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EXHIBIT 10.2
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (as amended, restated, supplemented, or otherwise
modified, the "Pledge Agreement"), dated as of August 26, 1998, is made by RARE
HOSPITALITY INTERNATIONAL, INC., a corporation organized under the laws of the
state of Georgia (the "Pledgor"), in favor of FIRST UNION NATIONAL BANK, a
national banking association, as Administrative Agent (the "Administrative
Agent"), for the ratable benefit of itself and the financial institutions (the
"Lenders") that are, or may from time to time become, parties to the Credit
Agreement referred to below.
STATEMENT OF PURPOSE
Pursuant to the terms of the Amended and Restated Credit Agreement
dated the date hereof (as amended, restated, supplemented or otherwise modified,
the "Credit Agreement") by and among the Pledgor, as borrower, the Lenders who
are or may become party thereto, the Administrative Agent and BankBoston, N.A.
and Fleet National Bank, as Co-Agents, the Lenders have agreed to make certain
Extensions of Credit to the Pledgor as more particularly described therein.
The Pledgor is the legal and beneficial owner of (a) the shares of
Pledged Stock (as hereinafter defined) issued by certain corporations as
specified on Schedule I attached hereto and incorporated herein by reference
(collectively, the "Issuers") and (b) the Partnership/LLC Interests (as
hereinafter defined) in the partnerships and limited liability companies listed
on Schedule I hereto (collectively, the "Partnerships/LLCs").
In connection with the transactions contemplated by the Credit
Agreement and as a condition precedent thereto, the Lenders have requested, and
the Pledgor has agreed to execute and deliver this Pledge Agreement together
with the Pledged Stock to the Administrative Agent, for the ratable benefit of
itself and the Lenders.
NOW, THEREFORE, in consideration of the foregoing premises and to
induce the Administrative Agent and the Lenders to enter into and make available
Extensions of Credit pursuant to the Credit Agreement, the Pledgor hereby agrees
with the Administrative Agent, for the ratable benefit of itself and the
Lenders, as follows:
1. Defined Terms. Unless otherwise defined herein, terms which are
defined in the Credit Agreement and used herein are so used as so defined, and
the following terms shall have the following meanings:
"Code" means the Uniform Commercial Code as in effect in the
State of North Carolina; provided that if by reason of mandatory
provisions of law, the perfection or the effect of perfection or
non-perfection of the security interests in any Collateral is governed
by the Uniform Commercial Code as in effect in a jurisdiction other
than North Carolina, "Code" means the Uniform Commercial Code as in
effect
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in such other jurisdiction for purposes of the provisions hereof
relating to such perfection or effect of perfection or non-perfection.
"Collateral" means the Stock Collateral and the
Partnership/LLC Collateral.
"Obligations" means the Pledgor's obligations under the Credit
Agreement, and each Loan Document to which such Pledgor is a party.
"Partnership/LLC Collateral" means all of the Partnership/LLC
Interests of the Pledgor in the Partnerships/LLCs and all Proceeds
therefrom.
"Partnership/LLC Interests" means the entire partnership or
membership interest of the Pledgor in each Partnership/LLC listed on
Schedule I hereto, including, without limitation, the Pledgor's capital
account, its interest as a partner or member in the net cash flow, net
profit and net loss, and items of income, gain, loss, deduction and
credit of the Partnerships/LLCs, its interest in all distributions made
or to be made by the Partnerships/LLCs to the Pledgor and all of the
other economic rights, titles and interests of the Pledgor as a partner
or member of the Partnerships/LLCs, whether set forth in the
partnership agreement or membership agreement of the Partnerships/LLCs,
by separate agreement or otherwise.
"Pledge Agreement" means this Pledge Agreement, as amended,
restated, supplemented or otherwise modified from time to time.
"Pledged Stock" means the shares of capital stock of each
Issuer listed on Schedule I hereto, together with all stock
certificates, options or rights of any nature whatsoever that may be
issued or granted by such Issuer to the Pledgor while this Pledge
Agreement is in effect.
