Document:

Exhibit 10.4

 

GENERAL PLEDGE AND SECURITY AGREEMENT

 

GENERAL PLEDGE AND SECURITY AGREEMENT, dated as of December 12, 2013 (as amended, supplemented, modified, renewed, extended, restated or amended and restated from time to time, this “Security Agreement”), made by SFX ENTERTAINMENT, INC., a Delaware corporation (the “Pledgor”), in favor of DEUTSCHE BANK, AG NEW YORK BRANCH (the “Secured Party”).  Capitalized terms used herein that are not otherwise defined herein shall have the same meaning as set forth in the Reimbursement Agreement (as hereinafter defined).

 

R E C I T A L S

 

WHEREAS, the Pledgor and the Secured Party have entered into that certain Letter of Credit and Reimbursement Agreement dated as of the date hereof (as amended, supplemented, modified, renewed, extended, restated or amended and restated from time to time, the “Reimbursement Agreement”) pursuant to which the Secured Party has agreed to make certain financial accommodations to the Pledgor upon the terms and subject to the conditions set forth therein; and

 

WHEREAS, it is a condition precedent to the Secured Party entering into the Reimbursement Agreement that the Pledgor enter into this Security Agreement and grant the Secured Party a security interest in the Collateral so as to secure the Pledgor’s Obligations.

 

NOW, THEREFORE, in consideration of the recitals and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.                                      Definitions.

 

(a)                                 Unless otherwise defined in this Security Agreement, terms defined in Article 1, Article 8 or Article 9 of the UCC (as hereinafter defined) are used herein as therein defined.

 

(b)                                 The words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Security Agreement, shall refer to this Security Agreement as a whole and not to any particular provision of this Security Agreement, and section references are to this Security Agreement unless otherwise specified.

 

(c)                                  Unless otherwise defined herein, terms defined in the Reimbursement Agreement are used herein as therein defined, and the following additional term(s) have, for the purposes hereof, the meanings set forth below:

 

“Collateral” shall have the meaning assigned to it in Section 2 of this Security Agreement.

 

“Pledged Account” means account # 44130165 held with the Secured Party in the name of the Pledgor.

 

 

“Proceeds” shall have the meaning assigned to such term under the Uniform Commercial Code in effect in any applicable jurisdiction and, in any event, shall include, but not be limited to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to Pledgor from time to time with respect to any of the Collateral, (ii) any and all payments (in any form whatsoever) made or due and payable from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any governmental body, authority, bureau or agency (or any person acting under color of governmental authority), and (iii) any and all other amounts from time to time paid or payable to Pledgor under or in connection with any of the Collateral.

 

“Records” shall mean all books of account, ledger sheets, files, and other records of the Pledgor with respect to the Collateral (including, without limitation, the Pledged Account), including, without limitation, all computer disks and tapes upon which is stored any information relating thereto.

 

“UCC” means the Uniform Commercial Code as adopted in the State of New York and any other state, which governs creation or perfection (and the effect thereof) of security interests in any Collateral.

 

2.                                      Grant of Security Interest.

 

(a)                                 As collateral security for the prompt, timely and complete payment and performance of all of the present and future Obligations whether direct or indirect, absolute or contingent, due or to become due, now existing or hereinafter arising, the Pledgor hereby grants to the Secured Party a continuing security interest and right of pledge in all of the Pledgor’s right, title and interests in and to the following assets in each case, as to each type of property described below, whether now owned or hereafter acquired by the Pledgor, wherever located, and whether now or hereafter existing or arising (collectively, the “Collateral”; it being further understood and agreed that all of the following terms have, as applicable, the meanings given to them in the UCC and terms used herein without definition that are defined in the UCC have the meanings given to them in the UCC (such meanings to be equally applicable to both the singular and plural forms of the terms defined)):

 

