Exhibit 10.3

 

 

GUARANTEE AND RESERVE ACCOUNT AGREEMENT

dated as of August 6, 2020

by

MSG ENTERTAINMENT GROUP, LLC

in favor of

JPMORGAN CHASE BANK, N.A.,

as Collateral Agent

 

 

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

         Page   ARTICLE I
DEFINITIONS AND INTERPRETATION

 

Section 1.1

 

Definitions

     1  

Section 1.2

 

Interpretation

     2   ARTICLE II
GUARANTEE

 

Section 2.1

 

Guarantee

     2  

Section 2.2

 

Guarantee of Payment; Continuing Guarantee

     2  

Section 2.3

 

No Limitations

     3  

Section 2.4

 

Reinstatement

     4  

Section 2.5

 

Agreement to Pay; Subrogation

     4  

Section 2.6

 

Information

     4   ARTICLE III
REPRESENTATIONS AND WARRANTIES

 

ARTICLE IV
INDEMNITY, SUBROGATION, CONTRIBUTION AND SUBORDINATION

 

Section 4.1

 

Indemnity and Subrogation

     5  

Section 4.2

 

Contribution and Subrogation

     5  

Section 4.3

 

Subordination

     6   ARTICLE V
COVENANTS

 

Section 5.1

 

Minimum Liquidity Covenant

     6  

Section 5.2

 

Debt Service Reserve Account

     6  

Section 5.3

 

Reporting Requirement

     7   ARTICLE VI
MISCELLANEOUS

 

Section 6.1

 

Notices

     8  

Section 6.2

 

Waivers; Amendments

     8  

Section 6.3

 

Collateral Agent’s Fees and Expenses; Indemnification

     8  

Section 6.4

 

Survival

     9  

Section 6.5

 

Counterparts; Effectiveness; Successors and Assigns

     9  

Section 6.6

 

Severability

     10  

 

i

--------------------------------------------------------------------------------

Section 6.7

 

Right of Set-Off

     10  

Section 6.8

 

Governing Law; Jurisdiction; Consent to Service of Process

     10  

Section 6.9

 

WAIVER OF JURY TRIAL

     11  

Section 6.10

 

Headings

     11  

Section 6.11

 

Termination or Release

     11  

 

ii

--------------------------------------------------------------------------------

GUARANTEE AND RESERVE ACCOUNT AGREEMENT

GUARANTEE AND RESERVE ACCOUNT AGREEMENT, dated as of August 6, 2020, by MSG
ENTERTAINMENT GROUP, LLC, a Delaware limited liability company (“MSGE”), in
favor of JPMORGAN CHASE BANK, N.A., as Collateral Agent (in such capacity, the
“Collateral Agent”) under the Credit Agreement, dated as of May 23, 2019 (as
amended by Amendment No. 1 to Credit Agreement, dated as of August 6, 2020, and
as further amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Tao Group Operating LLC (the “Borrower”), Tao Group
Intermediate Holdings LLC (“Intermediate Holdings”), the Lenders from time to
time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent and as
Collateral Agent.

W I T N E S S E T H:

WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to
make extensions of credit to the Borrower upon the terms and subject to the
conditions set forth therein; and

WHEREAS, MSGE will receive direct and indirect benefits as a result of the
continued making of extensions of credit to the Borrower under the Credit
Agreement;

NOW, THEREFORE, in consideration of the premises and the agreements hereinafter
set forth under the Credit Agreement, MSGE hereby provides the guarantee set
forth herein in favor of the Collateral Agent, for the benefit of the Secured
Parties, as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

SECTION 1.1 Definitions.

(a) Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.

(b) The following terms shall have the following meanings:

“Agreement” means this Guarantee and Reserve Account Agreement, as the same may
be amended, supplemented or otherwise modified from time to time.

“Ancillary Document” has the meaning assigned to such term in Section 6.5.

“Claiming Party” has the meaning assigned to such term in Section 4.2.

“Contributing Party” has the meaning assigned to such term in Section 4.2.

