PLEDGE AGREEMENT

Exhibit 10.14

 

PLEDGE AGREEMENT

dated as of March 26, 2009

among

SBARRO, INC.,

as Borrower,

SBARRO HOLDINGS, LLC,

as Holdings,

THE OTHER LOAN PARTIES FROM TIME TO TIME PARTY HERETO,

and

NATIXIS, NEW YORK BRANCH,

as Collateral Agent

 

TABLE OF CONTENTS ^a

 

a	The Table of Contents is not a part of the Pledge Agreement.

 

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PLEDGE AGREEMENT dated as of March 26, 2009 (as amended, restated, modified or supplemented from time to time, this “ Agreement ”) among SBARRO HOLDINGS, LLC, a Delaware limited liability company (“ Holdings ”), SBARRO, INC., a New York corporation (the “ Borrower ”), the other LOAN PARTIES from time to time party hereto and NATIXIS, NEW YORK BRANCH, as collateral agent for the Credit Parties (in such capacity, together with its successors, the “ Collateral Agent ”).

Holdings and the Borrower propose to enter into the Second Lien Credit Agreement dated as of March 26, 2009 (as amended, restated, modified, supplemented, restructured or refinanced from time to time, the “ Credit Agreement ”) among Holdings, the Borrower, the banks and other lending institutions from time to time party thereto (each a “ Lender ” and, collectively, the “ Lenders ”), Natixis, New York Branch, as administrative agent and collateral agent (together with its successor or successors in each such capacity, the “ Administrative Agent ” and the “ Collateral Agent ”).

The Lender, the Administrative Agent, the Collateral Agent and their respective successors and assigns are herein referred to individually as a “ Credit Party ” and collectively as the “ Credit Parties ”.

To induce the Credit Parties to enter into the Credit Agreement and the other Loan Documents referred to therein (collectively with the Credit Agreement, the “ Loan Documents ”) and as a condition precedent to the obligations of the Credit Parties under the Credit Agreement, Holdings and certain Subsidiaries of Holdings (each a “ Subsidiary Guarantor ” and, collectively, the “ Subsidiary Guarantors ”) and, together with Holdings, each other Person that becomes a guarantor and the respective successors and permitted assigns of each of the foregoing, the “ Guarantors ” and together with the Borrower, each a “ Loan Party ” and, collectively the “ Loan Parties ”, have agreed, jointly and severally, to provide a guaranty of all obligations of the Borrower and the other Loan Parties under or in respect of the Loan Documents.

As a further condition precedent to the obligations of the Lenders under the Loan Documents, each Loan Party has agreed or will agree to grant a continuing security interest in favor of the Collateral Agent in and to the Collateral to secure the Credit Obligations. Accordingly, in consideration of the foregoing, the mutual covenants and obligations herein set forth and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01 Terms Defined in the Credit Agreement . Terms defined in the Credit Agreement have the respective meanings set forth therein, unless otherwise defined in this Article I .

Section 1.02 Terms Defined in the UCC . Unless otherwise defined herein or in the Credit Agreement or the context otherwise requires, the following terms, together with any uncapitalized terms used herein which are defined in the UCC (as defined below), have the

respective meanings provided in the UCC: (i) Certificated Security; (ii) Financial Asset; (iii) Investment Property; (iv) Payment Intangibles; (v) Proceeds; (vi) Securities Account; (vii) Securities Intermediary; (viii) Security; (ix) Security Certificate; (x) Uncertificated Security; and (xi) Security Entitlement.