(i)                                     all cash, accounts, accounts receivable, chattel paper (including, without limitation, tangible chattel paper and electronic chattel paper), deposit accounts, documents (as defined in the UCC), commodity contracts, as-extracted collateral, equipment, general intangibles, instruments, inventory, investment property, licenses, patents, trademarks, tradenames, copyrights, Swap Contracts, health-care-insurance receivables, letter of credit rights and any supporting obligations related to any of the foregoing;

 

(ii)                                  the Pledged Account and all amounts deposited or otherwise added to the Pledged Account from time to time in cash;

 

(iii)                               all books and records pertaining to the assets and property described in this Section 2(a), including, without limitation, the Pledged Account;

 

(iv)                              all property of the Pledgor held by the Secured Party, including all property of every description, in the custody of or in transit to the Secured Party for any purpose,

 

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including safekeeping, collection or pledge, for the account of the Pledgor or as to which the Pledgor may have any right or power, including but not limited to cash;

 

(v)                                 all other goods (including but not limited to fixtures) and personal property of the Pledgor, whether tangible or intangible and wherever located; and

 

(vi)                              all Records with respect to any of such assets; and

 

(vii)                           all Proceeds of the foregoing.

 

Notwithstanding any of the other provisions set forth in this Section 2 to the contrary, in no event shall the Collateral include, and the Pledgor shall not be deemed to have granted a security interest in (i) any intent-to-use United States trademark application for which an amendment to allege use or statement of use has not been filed and accepted by the United States Patent and Trademark Office (provided that each such intent-to-use application shall be considered Collateral immediately and automatically upon such filing and acceptance), (ii) any real property, leasehold interest or any contract, license, permit or other assets which by its terms or under applicable law or any Governmental Authority cannot be pledged, transferred or assigned by such Pledgor, or to the extent that granting a security interest therein would result in a breach or default under the contract, license, permit or general intangible (in each case after giving effect to Sections 9-406(d), 9-407(a), 9-408(a) or 9-409 of the UCC (or any successor provision or provisions) or any other applicable law), (iii) vehicles and other goods subject to a certificate of title; (iv) any Collateral as to which the Lender has determined in its sole discretion that the collateral value is insufficient to justify the difficulty, time and/or expense of obtaining a perfected security interest therein and (v) any Equity Interests of (1) any Subsidiary of the Pledgor that is not directly owned by the Pledgor and (2) (x) a Subsidiary of the Pledgor that is not a U.S. Person or (y) a Person that is a “controlled foreign corporation” (or several thereof) as defined in Section 957(a) of the Code (any such Person described in clause (x) or (y), a “Foreign Stock Subsidiary”) in each case in excess of sixty-five percent (65%) of the outstanding Equity Interests of such Foreign Stock Subsidiary.

 

(b)                                 The Pledged Account constitutes a “deposit account” within the meaning of Article 9 of the UCC.  The Pledgor acknowledges and agrees that the Pledged Account shall remain open and shall be maintained at Secured Party for the term of the Loan Documents, that this Security Agreement shall govern the terms of the Pledged Account and that control of the Pledged Account shall, subject to the provisions hereof and of the other Loan Documents, be and remain with the Secured Party.  The Pledgor acknowledges and agrees that this Security Agreement constitutes written notification with respect to the Secured Party’s security interest in the Collateral pursuant to Articles 8 and 9 of the UCC and any applicable Federal regulations for the Federal Reserve Book Entry System.

 

3.                                      Representations and Warranties.  The Pledgor represents and warrants to the Secured Party that:

 

(a)                                 This Security Agreement and the security interests created hereby will not violate or constitute a default under any agreements or instruments to which the Pledgor is a party, or any order, judgment, ruling or decree of any court or other Governmental Authority

 

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body having jurisdiction over the Pledgor or any of its properties, except where such violation or default would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  To the Pledgor’s knowledge, no claim, setoff, counterclaim or other defense to the due and punctual payment of any amount due with respect to the Collateral has been asserted against the Pledgor.

