALL OR ANY PART OF THE COLLATERAL AS PROVIDED
IN THIS SECTION; (ii) ALL RIGHTS OF REDEMPTION, STAY, OR APPRAISAL THAT IT NOW
HAS OR MAY AT ANY TIME IN THE FUTURE HAVE UNDER ANY RULE OF LAW OR STATUTE NOW
EXISTING OR HEREAFTER ENACTED; AND (iii) EXCEPT AS SET FORTH IN SUBSECTION (a)
OF THIS SECTION, ANY REQUIREMENT OF NOTICE, DEMAND, OR ADVERTISEMENT FOR SALE.
(f) Each Pledgor authorizes Collateral Agent to sell all or any
portion of the Excluded Equity Interests together with all of the Pledged
Interests of the Issuer of such Excluded Equity Interests to the same extent as
it is permitted to authorize the sale of the Pledged Interests hereunder without
any liability thereto or any duty owed thereby other than as otherwise expressly
required hereunder with respect to such Pledged Interests in the same sale and
on the same terms and for the same consideration as provided in such sale of the
Pledged Interests and at the same price per share or unit of Pledged Interest as
the Excluded Equity Interests; PROVIDED that the Collateral Agent shall promptly
upon receipt of such consideration turn over to such Pledgor (after deducting a
pro rata portion of the costs and expenses incurred in connection with such
sale) the proceeds of such sale relating to the Excluded Equity Interests so
sold, together with a copy of any instruments or other documentation evidencing
such share and an accounting of the costs and expenses applied thereto. Each
Pledgor agrees that the foregoing provisions of this Section 9 shall apply to
such Excluded Equity Interests as if such Excluded Equity Interests were Pledged
Interests, subject to the immediately preceding sentence, Section 4(a) and the
last sentence of Section 4(b).
10. APPLICATION OF PROCEEDS. Upon the occurrence and during the
continuance of an Event of Default and subject to the terms of the Intercreditor
Agreement, any cash held by Collateral Agent as Pledged Collateral and all cash
proceeds received by Collateral Agent in respect of any sale of, collection
from, or other realization upon all or any part of the Pledged Collateral
pursuant to the exercise by Collateral Agent of its remedies as a secured
creditor as provided in SECTION 9 shall be applied from time to time by
Collateral Agent as provided in the Indenture.
11. DUTIES OF COLLATERAL AGENT. The powers conferred on Collateral Agent
hereunder are solely to protect its interests in the Pledged Collateral and
shall not impose on it any duty to exercise such powers. Except as provided in
Section 9-207 of the Code, Collateral Agent shall have no duty with respect to
the Pledged Collateral or any Excluded Equity Interests (it being understood
that for purposes of this Section the obligations of the Collateral Agent under
Section 9-207 of the Code shall apply thereto as if such Excluded Equity
Interests constituted Pledged Collateral) or any responsibility for taking any
necessary steps to preserve rights against any Persons with respect to any
Pledged Collateral.
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12. CHOICE OF LAW AND VENUE. THE VALIDITY OF THIS AGREEMENT, ITS
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF THE PARTIES
HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE
DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER INDENTURE DOCUMENTS SHALL BE TRIED
AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE BOROUGH OF
MANHATTAN IN THE CITY OF NEW YORK, STATE OF NEW YORK; PROVIDED, HOWEVER, THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY PLEDGED COLLATERAL OR OTHER PROPERTY
MAY BE BROUGHT, AT COLLATERAL AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE COLLATERAL AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH PLEDGED
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH PLEDGOR AND COLLATERAL AGENT
WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY
HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE
EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 12.
13. AMENDMENTS; ETC. No amendment or waiver of any provision of this
Agreement nor consent to any departure by any Pledgor herefrom shall in any
event be effective unless the same shall be in writing and signed by Collateral
Agent and each Pledgor, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given. No
failure on the part of Collateral Agent to exercise, and no delay in exercising
any right under this Agreement, any other Indenture Document, or otherwise with
respect to any of the Secured Obligations, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right under this Agreement, any
other Indenture Document, or otherwise with respect to any of the Secured
Obligations preclude any other or further exercise thereof or the exercise of
any other right. The remedies provided for in this Agreement or otherwise with
respect to any of the Secured Obligations are cumulative and not exclusive of
any remedies provided by law. Notwithstanding the foregoing, the parties hereto
agree that in the event that Rule 3-16 of Regulation S-X under the Securities
Act is amended, modified or interpreted by the Commission to require (or is
replaced with another rule or regulation, or any other law, rule or regulation
is adopted, which would require) the filing with the Commission of separate
financial statements of any Issuer whose Equity Interests constitute Pledged
Collateral, the term "Excluded Equity Interests" shall be deemed amended
(without further action or consent by any Pledgor, Collateral Agent, the Trustee
or any Noteholder) to the extent, and only to the extent, necessary to avoid the
requirement of filing with the Commission of such separate audited financial
statements of such Issuer, and for the avoidance of doubt, Pledged Interests
shall not include any Excluded Equity Interests as amended.
