PLEDGE AGREEMENT
Exhibit
10.4
THIS
PLEDGE AGREEMENT
(this
“Pledge
Agreement”)
is
entered into as of March 15, 2007, among BENIHANA
INC.,
a
Delaware corporation (the “Borrower”),
certain Subsidiaries of the Borrower (individually a “Guarantor”,
and
collectively the “Guarantors”;
together with the Borrower, individually a “Pledgor”,
and
collectively the “Pledgors”)
and
WACHOVIA
BANK, NATIONAL ASSOCIATION (F/K/A FIRST UNION NATIONAL
BANK),
in its
capacity as agent (in such capacity, the “Administrative
Agent”)
for
the lenders from time to time party to the Credit Agreement described below
(the
“Lenders”).
RECITALS
WHEREAS,
pursuant to that certain Credit Agreement dated as of the date hereof (as
amended, modified, extended, restated, replaced, or supplemented from time
to
time, the “Credit
Agreement”),
among
the Borrower, the Guarantors, the Lenders party thereto and the Administrative
Agent, the Lenders have agreed to make Loans and to issue and/or acquire
participation interests in Letters of Credit upon the terms and subject to
the
conditions set forth therein; and
WHEREAS,
it is a
condition precedent to the effectiveness of the Credit Agreement and the
obligations of the Lenders to make their respective Loans and to issue and/or
acquire participation interests in Letters of Credit under the Credit Agreement
that the Pledgors shall have executed and delivered this Pledge Agreement to
the
Administrative Agent for the ratable benefit of the Lenders.
NOW,
THEREFORE,
in
consideration of these premises and other good and valuable consideration,
the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1.
Definitions.
Unless
otherwise defined herein, capitalized terms used herein shall have the meanings
ascribed to such terms in the Credit Agreement, and the following terms that
are
defined in the Uniform Commercial Code from time to time in effect in the State
of North Carolina (the “UCC”)
are
used herein as so defined: Certificated Security, Control, Entitlement Order,
Financial Asset, Investment Company Security, Securities Account, Security,
Security Entitlement, Securities Intermediary and Uncertificated Security.
For
purposes of this Pledge Agreement, the term (a)
“Lender” shall include any Hedging Agreement Provider and the term “Secured
Hedging Agreement” shall mean any Hedging Agreement between a Credit Party and a
Hedging Agreement Provider, as amended, modified, extended, restated, replaced
or supplemented from time to time.
2.
Pledge
and Grant of Security Interest.
To
secure the prompt payment and performance in full when due, whether by lapse
of
time or otherwise, of the Secured Obligations (as defined in Section 3 hereof),
each Pledgor hereby pledges and grants to the Administrative Agent, for the
ratable benefit of the Lenders, a continuing security interest in any and all
right, title and interest of such Pledgor in and to the following, whether
now
owned or existing or owned, acquired, or arising hereafter (collectively, the
“Pledged
Collateral”):
(a)
Pledged
Capital Stock.
(i)
100% (or, if less, the full amount owned by such Pledgor) of the issued and
outstanding Capital Stock owned by such Pledgor of each Domestic Subsidiary
set
forth on Schedule
2(a)
attached
hereto and (ii) 65% (or, if less, the full amount owned by such Pledgor) of
each
class of the issued and outstanding Capital Stock entitled to vote (within
the
meaning of Treas. Reg. Section 1.956-2(c)(2)) (“Voting
Equity”)
and
100% (or, if less, the full amount owned by such Pledgor) of each class of
the
issued and outstanding Capital Stock not entitled to vote (within the meaning
of
Treas. Reg. Section 1.956-2(c)(2)) (“Non-Voting
Equity”)
owned
by such Pledgor of each first-tier Foreign Subsidiary set forth on Schedule
2(a)
attached
hereto (collectively, together with the Capital Stock and other interests
described in clauses (y) and (z) and in Sections 2(b) and 2(c) below, the
“Pledged
Capital Stock”),
including, but not limited to, the following:
(y)
subject
to the percentage restrictions described above and in Section 2(b) below, all
shares, securities, membership interests or other equity interests representing
a dividend on any of the Pledged Capital Stock, or representing a distribution
or return of capital upon or in respect of the Pledged Capital Stock, or
resulting from a stock split, revision, reclassification or other exchange
therefor, and any subscriptions, warrants, rights or options issued to the
holder of, or otherwise in respect of, the Pledged Capital Stock;
and
(z) subject
to the percentage restrictions described above and in Section 2(b) below and
without affecting the obligations of the Pledgors under any provision
prohibiting such action hereunder or under the Credit Agreement, in the event
of
any consolidation or merger involving the issuer of any Pledged Capital Stock
and in which such issuer is not the surviving entity, all shares of each class
of the Capital Stock of the successor entity formed by or resulting from such
consolidation or merger.
(b)
Additional
Interests.
(i)
100% (or, if less, the full amount owned by such Pledgor) of each class of
the
issued and outstanding Capital Stock of any Person which hereafter becomes
a
Domestic Subsidiary and (ii) 65% (or, if less, the full amount owned by such
Pledgor) of the Voting Equity and 100% (or, if less, the full amount owned
by
such Pledgor) of the Non-Voting Equity of any Person which hereafter becomes
a
first-tier Foreign Subsidiary, including, without limitation, the certificates
representing such Capital Stock.
(c)
Other
Equity Interests.
Subject
to the percentage restrictions described above, any and all other Capital Stock
or other equity interests owned by the Pledgors in any Domestic Subsidiary
or
any first-tier Foreign Subsidiary.
(d)
Proceeds.
All
proceeds and products of the foregoing, however and whenever acquired and in
whatever form.
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Without
limiting the generality of the foregoing, it is hereby specifically understood
and agreed that a Pledgor may from time to time hereafter pledge and deliver
additional shares of Capital Stock or other interests to the Administrative
Agent as collateral security for the Secured Obligations. Upon such pledge
and
delivery to the Administrative Agent, such additional shares of Capital Stock
or
other interests shall be deemed to be part of the Pledged Collateral of such
Pledgor and shall be subject to the terms of this Pledge Agreement whether
or
not Schedule
2(a)
is
amended to refer to such additional shares.
