EXHIBIT C
GUARANTEE, PLEDGE AND SECURITY AGREEMENT
GUARANTEE, PLEDGE AND SECURITY AGREEMENT, dated as of
September __, 1997, among The Marquee Group, Inc., a corporation duly
organized and validly existing under the laws of the State of Delaware (the
"Pledgor"), each of the Subsidiaries of the Pledgor identified under the
caption "SUBSIDIARY GUARANTORS" on the signature pages hereof (individually a
"Subsidiary Guarantor" and, collectively, the "Subsidiary Guarantors" and,
together with the Pledgor, the "Obligors"), and The Xxxx Alternative Income
Fund, L.P., a Delaware limited partnership (the "Fund").
The Obligors and the Fund are parties to a Bridge Financing
Agreement, dated as of August 26,1997 (as modified and supplemented and in
effect from time to time, the "Bridge Financing Agreement"), providing,
subject to the terms and conditions thereof, for a loan to be made by the Fund
to the Pledgor in an aggregate principal amount of not less than $5,000,000
and not more than $11,500,000 (the "Loan").
To induce the Fund to enter into the Bridge Financing
Agreement and to lend money to the Pledgor thereunder, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Obligors have agreed to pledge and grant a security interest
in the Collateral (as hereinafter defined) as security for the Secured
Obligations (as so defined). Accordingly, the parties hereto agree as follows:
Section 1. Definitions. Terms defined in the Bridge
Financing Agreement are used herein as defined therein. In addition, as used
herein:
"Accounts" shall have the meaning ascribed thereto in
Section 4(d) hereof.
"Collateral" shall have the meaning ascribed thereto in
Section 4 hereof.
"Collateral Account" shall have the meaning ascribed thereto
in Section 5.01 hereof.
"Instruments" shall have the meaning ascribed thereto in
Section 4(e) hereof.
"Maturity Date" shall mean the earlier to occur of (i) the
closing of any Offering by the Pledgor or (ii) 90 days from the
Pledgor's receipt of the Loan.
"Permitted Investments" shall mean (i) securities issued or
directly and fully guaranteed or insured by the government of the
United States or any agency or instrumentality thereof having
maturities of not more than six months from the
date of acquisition, and (ii) commercial paper rated A-1 or the
equivalent thereof by Standard & Poor's Corporation or P-1 or the
equivalent thereof by Moody's Funds Service, Inc. and in each case
maturing within six months after the date of acquisition.
"Pledged Stock" shall have the meaning ascribed thereto in
Section 3(a) hereof.
"Secured Obligations" shall mean, collectively, (a) the
principal of and interest on the Loan made by the Fund to the Pledgor
and all other amounts from time to time owing to the Fund by the
Pledgor under the Loan Documents including, without limitation, all
fees and reimbursement obligations and interest thereon, including
all Guaranteed Obligations and (b) all obligations of the Obligors to
the Fund hereunder.
"Stock Collateral" shall mean, collectively, the Collateral
described in clauses (a) through (c) of Section 4 hereof and the
proceeds of and to any such property and, to the extent related to
any such property or such proceeds, all books, correspondence, credit
files, records, invoices and other papers.
"Uniform Commercial Code" shall mean the Uniform Commercial
Code as in effect in the State of New York from time to time.
Section 2. The Guarantee.
2.01. The Guarantee. Each Subsidiary Guarantor hereby
guarantees to the Fund and its successors and assigns the prompt payment in
full when due (whether at stated maturity, by acceleration or otherwise) of
the principal of and interest on the Loan made by the Fund to, and the Bridge
Financing Note and all other amounts from time to time owing to the Fund by
the Company under the Bridge Financing Agreement and under the Bridge
Financing Note and all obligations and interest thereon, in each case strictly
in accordance with the terms thereof (such obligations being herein
collectively called the "Guaranteed Obligations"). Each Subsidiary Guarantor
hereby further agrees that if the Company shall fail to pay in full when due
(whether at stated maturity, by acceleration or otherwise) any of the
Guaranteed Obligations, such Subsidiary Guarantor will promptly pay the same,
without any demand or notice whatsoever, and that in the case of any extension
of time of payment or renewal of any of the Guaranteed Obligations, the same
will be promptly paid in full when due (whether at extended maturity, by
acceleration or otherwise) in accordance with the terms of such extension or
renewal.