“Indemnified Amount” has the meaning assigned to such term in Section 4.2.

 

1

--------------------------------------------------------------------------------

“MSGE Liquidity” means, as at any date of determination and without duplication,
an amount equal to the sum of (i) unrestricted Cash and Permitted Investments of
MSGE (excluding (A) any Investments described in clause (i) of the definition of
“Permitted Investments” in the Credit Agreement and (B) Cash or Permitted
Investments held in any foreign Deposit Account or foreign Securities Account),
plus (ii) Consolidated Liquidity, plus (iii) the amount held in the Reserve
Account at such time.

“MSGE Material Adverse Effect” means a material adverse effect on (a) the
business, assets, operations or financial condition of MSGE and its
Subsidiaries, taken as a whole or (b) the ability of MSGE to perform its
obligations under this Agreement.

“Reserve Account” means the Deposit Account in the name of MSGE and administered
by, and maintained with, the Collateral Agent for the sole purpose of complying
with MSGE’s obligations under Section 5.2, which Deposit Account shall be
interest-bearing.

“Secured Obligations” has the meaning assigned to such term in the Security
Agreement.

SECTION 1.2 Interpretation.

(a) The rules of interpretation specified in the Credit Agreement (including
Section 1.03 thereof) shall be applicable to this Agreement, mutatis mutandis.

(b) The expressions “payment in full,” “paid in full” and any other similar
terms or phrases when used herein shall mean payment in cash in immediately
available funds (other than in respect of unmatured contingent indemnification
and expense reimbursement obligations).

ARTICLE II

GUARANTEE

SECTION 2.1 Guarantee. MSGE irrevocably and unconditionally guarantees, jointly
with the other Guarantors and severally, as a primary obligor and not merely as
a surety, the due and punctual payment and performance of the Secured
Obligations. MSGE further agrees that the Secured Obligations may be extended or
renewed, in whole or in part, or amended or modified, without notice to or
further assent from it, and that it will remain bound upon its guarantee
hereunder notwithstanding any extension, renewal, amendment or modification of
any Secured Obligation. MSGE waives presentment to, demand of payment from and
protest to the Borrower or any other Loan Party of any of the Secured
Obligations, and also waives notice of acceptance of its guarantee hereunder and
notice of protest for nonpayment.

SECTION 2.2 Guarantee of Payment; Continuing Guarantee. MSGE further agrees that
its guarantee hereunder constitutes a guarantee of payment when due (whether or
not any bankruptcy, insolvency, receivership or other similar proceeding shall
have stayed the accrual or collection of any of the Secured Obligations or
operated as a discharge thereof) and not merely of collection, and waives any
right to require that any resort be had by the Collateral Agent or any other
Secured Party to any security held for the payment of the Secured Obligations or
to any balance of any deposit account or credit on the books of the Collateral
Agent or any other Secured Party in favor of the Borrower, any other Loan Party
or any other Person. MSGE agrees that its guarantee hereunder is continuing in
nature and applies to all Secured Obligations, whether currently existing or
hereafter incurred.

 

2

--------------------------------------------------------------------------------

SECTION 2.3 No Limitations.