3.
Security
for Secured Obligations.
The
security interest created hereby in the Pledged Collateral of each Pledgor
constitutes continuing collateral security for all of the following, whether
now
existing or hereafter incurred (the “Secured
Obligations”):
(a)
all
of the Credit Party Obligations (including obligations under Secured Hedging
Agreements), howsoever evidenced, created, incurred or acquired, whether
primary, secondary, direct, contingent, or joint and several and (b) all
expenses and charges, legal and otherwise, incurred by the Administrative Agent,
the Lenders and/or the Hedging Agreement Providers in collecting or enforcing
any of the Credit Party Obligations or in realizing on or protecting any
security therefor, including without limitation the security granted
hereunder.
4.
Delivery
of the Pledged Collateral; Perfection of Security Interest.
Each
Pledgor hereby agrees that:
(a)
Delivery
of Certificates and Instruments.
Each
Pledgor shall deliver as security to the Administrative Agent (i) simultaneously
with or prior to the execution and delivery of this Pledge Agreement, all
certificates representing the Pledged Capital Stock owned by such Pledgor and
(ii) promptly upon the receipt thereof by or on behalf of a Pledgor, all other
certificates and instruments constituting Pledged Collateral owned by a Pledgor.
Prior to delivery to the Administrative Agent, all such certificates and
instruments constituting Pledged Collateral of a Pledgor shall be held in trust
by such Pledgor for the benefit of the Administrative Agent pursuant hereto.
All
such certificates shall be delivered in suitable form for transfer by delivery
or shall be accompanied by duly executed instruments of transfer or assignment
in blank, substantially in the form provided in Exhibit
A
attached
hereto.
(b) Additional
Securities.
Subject
to the percentage restrictions set forth in Section 2, if such Pledgor shall
receive by virtue of its being or having been the owner of any Pledged
Collateral, any (i) certificate, including without limitation, any certificate
representing a dividend or distribution in connection with any increase or
reduction of capital, reclassification, merger, consolidation, sale of assets,
combination of shares of Capital Stock, stock splits, spin-off or split-off,
promissory notes or other instruments; (ii) option or right, whether as an
addition to, substitution for, or an exchange for, any Pledged Collateral or
otherwise; (iii) dividends payable in Capital Stock; or (iv) distributions
of Capital Stock or other equity interests in connection with a partial or
total
liquidation, dissolution or reduction of capital, capital surplus or paid-in
surplus, then such Pledgor shall receive such certificate, instrument, option,
right or distribution in trust for the benefit of the Administrative Agent,
shall segregate it from such Pledgor’s other property and shall deliver it
forthwith to the Administrative Agent in the exact form received accompanied
by
duly executed instruments of transfer or assignment in blank, substantially
in
the form provided in Exhibit
A
attached
hereto, to be held by the Administrative Agent as Pledged Collateral and as
further collateral security for the Secured Obligations.
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(c)
Financing
Statements; Other Perfection Actions.
Each
Pledgor hereby authorizes the Administrative Agent to prepare and file such
financing statements (including continuation statements) or amendments thereof
or supplements thereto or other instruments as the Administrative Agent may
from
time to time deem reasonably necessary or appropriate in order to perfect and
maintain the security interests granted hereunder in accordance with the UCC,
including, without limitation, any financing statement that describes the
Pledged Collateral as “all personal property” or “all assets” of such Pledgor or
that describes the Pledged Collateral in some other manner as the Administrative
Agent deems necessary or advisable. Each Pledgor shall also execute
and deliver to the Administrative Agent and/or file such agreements, assignments
or instruments (including affidavits, notices, reaffirmations, amendments and
restatements of existing documents, and any documents as may be necessary if
the
law of any jurisdiction other than North Carolina becomes
or is applicable to the Collateral or any portion thereof, in each case as
the
Administrative Agent may reasonably request) and do all such other things as
the
Administrative Agent may reasonably deem necessary or appropriate (i) to assure
to the Administrative Agent its security interests hereunder are perfected,
including such financing statements (including continuation statements) or
amendments thereof or supplements thereto or other instruments as the
Administrative Agent may from time to time reasonably request in order to
perfect and maintain the security interests granted hereunder in accordance
with
the UCC and any other personal property security legislation in the appropriate
jurisdictions, (ii) to consummate the transactions contemplated hereby and
(iii)
to otherwise protect and assure the Administrative Agent of its rights and
interests hereunder. Each Pledgor agrees to xxxx its books and records (and
to
cause the issuer of the Pledged Capital Stock of such Pledgor to xxxx its books
and records) to reflect the security interest of the Administrative Agent in
the
Pledged Collateral.
(d)
Provisions
Relating to Uncertificated Securities, Security Entitlements and Securities
Accounts.
The
Pledgors shall promptly notify the Administrative Agent of any Pledged
Collateral consisting of an Uncertificated Security or a Security Entitlement
or
any Pledged Collateral held in a Securities Account. With respect to any such
Pledged Collateral, (a) the applicable Pledgor and the applicable issuer of
the
Uncertificated Security or the applicable Securities Intermediary shall enter
into, upon the request of the Administrative Agent, an agreement with the
Administrative Agent granting Control to the Administrative Agent over such
Pledged Collateral, such agreement to be in form and substance reasonably
satisfactory to the Administrative Agent and (b) the Administrative Agent shall
be entitled, upon the occurrence and during the continuance of a Default or
an
Event of Default, to notify the applicable issuer of the Uncertificated Security
or the applicable Securities Intermediary that it should follow the instructions
or the Entitlement Orders, respectively, of the Administrative Agent and no
longer follow the instructions or the Entitlement Orders, respectively, of
the
applicable Pledgor. Upon receipt by a Pledgor of notice from a Securities
Intermediary of its intent to terminate the Securities Account of such Pledgor
held by such Securities Intermediary, prior to the termination of such
Securities Account the Pledged Collateral in such Securities Account shall
be
(i) transferred to a new Securities Account, upon the request of the
Administrative Agent, which shall be subject to a control agreement as provided
above or (ii) transferred to an account held by the Administrative Agent (in
which it will be held until a new Securities Account is
established).