"Proceeds" means all "proceeds" as such term is defined in
Section 9-306(1) of the Code on the date hereof and, in any event,
shall include, without limitation, all dividends or other income from
the Pledged Stock and the Partnership/LLC Interests, collections
thereon, proceeds of sale thereof or distributions with respect
thereto.
"Stock Collateral" means the Pledged Stock and all Proceeds
therefrom.
2. Pledge and Grant of Security Interest. The Pledgor hereby delivers
to the Administrative Agent, for the ratable benefit of itself and the Lenders,
all the Pledged Stock and hereby grants to the Administrative Agent, for the
ratable benefit of itself and the Lenders, a first priority security interest in
the Pledged Stock and all other Collateral, as collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations.
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3. Stock Powers; Register of Pledge. Concurrently with the delivery to
the Administrative Agent of each certificate representing one or more shares of
Pledged Stock, the Pledgor shall deliver an undated stock power covering such
certificate, duly executed in blank by the Pledgor with, if the Administrative
Agent so requests, signature guaranteed.
4. Pledgor Remains Liable. Anything herein to the contrary
notwithstanding, (a) the Pledgor shall remain liable to perform all of its
duties and obligations as a partner or member of the Partnerships/LLCs to the
same extent as if this Pledge Agreement had not been executed, (b) the exercise
by the Administrative Agent or any Lender of any of its rights hereunder shall
not release the Pledgor from any of its duties or obligations as a partner or
member of the Partnerships/LLCs, and (c) neither the Administrative Agent nor
any Lender shall have any obligation or liability as a partner or member of the
Partnerships/LLCs by reason of this Pledge Agreement.
5. Representations and Warranties. To induce the Administrative Agent
and the Lenders to execute the Credit Agreement and make any Extensions of
Credit and to accept the security contemplated hereby, the Pledgor hereby makes
to the Administrative Agent and the Lenders all of the representations and
warranties made by the Pledgor in the Credit Agreement and the other Loan
Documents, as if the same was set forth herein in full and additionally
represents and warrants that:
(a) as of the Closing Date, the shares of Pledged Stock listed
on Schedule I constitute all of the issued and outstanding shares of
all classes of the capital stock of each Issuer;
(b) all the shares of the Pledged Stock have been duly and
validly issued and are fully paid and nonassessable;
(c) as of the Closing Date, the Pledgor is the record and
beneficial owner of, and has good and marketable title to, the Pledged
Stock listed on Schedule I, free of any and all Liens or options in
favor of, or claims of, any other Person, except the Lien created by
this Pledge Agreement and the Liens permitted under Section 10.3 of the
Credit Agreement; and
(d) upon delivery to the Administrative Agent of the stock
certificates evidencing the Pledged Stock, the Lien granted pursuant to
this Pledge Agreement will constitute a valid, perfected first priority
Lien on the Collateral, enforceable as such against all creditors of
the Pledgor and any Persons purporting to purchase any of the
Collateral from the Pledgor.
6. Certain Covenants. The Pledgor covenants and agrees with the
Administrative Agent, for the ratable benefit of itself and the Lenders, that,
from and after the date of this Pledge Agreement until the Obligations are paid
in full and the Commitments are terminated:
(a) The Pledgor agrees that as a partner or member in the
Partnerships/LLCs it will abide by, perform and discharge each and
every obligation, covenant and agreement to be abided by, performed or
discharged by the Pledgor under the terms of the partnership
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agreements and operating agreements, as applicable, of the
Partnerships/LLCs, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect, at no cost or
expense to the Administrative Agent and the Lenders.
(b) If the Pledgor shall, as a result of its ownership of the
Collateral, become entitled to receive or shall receive any stock
certificate (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate
issued in connection with any reorganization), whether in addition to,
in substitution of, as a conversion of, or in exchange for any of the
Collateral, or otherwise in respect thereof, the Pledgor shall accept
the same as the agent of the Administrative Agent, hold the same in
trust for the Administrative Agent and deliver the same forthwith to
the Administrative Agent in the exact form received, duly indorsed by
the Pledgor to the Administrative Agent, if required, together with an
undated stock power covering such certificate duly executed in blank by
the Pledgor, to be held by the Administrative Agent, subject to the
terms hereof, as additional collateral security for the Obligations.