(a) Except for the termination or release of MSGE’s obligations hereunder as
expressly provided in Section 6.11, the obligations of MSGE hereunder shall not
be subject to any reduction, limitation, impairment or termination for any
reason, including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense or set-off, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Secured Obligations, any impossibility in the
performance of the Secured Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of MSGE hereunder shall not be
discharged or impaired or otherwise affected by (i) the failure of the
Collateral Agent or any other Secured Party to assert any claim or demand or to
enforce any right or remedy under the provisions of any Loan Document or
otherwise; (ii) any rescission, waiver, amendment or modification of, or any
release from any of the terms or provisions of, any Loan Document or any other
agreement, including with respect to any other Guarantor; (iii) the release of,
or any impairment of or failure to perfect any Lien on or security interest in,
any security held by the Collateral Agent or any other Secured Party for any of
the Secured Obligations; (iv) any default, failure or delay, wilful or
otherwise, in the performance of any of the Secured Obligations; or (v) any
other act or omission that may or might in any manner or to any extent vary the
risk of any Guarantor or otherwise operate as a discharge of any Guarantor as a
matter of law or equity (other than the payment in full in cash of all the
Secured Obligations (other than contingent obligations for indemnification,
expense reimbursement, tax gross up or yield protection as to which no claim has
been made)). MSGE expressly authorizes the Collateral Agent, on behalf of the
Secured Parties, to take and hold security for the payment and performance of
the Secured Obligations, to exchange, waive or release any or all such security
(with or without consideration), to enforce or apply such security and direct
the order and manner of any sale thereof in their sole discretion or to release
or substitute any one or more other guarantors or obligors upon or in respect of
the Secured Obligations, all without affecting the obligations of MSGE
hereunder.

(b) To the fullest extent permitted by applicable law, MSGE waives any defense
based on or arising out of any defense of the Borrower or any other Loan Party
or the unenforceability of the Secured Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of the Borrower or any
other Loan Party, other than the payment in full in cash of all the Secured
Obligations (other than contingent obligations for indemnification, expense
reimbursement, tax gross up or yield protection as to which no claim has been
made). Subject to Section 5.4, the Collateral Agent and the other Secured
Parties may, at their election, foreclose on any security held by one or more of
them by one or more judicial or nonjudicial sales, accept an assignment of any
such security in lieu of foreclosure, compromise or adjust any part of the
Secured Obligations, make any other accommodation with the Borrower or any other
Loan Party or exercise any other right or remedy available to them against the
Borrower or any other Loan Party, without affecting or impairing in any way the
liability of MSGE hereunder except to the extent the Secured Obligations have
been paid in full in cash (other than contingent obligations for
indemnification, expense reimbursement, tax gross up or

 

3

--------------------------------------------------------------------------------

yield protection as to which no claim has been made). To the fullest extent
permitted by applicable law, MSGE waives any defense arising out of any such
election even though such election operates, pursuant to applicable law, to
impair or to extinguish any right of reimbursement or subrogation or other right
or remedy of MSGE against the Borrower or any other Loan Party, as the case may
be, or any security.

SECTION 2.4 Reinstatement. MSGE agrees that this Agreement and its guarantee
hereunder shall continue to be effective or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any Secured Obligation is
rescinded or must otherwise be restored by the Collateral Agent or any other
Secured Party upon the bankruptcy, insolvency, dissolution, liquidation or
reorganization of the Borrower, any other Loan Party or otherwise.

SECTION 2.5 Agreement to Pay; Subrogation. In furtherance of the foregoing and
not in limitation of any other right that the Collateral Agent or any other
Secured Party has at law or in equity against MSGE by virtue hereof, upon the
failure of the Borrower or any other Loan Party to pay any Secured Obligation
when and as the same shall become due, whether at maturity, by acceleration,
after notice of prepayment or otherwise, MSGE hereby promises to and will
promptly pay, or cause to be paid, to the Collateral Agent for distribution to
the applicable Secured Parties in cash the amount of such unpaid Secured
Obligation. Upon payment by MSGE of any sums to the Collateral Agent as provided
above, all rights of MSGE against the Borrower or any other Loan Party arising
as a result thereof by way of right of subrogation, contribution, reimbursement,
indemnity or otherwise shall in all respects be subject to Article IV.