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5.
Representations
and Warranties.
Each
Pledgor hereby represents and warrants to the Administrative Agent, for the
benefit of the Lenders, that so
long
as any of the Secured Obligations (other than contingent indemnity obligations
that survive termination of the Credit Documents pursuant to the stated terms
thereof) remain outstanding, any Credit Document or Secured Hedging Agreement
is
in effect, and until all of the Commitments shall have been
terminated:
(a)
Authorization
of Pledged Capital Stock.
The
Pledged Capital Stock is duly authorized and validly issued, is fully paid
and
nonassessable and is not subject to the preemptive rights of any Person. All
other shares of Capital Stock or other interests constituting Pledged Collateral
are duly authorized and validly issued, fully paid and nonassessable and not
subject to the preemptive rights of any Person.
(b)
Title.
Each
Pledgor has good and indefeasible title to the Pledged Collateral of such
Pledgor and will at all times be the legal and beneficial owner of such Pledged
Collateral free and clear of any Lien, other than Permitted Liens. There exists
no “adverse claim” within the meaning of Section 8-102 of the UCC with respect
to the Pledged Capital Stock of such Pledgor.
(c)
Exercising
of Rights.
The
exercise by the Administrative Agent of its rights and remedies hereunder will
not violate any law or governmental regulation (excluding for purposes hereof,
liquor license laws, the violation of which could not, either individually
or in
the aggregate, reasonably be expected to be material on the Pledgors’ business
taken as a whole) or any material contractual restriction binding on or
affecting a Pledgor or any of its property.
(d)
Pledgor’s
Authority.
No
authorization, approval or action by, and no notice or filing with any
Governmental Authority, the issuer of any Pledged Capital Stock or third party
is required either (i) for the pledge made by a Pledgor or for the granting
of
the security interest by a Pledgor pursuant to this Pledge Agreement or (ii)
for
the exercise by the Administrative Agent or the Lenders of their rights and
remedies hereunder (except as may be required by laws affecting the offering
and
sale of securities).
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(e)
Security
Interest/Priority.
This
Pledge Agreement creates a valid security interest in favor of the
Administrative Agent for the ratable benefit of the Lenders, in the Pledged
Collateral. The taking possession by the Administrative Agent of the
certificates (if any) representing the Pledged Capital Stock and all other
certificates and instruments constituting Pledged Collateral will perfect and
establish the first priority of the Administrative Agent’s security interest in
all certificated Pledged Capital Stock and such certificates and instruments.
Upon the filing of UCC financing statements in the location of each Pledgor’s
state
of
organization,
the
Administrative Agent shall have a first priority perfected security interest
in
all uncertificated Pledged Capital Stock consisting of partnership or limited
liability company interests that do not constitute a Security pursuant to
Section 8-103(c) of the UCC. With respect to any Pledged Collateral consisting
of an Uncertificated Security or a Security Entitlement or any Pledged
Collateral held in a Securities Account, upon execution and delivery by the
applicable Pledgor, the Administrative Agent and the applicable Securities
Intermediary or the applicable issuer of the Uncertificated Security of an
agreement granting Control to the Administrative Agent over such Pledged
Collateral, the Administrative Agent shall have a first priority perfected
security interest in such Pledged Collateral. Except as set forth in this
Section, no action is necessary to perfect the Administrative Agent’s security
interest.
(f) No
Other Capital Stock.
Except
as set forth on Schedule
2(a)
attached
hereto (as updated or deemed updated from time to time in accordance with the
terms hereof and of the Credit Agreement), no Pledgor owns any Capital Stock
of
the Borrower or any of its Domestic Subsidiaries or any of its first-tier
Foreign Subsidiaries.
(g)
Partnership
and Limited Liability Company Interests.
Except
as previously disclosed to the Administrative Agent, none of the Pledged Capital
Stock consisting of partnership or limited liability company interests (i)
is
dealt in or traded on a securities exchange or in a securities market, (ii)
by
its terms expressly provides that it is a Security governed by Article 8 of
the
UCC, (iii) is an Investment Company Security, (iv) is held in a Securities
Account or (v) constitutes a Security or a Financial Asset.
6.
Covenants.
Each
Pledgor hereby covenants, that so
long
as any of the Secured Obligations (other than contingent indemnity obligations
that survive termination of the Credit Documents pursuant to the stated terms
thereof) remain outstanding, any Credit Document or Secured Hedging Agreement
is
in effect, and until all of the Commitments shall have been
terminated,
such
Pledgor shall:
(a)
Defense
of Title.
Warrant
and defend title to and ownership of the Pledged Collateral of such Pledgor
at
its own expense against the claims and demands of all other parties claiming
an
interest therein; keep the Pledged Collateral free from all Liens, other than
Permitted Liens; and not sell, exchange, transfer, assign, lease or otherwise
dispose of Pledged Collateral of such Pledgor or any interest therein, except
as
permitted under the Credit Agreement and the other Credit
Documents.
6
(b)
Further
Assurances.
Promptly execute and deliver at its expense all further instruments and
documents and take all further action that may be necessary and desirable or
that the Administrative Agent may reasonably request in order to (i) perfect
and
protect the security interest created hereby in the Pledged Collateral of such
Pledgor (including, without limitation, execution and delivery of one or more
control agreements reasonably acceptable to the Administrative Agent, filing
of
UCC financing statements and any and all other actions reasonably necessary
to
satisfy the Administrative Agent that the Administrative Agent has obtained
a
first priority perfected security interest in all Pledged Collateral); (ii)
enable the Administrative Agent to exercise and enforce its rights and remedies
hereunder in respect of the Pledged Collateral of such Pledgor; and (iii)
otherwise effect the purposes of this Pledge Agreement, including, without
limitation and if requested by the Administrative Agent, delivering to the
Administrative Agent irrevocable proxies in respect of the Pledged Collateral
of
such Pledgor.