Section 1.03 Additional Definitions. Terms defined in the introductory section hereof have the respective meanings set forth therein. The following additional terms, as used herein, have the following respective meanings:

“ Account Control Agreement ” means (i) with respect to a Deposit Account, a deposit account control agreement, substantially in the form of Exhibit C to the Security Agreement or otherwise containing reasonably acceptable terms and in form and substance reasonably acceptable to the Collateral Agent (which approval shall be deemed given by execution of such agreement), among one or more Loan Parties, the Collateral Agent and the bank which maintains such Deposit Account and (ii) with respect to a Securities Account, a securities account control agreement, substantially in the form of Exhibit B hereto or otherwise containing reasonably acceptable terms and in form and substance reasonably acceptable to the Collateral Agent (which approval shall be deemed given by execution of such agreement), among one or more Loan Parties, the Collateral Agent and the Securities Intermediary which maintains such Securities Account, in each case as the same may be amended, modified or supplemented from time to time.

“ Bankruptcy Code ” means title 11 of the United States Code entitled “Bankruptcy”, as now and hereafter in effect, or any successor statute.

“ Bankruptcy Law ” means the Bankruptcy Code and all other liquidation, receivership, moratorium, conservatorship, assignment for the benefit of creditors, insolvency or similar federal, state or foreign law for the relief of debtors.

“ Collateral ” has the meaning set forth in Section 2.02 of this Agreement.

“ Collateral Agent ” means Natixis, New York Branch., in its capacity as collateral agent for the Credit Parties, and its successor or successors in such capacity.

“ Credit Obligations ” has the meaning assigned to the term “Second Lien Credit Obligations” in the Credit Agreement.

“ Delivery ” and the corresponding term “ Delivered ” when used with respect to Collateral means:

(i) in the case of Collateral constituting Certificated Securities, transfer thereof to the First Lien Collateral Agent or its nominee or custodian or the Collateral Agent or its nominee or custodian, as applicable, in accordance with the terms of the Intercreditor Agreement, by physical delivery to the First Lien Collateral Agent or its nominee or custodian or the Collateral Agent or its nominee or custodian, as applicable, in accordance with the terms of the Intercreditor Agreement, such Collateral to be in suitable form for transfer by delivery, or accompanied by undated stock or note transfer powers duly executed in blank;

 

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(ii) in the case of Collateral constituting Uncertificated Securities, (A) registration thereof on the books and records of the issuer thereof in the name of the First Lien Collateral Agent or its nominee or custodian or the Collateral Agent or its nominee or custodian, as applicable, in accordance with the terms of the Intercreditor Agreement, (who may not be a Securities Intermediary) or (B) the execution and delivery by the issuer thereof of an effective agreement, substantially in the form of Exhibit A hereto (each an “ Issuer Control Agreement ”), pursuant to which such issuer agrees that it will comply with instructions originated by the First Lien Collateral Agent or its nominee or custodian or the Collateral Agent or its nominee or custodian, as applicable, in accordance with the terms of the Intercreditor Agreement, without further consent of the registered owner of such Collateral or any other Person; provided that no such Delivery shall be required for Foreign Subsidiaries or Persons who are not Wholly-Owned Subsidiaries;

(iii) in the case of Collateral constituting Security Entitlements or other Financial Assets deposited in or credited to a Securities Account at the option of the applicable Loan Parties, (A) completion of all actions necessary to constitute the First Lien Collateral Agent or its nominee or custodian or the Collateral Agent or its nominee or custodian, as applicable, in accordance with the terms of the Intercreditor Agreement, the entitlement holder with respect to each such Security Entitlement or (B) the execution and delivery by the relevant Securities Intermediary of an effective Account Control Agreement pursuant to which such Securities Intermediary agrees to comply with all entitlement orders originated by the First Lien Collateral Agent or its nominee or custodian or the Collateral Agent or its nominee or custodian, as applicable, in accordance with the terms of the Intercreditor Agreement, without further consent by the relevant entitlement holder or any other Person;

(iv) in the case of LLC Interests and Partnership Interests which do not constitute Securities, (A) compliance with the provisions of clause (i)  above for each such item of Collateral which is represented by a certificate and (B) compliance with the provisions of clause (ii)  above for each such item of Collateral which is not evidenced by a certificate;