SECTION 2.6 Information. MSGE (a) assumes all responsibility for being and
keeping itself informed of the Borrower’s and each other Loan Party’s financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Secured Obligations and the nature, scope and extent of the
risks that MSGE assumes and incurs hereunder, and (b) agrees that none of the
Collateral Agent or the other Secured Parties will have any duty to advise MSGE
of information known to it or any of them regarding such circumstances or risks.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

MSGE represents and warrants to the Collateral Agent and the other Secured
Parties that as of the date of this Agreement:

(a) entering into this Agreement and performance hereunder (i) will not violate
or result in a default under any indenture, agreement or other instrument
binding upon MSGE, except to the extent that such violation or default could not
reasonably be expected to have a MSGE Material Adverse Effect, and (ii) will not
result in the creation or imposition of, or the requirement to create, any lien
upon any property of MSGE, except as otherwise set forth herein;

(b) MSGE is duly organized or formed, validly existing and in good standing
under the laws of the State of Delaware, has all requisite power and authority
to carry on its business as now conducted and is qualified to do business in,
and is in good standing in, each jurisdiction where such qualification is
required except where the failure to so qualify and be in good standing would
not reasonably be expected to result in a MSGE Material Adverse Effect;

 

4

--------------------------------------------------------------------------------

(c) the execution and delivery by MSGE of this Agreement, and the performance by
MSGE of its obligations hereunder, (i) are within MSGE’s organizational powers,
(ii) have been duly authorized by all necessary organizational action, (iii) do
not violate any law or regulation applicable to MSGE, except to the extent such
violation could not reasonably be expected to have a MSGE Material Adverse
Effect, and (iv) do not require the consent or approval of, or registration or
filing with, or any other action by, any Governmental Authority which has not
already been obtained or made and is in full force and effect, except those
consents, approvals, registrations, filings or other actions the absence of
which would not (A) reasonably be expected to impair or delay in any material
respect MSGE’s ability to perform its obligations hereunder or to consummate the
transactions contemplated hereby or (II) be material to the business, financial
condition or operating results of MSGE and its Subsidiaries, taken as a whole;

(d) there are no bankruptcy proceedings pending or being contemplated by MSGE
or, to its knowledge, threatened against it in writing, and there are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending or, to MSGE’s knowledge, threatened against or affecting MSGE
or its Subsidiaries as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected to
result in a MSGE Material Adverse Effect; and

(e) this Agreement constitutes the legal, valid and binding obligation of MSGE
enforceable against MSGE in accordance with its terms, except to the extent that
such enforceability may be limited by applicable bankruptcy, insolvency,
dissolution, reorganization, moratorium, liquidation or other similar laws
affecting creditors’ rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).

ARTICLE IV

INDEMNITY, SUBROGATION, CONTRIBUTION AND SUBORDINATION

SECTION 4.1 Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as MSGE may have under applicable law (but subject to
Section 4.3), each of Intermediate Holdings and the Borrower agrees that (a) in
the event a payment in respect of any Secured Obligation shall be made by MSGE
under this Agreement, Intermediate Holdings and the Borrower shall indemnify
MSGE for the full amount of such payment and MSGE shall be subrogated to the
rights of the Person to whom such payment shall have been made to the extent of
such payment.

SECTION 4.2 Contribution and Subrogation. MSGE (the “Contributing Party”) agrees
(subject to Section 4.3) that, in the event a payment shall be made by any other
Guarantor other than Intermediate Holdings or the Borrower under the Security
Agreement in respect of any Secured Obligation or assets of any Grantor (as
defined in the Security Agreement) other than Intermediate Holdings or the
Borrower shall be sold pursuant to any Security Document to satisfy any Secured
Obligation and such other Grantor (as defined in the Security Agreement) or

 

5

--------------------------------------------------------------------------------

Guarantor (the “Claiming Party”) shall not have been fully indemnified by
Intermediate Holdings or the Borrower as provided in Section 4.1, the
Contributing Party shall indemnify the Claiming Party in an amount equal to the
amount of such payment or the greater of the book value or the fair market value
of such assets (the “Indemnified Amount”), as the case may be, in each case
multiplied by a fraction of which the numerator shall be the net worth of the
Contributing Party on the date hereof and the denominator shall be the aggregate
net worth of all the Contributing Parties (as defined in the Security Agreement)
on the date hereof. The Contributing Party shall (subject to Section 4.3) be
subrogated to the rights of the Claiming Party under Section 4.1 to the extent
of the payment made to such Claiming Party pursuant to this Section 4.2.
Notwithstanding the foregoing, to the extent that the Claiming Party’s right to
indemnification hereunder arises from a payment or sale of Collateral made to
satisfy Secured Obligations constituting Swap Obligations, only those
Contributing Parties (as defined in the Security Agreement) for whom such Swap
Obligations do not constitute Excluded Swap Obligations shall indemnify the
Claiming Party, with the fraction set forth in the second preceding sentence
being modified as appropriate to provide for indemnification of the entire
Indemnified Amount.