2.02 Obligations Unconditional. The obligations of each
Subsidiary Guarantor under Section 2.01 hereof are absolute and unconditional
irrespective of the value, genuineness, validity, regularity or enforceability
of the Bridge Financing Agreement, the Bridge Financing Note or any other
agreement or instrument referred to herein or therein, or any substitution,
release or exchange of any other guarantee of or security for any of the
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Guaranteed Obligations, and, to the fullest extent permitted by applicable
law, irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section 2.02 that the obligations of each
Subsidiary Guarantor hereunder shall be absolute and unconditional under any
and all circumstances. Without limiting the generality of the foregoing, it is
agreed that the occurrence of any one or more of the following shall not alter
or impair the liability of each Subsidiary Guarantor hereunder which shall
remain absolute and unconditional as described above:
(i) at any time or from time to time, without
notice to such Subsidiary Guarantor, the time for any performance of
or compliance with any of the Guaranteed Obligations shall be
extended, or such performance or compliance shall be waived;
(ii) any of the acts mentioned in any of the
provisions of the Bridge Financing Agreement or the Bridge Financing
Note or any other agreement or instrument referred to herein or
therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed
Obligations shall be accelerated, or any of the Guaranteed
Obligations shall be modified, supplemented or amended in any
respect, or any right under the Bridge Financing Agreement or the
Bridge Financing Note or any other agreement or instrument referred
to herein or therein shall be waived or any other guarantee of any of
the Guaranteed Obligations or any security therefor shall be released
or exchanged in whole or in part or otherwise dealt with; or
(iv) any lien or security interest granted to, or
in favor of, the Fund as security for any of the Guaranteed
Obligations shall fail to be perfected.
Each Subsidiary Guarantor hereby expressly waives diligence, presentment,
demand of payment, protest and all notices whatsoever, and any requirement
that the Fund exhaust any right, power or remedy or proceed against the
Company under the Bridge Financing Agreement or the Bridge Financing Note or
any other agreement or instrument referred to herein or therein, or against
any other Person under any other guarantee of, or security for, any of the
Guaranteed Obligations.
2.03 Reinstatement. The obligations of each Subsidiary
Guarantor under this Section 2 shall be automatically reinstated if and to the
extent that for any reason any payment by or on behalf of the Company in
respect of the Guaranteed Obligations is rescinded or must be otherwise
restored by any holder of any of the Guaranteed Obligations, whether as a
result of any proceedings in bankruptcy or reorganization or otherwise, and
each Subsidiary Guarantor agrees that it will indemnify the Fund on demand for
all reasonable costs and expenses (including, without limitation, fees of
counsel) incurred by the Fund in connection with such rescission or
restoration, including any such costs and expenses incurred in
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defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.
2.04 Remedies. Each Subsidiary Guarantor agrees that, as
between such Subsidiary Guarantor and the Fund, the obligations of the Company
under the Bridge Financing Agreement and the Bridge Financing Note may be
declared to be forthwith due and payable as provided in Section 7.1 of the
Bridge Financing Agreement (and shall be deemed to have become automatically
due and payable in the circumstances provided in Section 7.1(e) of the Bridge
Financing Agreement) for purposes of Section 2.01 hereof notwithstanding any
stay, injunction or other prohibition preventing such declaration (or such
obligations from becoming automatically due and payable) as against the
Company and that, in the event of such declaration (or such obligations being
deemed to have become automatically due and payable), such obligations
(whether or not due and payable by the Company) shall forthwith become due and
payable by such Subsidiary Guarantor for purposes of said Section 2.01.
2.05 Continuing Guarantee. The guarantee in this Section 2
is a continuing guarantee, and shall apply to all Guaranteed Obligations
whenever arising, until all such Guaranteed Obligations have been satisfied.