(v) in the case of Collateral constituting Instruments, transfer thereof to the First Lien Collateral Agent or its nominee or custodian or the Collateral Agent or its nominee or custodian, as applicable, in accordance with the terms of the Intercreditor Agreement, by physical delivery to the First Lien Collateral Agent or its nominee or custodian or the Collateral Agent or its nominee or custodian, as applicable, in accordance with the terms of the Intercreditor Agreement, indorsed to, or registered in the name of, the First Lien Collateral Agent or its nominee or custodian or the Collateral Agent or its nominee or custodian, as applicable, in accordance with the terms of the Intercreditor Agreement, or indorsed in blank;

 

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(vi) in the case of cash, transfer thereof to the First Lien Collateral Agent or its nominee or custodian or the Collateral Agent or its nominee or custodian, as applicable, in accordance with the terms of the Intercreditor Agreement, by physical delivery to the Collateral Agent or such nominee or custodian; and

(vii) in each case such additional or alternative procedures as may hereafter become reasonably appropriate to grant control of, or otherwise perfect a security interest in, any Collateral in favor of the First Lien Collateral Agent or its nominee or custodian or the Collateral Agent or its nominee or custodian, as applicable, in accordance with the terms of the Intercreditor Agreement,, consistent with changes in applicable Law or regulations or the interpretation thereof.

“ Domestic Subsidiary ” means with respect to any Person each Subsidiary of such Person that is organized under the laws of the United States, the District of Columbia or any State, and “ Domestic Subsidiaries ” means any two or more of them.

“ Event of Default ” means one or more Events of Default, as such term is defined in the Credit Agreement.

“ Excluded Contracts ” shall have the meaning specified in the Security Agreement.

“ Excluded Equipment ” shall have the meaning specified in the Security Agreement.

“ Exempt Deposit Accounts ” shall have the meaning specified in the Credit Agreement.

“ First Lien Finance Party ” means “Finance Party” as defined in the First Lien Security Agreement.

“ First Lien Security Agreement ” means the Security Agreement, dated as of January 31, 2007, among Holdings, the Borrower, the loan parties from time to time party thereto, and the First Lien Collateral Agent.

“ Foreign Subsidiary ” means, with respect to any Person, any Subsidiary of such Person that is not a Domestic Subsidiary of such Person.

“ General Intangibles ” means all “general intangibles” (as defined in the UCC), including, without limitation, (i) all Payment Intangibles and other obligations and indebtedness owing to any Loan Party in respect of Collateral and (ii) all interests in limited liability companies and/or partnerships which interests do not constitute Securities.

“ Insolvency or Liquidation Proceeding ” means (i) any voluntary or involuntary case or proceeding under the Bankruptcy Code or any other Bankruptcy Law with respect to any Loan Party, (ii) any other voluntary or involuntary insolvency, reorganization or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding

 

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with respect to any Loan Party or with respect to a material portion of their respective assets, (iii) any liquidation, dissolution, reorganization or winding up of any Loan Party whether voluntary or involuntary and whether or not involving insolvency or bankruptcy or (iv) any assignment for the benefit of creditors or any other marshalling of assets and liabilities of any Loan Party.

“ Instruments ” means:

(i) the promissory notes described on Schedule II hereto, as such Schedule may be amended, supplemented or modified from time to time (the “ Pledged Notes ”), and all interest, distributions, cash, instruments and other property, income, profits and proceeds from time to time received or receivable or otherwise made upon or distributed in respect of or in exchange for any or all of the Pledged Notes;

(ii) all additional or substitute promissory notes from time to time issued to or otherwise acquired by any Loan Party in any manner in respect of Pledged Notes or otherwise, and all interest, distributions, cash, instruments and other property, income, profits and proceeds from time to time received or receivable or otherwise made upon or distributed in respect of such additional or substitute notes; and

(iii) all promissory notes, bankers’ acceptances, commercial paper, negotiable certificates of deposit and other obligations constituting “instruments” within the meaning of the UCC; and

(iv) to the extent not otherwise included in the foregoing, all cash and non-cash Proceeds thereof.