Further, if the Pledgor shall, as a result of its ownership of the
Collateral, become entitled to receive or shall receive any options or
rights, whether in addition to, in substitution of, as a conversion of,
or in exchange for any of the Collateral, or otherwise in respect
thereof, the Pledgor shall assign such options or rights as the case
may be to the Administrative Agent, to be held by the Administrative
Agent, subject to the terms hereof, as additional collateral security
for the Obligations. In addition, any sums paid upon or in respect of
the Collateral upon the liquidation or dissolution of any Issuer or
Partnership/LLC shall be held by the Administrative Agent as additional
collateral security for the Obligations.
(c) Without the prior written consent of the Administrative
Agent, the Pledgor will not (i) vote to enable, or take any other
action to permit, any Issuer or Partnership/LLC to issue any stock,
partnership interests, limited liability company interests or other
equity securities of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for any
stock, partnership interests, limited liability company interests or
other equity securities of any nature of such Issuer or Partnership/LLC
except stock, partnership interests, limited liability company
interests or other securities issued to the Pledgor and pledged to the
Administrative Agent pursuant to the terms of this Pledge Agreement,
(ii) sell, assign, transfer, exchange, or otherwise dispose of, or
grant any option with respect to, the Collateral, or (iii) create,
incur or permit to exist any Lien or option in favor of, or any claim
of any Person with respect to, any of the Collateral, or any interest
therein, except for the Lien provided for by this Pledge Agreement and
Liens permitted under Section 10.3 of the Credit Agreement. The Pledgor
will defend the right, title and interest of the Administrative Agent
in and to the Collateral against the claims and demands of all Persons
whomsoever.
(d) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of the
Pledgor, the Pledgor will promptly and duly execute and deliver such
further instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purposes of
obtaining or
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preserving the full benefits of this Pledge Agreement and of the rights
and powers herein granted. If any amount payable under or in connection
with any of the Collateral shall be or become evidenced by any
promissory note, other instrument or chattel paper, such note,
instrument or chattel paper shall be immediately delivered to the
Administrative Agent, duly endorsed in a manner satisfactory to the
Administrative Agent, to be held as Collateral pursuant to this Pledge
Agreement.
(e) The Pledgor agrees to pay, and to save the Administrative
Agent and the Lenders harmless from, any and all liabilities with
respect to, or resulting from any delay in paying, any and all stamp,
excise, sales or other similar taxes which may be payable or determined
to be payable with respect to any of the Collateral or in connection
with any of the transactions contemplated by this Pledge Agreement.
(f) Within ten (10) Business Days following the formation or
acquisition of any Material Subsidiary of the Pledgor, the Pledgor
agrees to execute a new pledge agreement or a supplement to this Pledge
Agreement, as applicable, and such other documents and instruments as
required pursuant to Section 8.12 of the Credit Agreement.
7. Cash Dividends and Distributions; Voting Rights. Unless an Event of
Default shall have occurred and be continuing and the Administrative Agent shall
have given notice to the Pledgor of the Administrative Agent's intent to
exercise its rights pursuant to Paragraph 8 below, the Pledgor shall be
permitted to receive all cash dividends and shareholder, partnership and
membership distributions paid in accordance with the terms of the Credit
Agreement in respect of the Collateral and to exercise all voting and corporate,
partnership or membership rights, as applicable, with respect to the Collateral;
provided, that no vote shall be cast or corporate, partnership or membership
right exercised or other action taken which would impair in any material respect
the Collateral or which would result in any violation of any provision of the
Credit Agreement, the Notes, this Pledge Agreement or any other Loan Document.