 

(b)                                 The Pledgor is the sole legal and beneficial owner of the Collateral, which Collateral is free and clear of any Liens (other than any Liens permitted under Section 5.2 of the Reimbursement Agreement), and no financing statement (other than any which may be filed on behalf of the Secured Party in connection herewith) covering any of the Pledgor’s interest in the Collateral is or shall be on file in any public office. This Security Agreement creates a valid security interest in the Collateral, to the extent a security interest therein can be created under the UCC, securing the payment of the Obligations. Except to the extent a security interest in the Collateral cannot be perfected by the filing of a financing statement under the UCC, all filings and other actions necessary to perfect and protect such security interest have been duly taken or will have been taken upon the filing of financing statements listing the Pledgor, as a debtor, and Secured Party, as secured party.  Upon the making of such filings, the Secured Party shall have a fully perfected, first priority, security interest in the Collateral upon the execution and delivery of this Security Agreement by the Pledgor to the extent such security interest can be perfected by the filing of a financing statement subject only to Permitted Liens.

 

(c)                                  The Pledgor is a corporation duly organized, validly existing and in good standing under the laws of State of Delaware; has full power and authority and legal right and all governmental licenses, consents, and approvals necessary to own and operate its properties and carry on its business as now conducted; and is qualified to do business in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary, in each case with such exceptions as would not have a Material Adverse Effect.

 

(d)                                 The Pledgor has all necessary or other power and authority to execute, deliver and perform this Security Agreement, and to perform all obligations arising or created under this Security Agreement; the execution, delivery and performance by Pledgor of this Security Agreement, and all obligations arising or created under this Security Agreement, have been duly authorized by all necessary and appropriate corporate or other action on its part; and this Security Agreement has been duly and validly executed and delivered by Pledgor.

 

(e)                                  The Pledgor has all requisite legal right (a) to execute and deliver this Security Agreement, together with all other documents contemplated herein to be executed by Pledgor, and to consummate the transactions and perform the Obligations hereunder, and (b) to own Pledgor’s properties and assets, in each case, except where the failure to have such legal right would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(f)                                   None of the execution and delivery of this Security Agreement, the consummation of any of the transactions herein contemplated, or the compliance with the terms and provisions hereof, will contravene or conflict with (a) any provision of any of Pledgor’s Constituent Instruments, (b) any Legal Requirement to which Pledgor is subject or any judgment, license, order, or permit applicable to Pledgor except where the contravention or

 

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conflict with such Legal Requirement or judgment, license, order, or permit or would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or (c) any indenture, mortgage, deed of trust, or other material agreement or instrument to which Pledgor is a party or by which Pledgor may be bound, or to which Pledgor may be subject except where the contravention or conflict with such indenture, mortgage, deed of trust, or other material agreement or instrument would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  No consent, approval, authorization, or order of any court or Governmental Authority or third party is required in connection with the execution and delivery by Pledgor of this Security Agreement or to consummate the transactions contemplated hereby or thereby.

 

(g)                                  This Security Agreement constitutes the legal, valid and binding obligation of Pledgor, enforceable in accordance with their respective terms, subject only to Debtor Relief Laws and general principles of equity (regardless of whether enforcement is sought by proceeds in equity or at law).

 

(h)                                 The chief executive office of the Pledgor and the place where the Pledgor keeps its books and records, including recorded data of any kind or nature, regardless of the medium or recording, including software, writings, plans, specifications and schematics, has been and will continue to be at the Pledgor’s office at 430 Park Avenue, 6th Floor, New York, New York 10022 (unless Pledgor notifies Lender in writing promptly following the date of such change).  Pledgor’s federal taxpayer’s identification number is 90-0860047.

 

4.                                      Withdrawals By Pledgor.  The Pledgor shall not at any time be entitled to withdraw any amounts from the Pledged Account.