“ LLC Interests ” means:

(i) the limited liability company membership interests described on Schedule III hereto, as such Schedule may be amended, supplemented or modified from time to time and all other limited liability company membership interests of any Subsidiary from time to time issued or otherwise acquired by any Loan Party (collectively, the “ Pledged LLC Interests ”), and all dividends, distributions, cash, instruments and other property, income, profits and proceeds from time to time received or receivable or otherwise made upon or distributed in respect of or in exchange for any or all of the Pledged LLC Interests;

(ii) all additional or substitute limited liability company membership interests from time to time issued to or otherwise acquired by any Loan Party in any manner in respect of Pledged LLC Interests or otherwise, and all dividends, distributions, cash, instruments and other property, income, profits and proceeds from time to time received or receivable or otherwise made upon or distributed in respect of such additional or substitute membership interests;

(iii) all right, title and interest of any Loan Party in each limited liability company to which any Pledged LLC Interest relates, including, without limitation;

 

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(iv) all interests of such Loan Party in the capital of such limited liability company and in all profits, losses and assets, whether tangible or intangible and whether real, personal or mixed, of such limited liability company, and all other distributions to which such Loan Party shall at any time be entitled in respect of such Pledged LLC Interests;

(v) all other payments due or to become due to such Loan Party in respect of Pledged LLC Interests, whether under any limited liability company agreement or operating agreement or otherwise and whether as contractual obligations, damages, insurance proceeds or otherwise;

(vi) all of such Loan Party’s claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any limited liability company agreement or operating agreement, or at Law or otherwise in respect of such Pledged LLC Interests;

(vii) all present and future claims, if any, of such Loan Party against any such limited liability company for moneys loaned or advanced, for services rendered or otherwise; and

(viii) all of such Loan Party’s rights under any limited liability company agreement or operating agreement or at Law to exercise and enforce every right, power, remedy, authority, option and privilege of such Loan Party relating to such Pledged LLC Interests, including any power to terminate, cancel or modify any limited liability company agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of such Loan Party in respect of such Pledged LLC Interests and any such limited liability company, to make determinations, to exercise any election (including, without limitation, election of remedies) or option to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or give receipt for any of the foregoing or for any assets of any such limited liability company, to enforce or execute any checks or other instruments or orders, to file any claims and to take any other action in connection with any of the foregoing; and

(ix) to the extent not otherwise included in the foregoing, all cash and non-cash Proceeds thereof.

“ Loan Party ” means Holdings, the Borrower and each Guarantor, and “ Loan Parties ” means all of them, collectively.

“ Partnership Interests ” means:

(i) the partnership interests described on Schedule IV hereto, as such Schedule may be amended, supplemented or modified from time to time and all other partnership interests of any Subsidiary from time to time issued or otherwise acquired by any Loan Party (collectively, the “ Pledged Partnership Interests ”), and all dividends, distributions, cash, instruments and other property, income, profits and proceeds from time to time received or receivable or otherwise made upon or distributed in respect of or in exchange for any or all of the Pledged Partnership Interests;

 

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(ii) all additional or substitute partnership interests from time to time issued to or otherwise acquired by any Loan Party in any manner in respect of Pledged Partnership Interests or otherwise, and all dividends, distributions, cash, instruments and other property, income, profits and proceeds from time to time received or receivable or otherwise made upon or distributed in respect of such additional or substitute partnership interests;

(iii) all right, title and interest of any Loan Party in each partnership to which any Pledged Partnership Interest relates, including, without limitation:

(A) all interests of such Loan Party in the capital of such partnership and in all profits, losses and assets, whether tangible or intangible and whether real, personal or mixed, of such partnership, and all other distributions to which such Loan Party shall at any time be entitled in respect of such Pledged Partnership Interests;

(B) all other payments due or to become due to such Loan Party in respect of Pledged Partnership Interests, whether under any partnership agreement or otherwise and whether as contractual obligations, damages, insurance proceeds or otherwise;