Section 3. Representations and Warranties. Each Obligor
represents and warrants to the Fund that:
(a) such Obligor is the sole beneficial owner of the
Collateral in which it purports to grant a security interest pursuant
to Section 4 hereof and no Lien exists or will exist upon any such
Collateral at any time (and no right or option to acquire the same
exists in favor of any other Person), except for Liens permitted
under Section 6.2(h) of the Bridge Financing Agreement and except for
the pledge and security interest in favor of the Fund created or
provided for herein, which pledge and security interest constitutes a
first priority perfected pledge and security interest in and to all
of such Collateral;
(b) the Pledged Stock evidenced by the certificates
identified under the name of each Subsidiary Guarantor in Annex 1
hereto is, and all other Pledged Stock in which any Subsidiary
Guarantor shall hereafter grant a security interest pursuant to
Section 4 hereof will be, duly authorized, validly issued, fully paid
and nonassessable and none of such Pledged Stock is or will be
subject to any contractual restriction, or any restriction under the
charter or by-laws of the respective issuers of such Pledged Stock,
upon the transfer of such Pledged Stock (except for any such
restriction contained herein);
(c) the Pledged Stock evidenced by the certificates
identified under the name of each Subsidiary Guarantor in Annex 1
hereto constitutes all of the issued and outstanding shares of
capital stock of the Subsidiary Guarantors on the date hereof and
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said Annex 1 correctly identifies, as at the date hereof, the
respective issuers of such Pledged Stock, the respective class and
par value of the shares comprising such Pledged Stock and the
respective number of shares (and registered owner thereof) evidenced
by each such certificate; and
(d) Annex 2 correctly sets forth all the Collateral other
than the Stock Collateral and upon the filing of a Form UCC-1 for
each of the locations set forth in Annex II the Fund will have a
perfected security interest in such Collateral.
Section 4. Collateral. As collateral security for the prompt
payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the Secured Obligations, the Obligors hereby pledge and grant to
the Fund a security interest in all of the Obligors' right, title and interest
in the following property, whether now owned by the Obligors or hereafter
acquired and whether now existing or hereafter coming into existence, and
wherever located (all being collectively referred to herein as "Collateral"):
(a) the respective shares of stock of the Subsidiary
Guarantors evidenced by the certificates identified in Annex 1 hereto
under the names of the respective Subsidiary Guarantors, together
with in each case the certificates evidencing the same (collectively,
the "Pledged Stock");
(b) all shares, securities, moneys or property representing
a dividend on any of the Pledged Stock, or representing a
distribution or return of capital upon or in respect of the Pledged
Stock, or resulting from a split-up, revision, reclassification or
other like change of the Pledged Stock or otherwise received in
exchange therefor, and any subscription warrants, rights or options
issued to the holders of, or otherwise in respect of, the Pledged
Stock;
(c) without affecting the obligations of the Pledgor under
any provision prohibiting such action hereunder or under the Bridge
Financing Agreement, in the event of any consolidation or merger in
which any Subsidiary Guarantor is not the surviving corporation, all
shares of each class of the capital stock of the successor
corporation formed by or resulting from such consolidation or merger
(the Pledged Stock, together with all other certificates, shares,
securities, properties or moneys as may from time to time be pledged
hereunder pursuant to clause (a) or (b) above and this clause (c)
being herein collectively called the "Stock Collateral");
(d) all accounts (as defined in the Uniform Commercial Code)
of the Obligors constituting any right to the payment of money,
including (but not limited to) all moneys due and to become due to
the Obligors in respect of any loans or advances for the purchase
price of inventory or equipment or other goods sold or leased or for
services rendered, all moneys due and to become due to the Obligors
under any guarantee (including a letter of credit) of the purchase
price of inventory or equipment
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sold by the Obligors and all tax refunds (such accounts, general
intangibles and moneys due and to become due being herein called
collectively "Accounts");
(e) all instruments, chattel paper or letters of credit
(each as defined in the Uniform Commercial Code) of the Obligors
evidencing, representing, arising from or existing in respect of,
relating to, securing or otherwise supporting the payment of, any of
the Accounts, including (but not limited to) promissory notes,
drafts, bills of exchange and trade acceptances (herein collectively
called "Instruments");
(f) the balance from time to time in the Collateral Account,
and all other proceeds of Accounts and Instruments.
Section 5. Cash Proceeds of Collateral.