(c)
Amendments.
Not
make or consent to any amendment or other modification or waiver with respect
to
any of the Pledged Collateral of such Pledgor or enter into any agreement or
allow to exist any restriction with respect to any of the Pledged Collateral
of
such Pledgor other than pursuant hereto or as may be permitted under the Credit
Agreement.
(d)
Compliance
with Securities Laws.
File
all reports and other information now or hereafter required to be filed by
such
Pledgor with the United States Securities and Exchange Commission and any other
state, federal or foreign agency in connection with the ownership of the Pledged
Collateral of such Pledgor.
(e)
Issuance
or Acquisition of Capital Stock.
Not
without executing and delivering, or causing to be executed and delivered,
to
the Administrative Agent such agreements, documents and instruments as the
Administrative Agent may reasonably require, issue or acquire any Capital Stock
that consists of an interest in a partnership or a limited liability company
which (i) is dealt in or traded on a securities exchange or in a securities
market, (ii) by its terms expressly provides that it is a Security governed
by
Article 8 of the UCC, (iii) is an Investment Company Security, (iv) is held
in a
Securities Account or (v) constitutes a Security or a Financial
Asset.
7.
Performance
of Obligations; Advances by Administrative Agent.
On
failure of any Pledgor to perform any of the covenants and agreements contained
herein, the Administrative Agent may, at its sole option and in its sole
discretion, perform or cause to be performed the same and in so doing may expend
such sums as the Administrative Agent may reasonably deem advisable in the
performance thereof, including, without limitation, the payment of any insurance
premiums, the payment of any taxes, a payment to obtain a release of a Lien
or
potential Lien, expenditures made in defending against any adverse claim and
all
other expenditures which the Administrative Agent may make for the protection
of
the security interest hereof or may be compelled to make by operation of law.
All such sums and amounts so expended shall be repayable by the Pledgors on
a
joint and several basis promptly upon timely notice thereof and demand therefor,
shall constitute additional Secured Obligations and shall bear interest from
the
date said amounts are expended at the default
rate for Revolving Loans that are Base Rate Loans set forth in Section 3.1
of
the Credit Agreement.
No such
performance of any covenant or agreement by the Administrative Agent on behalf
of any Pledgor, and no such advance or expenditure therefor, shall relieve
the
Pledgors of any default under the terms of this Pledge Agreement, the other
Credit Documents or any Secured Hedging Agreement. The Administrative Agent
may
make any payment hereby authorized in accordance with any xxxx, statement or
estimate procured from the appropriate public office or holder of the claim
to
be discharged without inquiry into the accuracy of such xxxx, statement or
estimate or into the validity of any tax assessment, sale, forfeiture, tax
lien,
title or claim except to the extent such payment is being contested in good
faith by a Pledgor in appropriate proceedings and against which adequate
reserves are being maintained in accordance with GAAP.
7
8.
Events
of Default.
The
occurrence of an event which under the Credit Agreement would constitute an
Event of Default shall be an event of default hereunder (an “Event
of Default”).
9.
Remedies.
(a)
General
Remedies.
Upon
the occurrence of an Event of Default and during the continuation thereof,
the
Administrative Agent shall have, in respect of the Pledged Collateral of any
Pledgor, in addition to the rights and remedies provided herein, in the other
Credit Documents, in any Secured Hedging Agreement or by law, the rights and
remedies of a secured party under the UCC or any other applicable law.
(b)
Sale
of Pledged Collateral.
Upon
the occurrence of an Event of Default and during the continuation thereof,
without limiting the generality of this Section and without notice, the
Administrative Agent may, in its sole discretion, sell or otherwise dispose
of
or realize upon the Pledged Collateral, or any part thereof, in one or more
parcels, at public or private sale, at any exchange or broker’s board or
elsewhere, at such price or prices and on such other terms as the Administrative
Agent may deem commercially reasonable, for cash, credit or for future delivery
or otherwise in accordance with applicable law. To the extent permitted by
law,
any Lender may in such event, bid for the purchase of such securities. Each
Pledgor agrees that, to the extent notice of sale shall be required by law
and
has not been waived by such Pledgor, any requirement of reasonable notice shall
be met if notice, specifying the place of any public sale or the time after
which any private sale is to be made, is personally served on or mailed, postage
prepaid, to such Pledgor, in accordance with the notice provisions of Section
11.1 of the Credit Agreement at least ten (10) days before the time of such
sale. The Administrative Agent shall not be obligated to make any sale of
Pledged Collateral of such Pledgor regardless of notice of sale having been
given. The Administrative 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.
(c)
[Reserved].
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(d)
Private
Sale.
Upon
the occurrence of an Event of Default and during the continuation thereof,
the
Pledgors recognize that the Administrative Agent may deem it impracticable
to
effect a public sale of all or any part of the Pledged Collateral and that
the
Administrative Agent may, therefore, determine to make one or more private
sales
of any such Pledged Collateral to a restricted group of purchasers who will
be
obligated to agree, among other things, to acquire such Pledged Collateral
for
their own account, for investment and not with a view to the distribution or
resale thereof. Each Pledgor acknowledges that any such private sale may be
at
prices and on terms less favorable to the seller than the prices and other
terms
which might have been obtained at a public sale and, notwithstanding the
foregoing, agrees that such private sale shall be deemed to have been made
in a
commercially reasonable manner and that the Administrative Agent shall have
no
obligation to delay sale of any such Pledged Collateral for the period of time
necessary to permit the issuer of such Pledged Collateral to register such
Pledged Collateral for public sale under the Securities Act of 1933. Each
Pledgor further acknowledges and agrees that any offer to sell such Pledged
Collateral which has been (i) publicly advertised on a bona fide basis in a
newspaper or other publication of general circulation in the financial community
of New York, New York (to the extent that such offer may be advertised without
prior registration under the Securities Act of 1933), or (ii) made privately
in
the manner described above shall be deemed to involve a “public sale” under the
UCC, notwithstanding that such sale may not constitute a “public offering” under
the Securities Act of 1933, and the Administrative Agent may, in such event,
bid
for the purchase of such Pledged Collateral.