(C) all of such Loan Party’s claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any partnership agreement, or at Law or otherwise in respect of such Pledged Partnership Interests;

(D) all present and future claims, if any, of such Loan Party against any such partnership for moneys loaned or advanced, for services rendered or otherwise; and

(E) all of such Loan Party’s rights under any partnership agreement or at Law to exercise and enforce every right, power, remedy, authority, option and privilege of such Loan Party relating to such Pledged Partnership Interests, including any power to terminate, cancel or modify any partnership agreement, to execute any instruments and to take any and all other action on behalf of and in the name of such Loan Party in respect of such Pledged Partnership Interests and any such partnership, to make determinations, to exercise any election (including, without limitation, election of remedies) or option to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or give receipt for any of the foregoing or for any assets of any such partnership, to enforce or execute any checks or other instruments or orders, to file any claims and to take any other action in connection with any of the foregoing; and

 

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(iv) to the extent not otherwise included in the foregoing, all cash and non-cash Proceeds thereof.

“ Perfection Certificate ” means with respect to each Loan Party a certificate, substantially in the form of Exhibit F-3 to the Credit Agreement, completed and supplemented with the schedules and attachments contemplated thereby to the reasonable satisfaction of the Collateral Agent.

“ Permitted Lien ” means any Lien referred to in, and permitted by, Section 7.02 of the Credit Agreement.

“ Pledged LLC Interests ” has the meaning set forth in clause (i)  of the definition of “LLC Interests”.

“ Pledged Notes ” has the meaning set forth in clause (i)  of the definition of “Instruments”.

“ Pledged Partnership Interests ” has the meaning set forth in clause (i)  of the definition of “Partnership Interests”.

“ Pledged Shares ” has the meaning set forth in clause (i)  of the definition of “Stock”.

“ Requisite Priority Lien ” means a valid and perfected security interest in favor of the Collateral Agent for the benefit of the Credit Parties and securing the Credit Obligations.

“ Security Agreement ” means the Security Agreement dated as of the date hereof among Holdings, the Borrower, the Subsidiary Guarantors from time to time party thereto and the Collateral Agent, as the same may be amended, modified or supplemented from time to time.

“ Security Interest ” means the security interest granted pursuant to Section 2.01 hereof in favor of the Collateral Agent for the benefit of the Credit Parties securing the Credit Obligations.

“ Stock ” means:

(i) the shares of capital stock and other Securities described on Schedule I hereto, as such Schedule may be amended, supplemented or modified from time to time and all other capital stock and securities of any Subsidiary from time to time issued or otherwise acquired by any Loan Party (collectively, the “ Pledged Shares ”), and all dividends, interest, distributions, cash, instruments and other property, income, profits and proceeds from time to time received, receivable or otherwise made upon or distributed in respect of or in exchange for any or all of the Pledged Shares; and

(ii) all additional or substitute shares of capital stock or other equity interests of any class of any issuer from time to time issued to or otherwise acquired by any Loan Party in any manner in respect of Pledged Shares or otherwise, the certificates

 

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representing such additional or substitute shares, and all dividends, interest, distributions, cash, instruments and other property, income, profits and proceeds from time to time received, receivable or otherwise made upon or distributed in respect of or in exchange for any or all of such additional or substitute shares; and

(iii) to the extent not otherwise included in the foregoing, all cash and non-cash proceeds thereof.

“ Supporting Obligation ” means a Letter-of-Credit Right, Guaranty Obligation or other secondary obligation supporting or any Lien securing the payment or performance of one or more Receivables, General Intangibles, Documents or Investment Property.

“ UCC ” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if by reason of mandatory provisions of Law, the perfection, the effect of perfection or non-perfection or the priority of the Security Interests in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “ UCC ” means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

Section 1.04 Terms Generally . The definitions in Sections 1.02 and 1.03 shall apply equally to both the singular and plural forms of the terms defined, except for terms defined in both the singular and the plural form. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. All references herein to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require. Unless otherwise expressly provided herein, the word “day” means a calendar day.