5.01 Collateral Account. On or before the date hereof, the
Fund has established at The Chase Manhattan Bank, N.A. a cash collateral
account (the "Collateral Account") in the name and under the control of the
Fund and the Company and each Obligor has delivered to the Fund, in escrow,
irrevocable instructions to its banks, account debtors and other Persons
obligated in respect of all Accounts to make all payments either directly to
the Fund or to the Collateral Account, as provided in Section 5.02 below. The
Fund will not release any such instructions except upon the occurrence of an
Event of Default, or any Default which by its nature cannot be cured. Upon the
occurrence of any Event of Default, or any Default which by its nature cannot
be cured, the Obligors will deposit in the Collateral Account the cash
proceeds of any Collateral (including proceeds of insurance thereon) and any
additional amounts which any of the Obligors wishes to pledge to the Fund as
additional collateral security hereunder. The balance from time to time in the
Collateral Account shall constitute part of the Collateral hereunder and shall
not constitute payment of the Secured Obligations until applied as hereinafter
provided. At any time following the occurrence and during the continuance of
an Event of Default, the Fund may in its discretion apply or cause to be
applied (subject to collection) the balance from time to time outstanding to
the credit of the Collateral Account to the payment of the Secured Obligations
in the manner specified in Section 6.09 hereof. The balance from time to time
in the Collateral Account shall be subject to withdrawal only as provided
herein.
5.02 Proceeds of Accounts. If the Loan is not satisfied on
or before the Maturity Date, each Obligor shall, as of the Maturity Date,
instruct all account debtors and other Persons obligated in respect of all
Accounts to make all payments in respect of the Accounts either (a) directly
to the Fund (by instructing that such payments be remitted to a post office
box which shall be in the name and under the control of the Fund) or (b) to
one or more other banks in the United States of America (by instructing that
such payments be remitted to a post office box which shall be in the name and
under the control of the Fund) under arrangements, in form and substance
satisfactory to the Fund pursuant to which such Obligor shall have irrevocably
instructed such other bank (and such other bank shall have agreed) to
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remit all proceeds of such payments directly to the Fund for deposit into the
Collateral Account. All payments made to the Fund, as provided in the
preceding sentence, shall be immediately deposited in the Collateral Account.
In addition to the foregoing, each Obligor agrees that if (after the Maturity
Date or during the pendancy of any Event of Default or Default which by its
nature cannot be cured) the proceeds of any Collateral hereunder (including
the payments made in respect of Accounts) shall be received by it, such
Obligor shall as promptly as possible deposit such proceeds into the
Collateral Account. Until so deposited, all such proceeds shall be held in
trust by such Obligor for and as the property of the Fund and shall not be
commingled with any other funds or property of such Obligor.
5.03 Investment of Balance in Collateral Account. Amounts on
deposit in the Collateral Account shall be invested from time to time in such
Permitted Investments as the Obligors through the Pledgor (or, after the
occurrence and during the continuance of a Default, the Fund) shall determine,
which Permitted Investments shall be held in the name and be under the control
of the Fund, provided that at any time after the occurrence and during the
continuance of an Event of Default, the Fund may in its discretion at any time
and from time to time elect to liquidate any such Permitted Investments and to
apply or cause to be applied the proceeds thereof to the payment of the
Secured Obligations in the manner specified in Section 6.09 hereof.