SECTION 4.3 Subordination.

(a) Notwithstanding any provision of this Agreement to the contrary, all rights
of MSGE under Sections 4.1 and 4.2 and all other rights of MSGE of indemnity,
contribution or subrogation under applicable law or otherwise shall be fully
subordinated to the payment in full in cash of the Secured Obligations (other
than contingent obligations for indemnification, expense reimbursement, tax
gross up or yield protection as to which no claim has been made). No failure on
the part of the Borrower or any other Guarantor or Grantor (as defined in the
Security Agreement) to make the payments required by Sections 4.1 and 4.2 (or
any other payments required under applicable law or otherwise) shall in any
respect limit the obligations and liabilities of MSGE with respect to its
obligations hereunder to the Collateral Agent and the other Secured Parties, and
MSGE shall remain liable for the full amount of such obligations of MSGE
hereunder.

(b) MSGE hereby agrees that all Indebtedness and other monetary obligations owed
by it to, or to it by, any other Guarantor, Grantor (as defined in the Security
Agreement) or any other Subsidiary of the Borrower shall be fully subordinated
to the payment in full in cash of the Secured Obligations (other than contingent
obligations for indemnification, expense reimbursement, tax gross up or yield
protection as to which no claim has been made).

ARTICLE V

COVENANTS

SECTION 5.1 Minimum Liquidity Covenant. MSGE shall not permit MSGE Liquidity to
be less than $75,000,000 at any time.

SECTION 5.2 Debt Service Reserve Account.

(a) Within 30 days (as such time period may be extended by the Collateral Agent
in its reasonable discretion) of the date of this Agreement, MSGE shall
(i) establish the Reserve Account, (ii) cause the Reserve Account to be subject
to a control agreement, in form and substance

 

6

--------------------------------------------------------------------------------

reasonably satisfactory to the Collateral Agent, and (iii) deposit proceeds in
the Reserve Account in an aggregate amount equal to $9,760,000, it being
understood and agreed that such amount shall be reduced upon receipt by the
Administrative Agent of any scheduled payments of principal of the Loans in
accordance with Section 2.07 of the Credit Agreement after the date hereof and
scheduled payments of interest under the Credit Agreement on any Interest
Payment Date after the date hereof, in each case, made by or on behalf of the
Borrower. MSGE hereby grants a lien on, and security interest in, the Reserve
Account in favor of the Collateral Agent for the benefit of the Secured Parties.
MSGE authorizes the Collateral Agent, without further approval of MSGE, to, at
any time following the occurrence and during the continuance of an Event of
Default pursuant to Section 7.01(a) (solely in respect of the failure to pay a
scheduled payment of principal of the Loans in accordance with Section 2.07 of
the Credit Agreement) or Section 7.01(b) (solely in respect of the failure to
pay a scheduled payment of interest under the Credit Agreement) of the Credit
Agreement during the Financial Covenant Suspension Period (each a “Specified
Event of Default”), withdraw funds from the Reserve Account to make, on behalf
of the Borrower, (x) scheduled payments of principal of the Loans in accordance
with Section 2.07 of the Credit Agreement and (y) scheduled payments of interest
under the Credit Agreement on any Interest Payment Date. The Collateral Agent
shall remit any amounts remaining in the Reserve Account (including any interest
accumulated therein) to MSGE on the earlier of (a) the first Business Day after
the end of the Financial Covenant Suspension Period and (b) the date on which
this Agreement is terminated in accordance with its terms, it being understood
and agreed that, prior to such date of remittance, (i) the Reserve Account shall
remain under the control of the Collateral Agent and (ii) neither MSGE nor any
Person acting on its behalf shall be permitted to withdraw funds from the
Reserve Account.