ARTICLE II

THE SECURITY INTERESTS

Section 2.01 Grant of Security Interests . To secure the due and punctual payment of the Credit Obligations, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing or due or to become due, in accordance with the terms thereof and to secure the performance of all of the obligations of each Loan Party hereunder and under the other Loan Documents in respect of the Credit Obligations, each Loan Party hereby grants to the Collateral Agent for the benefit of the Credit Parties a security interest in, and each Loan Party hereby pledges and collaterally assigns to the Collateral Agent for the benefit of the Credit Parties, all of such Loan Party’s right, title and interest in, to and under the Collateral.

 

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Section 2.02 Collateral .

(a) All right, title and interest of each Loan Party in, to and under the following property, whether now owned or existing or hereafter created or acquired by a Loan Party, whether tangible or intangible, and regardless of where located, are herein collectively referred to as the “ Collateral ”:

(i) Stock;

(ii) Instruments;

(iii) LLC Interests;

(iv) Partnership Interests;

(v) Investment Property;

(vi) Financial Assets;

(vii) all General Intangibles; and

(viii) to the extent not otherwise included, all Proceeds of all or any of the Collateral described in clauses (i)  through ( vii ) hereof;

provided , however , that the Collateral shall not include (w) cash or other distributions in respect of federal, state and/or local income taxes payable by any Loan Party or any direct or indirect equity holder of any Loan Party in respect of the income and profits of any limited liability company, partnership or other entity which is not a corporation for United States federal income tax purposes; (x) shares of capital stock or other equity interests of Subsidiaries of a Foreign Subsidiary or capital stock or other equity interests in excess of 65% of all classes of capital stock or other equity interests issued by a first tier Foreign Subsidiary of any Loan Party and (y) any property excluded from the “Collateral” under and as that term is defined in the Security Agreement.

(b) Subject to the terms of the Intercreditor Agreement, notwithstanding anything herein to the contrary, the foregoing Section 2.02(a) shall not require the creation or perfection of pledges of or security interests in particular assets if and for so long as, in the reasonable judgment of the Administrative Agent (confirmed in writing by notice to the Borrower), the cost or effort of creating or perfecting such pledges or security interests in such assets shall be excessive in view of the benefits to be obtained by the Credit Parties therefrom. Subject to the terms of the Intercreditor Agreement, the Administrative Agent may grant extensions of time for the perfection of security interests in particular assets (including extensions beyond the Closing Date for the perfection of security interests in the assets of any Loan Party on such date) where it reasonably determines, in consultation with the Borrower, that perfection cannot be accomplished without undue effort or expense by the time or times at which it would otherwise be required by this Agreement or the other Loan Documents.

 

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Section 2.03 Security Interests Absolute . All rights of the Collateral Agent, all security interests hereunder and all obligations of each Loan Party hereunder are unconditional and absolute and independent and separate from any other security for or guaranty of the Credit Obligations, whether executed by such Loan Party, any other Loan Party or any other Person. Without limiting the generality of the foregoing, the obligations of each Loan Party hereunder shall not be released, discharged or otherwise affected or impaired by:

(i) any extension, renewal, settlement, compromise, acceleration, waiver or release in respect of any obligation of any other Loan Party under any Loan Document or any other agreement or instrument evidencing or securing any Credit Obligation, by operation of Law or otherwise;

(ii) any change in the manner, place, time or terms of payment of any Credit Obligation or any other amendment, supplement or modification to any Loan Document or any other agreement or instrument evidencing or securing any Credit Obligation;

(iii) any release, non-perfection or invalidity of any direct or indirect security for any Credit Obligation, any sale, exchange, surrender, realization upon, offset against or other action in respect of any direct or indirect security for any Credit Obligation or any release of any other obligor or Loan Parties in respect of any Credit Obligation;