Section 6. Further Assurances; Remedies. In furtherance of
the grant of the pledge and security interest pursuant to Section 4 hereof,
the Obligors hereby jointly and severally agree with the Fund as follows:
6.01 Delivery and other Perfection. Each Obligor shall:
(a) if any of the above-described shares, securities or
monies required to be pledged by such Obligor under clauses (a), (b)
and (c) of Section 4 hereof are received by such Obligor, forthwith
either (x) transfer and deliver to the Fund such shares, securities
or monies so received by such Obligor (together with the certificates
for any such shares and securities duly endorsed in blank or
accompanied by undated stock powers duly executed in blank) all of
which thereafter shall be held by the Fund, pursuant to the terms of
this Agreement, as part of the Collateral or (y) take such other
action as the Fund shall deem necessary or appropriate to duly record
the Lien created hereunder in such shares, securities or monies
referred to in said clauses (a), (b) and (c);
(b) deliver and pledge to the Fund any and all Instruments,
endorsed and/or accompanied by such instruments of assignment and
transfer in such form and substance as the Fund may request;
provided, that so long as no Default shall have occurred and be
continuing, such Obligor may retain for collection in the ordinary
course any Instruments received by it in the ordinary course of
business and the Fund shall, promptly upon request of such Obligor
through the Pledgor, make appropriate
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arrangements for making any other Instrument pledged by such Obligor
available to it for purposes of presentation, collection or renewal
(any such arrangement to be effected, to the extent deemed
appropriate by the Fund, against trust receipt or like document);
(c) (i) concurrently herewith, file financing statements in
accordance with the UCC to evidence the Fund's Lien in the Collateral
as security of the Loan, in such jurisdictions as are necessary to
perfect such Lien; and (ii) on or after the Maturity Date, give,
execute, deliver, file and/or record any financing statement, notice,
instrument, document, agreement or other papers that may be necessary
or desirable (in the judgment of the Fund) to create, preserve,
perfect or validate any security interest granted pursuant hereto or
to enable the Fund to exercise and enforce its rights hereunder with
respect to such security interest, including, without limitation,
causing any or all of the Stock Collateral to be transferred of
record into the name of the Fund or its nominee (and the Fund agrees
that if any Stock Collateral is transferred into its name or the name
of its nominee, the Fund will thereafter promptly give to the
respective Obligor copies of any notices and communications received
by it with respect to the Stock Collateral pledged by such Obligor
hereunder), provided that notices to account debtors in respect of
any Accounts or Instruments shall be subject to the provisions of
clause (f) below;
(d) keep full and accurate books and records relating to the
Collateral, and stamp or otherwise xxxx such books and records in
such manner as the Fund may reasonably require in order to reflect
the security interests granted by this Agreement;
(e) permit representatives of the Fund, upon reasonable
notice, at any time during normal business hours to inspect and make
abstracts from its books and records pertaining to the Collateral,
and permit representatives of the Fund to be present at such
Obligor's place of business to receive copies of all communications
and remittances relating to the Collateral, and forward copies of any
notices or communications received by such Obligor with respect to
the Collateral all in such manner as the Fund may require; and
(f) upon the occurrence and during the continuance of any
Default, upon request of the Fund, promptly notify (and such Obligor
hereby authorizes the Fund so to notify) each account debtor in
respect of any Accounts or Instruments that such Collateral has been
assigned to the Fund hereunder, and that any payments due or to
become due in respect of such Collateral are to be made directly to
the Fund.
6.02 Other Financing Statements and Liens. Except as
otherwise permitted under Section 6.2(b) of the Bridge Financing Agreement,
without the prior written consent of the Fund, the Obligors shall not file or
suffer to be on file, or authorize or permit to be filed or
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to be on file, in any jurisdiction, any financing statement or like instrument
with respect to the Collateral in which the Fund is not named as the sole
secured party.
6.03 Preservation of Rights. The Fund shall not be required
to take steps necessary to preserve any rights against prior parties to any of
the Collateral.
6.04 Special Provisions Relating to Certain Collateral.
(a) Stock Collateral.
(1) The Obligors will cause the Stock Collateral to
constitute at all times 100% of the total number of shares of each class of
capital stock of each Obligor then outstanding.
(2) So long as no Event of Default shall have occurred and
be continuing, the Obligors shall have the right to exercise all voting,
consensual and other powers of ownership pertaining to the Stock Collateral
for all purposes not inconsistent with the terms of this Agreement, the other
Loan Documents, or any other instrument or agreement referred to herein or
therein, provided that the Obligors jointly and severally agree that they will
not vote the Stock Collateral in any manner that is inconsistent with the
terms of this Agreement, the Bridge Financing Agreement, or any such other
instrument or agreement; and the Fund shall execute and deliver to the
Obligors or cause to be executed and delivered to the Obligors all such
proxies, powers of attorney, dividend and other orders, and all such
instruments, without recourse, as the Obligors may reasonably request for the
purpose of enabling the Obligors to exercise the rights and powers which they
are entitled to exercise pursuant to this Section 6.04(a)(2).