(e)
Retention
of Pledged Collateral.
In
addition to the rights and remedies hereunder, upon the occurrence of an Event
of Default and during the continuation thereof, the Administrative Agent may,
after providing the notices required by Sections 9-620 and 9-621 of the UCC
(or
any successor sections of the UCC) or otherwise complying with the notice
requirements of applicable law of the relevant jurisdiction, accept or retain
all or any portion of the Pledged Collateral in satisfaction of the Secured
Obligations. Unless and until the Administrative Agent shall have provided
such
notices, however, the Administrative Agent shall not be deemed to have retained
any Pledged Collateral in satisfaction of any Secured Obligations for any
reason.
(f)
Deficiency.
In the
event that the proceeds of any sale, collection or realization are insufficient
to pay all amounts to which the Administrative Agent or the Lenders are legally
entitled, the Pledgors shall be jointly and severally liable for the deficiency,
together with interest thereon at the default rate for Revolving Loans that
are
Base Rate Loans set forth in Section 3.1 of the Credit Agreement together with
the costs of collection and the reasonable fees of any attorneys employed by
the
Administrative Agent to collect such deficiency. Any surplus remaining after
the
full payment and satisfaction of the Secured Obligations shall be returned
to
the Pledgors or to whomsoever a court of competent jurisdiction shall determine
to be entitled thereto.
(g) Other
Security.
To the
extent that any of the Secured Obligations are now or hereafter secured by
property other than the Pledged Collateral (including, without limitation,
real
and other personal property owned by a Pledgor), or by a guarantee, endorsement
or property of any other Person, then the Administrative Agent shall have the
right to proceed against such other property, guarantee or endorsement upon
the
occurrence and during the continuation of any Event of Default, and the
Administrative Agent shall have the right, in its sole discretion, to determine
which rights, security, Liens, security interests or remedies the Administrative
Agent shall at any time pursue, relinquish, subordinate, modify or take with
respect thereto, without in any way modifying or affecting any of them or any
of
the Administrative Agent’s rights or the Secured Obligations under this Pledge
Agreement, under any other of the Credit Documents or under any Secured Hedging
Agreement.
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10.
Rights
of the Administrative Agent.
(a)
Power
of Attorney.
Each
Pledgor hereby designates and appoints the Administrative Agent, on behalf
of
the Lenders, and each of its designees or agents as attorney-in-fact of such
Pledgor, irrevocably and with power of substitution, with authority to take
any
or all of the following actions upon the occurrence and during the continuation
of an Event of Default:
(i)
to
demand, collect, settle, compromise, adjust and give discharges and releases
concerning the Pledged Collateral of such Pledgor, all as the Administrative
Agent may reasonably determine in respect of such Pledged
Collateral;
(ii)
to
commence and prosecute any actions at any court for the purposes of collecting
any of the Pledged Collateral and enforcing any other right in respect
thereof;
(iii)
to
defend, settle, adjust or compromise any action, suit or proceeding brought
with
respect to the Pledged Collateral and, in connection therewith, give such
discharge or release as the Administrative Agent may deem reasonably
appropriate;
(iv)
to
pay or
discharge taxes, Liens, security interests, or other encumbrances levied or
placed on or threatened against the Pledged Collateral;
(v)
to
direct
any parties liable for any payment under any of the Pledged Collateral to make
payment of any and all monies due and to become due thereunder directly to
the
Administrative Agent or as the Administrative Agent shall direct;
(vi)
to
receive payment of and receipt for any and all monies, claims, and other amounts
due and to become due at any time in respect of or arising out of any Pledged
Collateral of such Pledgor;
(vii)
to
sign
and endorse any drafts, assignments, proxies, stock powers, verifications,
notices and other documents relating to the Pledged Collateral of such
Pledgor;
(viii)
to
execute and deliver and/or file all assignments, conveyances, statements,
financing statements, continuation statements, pledge agreements, affidavits,
notices and other agreements, instruments and documents that the Administrative
Agent may determine necessary in order to perfect and maintain the security
interests and Liens granted in this Pledge Agreement and in order to fully
consummate all of the transactions contemplated herein;
10
(ix) to
exchange any of the Pledged Collateral of such Pledgor or other property upon
any merger, consolidation, reorganization, recapitalization or other
readjustment of the issuer thereof and, in connection therewith, deposit any
of
the Pledged Collateral of such Pledgor with any committee, depository, transfer
agent, registrar or other designated agency upon such terms as the
Administrative Agent may determine;
(x)
to
vote
for a shareholder, partner or member resolution, or to sign an instrument in
writing, sanctioning the transfer of any or all of the Pledged Collateral of
such Pledgor into the name of the Administrative Agent or into the name of
any
transferee to whom the Pledged Collateral of such Pledgor or any part thereof
may be sold pursuant to Section 9 hereof; and
(xi)
to
do and
perform all such other acts and things as the Administrative Agent may
reasonably deem to be necessary, proper or convenient in connection with the
Pledged Collateral of such Pledgor.
This
power of attorney is a power coupled with an interest and shall be irrevocable
for so long as any of the Secured Obligations (other than contingent indemnity
obligations that survive termination of the Credit Documents pursuant to
the
stated terms thereof) remain outstanding, any Credit Document or Secured
Hedging
Agreement is in effect, and until all of the Commitments shall have been
terminated. The Administrative Agent shall be under no duty to exercise or
withhold the exercise of any of the rights, powers, privileges and options
expressly or implicitly granted to the Administrative Agent in this Pledge
Agreement, and shall not be liable for any failure to do so or any delay
in
doing so. The Administrative Agent shall not be liable for any act or omission
or for any error of judgment or any mistake of fact or law in its individual
capacity or its capacity as attorney-in-fact except acts or omissions resulting
from its gross negligence or willful misconduct. This power of attorney is
conferred on the Administrative Agent solely to perfect, protect, preserve
and
realize upon its security interest in the Pledged Collateral.
(b)
Assignment
by the Administrative Agent.