8. Rights of the Administrative Agent.
(a) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the Pledgor, (i) the Administrative Agent shall have the right to receive any
and all cash dividends paid in respect of the Pledged Stock and partnership and
membership distributions in respect of the Partnership/LLC Interests and make
application thereof to the Obligations in the order set forth in Section 4.5 of
the Credit Agreement and (ii) all shares of the Pledged Stock and the
Partnership/LLC Interests shall be registered in the name of the Administrative
Agent or its nominee, and the Administrative Agent or its nominee may thereafter
exercise (A) all voting, corporate, partnership, membership and other rights
pertaining to such shares of the Pledged Stock or Partnership/LLC Interests at
any meeting of shareholders, partners or members of the applicable Issuer or
Partnership/LLC or otherwise and (B) any and all rights of conversion, exchange,
subscription and any other rights, privileges or options pertaining to such
shares of the Pledged Stock or Partnership/LLC Interests as if it were the
absolute owner thereof (including, without limitation, the right to exchange at
its discretion any and all of the Pledged Stock or Partnership/LLC Interests
upon the merger, consolidation, reorganization,
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recapitalization or other fundamental change in the corporate structure of the
applicable Issuer or Partnership/LLC, or upon the exercise by the Pledgor or the
Administrative Agent of any right, privilege or option pertaining to such shares
of the Pledged Stock or the Partnership/LLC Interests, and in connection
therewith, the right to deposit and deliver any and all of the Pledged Stock or
the Partnership/LLC Interests with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as it may
determine), all without liability except to account for property actually
received by it, but the Administrative Agent shall have no duty to the Pledgor
to exercise any such right, privilege or option and shall not be responsible for
any failure to do so or delay in so doing.
(b) The rights of the Administrative Agent and the Lenders hereunder
shall not be conditioned or contingent upon the pursuit by the Administrative
Agent or any Lender of any right or remedy against the Pledgor or against any
other Person which may be or become liable in respect of all or any part of the
Obligations or against any collateral security therefor, guarantee thereof or
right of offset with respect thereto. Neither the Administrative Agent nor any
Lender shall be liable for any failure to demand, collect or realize upon all or
any part of the Collateral or for any delay in doing so, nor shall the
Administrative Agent be under any obligation to sell or otherwise dispose of any
Collateral upon the request of the Pledgor or any other Person or to take any
other action whatsoever with regard to the Collateral or any part thereof.
9. Remedies. If an Event of Default shall occur and be continuing, upon
the request of the Required Lenders, the Administrative Agent shall exercise, on
behalf of itself and the Lenders, all rights and remedies granted in this Pledge
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, and in addition thereto, all rights and remedies of
a secured party under the Code. Without limiting the generality of the foregoing
with regard to the scope of the Administrative Agent's remedies, the
Administrative Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by Applicable Law referred to below) to or upon the Pledgor, any
Issuer, any Partnership/LLC or any other Person (all and each of which demands,
defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, assign, give option
or options to purchase or otherwise dispose of and deliver the Collateral or any
part thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, in the over-the-counter market, at any
exchange, broker's board or office of the Administrative Agent or any Lender or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Administrative Agent or any Lender shall have
the right upon any such public sale or sales, and, to the extent permitted by
Applicable Law, upon any such private sale or sales, to purchase the whole or
any part of the Collateral so sold, free of any right or equity of redemption in
the Pledgor, which right or equity is hereby waived or released. The
Administrative Agent shall apply any Proceeds from time to time held by it and
the net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of every
kind incurred in respect thereof or incidental to the care or safekeeping of any
of the Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the Lenders hereunder, including, without limitation,
reasonable attorneys' fees and disbursements of counsel thereto, to the
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payment in whole or in part of the Obligations, in the order set forth in
Section 4.5 of the Credit Agreement, and only after such application and after
the payment by the Administrative Agent of any other amount required by any
provision of Applicable Law, including, without limitation, Section 9-504(1)(c)
of the Code, need the Administrative Agent account for the surplus, if any, to
the Pledgor. To the extent permitted by Applicable Law, the Pledgor waives all
claims, damages and demands it may acquire against the Administrative Agent or
any Lender arising out of the exercise by them of any rights hereunder. If any
notice of a proposed sale or other disposition of Collateral shall be required
by Applicable Law, such notice shall be deemed reasonable and proper if given at
least five (5) Business Days before such sale or other disposition. The Pledgor
further waives and agrees not to assert any rights or privileges which it may
acquire under Section 9-112 of the Code. Nothing in this Section 9 or otherwise
in this Pledge Agreement shall be construed to require the Administrative Agent
to give any notice of an action not otherwise required by Applicable Law and the
express provision of the Pledge Agreement, the Credit Agreement or any other
Loan Document.