(b) All net interest, if any, earned on funds on deposit in the Reserve Account
shall be accumulated therein.

SECTION 5.3 Reporting Requirement. On or prior to August 31, 2020, MSGE shall
furnish to the Collateral Agent a detailed business plan for MSGE in form and
substance reasonably satisfactory to the Collateral Agent.

SECTION 5.4 Order of Remedies. Notwithstanding anything to the contrary
contained in this Agreement or any other Loan Document, at any time following
the occurrence and during the continuance of a Specified Event of Default during
the Financial Covenant Suspension Period, unless the Secured Obligations have
been accelerated in accordance with the Loan Documents, the Collateral Agent and
the Secured Parties shall first attempt to exercise the remedy set forth in the
third sentence of Section 5.2(a) above with respect to the applicable Secured
Obligations then due and payable and to the extent the aggregate amount of cash
in the Reserve Account is not sufficient to satisfy in full such Secured
Obligations, then the Collateral Agent and the Secured Parties shall be
permitted to exercise the other remedies provided under Section 5.01 of the
Security Agreement with respect to the remaining unpaid Secured Obligations then
due and payable.

 

7

--------------------------------------------------------------------------------

ARTICLE VI

MISCELLANEOUS

SECTION 6.1 Notices. All communications and notices hereunder shall (except as
otherwise expressly permitted herein) be in writing and given in the manner
provided in Section 9.01 of the Credit Agreement. All communications and notices
hereunder to MSGE shall be given to it at its address set forth below its
signature to this Agreement in the manner provided in Section 9.01 of the Credit
Agreement.

SECTION 6.2 Waivers; Amendments.

(a) No failure or delay by the Collateral Agent or any Lender in exercising any
right or power hereunder or under any other Loan Document shall operate as a
waiver thereof, nor shall, subject to Section 5.4, any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Collateral Agent and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by MSGE therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) of this Section 6.2, and
then such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. Without limiting the generality of the
foregoing, the execution and delivery of this Agreement or the making of a Loan
shall not be construed as a waiver of any Default, regardless of whether the
Collateral Agent or any Lender may have had notice or knowledge of such Default
at the time. No notice or demand on MSGE in any case shall entitle MSGE to any
other or further notice or demand in similar or other circumstances.

(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Collateral Agent and MSGE, subject to any consent required in accordance
with Section 9.02 of the Credit Agreement; provided that the terms of Article IV
may not be waived, amended or modified without the consent of each of the
Borrower and Intermediate Holdings.

SECTION 6.3 Collateral Agent’s Fees and Expenses; Indemnification. (a) MSGE
agrees to reimburse the Collateral Agent for its fees and expenses incurred
hereunder as provided in Section 9.03 of the Credit Agreement as if each
reference therein to the Borrower were a reference to MSGE.

(b) MSGE agrees to indemnify and hold harmless each Indemnitee as provided in
Section 9.03(b) of the Credit Agreement as if each reference to the Borrower
therein were a reference to MSGE.

(c) Any amounts payable hereunder, including as provided in Section 6.3(a)
or 6.3(b), shall be additional Secured Obligations guaranteed hereby. All
amounts due under Section 6.3(a) or 6.3(b) shall be payable promptly after
written demand therefor.

 

8

--------------------------------------------------------------------------------

(d) To the extent permitted by applicable law, MSGE shall not assert, or permit
any of its Subsidiaries to assert, and MSGE hereby waives, any claim against any
Indemnitee (i) for any damages arising from the use by others of information or
other materials obtained through telecommunications, electronic or other
information transmission systems (including the Internet), unless determined by
a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee, or
(ii) on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of this Agreement.