The
Administrative Agent may from time to time assign the Secured Obligations or
any
portion thereof and/or the Pledged Collateral or any portion thereof to a
successor Administrative Agent, and the assignee shall be entitled to all of
the
rights and remedies of the Administrative Agent under this Pledge Agreement
in
relation thereto.
(c)
The
Administrative Agent’s Duty of Care.
Other
than the exercise of reasonable care to assure the safe custody of the Pledged
Collateral while being held by the Administrative Agent hereunder, the
Administrative Agent shall have no duty or liability to preserve rights
pertaining thereto, it being understood and agreed that Pledgors shall be
responsible for preservation of all rights in the Pledged Collateral of such
Pledgor, and the Administrative Agent shall be relieved of all responsibility
for the Pledged Collateral upon surrendering it or tendering the surrender
of it
to the Pledgors. The Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Pledged Collateral in
its
possession if such Pledged Collateral is accorded treatment substantially equal
to that which the Administrative Agent accords its own property, which shall
be
no less than the treatment employed by a reasonable and prudent agent in the
industry, it being understood that the Administrative Agent shall not have
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Pledged Collateral, whether or not the Administrative Agent has or is deemed
to
have knowledge of such matters; or (ii) taking any necessary steps to preserve
rights against any parties with respect to any Pledged Collateral.
11
(d)
Voting
Rights in Respect of the Pledged Collateral.
(i) So
long
as no Event of Default shall have occurred and be continuing, to the extent
permitted by law, each Pledgor may exercise any and all voting and other
consensual rights pertaining to the Pledged Collateral of such Pledgor or any
part thereof for any purpose not inconsistent with the terms of this Pledge
Agreement or the Credit Agreement; provided,
however,
that
Pledgor shall not exercise or shall refrain from exercising any such right
if
the Administrative Agent shall have notified the Pledgor that, in the
Administrative Agent’s judgment, such action would have a material adverse
effect on the value of the Pledged Collateral or any part thereof.
(ii)
Upon
the
occurrence and during the continuance of a Default or an Event of Default,
all
rights of a Pledgor to exercise the voting and other consensual rights which
it
would otherwise be entitled to exercise pursuant to paragraph (i) of this
subsection (d) shall cease and all such rights shall thereupon become vested
in
the Administrative Agent which shall then have the sole right to exercise such
voting and other consensual rights.
(e)
Dividend
and Distribution Rights in Respect of the Pledged Collateral.
(i)
So
long
as no Event of Default shall have occurred and be continuing, each Pledgor
may
receive and retain any and all dividends (other than dividends payable in the
form of Capital Stock and other dividends constituting Pledged Collateral which
are required to be delivered to the Administrative Agent pursuant to Section
4
above), distributions or interest paid in respect of the Pledged Collateral
to
the extent they are allowed under the Credit Agreement.
(ii)
Upon
the
occurrence and during the continuation of an Event of Default:
(A)
all
rights of a Pledgor to receive the dividends, distributions and interest
payments which it would otherwise be authorized to receive and retain pursuant
to paragraph (i) of this subsection (e) shall cease and all such rights shall
thereupon be vested in the Administrative Agent which shall then have the sole
right to receive and hold as Pledged Collateral such dividends, distributions
and interest payments; and
12
(B)
all
dividends, distributions and interest payments which are received by a Pledgor
contrary to the provisions of clause (A) of this subsection (ii) shall be
received in trust for the benefit of the Administrative Agent, shall be
segregated from other property or funds of such Pledgor, and shall be forthwith
paid over to the Administrative Agent as Pledged Collateral in the exact form
received, to be held by the Administrative Agent as Pledged Collateral and
as
further collateral security for the Secured Obligations.
(f)
Release
of Pledged Collateral.
The
Administrative Agent may release any of the Pledged Collateral from this Pledge
Agreement or may substitute any of the Pledged Collateral for other Pledged
Collateral without altering, varying or diminishing in any way the force,
effect, Lien, pledge or security interest of this Pledge Agreement as to any
Pledged Collateral not expressly released or substituted, and this Pledge
Agreement shall continue as a first priority Lien on all Pledged Collateral
not
expressly released or substituted.
11.
Application
of Proceeds.
After
the exercise of remedies by the Administrative Agent or the Lenders pursuant
to
Section 9.2 of the Credit Agreement (or after the Commitments shall
automatically terminate and the Loans (with accrued interest thereon) and all
other amounts under the Credit Documents shall automatically become due and
payable in accordance with the terms of such Section), any proceeds of the
Pledged Collateral, when received by the Administrative Agent, any of the
Lenders or any Hedging Agreement Provider in cash or its equivalent, will be
applied in reduction of the Secured Obligations in the order set forth in
Section 3.15 of the Credit Agreement, and each Pledgor irrevocably waives the
right to direct the application of such payments and proceeds and acknowledges
and agrees that the Administrative Agent shall have the continuing and exclusive
right to apply and reapply any and all such proceeds in the Administrative
Agent’s sole discretion, notwithstanding any entry to the contrary upon any of
its books and records.
12.
Costs
of Counsel.
If
at any
time hereafter, whether upon the occurrence of an Event of Default or not,
the
Administrative Agent employs counsel to prepare or consider amendments, waivers
or consents with respect to this Pledge Agreement, or to take action or make
a
response in or with respect to any legal or arbitral proceeding relating to
this
Pledge Agreement or relating to the Pledged Collateral, or to protect the
Pledged Collateral or exercise any rights or remedies under this Pledge
Agreement or with respect to the Pledged Collateral, then the Pledgors agree
to
promptly pay upon demand any and all such reasonable documented costs and
expenses of the Administrative Agent or the Lenders, all of which costs and
expenses shall constitute Secured Obligations hereunder.
13
13.
Continuing
Agreement.