(iv) any change in the existence, structure or ownership of any Loan Party, or any insolvency, bankruptcy, reorganization, arrangement, readjustment, composition, liquidation or other similar proceeding affecting any Loan Party or its assets or any resulting disallowance, release or discharge of all or any portion of any Credit Obligation;

(v) the existence of any claim, set-off or other right which any Loan Party may have at any time against the Borrower, any other Loan Party, any Agent, any other Credit Party, or any other Person, whether in connection herewith or any unrelated transaction; provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim;

(vi) any invalidity or unenforceability relating to or against the Borrower or any other Loan Party for any reason of any Loan Document or any other agreement or instrument evidencing or securing any Credit Obligation or any provision of applicable Law or regulation purporting to prohibit the payment by the Borrower or any other Loan Party of any Credit Obligation;

(vii) any failure by any Credit Party: (A) to file or enforce a claim against any Loan Party or its estate in an Insolvency or Liquidation Proceeding; (B) to give notice of the existence, creation or incurrence by any Loan Party of any new or additional indebtedness or obligation under or with respect to the Credit Obligations; (C) to commence any action against any Loan Party; (D) to disclose to any Loan Party any facts which such Credit Party may now or hereafter know with regard to any Loan Party; or (E) to proceed with due diligence in the collection, protection or realization upon any collateral securing the Credit Obligations;

 

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(viii) any direction as to application of payment by the Borrower, any other Loan Party or any other Person;

(ix) any subordination by any Credit Party of the payment of any Credit Obligation to the payment of any other liability (whether matured or unmatured) of any Loan Party to its creditors;

(x) any act or failure to act by the Collateral Agent or any other Credit Party under this Agreement or otherwise which may deprive any Loan Party of any right to subrogation, contribution or reimbursement against any other Loan Party or any right to recover full indemnity for any payments made by such Loan Party in respect of the Credit Obligations; or

(xi) any other act or omission to act or delay of any kind by any Loan Party or any Credit Party or any other Person or any other circumstance whatsoever which might, but for the provisions of this clause, constitute a legal or equitable discharge of any Loan Party’s obligations hereunder, except that a Loan Party may assert the defense of final payment in full of the Credit Obligations.

Each Loan Party has irrevocably and unconditionally delivered this Agreement to the Collateral Agent, for the benefit of the Credit Parties, and the failure by any other Person to sign this Agreement or a security agreement similar to this Agreement or otherwise shall not discharge the obligations of any Loan Party hereunder.

This Agreement shall remain fully enforceable against each Loan Party irrespective of any defenses that any other Loan Party may have or assert in respect of the Credit Obligations, including, without limitation, failure of consideration, breach of warranty, payment, statute of frauds, statute of limitations, accord and satisfaction and usury, except that a Loan Party may assert the defense of final payment in full of the Credit Obligations.

Section 2.04 Continuing Liability Under Collateral . Notwithstanding anything herein to the contrary, (i) nothing contained herein shall affect the liability of each Loan Party to observe and perform all obligations under the Collateral and nothing contained herein is intended or shall be a delegation of duties to the Collateral Agent or any Credit Party, (ii) nothing contained herein shall affect the liability of each Loan Party under each of the agreements included in the Collateral, including, without limitation, any agreements relating to Pledged Partnership Interests or Pledged LLC Interests, to perform all of the obligations undertaken by it thereunder all in accordance with and pursuant to the terms and provisions thereof (except following any change in owner or control of any Loan Party resulting from the exercise by the Collateral Agent or any other Credit Party of their rights hereunder) and neither the Collateral Agent nor any Credit Party shall have any obligation or liability under any of such agreements by reason of or arising out of this Agreement or any other document related thereto nor shall the Collateral Agent nor any Credit Party have any obligation to make any inquiry as to the nature or sufficiency of any payment received by it or have any obligation to take any action to collect or enforce any rights under any agreement included in the Collateral, including, without limitation, any agreements relating to Pledged Partnership Interests or Pledged LLC Interests, and (iii) the exercise by the Collateral Agent of any of its rights hereunder shall not release any Loan Party from any of its duties or obligations under the contracts and agreements included in the Collateral.