14. NOTICES. All notices and other communications hereunder to Collateral
Agent shall be in writing and shall be mailed, sent or delivered in accordance
with the Indenture and all notices and other communications hereunder to any
Debtor shall be in writing and shall be mailed, sent or delivered in care of
Company in accordance with the Indenture.
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15. CONTINUING SECURITY INTEREST. This Agreement shall create a continuing
security interest in the Pledged Collateral and shall: (i) remain in full force
and effect until the payment in full of all Secured Obligations or the
Defeasance thereof; (ii) be binding upon each Pledgor and its successors and
assigns; and (iii) inure to the benefit of Collateral Agent and its successors,
transferees, and assigns, in each case other than as expressly permitted
pursuant to the terms of the Indenture Documents. Upon the payment in full of
all Secured Obligations or the Defeasance thereof, the security interests
granted herein shall automatically terminate and all rights to the Pledged
Collateral shall revert to the applicable Pledgor and all restrictions imposed
on the exercise by such Pledgor of any of its rights with respect to any
Excluded Equity Interests held by it shall be terminated. Upon any such
termination, Collateral Agent will, at Pledgors' expense, execute and deliver to
each Pledgor such documents without recourse, representation or warranty as such
Pledgor shall reasonably request to evidence such termination. Such documents
shall be prepared by the Pledgors and shall be in form and substance reasonably
satisfactory to Collateral Agent.
16. SECURITY INTEREST ABSOLUTE. To the maximum extent permitted by law,
all rights of Collateral Agent, all security interests hereunder, and all
obligations of each Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of any of the Secured
Obligations or any other agreement or instrument relating thereto, including any
of the Indenture Documents;
(b) any change in the time, manner, or place of payment of, or in any
other term of, all or any of the Secured Obligations, or any other amendment or
waiver of or any consent to any departure from any of the Indenture Documents,
or any other agreement or instrument relating thereto;
(c) any exchange, release, or non-perfection of any other collateral,
or any release or amendment or waiver of or consent to departure from any
guaranty for all or any of the Secured Obligations; or
(d) any other circumstances that might otherwise constitute a defense
available to, or a discharge of, any Pledgor.
To the maximum extent permitted by law, each Pledgor hereby waives any right to
require Collateral Agent to: (A) proceed against or exhaust any security held
from such Pledgor; or (B) pursue any other remedy in Collateral Agent's power
whatsoever.
17. PLEDGORS REMAIN LIABLE. Anything herein to the contrary
notwithstanding:
(a) Pledgors will remain liable under all agreements (including all
limited liability company agreements) relating to the Pledged Collateral to the
extent set forth therein, and will perform all of their duties and obligations
under such agreements to the same extent as if this Agreement had not been
executed;
(b) the exercise by Collateral Agent of any of its rights hereunder
will not release any Pledgor from any of its duties or obligations under any
such agreements; and
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(c) none of Collateral Agent, the Trustee or any Noteholder will have
any obligation or liability under any such agreement by reason of this
Agreement, nor will any such Person be obligated to perform any of the
obligations or duties of any Pledgor thereunder.
18. REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or payment
of the Secured Obligations by Debtor, any Defeasance thereof or the transfer by
Debtor to Collateral Agent of any property of Debtor should for any reason
subsequently be declared to be void or voidable under any state or federal law
relating to creditors' rights, including provisions of the Bankruptcy Code
relating to fraudulent conveyances, preferences, and other voidable or
recoverable payments of money or transfers of property (collectively, a
"VOIDABLE TRANSFER"), and if Collateral Agent is required to repay or restore,
in whole or in part, any such Voidable Transfer, or elects to do so upon the
reasonable advice of its counsel, then, as to any such Voidable Transfer, or the
amount thereof that Collateral Agent is required or elects to repay or restore,
and as to all reasonable costs, expenses, and attorneys' fees of Collateral
Agent related thereto, the liability of Debtor automatically shall be revived,
reinstated, and restored and shall exist as though such Voidable Transfer had
never been made.
19. POSTPONEMENT OF SUBROGATION. Each Pledgor hereby agrees that it will
not exercise any rights which it may acquire by reason of any payment made
hereunder, whether by way of subrogation, reimbursement or otherwise, until the
prior payment in full of all Secured Obligations or the Defeasance thereof.