(e) BY ACCEPTING THE BENEFITS OF THIS AGREEMENT AND THE GUARANTEES AND SECURITY
INTERESTS CREATED HEREBY, EACH SECURED PARTY ACKNOWLEDGES THE PROVISIONS OF
ARTICLE VIII OF THE CREDIT AGREEMENT AND AGREES TO BE BOUND BY SUCH PROVISIONS
AS FULLY AS IF THEY WERE SET FORTH HEREIN.

SECTION 6.4 Survival. All covenants, agreements, representations and warranties
made by the Loan Parties in the Loan Documents and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement or any
other Loan Document shall be considered to have been relied upon by the
Collateral Agent and the Lenders and shall survive the execution and delivery of
the Loan Documents and the making of any Loans, regardless of any investigation
made by or on behalf of the Collateral Agent, any Lender or any other Person and
notwithstanding that the Collateral Agent, any Lender or any other Person may
have had notice or knowledge of any Default or incorrect representation or
warranty at the time any Loan Document is executed and delivered or any credit
is extended under the Credit Agreement, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under the Credit Agreement is outstanding and
unpaid (other than contingent obligations for indemnification, expense
reimbursement, tax gross up or yield protection as to which no claim has been
made) and so long as the Commitments have not expired or terminated. The
provisions of Section 6.3 shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated by the Loan
Documents, the repayment of the Loans, the expiration or termination of the
Commitments or the termination of this Agreement or any provision hereof.

SECTION 6.5 Counterparts; Effectiveness; Successors and Assigns.

(a) This Agreement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original
but all of which when taken together shall constitute a single contract.
Delivery of an executed counterpart of a signature page of (x) this Agreement
and/or (y) any document, approval, consent, information, notice, certificate,
request, statement disclosure or authorization related to this Agreement and/or
the transactions contemplated hereby (each an “Ancillary Document”) that is an
Electronic Signature transmitted by telecopy, e-mailed .pdf or any other
electronic means that reproduces an image of an actual executed signature page
shall be effective as delivery of a manually executed counterpart of this
Agreement or such Ancillary Document, as applicable. The words “execution,”
“signed,” “signature,” “delivery,” and words of like import in or relating to
this Agreement and/or any Ancillary Document shall be deemed to include
Electronic Signatures, deliveries or the keeping of

 

9

--------------------------------------------------------------------------------

records in any electronic form (including deliveries by telecopy, emailed .pdf,
or any other electronic means that reproduces an image of an actual executed
signature page), each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature, physical delivery thereof or
the use of a paper-based recordkeeping system as the case may be.

(b) This Agreement shall become effective when a counterpart hereof executed on
behalf of MSGE shall have been delivered to the Collateral Agent and a
counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter shall be binding upon MSGE and the Collateral Agent and their
respective successors and assigns, and shall inure to the benefit of MSGE, the
Collateral Agent and the other Secured Parties and their respective successors
and assigns, except that MSGE may not assign or otherwise transfer any of its
rights or obligations hereunder or any interest herein (and any attempted
assignment or transfer by MSGE shall be null and void), except as expressly
contemplated by this Agreement or the other Loan Documents. Delivery of an
executed counterpart of a signature page of this Agreement by facsimile or other
electronic imaging shall be effective as delivery of a manually executed
counterpart of this Agreement. This Agreement shall constitute a Loan Document
for all purposes of the Credit Agreement and the other Loan Documents.

SECTION 6.6 Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 6.7 Right of Set-Off. If an Event of Default shall have occurred and be
continuing, each Lender and each Affiliate of such Lender, is hereby authorized
at any time and from time to time, to the fullest extent permitted by applicable
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final, in whatever currency) or other amounts at any time
held and other obligations (in whatever currency) at any time owing by such
Lender, or by such an Affiliate, to or for the credit or the account of any Loan
Party against any of and all the obligations then due of such Loan Party now or
hereafter existing under this Agreement or any other Loan Document held by such
Lender, irrespective of whether or not such Lender shall have made any demand
under this Agreement or any other Loan Document and although such obligations of
such Loan Parties are owed to a branch, office or Affiliate of such Lender
different from the branch, office or Affiliate holding such deposit or obligated
on such Indebtedness. The rights of each Lender and each Affiliate of such
Lender under this Section 6.7 are in addition to other rights and remedies
(including other rights of setoff) that such Lender or Affiliate may have.