10. Private Sales.
(a) The Pledgor recognizes that the Administrative Agent may be unable
to effect a public sale of any or all the Pledged Stock, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws or otherwise, and may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers which will be obliged to agree,
among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof. The
Pledgor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Administrative
Agent shall be under no obligation to delay a sale of any of the Pledged Stock
for the period of time necessary to permit the applicable Issuer to register
such securities for public sale under the Securities Act, or under applicable
state securities laws, even if the applicable Issuer would agree to do so.
(b) The Pledgor further agrees to use commercially reasonable efforts
to do or cause to be done all such other acts as may be necessary to make such
sale or sales of all or any portion of the Collateral pursuant to this Paragraph
10 valid and binding and in compliance with any and all other Applicable Laws.
The Pledgor further agrees that a breach of any of the covenants contained in
this Paragraph 10 will cause irreparable injury to the Administrative Agent and
the Lenders not compensable in damages, that the Administrative Agent and the
Lenders have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Paragraph 10 shall
be specifically enforceable against the Pledgor, and the Pledgor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no Event of Default has occurred
under the Credit Agreement.
11. Amendments, etc. With Respect to the Obligations. The Pledgor shall
remain obligated hereunder, and the Collateral shall remain subject to the Lien
granted hereby, notwithstanding that, without any reservation of rights against
the Pledgor, and without notice to or further assent by the Pledgor, any demand
for payment of any of the Obligations made by the
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Administrative Agent or any Lender may be rescinded by the Administrative Agent
or such Lender, and any of the Obligations continued, and the Obligations, or
the liability of the Pledgor or any other Person upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered, or released by
the Administrative Agent or any Lender, and the Credit Agreement, the Notes, any
other Loan Documents and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or terminated, in
whole or part, as the Lenders (or the Required Lenders, as the case may be) may
deem advisable from time to time, and any guarantee, right of offset or other
collateral security at any time held by the Administrative Agent or any Lender
for the payment of the Obligations may be sold, exchanged, waived, surrendered
or released. Neither the Administrative Agent nor any Lender shall have any
obligation to protect, secure, perfect or insure any other Lien at any time held
by it as security for the Obligations or any property subject thereto. The
Pledgor waives any and all notice of the creation, renewal, extension or accrual
of any of the Obligations and notice of or proof of reliance by the
Administrative Agent or any Lender upon this Pledge Agreement; the Obligations,
and any of them, shall conclusively be deemed to have been created, contracted
or incurred in reliance upon this Pledge Agreement; and all dealings between the
Pledgor, on the one hand, and the Administrative Agent and the Lenders, on the
other, shall likewise be conclusively presumed to have been had or consummated
in reliance upon this Pledge Agreement. The Pledgor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Pledgor with respect to the Obligations.
12. Limitation on Duties Regarding Collateral. The Administrative
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the
Code or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar securities and property for its own
account. Neither the Administrative Agent, any Lender nor any of their
respective directors, officers, employees or agents shall be liable for failure
to demand, collect or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of the Pledgor or otherwise.
13. Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Collateral constitute irrevocable powers
coupled with an interest.
14. Severability. Any provision of this Pledge Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
15. Paragraph Headings. The paragraph headings used in this Pledge
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
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16. No Waiver; Cumulative Remedies. Neither the Administrative Agent
nor any Lender shall by any act (except by a written instrument pursuant to
Paragraph 17 hereof) be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of Default or in any breach of any of
the terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Administrative Agent or any Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent or such Lender would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.
17. Waivers and Amendments; Successors and Assigns; Governing Law. None
of the terms or provisions of this Pledge Agreement may be amended, supplemented
or otherwise modified except by a written instrument executed by the Pledgor and
the Administrative Agent; provided that any consent by the Administrative Agent
to any waiver, amendment, supplement or modification hereto shall be subject to
approval thereof by the Lenders or Required Lenders, as applicable, in
accordance with Section 13.11 of the Credit Agreement. This Pledge Agreement
shall be binding upon the successors and assigns of the Pledgor and shall inure
to the benefit of the Administrative Agent, the Lenders and their respective
successors and assigns. This Pledge Agreement shall be governed by, and
construed and interpreted in accordance with, the laws of the State of North
Carolina.