(3) All dividends and other distributions on the Stock
Collateral shall be paid directly to the Fund and retained by it in the
Collateral Account as part of the Stock Collateral, subject to the terms of
this Agreement, and, if the Fund shall so request in writing, the Obligors
jointly and severally agree to execute and deliver to the Fund appropriate
additional dividend, distribution and other orders and documents to that end.
6.05 Events of Default, etc. During the period during which
an Event of Default shall have occurred and be continuing:
(i) each Obligor shall, at the request of the Fund, assemble
the Collateral owned by it at such place or places, reasonably
convenient to both the Fund and such Obligor, designated in the
Fund's request;
(ii) the Fund may make any reasonable compromise or
settlement deemed desirable with respect to any of the Collateral and
may extend the time of payment, arrange for payment in installments,
or otherwise modify the terms of, any of the Collateral;
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(iii) the Fund shall have all of the rights and remedies
with respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not said Code is in effect in the
jurisdiction where the rights and remedies are asserted) and such
additional rights and remedies to which a secured party is entitled
under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted, including, without limitation,
the right, to the maximum extent permitted by law, to exercise all
voting, consensual and other powers of ownership pertaining to the
Collateral as if the Fund were the sole and absolute owner thereof
(and each Obligor agrees to take all such action as may be
appropriate to give effect to such right);
(iv) the Fund in its discretion may, in its name or in the
name of the Obligors or otherwise, demand, xxx for, collect or
receive any money or property at any time payable or receivable on
account of or in exchange for any of the Collateral, but shall be
under no obligation to do so; and
(v) the Fund may, upon 10 Business Days' prior written
notice to the Obligors of the time and place, with respect to the
Collateral or any part thereof which shall then be or shall
thereafter come into the possession, custody or control of the Fund,
sell, assign or otherwise dispose of all or any of such Collateral,
at such place or places as the Fund deems best, and for cash or on
credit or for future delivery (without thereby assuming any credit
risk), at public or private sale, without demand of performance or
notice of intention to effect any such disposition or of time or
place thereof (except such notice as is required above or by
applicable statute and cannot be waived) and the Fund or anyone else
may be the purchaser, lessee, assignee or recipient of any or all of
the Collateral so disposed of at any public sale (or, to the extent
permitted by law, at any private sale), and thereafter hold the same
absolutely, free from any claim or right of whatsoever kind,
including any right or equity of redemption (statutory or otherwise),
of the Obligors, any such demand, notice or right and equity being
hereby expressly waived and released. The Fund may, without notice or
publication, adjourn any public or private sale or cause the same to
be adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place to
which the same may be so adjourned.
The proceeds of each collection, sale or other disposition under this Section
5.05 shall be applied in accordance with Section 6.09 hereof.
The Obligors recognize that, by reason of certain
prohibitions contained in the Securities Act of 1933, as amended, and
applicable state securities laws, the Fund may be compelled, with respect to
any sale of all or any part of the Collateral, to limit purchasers to those
who will agree, among other things, to acquire the Collateral for their own
account, for investment and not with a view to the distribution or resale
thereof. The Obligors acknowledge that any such private sales may be at prices
and on terms less favorable to the Fund than those obtainable through a public
sale without such restrictions, and,
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notwithstanding such circumstances, agree that any such private sale shall be
deemed to have been made in a commercially reasonable manner and that the Fund
shall have no obligation to engage in public sales and no obligation to delay
the sale of any Collateral for the period of time necessary to permit the
respective Obligor thereof to register it for public sale.
6.06 Deficiency. If the proceeds of sale, collection or
other realization of or upon the Collateral pursuant to Section 6.05 hereof
are insufficient to cover the costs and expenses of such realization and the
payment in full of the Secured Obligations, the Obligors shall remain jointly
liable for any deficiency.
6.07 Removals, etc. Without at least 30 days prior written
notice to the Fund, the Obligors shall not (i) maintain any of their books or
records with respect to the Collateral at any office or maintain their chief
executive office or their principal place of business at any place other than
at the address indicated beneath the signature of the Pledgor to the Bridge
Financing Agreement or at one of the locations identified in Annex 2 hereto
under their respective names or in transit from one of such respective
locations to another or (ii) change the respective corporate names, or the
respective names under which they do business, from the names shown on the
signature pages hereto.