SECTION 6.8 Governing Law; Jurisdiction; Consent to Service of Process.

(a) This Agreement shall be governed by, and construed in accordance with, the
law of the State of New York.

(b) Each party hereto irrevocably and unconditionally submits, for itself and
its property, to the jurisdiction of the Supreme Court of the State of New York
sitting in New York County and of the United States District Court of the
Southern District of New York, and any

 

10

--------------------------------------------------------------------------------

appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any judgment,
and MSGE hereby irrevocably and unconditionally agrees that all claims arising
out of or relating to this Agreement brought by it or any of its Affiliates
shall be brought, and shall be heard and determined, exclusively in such
New York State or, to the extent permitted by law, in such Federal court. Each
party hereto agrees that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. Nothing in this Agreement or any other
Loan Document shall affect any right that the Collateral Agent or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement
against MSGE or any of its properties in the courts of any jurisdiction.

(c) MSGE hereby irrevocably and unconditionally waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of or relating to this
Agreement in any court referred to in paragraph (b) of this Section 6.8. MSGE
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.

(d) Each party hereto irrevocably consents to service of process in the manner
provided for notices in Section 6.1. Nothing in this Agreement will affect the
right of any party to this Agreement to serve process in any other manner
permitted by law.

SECTION 6.9 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.9.

SECTION 6.10 Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

SECTION 6.11 Termination or Release.

(a) This Agreement, the guarantee made herein and the security interest granted
hereby shall, subject to Section 2.4, automatically terminate and be
automatically released when all the Obligations (other than contingent
obligations for indemnification, expense reimbursement, tax gross up or yield
protection as to which no claim has been made) have been paid in full in cash
and the Lenders have no further commitment to lend under the Credit Agreement.

 

11

--------------------------------------------------------------------------------

(b) In connection with any termination or release pursuant to this Section 6.11,
the Collateral Agent shall execute and deliver to MSGE, at MSGE’s expense, all
documents, and take all such further actions, that MSGE shall reasonably request
to evidence such termination or release. Any execution and delivery of documents
by the Collateral Agent pursuant to this Section 6.11 shall be without recourse
to or warranty by the Collateral Agent.

[Signature Pages Follow]

 

12

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has caused this Agreement to be duly
executed and delivered as of the date first above written.

 

MSG ENTERTAINMENT GROUP, LLC, as Guarantor By:  

/s/ Philip D’Ambrosio

  Name:   Philip D’Ambrosio   Title:   Senior Vice President, Treasurer and
Secretary

 

Address: Two Pennsylvania Plaza New York, NY 10121 Attention: General Counsel
with a copy to (which shall not constitute notice): Hughes Hubbard & Reed LLP
One Battery Park Plaza New York, NY 10004 Attention: Steven J. Greene E-mail:
steven.greene@hugheshubbard.com Facsimile No.: (212) 299-6270

--------------------------------------------------------------------------------

JPMORGAN CHASE BANK, N.A., as Collateral Agent, by  

/s/ Joon Hur

  Name:   Joon Hur   Title:   Executive Director

--------------------------------------------------------------------------------

ACKNOWLEDGED AND AGREED: TAO GROUP OPERATING LLC, as Borrower By:  

/s/ Noah Tepperberg

  Name:   Noah Tepperberg   Title:   Co-Chief Executive Officer

--------------------------------------------------------------------------------

ACKNOWLEDGED AND AGREED: TAO GROUP INTERMEDIATE HOLDINGS LLC, as Intermediate
Holdings By:  

/s/ Noah Tepperberg

  Name:   Noah Tepperberg   Title:   Co-Chief Executive Officer