(a)
This
Pledge Agreement shall be a continuing agreement in every respect and shall
remain in full force and effect so long as any of the Secured Obligations (other
than contingent indemnity obligations that survive termination of the Credit
Documents pursuant to the stated terms thereof) remain outstanding, any Credit
Document or Secured Hedging Agreement is in effect, and until all of the
Commitments shall have been terminated. Upon such payment and termination,
this
Pledge Agreement shall be automatically terminated and the Administrative Agent
and the Lenders shall, upon the request and at the expense of the Pledgors,
forthwith release all of the Liens and security interests granted hereunder
and
shall deliver all UCC termination statements and/or other documents reasonably
requested by the Pledgors evidencing such termination. Notwithstanding the
foregoing, all releases and indemnities provided hereunder shall survive
termination of this Pledge Agreement.
(b) This
Pledge Agreement shall continue to be effective or be automatically reinstated,
as the case may be, if at any time payment, in whole or in part, of any of
the
Secured Obligations is rescinded or must otherwise be restored or returned
by
the Administrative Agent or any Lender as a preference, fraudulent conveyance
or
otherwise under any bankruptcy, insolvency or similar law, all as though such
payment had not been made; provided
that in
the event payment of all or any part of the Secured Obligations is rescinded
or
must be restored or returned, all reasonable costs and expenses (including
without limitation any reasonable legal fees and disbursements) incurred by
the
Administrative Agent or any Lender in defending and enforcing such reinstatement
shall be deemed to be included as a part of the Secured
Obligations.
14.
Amendments;
Waivers; Modifications.
This
Pledge Agreement and the provisions hereof may not be amended, waived, modified,
changed, discharged or terminated except as set forth in Section 11.6 of the
Credit Agreement.
15.
Successors
in Interest.
This
Pledge Agreement shall create a continuing security interest in the Pledged
Collateral and shall be binding upon each Pledgor, its successors and assigns
and shall inure, together with the rights and remedies of the Administrative
Agent hereunder, to the benefit of the Administrative Agent and the Lenders
and
their successors and permitted assigns; provided,
however,
that
none of the Pledgors may assign its rights or delegate its duties hereunder
without the prior written consent of each Lender or the Required Lenders, as
required by the Credit Agreement. To the fullest extent permitted by law, each
Pledgor hereby releases the Administrative Agent and each Lender, each of their
respective officers, employees and agents and each of their respective
successors and assigns, from any liability for any act or omission relating
to
this Pledge Agreement or the Pledged Collateral, except for any liability
arising from the gross negligence or willful misconduct of the Administrative
Agent or such Lender or their respective officers, employees and agents, in
each
case as determined by a court of competent jurisdiction.
16.
Notices.
All
notices required or permitted to be given under this Pledge Agreement shall
be
in conformance with Section 11.1 of the Credit Agreement.
14
17.
Counterparts.
This
Pledge Agreement may be executed in any number of counterparts, each of which
where so executed and delivered shall be an original, but all of which shall
constitute one and the same instrument. It shall not be necessary in making
proof of this Pledge Agreement to produce or account for more than one such
counterpart. Delivery of executed counterparts of the Pledge Agreement by
telecopy or other electronic means shall be effective as an original and shall
constitute a representation that an original shall be delivered upon the request
of the Administrative Agent.
18.
Headings.
The
headings of the sections and subsections hereof are provided for convenience
only and shall not in any way affect the meaning, construction or interpretation
of any provision of this Pledge Agreement.
19.
Governing
Law; Submission to Jurisdiction and Service of Process; Waiver of Jury Trial;
Venue.
THIS
PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NORTH CAROLINA. The terms of Sections 11.10 and 11.16 of
the
Credit Agreement are incorporated herein by reference, mutatis
mutandis,
and the
parties hereto agree to such terms.
20.
Severability.
If any
provision of this Pledge Agreement is determined to be illegal, invalid or
unenforceable, such provision shall be fully severable and the remaining
provisions shall remain in full force and effect and shall be construed without
giving effect to the illegal, invalid or unenforceable provisions.
21.
Entirety.
This
Pledge Agreement, the other Credit Documents and any Secured Hedging Agreement
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including
any
commitment letters or correspondence relating to this Pledge Agreement, the
other Credit Documents, any such Secured Hedging Agreement or the transactions
contemplated herein and therein.
22.
Survival.
All
representations and warranties of the Pledgors hereunder shall survive the
execution and delivery of this Pledge Agreement, the other Credit Documents
and
any Secured Hedging Agreement, the delivery of the Notes and the making of
the
Loans and the issuance of the Letters of Credit under the Credit
Agreement.
23.
Joint
and Several Obligations of Pledgors.
(a)
Each
of
the Pledgors is accepting joint and several liability hereunder in consideration
of the financial accommodations to be provided by the Lenders under the Credit
Agreement, for the mutual benefit, directly and indirectly, of each of the
Pledgors and in consideration of the undertakings of each of the Pledgors to
accept joint and several liability for the obligations of each of
them.
15
(b)
Each
of
the Pledgors, jointly and severally hereby irrevocably and unconditionally
accepts, not merely as a surety but also as a co-debtor, joint and several
liability with the other Pledgors with respect to the payment and performance
of
all of the Secured Obligations arising under this Pledge Agreement, the other
Credit Documents and any Hedging Agreement, it being the intention of the
parties hereto that all the Secured Obligations shall be the joint and several
obligations of each of the Pledgors without preferences or distinction among
them.
(c)
Notwithstanding
any provision to the contrary contained herein, in any other of the Credit
Documents or in any Secured Hedging Agreement, to the extent the obligations
of
a Pledgor shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal
law
relating to fraudulent conveyances or transfers) then the obligations of such
Pledgor hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether federal or state and including, without
limitation, the Bankruptcy Code).
24.
Rights
of Required Lenders.
All
rights of the Administrative Agent hereunder, if not exercised by the
Administrative Agent, may be exercised by the Required Lenders.