6.08 Private Sale. The Fund shall incur no liability as a
result of the sale of the Collateral, or any part thereof, at any private sale
pursuant to Section 6.05 hereof conducted in a commercially reasonable manner.
The Obligors hereby waive any claims against the Fund arising by reason of the
fact that the price at which the Collateral may have been sold at such a
private sale was less than the price which might have been obtained at a
public sale or was less than the aggregate amount of the Secured Obligations,
even if the Fund accepts the first offer received and does not offer the
Collateral to more than one offeree.
6.09 Application of Proceeds. Except as otherwise herein
expressly provided, the proceeds of any collection, sale or other realization
of all or any part of the Collateral pursuant hereto, and any other cash at
the time held by the Fund under Section 5 hereof or this Section 6, shall be
applied by the Fund:
First, to the payment of the costs and expenses of such
collection, sale or other realization, including reasonable
out-of-pocket costs and expenses of the Fund and the fees and
expenses of its counsel, and all expenses, and advances made or
incurred by the Fund in connection therewith;
Next, to the payment in full of the Secured Obligations in
each case equally and ratably in accordance with the respective
amounts thereof then due and owing; and
Finally, to the payment to the respective Obligor, or its
successors or assigns, or as a court of competent jurisdiction may
direct, of any surplus then remaining.
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As used in this Section 6, "proceeds" of Collateral shall mean cash,
securities and other property realized in respect of, and distributions in
kind of, Collateral, including any thereof received under any reorganization,
liquidation or adjustment of debt of the Obligors or any obligor on any of the
Collateral.
6.10 Attorney-in-Fact. Without limiting any rights or powers
granted by this Agreement to the Fund while no Event of Default has occurred
and is continuing, upon the occurrence and during the continuance of any Event
of Default the Fund is hereby appointed the attorney-in-fact of the Obligors
for the purpose of carrying out the provisions of this Section 6 and taking
any action and executing any instruments which the Fund may deem necessary or
advisable to accomplish the purposes hereof, which appointment as
attorney-in-fact is irrevocable and coupled with an interest. Without limiting
the generality of the foregoing, so long as the Fund shall be entitled under
this Section 6 to make collections in respect of the Collateral, the Fund
shall have the right and power to receive, endorse and collect all checks made
payable to the order of any Obligor representing any dividend, payment, or
other distribution in respect of the Collateral or any part thereof and to
give full discharge for the same.
6.11 Perfection. Prior to or concurrently with the execution
and delivery of this Agreement, each Obligor shall (i) file financing
statements evidencing the security of the Loan in accordance with the UCC
and(ii) deliver to the Fund all stock certificates identified in Annex 1
hereto, accompanied by undated stock powers duly executed in blank.
6.12 Termination. When all Secured Obligations shall have
been paid in full, this Agreement shall terminate, and the Fund shall
forthwith cause to be assigned, transferred and delivered, against receipt but
without any recourse, warranty or representation whatsoever, any remaining
Collateral and money received in respect thereof, to or on the order of the
respective Obligors and to be released and canceled all licenses and rights
referred to in Section 6.04(b)(1) hereof. The Fund shall also execute and
deliver to the respective Obligors upon such termination such Uniform
Commercial Code termination statements, and such other documentation as shall
be reasonably requested by the respective Obligors to effect the termination
and release of the Liens on the Collateral.
6.13 Expenses. The Obligors jointly and severally agree to
pay to the Fund all out-of-pocket expenses (including reasonable expenses for
legal services of every kind)(all of which expenses periodically shall be
reimbursed as incurred) of, or incident to, the enforcement or protection of
any of the provisions of this Section 6, or performance by the Fund of any
obligations of the Obligors in respect of the Collateral which the Obligors
have failed or refused to perform, or any actual or attempted sale, or any
exchange, enforcement, collection, compromise or settlement in respect of any
of the Collateral, and for the care of the Collateral and defending or
asserting rights and claims of the Fund in respect thereof, by litigation or
otherwise, including expenses of insurance, and all such expenses shall be
Secured Obligations to the Fund secured under Section 4 hereof.