18. Notices. All notices and communications hereunder shall be given to
the addresses and otherwise in accordance with Section 13.1 of the Credit
Agreement.
19. Control Agreement; Acknowledgement by Issuers and Partnership/LLC.
(a) The Pledgor hereby authorizes and instructs each Issuer and Partnership/LLC
to comply, and each Issuer and Partnership LLC hereby agrees to so comply, with
any instruction received thereby from the Administrative Agent in accordance
with the terms of this Pledge Agreement with respect to the Collateral, without
any consent or further instructions from the Pledgor (or other registered
owner), and the Pledgor agrees that such Issuer and Partnership/LLC shall be
fully protected in so complying. Each Issuer and Partnership/LLC agrees that its
agreement set forth in the preceding sentence shall be sufficient to create in
favor of the Administrative Agent, for the benefit of the Lenders, "control" of
the Partnership/LLC Interests within the meaning of such term under Section
8-106(c) of the Code. (Notwithstanding the foregoing, nothing in this Pledge
Agreement is intended or shall be construed to mean or imply that the
Partnership/LLC Interests constitute "securities" within the meaning of such
term under Section 8-102(a)(15) of the Code or otherwise to limit or modify the
application of Section 8-103(c) of the Code. Rather, the Administrative Agent
has requested that this provision be included in this Pledge Agreement solely
out of an abundance of caution in the event the Partnership/LLC Interests are,
nevertheless, deemed to constitute "securities" under the Code.)
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(b) Each Issuer and Partnership/LLC acknowledges receipt of a copy of
this Pledge Agreement and agrees to be bound thereby and to comply with the
terms thereof insofar as such terms are applicable to it. Each Issuer and
Partnership/LLC agrees to notify the Administrative Agent promptly in writing of
the occurrence of any of the events described in Section 6(c) of this Pledge
Agreement. Each Issuer and Partnership/LLC further agrees that the terms of
Section 10 of this Pledge Agreement shall apply to it with respect to all
actions that may be required of it under or pursuant to or arising out of
Section 10 of this Pledge Agreement.
20. Authority of Administrative Agent. The Pledgor acknowledges that
the rights and responsibilities of the Administrative Agent under this Pledge
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Pledge Agreement shall, as between the
Administrative Agent and the Lenders, be governed by the Credit Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Administrative Agent and the Pledgor, the
Administrative Agent shall be conclusively presumed to be acting as agent for
itself and the Lenders with full and valid authority so to act or refrain from
acting, and neither the Pledgor nor any Issuer or Partnership/LLC shall be under
any obligation, or entitlement, to make any inquiry respecting such authority.
21. Consent to Jurisdiction. The Pledgor hereby irrevocably consents to
the personal jurisdiction of the state and federal courts located in Mecklenburg
County, North Carolina, in any action, claim or other proceeding arising out of
or any dispute in connection with this Pledge Agreement, any rights or
obligations hereunder, or the performance of such rights and obligations. The
Pledgor hereby irrevocably consents to the service of a summons and complaint
and other process in any action, claim or proceeding brought by the
Administrative Agent or any Lender in connection with this Pledge Agreement, any
rights or obligations hereunder, or the performance of such rights and
obligations, on behalf of itself or its property, in the manner provided in
Section 13.1 of the Credit Agreement. Nothing in this Paragraph 21 shall affect
the right of the Administrative Agent or any Lender to serve legal process in
any other manner permitted by Applicable Law or affect the right of the
Administrative Agent or any Lender to bring any action or proceeding against the
Pledgor or its properties in the courts of any other jurisdictions.