16
Each
of
the parties hereto has caused a counterpart of this Pledge Agreement to be
duly
executed and delivered as of the date first above written.
| BORROWER: | ||
|
a
Delaware corporation
|
||
| |
|
|
| By: | /s/ Xxxx X. Xxxxxxxx | |
|
|
||
|
Xxxx
X. Xxxxxxxx
|
||
|
President
|
||
|
GUARANTORS:
|
|
|
1500
XXXXXXXX XESTAURANT CORP.,
a
New York corporation
|
|
|
BENIHANA
BETHESDA CORP.,
a
New York corporation
BENIHANA
BRICKELL STATION CORP.,
a
Delaware corporation
BENIHANA
BROOMFIELD CORP.,
a
Delaware corporation
BENIHANA
CARLSBAD CORP.,
a
Delaware corporation
BENIHANA
XXXXXXXX CORP.,
a
Delaware corporation
BENIHANA
CHICAGO CORP.,
a
Delaware corporation
BENIHANA
ENCINO CORP.,
a
California corporation
BENIHANA
INTERNATIONAL CORP.,
a
Delaware corporation
BENIHANA
LINCOLN ROAD CORP.,
a
Florida corporation
BENIHANA
LOMBARD CORP.,
an
Illinois corporation
BENIHANA
MARINA CORP.,
a
California corporation
BENIHANA
MONTEREY CORPORATION,
a
Delaware corporation
BENIHANA
NATIONAL CORP.,
a
Delaware corporation
BENIHANA
NATIONAL OF FLORIDA CORP.,
a
Delaware corporation
BENIHANA
NEW YORK CORP.,
a
Delaware corporation
BENIHANA
ONTARIO CORP.,
a
Delaware corporation
BENIHANA
ORLANDO CORP.,
a
Delaware corporation
|
[signature
pages continue]
|
BENIHANA
PLYMOUTH MEETING CORP.,
a
Delaware corporation
BENIHANA
OF XXXXXX HILLS CORP.,
a
Delaware corporation
BENIHANA
SCHAUMBURG CORP.,
a
Delaware corporation
BENIHANA
SUNRISE CORPORATION,
a
Delaware corporation
BENIHANA
TUCSON CORP.,
a
Delaware corporation
BENIHANA
WESTBURY CORP.,
a
Delaware corporation
BENIHANA
WESTWOOD CORP.,
a
Delaware corporation
BENIHANA
WHEELING CORP.,
a
Delaware corporation
BIG
SPLASH XXXXXXX CORP.,
a
Delaware corporation
HARU
AMSTERDAM AVENUE CORP.,
a
New York corporation
HARU
FOOD CORP.,
a
New York corporation
HARU
GRAMERCY PARK CORP.,
a
New York corporation
HARU
HOLDING CORP.,
a
Delaware corporation
HARU
PARK AVENUE CORP.,
a
Delaware corporation
HARU
PHILADELPHIA CORP.,
a
Delaware corporation
HARU
PRUDENTIAL CORP.,
a
Delaware corporation
HARU
THIRD AVENUE CORP.,
a
New York corporation
HARU
TOO, INC.,
a
New York corporation
HARU
WALL STREET CORP.,
a
Delaware corporation
XXXXXXX’X
INTERNATIONAL INC.,
a
Delaware corporation
NOODLE
TIME, INC.,
a
Florida corporation
RA
AHWATUKEE RESTAURANT CORP.,
a
Delaware corporation
RA
FASHION VALLEY CORP.,
a
Delaware corporation
XX
XXXXXXXX RESTAURANT CORP.,
a
Delaware corporation
RA
SCOTTSDALE CORP.,
a
Delaware corporation
|
[signature
pages continue]
2
|
RA
TEMPE CORP.,
a
Delaware corporation
RA
SUSHI BALTIMORE CORP.,
a
Delaware corporation
RA
SUSHI CHICAGO CORP.,
a
Delaware corporation
RA
SUSHI CORONA CORP.,
a
Delaware corporation
RA
SUSHI DENVER CORP.,
a
Delaware corporation
RA
SUSHI GLENVIEW CORP.,
a
Delaware corporation
RA
SUSHI HUNTINGTON BEACH CORP.,
a
Delaware corporation
RA
SUSHI HOLDING CORP.,
a
Delaware corporation
RA
SUSHI LAS VEGAS CORP.,
a
Nevada corporation
RA
SUSHI LOMBARD CORP.,
a
Delaware corporation
RA
SUSHI MESA CORP.,
a
Delaware corporation
RA
SUSHI PALM BEACH GARDENS CORP.,
a
Delaware corporation
RA
SUSHI SAN DIEGO CORP.,
a
Delaware corporation
RA
SUSHI SOUTH MIAMI CORP.,
a
Delaware corporation
RA
SUSHI TORRANCE CORP.,
a
Delaware corporation
RA
SUSHI TUCSON CORP.,
a
Delaware corporation
RA
SUSHI TUSTIN CORP.,
a
Delaware corporation
RA
SUSHI WESTWOOD CORP.,
a
Delaware corporation
RUDY’S
RESTAURANT GROUP, INC.,
a
Nevada corporation
TEPPAN
RESTAURANTS LTD.,
an
Oregon corporation
THE
SAMURAI, INC.,
a
New York corporation
|
| By: | /s/ Xxxx X. Xxxxxxxx | |
|
|
||
|
Name: Xxxx
X. Xxxxxxxx
|
||
| Title: President of each of the foregoing Guarantors | ||
[signature
pages continue]
3
|
BENIHANA
LAS COLINAS CORP.,
a
Texas corporation
BENIHANA
OF TEXAS, INC.,
a
Texas corporation
BENIHANA
WOODLANDS CORP.,
a
Texas corporation
XX
XXXXXXX CORP.,
a
Texas corporation
RA
SUSHI CITY CENTER CORP.,
a
Texas corporation
RA
SUSHI PLANO CORP.,
a
Texas corporation
|
| By: | /s/ Xxxx X. Xxxxxxxx | |
|
|
||
|
Name: Xxxx
X. Xxxxxxxx
|
||
| Title: Authorized Agent of each of the foregoing Guarantors | ||
4
Accepted
and agreed to as of the date first above written.
|
WACHOVIA
BANK, NATIONAL ASSOCIATION,
as
Administrative Agent
|
||
| By: | ||
|
|
||
|
Name:
|
||
| Title: | ||