12
6.14 Future Direct and Indirect Subsidiaries. The Company
will cause all of its future direct and indirect subsidiaries (the "Future
Subsidiaries") to become a party to this Agreement, such that each Future
Subsidiary will become a Subsidiary Guarantor under this Agreement and be
subject to the all the conditions of this Agreement applicable to Subsidiary
Guarantors.
6.15 Further Assurances. The Obligors agree that, from time
to time upon the written request of the Fund, the Obligors will execute and
deliver such further documents and do such other acts and things as the Fund
may reasonably request in order fully to effect the purposes of this
Agreement.
Section 7. Miscellaneous.
7.01 No Waiver. No failure on the part of the Fund, and no
course of dealing with respect to, and no delay in exercising, any right,
power or remedy hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise by the Fund of any right, power or remedy hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. The remedies herein are cumulative and are not
exclusive of any remedies provided by law.
7.02 Governing Law. This Agreement shall be governed by and
construed under the law of the State of New York as applied to agreements
among New York residents entered into and performed entirely within New York.
7.03 Notices. All notices, requests, consents and demands
hereunder shall be in writing and telecopied or delivered to the intended
recipient at its address or telecopy number specified pursuant to Section 8.10
of the Bridge Financing Agreement and shall be deemed to have been given at
the times specified in said Section 8.10.
7.04 Waivers, etc. The terms of this Agreement may be
waived, altered or amended only by an instrument in writing duly executed by
each Obligor and the Fund. Any such amendment or waiver shall be binding upon
the Fund, each holder of any Secured Obligation and the Obligors.
7.05 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of each
Obligor, the Fund, and each holder of the Secured Obligations (provided,
however, that the Obligors shall not assign or transfer their rights hereunder
without the prior written consent of the Fund).
7.06 Counterparts. This Agreement may be executed in any
number of counterparts, all of which together shall constitute one and the
same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.
13
7.07 Agents. The Fund may employ agents and
attorneys-in-fact in connection herewith and shall not be responsible for the
negligence or misconduct of any such agent or attorneys-in-fact selected by it
in good faith and with reasonable care.
7.08 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (i) the other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be liberally construed in favor of the Fund and
the Banks in order to carry out the intentions of the parties hereto as nearly
as may be possible and (ii) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
14
IN WITNESS WHEREOF, the parties hereto have caused this
Security Agreement to be duly executed as of the day and year first above
written.
THE MARQUEE GROUP, INC.
By_________________________________
Title:
SUBSIDIARY GUARANTORS
ATHLETES AND ARTISTS, INC.
By_________________________________
Title:
SPORTS MARKETING & TELEVISION
INTERNATIONAL, INC.
By_________________________________
Title:
THE XXXX ALTERNATIVE INCOME
FUND, L.P.
By_________________________________
Title:
15
ANNEX 1
LIST OF PLEDGED STOCK
ATHLETES AND ARTISTS, INC.
Class of Registered
Stock Certificate Nos. Owner Number of Shares
----- ---------------- ----- ----------------
__________ The Marquee Group, Inc. 100 shares of common stock,
[no] par value [$__________]
SPORTS MARKETING & TELEVISION
INTERNATIONAL, INC.
Class of Registered
Stock Certificate Nos. Owner Number of Shares
----- ---------------- ----- ----------------
__________ The Marquee Group, Inc. 5,000 shares of common stock,
[no] par value [$__________]
[Name of Subsidiary Guarantor #3]
Class of Registered
Stock Certificate Nos. Owner Number of Shares
----- ---------------- ----- ----------------
Class # 1 __________ ____ ____ shares of
[common/preferred] stock,
[no] par value [$__________]
Class # 2 __________ ____ ____ shares of
[common/preferred] stock,
[no] par value [$__________]
Class # 3 __________ ____ ____ shares of
[common/preferred] stock,
[no] par value [$__________]
2
ANNEX 2
LIST OF LOCATIONS
THE MARQUEE GROUP, INC. 000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATHLETES AND ARTISTS, INC. 000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
SPORTS MARKETING & TELEVISION
INTERNATIONAL, INC. 000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