22. Binding Arbitration; Waiver of Jury Trial.
(a) Binding Arbitration. Upon demand of any party, whether made before
or after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to this Pledge Agreement
or any other Loan Document ("Disputes"), between or among parties to this Pledge
Agreement or any other Loan Document shall be resolved by binding arbitration as
provided herein. Institution of a judicial proceeding by a party does not waive
the right of that party to demand arbitration hereunder. Disputes may include,
without limitation, tort claims, counterclaims, claims brought as class actions,
claims arising from Loan Documents executed in the future, or claims concerning
any aspect of the past, present or future relationships arising out of or
connected with the Loan Documents. Arbitration shall be conducted under and
governed by the Commercial Financial Disputes Arbitration Rules (the
"Arbitration Rules") of the
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American Arbitration Association and Title 9 of the U.S. Code. All arbitration
hearings shall be conducted in Charlotte, North Carolina. The expedited
procedures set forth in Rule 51, et seq. of the Arbitration Rules shall be
applicable to claims of less than $1,000,000. All applicable statutes of
limitation shall apply to any Dispute. A judgment upon the award may be entered
in any court having jurisdiction. Notwithstanding anything foregoing to the
contrary, any arbitration proceeding demanded hereunder shall begin within
ninety (90) days after such demand thereof and shall be concluded within
one-hundred and twenty (120) days after such demand. These time limitations may
not be extended unless a party hereto shows cause for extension and then such
extension shall not exceed a total of sixty (60) days. The panel from which all
arbitrators are selected shall be comprised of licensed attorneys. The single
arbitrator selected for expedited procedure shall be a retired judge from the
highest court of general jurisdiction, state or federal, of the state where the
hearing will be conducted. The parties hereto do not waive any applicable
Federal or state substantive law except as provided herein. Notwithstanding the
foregoing, this paragraph shall not apply to any Hedging Agreement that is a
Loan Document.
(b) Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
ADMINISTRATIVE AGENT, EACH LENDER AND THE PLEDGOR HEREBY IRREVOCABLY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER
PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE
NOTES OR THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR
THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
(c) Preservation of Certain Remedies. Notwithstanding the preceding
binding arbitration provisions, the parties hereto and the other Loan Documents
preserve, without diminution, certain remedies that such Persons may employ or
exercise freely, either alone, in conjunction with or during a Dispute. Each
such Person shall have and hereby reserves the right to proceed in any court of
proper jurisdiction or by self help to exercise or prosecute the following
remedies: (i) all rights to foreclose against any real or personal property or
other security by exercising a power of sale granted in the Loan Documents or
under applicable law or by judicial foreclosure and sale, (ii) all rights of
self help including peaceful occupation of property and collection of rents, set
off, and peaceful possession of property, (iii) obtaining provisional or
ancillary remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and in filing an involuntary bankruptcy
proceeding, and (iv) when applicable, a judgment by confession of judgment.
Preservation of these remedies does not limit the power of an arbitrator to
grant similar remedies that may be requested by a party in a Dispute.
23. Entire Agreement; Term of Agreement. This Pledge Agreement,
together with the other Loan Documents, constitutes the entire agreement with
respect to the subject matter hereof and supersedes all prior agreements with
respect to the subject matter hereof. This Pledge Agreement shall remain in
effect from the Closing Date through and including the date upon which all
Obligations shall have been indefeasibly and irrevocably paid and satisfied in
full and the Commitments terminated.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the undersigned have caused this Pledge Agreement
to be duly executed and delivered as of the date first above written.
[CORPORATE SEAL] RARE HOSPITALITY INTERNATIONAL, INC.
By: /s/
----------------------------------
Name:
--------------------------------
Title:
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[CORPORATE SEAL] BUGABOO CREEK STEAK HOUSE, INC.
By: /s/
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Name:
--------------------------------
Title:
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SCHEDULE I
To Pledge
Agreement
DESCRIPTION OF PLEDGED STOCK
Subsidiaries
===================================================================================================================================
Percentage of
all Outstanding
No. of Shares issued
Issuer Class of Stock Certificate No. Capital Stock
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Bugaboo Creek Steak House, Common 2 1,000 100%
Inc.
-----------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF PARTNERSHIP/LLC INTEREST
Partnerships/LLCs
-----------------
Partnership/LLC Partnership/LLC Interest
--------------- ------------------------
None