 

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ARTICLE III

REPRESENTATIONS AND WARRANTIES

Each Loan Party represents and warrants that:

Section 3.01 Title to Collateral . Other than financing statements or other similar or equivalent documents or instruments with respect to the Security Interests and Permitted Liens, no authorized financing statement, mortgage, security agreement or similar or equivalent document or instrument covering all or any part of the Collateral is on file or of record in any jurisdiction in which such filing or recording would be effective to perfect a Lien on such Collateral. No Collateral is in the possession or control of any Person asserting any claim thereto or security interest therein, except that the Collateral Agent (on behalf of itself and the Credit Parties) or its designees may have possession and/or control of the Collateral as contemplated hereby and by the other Loan Documents.

Section 3.02 Governmental Authority . Except as set forth on Schedule 4.01 of the Security Agreement, on and as of the date hereof no registration, recordation or filing with any Governmental Authority is required in connection with the execution or delivery of this Agreement, or necessary for the validity or enforceability hereof or for the perfection of the Security Interest.

Section 3.03 Collateral .

(a) Schedules I , II , III and IV hereto (as such schedules may be amended, supplemented or modified from time to time) set forth (i) the name and jurisdiction of organization of, and the ownership interest (including percentage owned and number of shares, units or other equity interests) of such Loan Party in the Shares, LLC Interests and Partnership Interests issued by each of such Loan Party’s direct Subsidiaries which are required to be included in the Collateral and, subject to the terms of the Intercreditor Agreement, pledged hereunder, (ii) all other Shares, LLC Interests and Partnership Interests directly owned by such Loan Party that are required to be included in the Collateral and, subject to the terms of the Intercreditor Agreement, pledged hereunder and (iii) the issuer, date of issuance and amount of all promissory notes having a face value in excess of $1,000,000 directly owned or held by such Loan Party that are required to be included in the Collateral and, subject to the terms of the Intercreditor Agreement, pledged hereunder. Except as set forth on Schedules I , II , III and IV , such Loan Party holds all such Collateral directly ( i.e ., not through a Subsidiary, Securities Intermediary or any other Person).

(b) Except as set forth on Schedules I , II , III and IV hereto, all Collateral consisting of Pledged Shares, Pledged LLC Interests and Pledged Partnership Interests has been duly authorized and validly issued, is fully paid and with respect to capital stock of a corporation, non-assessable and is subject to no options to purchase or similar rights of any Person. Except as

 

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set forth on Schedules I , III and IV hereto, with respect to Pledged Shares, Pledged LLC Interests and Pledged Partnership Interests issued by each of such Loan Party’s direct Subsidiary which are required to be included in the Collateral (i) such Collateral constitutes 100% of the issued and outstanding shares of capital stock or other equity interests of the respective issuers thereof, (ii) no issuer of such Collateral has outstanding any security convertible into or exchangeable for any shares of its capital stock or other equity interests or any warrant, option, convertible security, instrument or other interest entitling the holder thereof to acquire any such shares or any security convertible into or exchangeable for such shares, (iii) there are no voting trusts, stockholder agreements, proxies or other agreements in effect with respect to the voting or transfer of such shares of its capital stock and (iv) there are no Liens or agreements, arrangements or obligations to create or give any Lien relating to any such shares of capital stock except for Permitted Liens. Except as permitted under the Credit Agreement, no Loan Party is now and or will become a party to or otherwise bound by any agreement, other than the First Lien Finance Documents, this Agreement or the Loan Documents, which materially restricts in any adverse manner the rights of the Collateral Agent or any other present or future holder of any Collateral with respect thereto.

Section 3.04 No Consents . No consent (other than consents previously obtained) of any other Person (including, without limitation, any stockholder or creditor of such Loan Party or any of its Subsidiaries) and no order, material consent