Subject to the terms of the Intercreditor Agreement, any amount paid to any
Pledgor on account of any payment made hereunder prior to the payment in full of
all Secured Obligations or the Defeasance thereof shall be held in trust for the
benefit of Collateral Agent, the Noteholders and the Trustee and shall
immediately be paid to Collateral Agent, to be distributed to the Trustee for
application against the Secured Obligations, whether matured or unmatured, in
accordance with the terms of the Indenture. In furtherance of the foregoing, for
so long as any Secured Obligations remain outstanding or the Defeasance thereof
shall not have been consummated, each Pledgor shall refrain from taking any
action or commencing any proceeding against Company or any other Pledgor (or any
of their respective successors or assigns, whether in connection with a
bankruptcy proceeding or otherwise) to recover any amounts in respect of
payments made under this Agreement to Collateral Agent, the Trustee or any
Noteholder.
20. HEADINGS. Section and subsection headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement or be given any substantive effect.
21. SEVERABILITY. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
22. COUNTERPARTS; TELEFACSIMILE EXECUTION. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original and all
of which together shall constitute one and the same Agreement. Delivery of an
executed counterpart of this Agreement by telefacsimile shall be equally as
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by
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telefacsimile also shall deliver an original executed counterpart of this
Agreement but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, or binding effect hereof.
23. WAIVER OF MARSHALING. Each Pledgor and Collateral Agent acknowledge
and agree that in exercising any rights under or with respect to the Pledged
Collateral, Collateral Agent, subject to the terms of the Intercreditor
Agreement: (i) is under no obligation to marshal any Pledged Collateral; (ii)
may, in its absolute discretion, realize upon the Pledged Collateral in any
order and in any manner it so elects; and (iii) may, in its absolute discretion,
apply the proceeds of any or all of the Pledged Collateral to the Secured
Obligations in any order and in any manner it so elects. Each Pledgor and
Collateral Agent waive any right to require the marshaling of any of the Pledged
Collateral.
24. WAIVER OF JURY TRIAL. EACH PLEDGOR AND COLLATERAL AGENT HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PLEDGOR AND COLLATERAL AGENT
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE
EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT
TO A TRIAL BY THE COURT.
25. INTERCREDITOR AGREEMENT.
(a) THE LIENS GRANTED HEREUNDER IN FAVOR OF COLLATERAL AGENT FOR THE
BENEFIT OF ITSELF, THE TRUSTEE AND THE NOTEHOLDERS IN RESPECT OF THE PLEDGED
COLLATERAL AND THE EXERCISE OF ANY RIGHT RELATED THERETO THEREBY SHALL BE
SUBJECT, IN EACH CASE, TO THE TERMS OF THE INTERCREDITOR AGREEMENT.
(b) IN THE EVENT OF ANY DIRECT CONFLICT BETWEEN THE EXPRESS TERMS AND
PROVISIONS OF THIS AGREEMENT AND OF THE INTERCREDITOR AGREEMENT, THE TERMS AND
PROVISIONS OF THE INTERCREDITOR AGREEMENT SHALL CONTROL.
(c) NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, ANY PROVISION
HEREOF THAT REQUIRES ANY PLEDGOR TO DELIVER ANY PLEDGED INTERESTS TO COLLATERAL
AGENT MAY BE SATISFIED BY THE DELIVERY OF SUCH PLEDGED INTERESTS BY SUCH PLEDGOR
TO THE ADMINISTRATIVE AGENT FOR THE BENEFIT OF THE LENDER AND COLLATERAL AGENT
FOR THE BENEFIT OF ITSELF, THE TRUSTEE AND THE NOTEHOLDERS PURSUANT TO SECTION
3.02 OF THE INTERCREDITOR AGREEMENT.
[Signature page to follow.]
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered as of the date first written above.
Borrower:
MORTON'S RESTAURANT GROUP, INC.,
a Delaware corporation
By: /s/ Thomas J. Baldwin
-----------------------------------------
Name: Thomas J. Baldwin
Title: Executive Vice President and
Chief Financial Officer
Guarantors:
PORTERHOUSE, INC., a Delaware
corporation
MORTON'S OF CHICAGO, INC., an
Illinois corporation
MORTON'S OF CHICAGO/ADDISON,
INC., a Delaware corporation
MORTON'S OF CHICAGO/DALLAS,
INC., an Illinois corporation
MORTON'S OF CHICAGO HOLDING,
INC., a Delaware corporation
MORTON'S OF CHICAGO/HOUSTON,
INC., a Delaware corporation
MORTON'S OF CHICAGO/
PITTSBURGH, INC., a Delaware corporation
MORTON'S OF CHICAGO/SAN
ANTONIO, INC., a Delaware corporation
ITALIAN RESTAURANTS HOLDING
CORP., a Delaware corporation
BERTOLINI'S RESTAURANTS, INC., a
Delaware corporation
By: /s/ Thomas J. Baldwin
------------------------------------------
Name: Thomas J. Baldwin
Title: Executive Vice President and Chief
Financial Officer of the above
corporations
<Page>
THE BANK OF NEW YORK, AS
COLLATERAL AGENT
By: /s/ Julie Salovitch-Miller
-----------------------------------------
Name: Julie Salovitch-Miller
Title: Vice President