 

5.                                      Covenants and Agreements of the Pledgor.  The Pledgor covenants and agrees:

 

(a)                                 to keep and maintain, at all times, at least $15,000,000 in cash in the Pledged Account;

 

(b)                                 at any time and from time to time, upon the reasonable written request of the Secured Party, and at the sole cost and expense of the Pledgor, the Pledgor will promptly and duly execute, acknowledge and/or deliver any and all such further agreements, assignments, applications, certificates, documents, public notices and other papers and take such further actions as may be necessary or as the Secured Party may reasonably deem desirable in obtaining the full benefits of this Security Agreement and of the rights and powers herein granted, including, without limitation, the filing of any financing or continuation statements under the Uniform Commercial Code in effect in any jurisdiction with respect to the liens and security interests granted hereby; the Pledgor also hereby authorizes the Secured Party to file any such financing or continuation statement without the signature of the Pledgor as Pledgor to the extent permitted by applicable law, and agrees that, to the extent allowed by applicable law, a carbon, photographic or other reproduction of this Security Agreement or of any financing or continuation statement shall be sufficient as a financing or continuation statement, as the case may be (and pay the cost of filing and recording the same in all public offices deemed reasonably necessary by the Secured Party);

 

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(c)                                  to notify the Secured Party at least thirty (30) days prior to the change of its chief executive office as set forth in Section 3(h) hereof;

 

(d)                                 to keep and maintain at its own cost and expense satisfactory and complete Records of the Collateral; and to, on demand of the Secured Party, furnish to the Secured Party such information concerning the Collateral as the Secured Party may from time to time reasonably deem necessary;

 

(e)                                  to reimburse the Secured Party for all reasonable and documented out-of-pocket costs, expenses and charges, including court costs and reasonable attorneys’ fees, suffered or incurred by the Secured Party in seeking to collect the Obligations or in realizing upon, protecting or preserving any rights with respect to the Collateral;

 

(f)                                   so long as any of the Obligations shall remain unpaid, the Pledgor shall, unless the Secured Party shall otherwise consent in writing, comply in all material respects with all Legal Requirements applicable to the Collateral, such compliance to include, without limitation, paying before the same become delinquent all taxes, assessments and governmental charges imposed upon the Collateral, except to the extent contested in good faith and by appropriate proceedings and for which appropriate reserves have been established in accordance with GAAP;

 

(g)                                  so long as any of the Obligations shall remain unpaid, the Pledgor will not, without the prior written consent of the Secured Party, create or suffer to exist any Lien (other than any Liens permitted under Section 5.2 of the Reimbursement Agreement) upon or with respect to the Pledged Account or the Collateral; and

 

(h)                                 to maintain the Collateral in good condition and repair and insured in the manner, and in the amounts, customary in the industries of the Pledgor.

 

6.                                      Remedies.  Upon the occurrence of and during the continuance of an Event of Default, the Secured Party may, in addition to exercising, invoking or enforcing any other rights, powers, authorities or remedies granted under the Reimbursement Agreement do or cause to be done any or all of the following, concurrently or successively:

 

(a)                                 (i)                                     exercise, invoke or enforce from time to time any rights, powers, authorities or remedies available to it as a secured party under the UCC or under any other applicable law, including, without limiting the foregoing, the right (A) to sell any interest in the Collateral, free of all rights and claims of the Pledgor therein and thereto at any public or private sale (if permitted by applicable law) held pursuant to the UCC for that purpose, and (B) bid for and purchase any interest in the Collateral at any such public or private sale;

 

(ii)                                  the Secured Party may also exercise, invoke or enforce such other rights or remedies as the Secured Party may have hereunder, under the other Loan Documents, at law or in equity; and/or

 

(iii)                               the Secured Party will at all times have the right to take possession of the Collateral and to maintain such possession on the Pledgor’s premises or to remove the Collateral or any part thereof to such other premises as the Secured Party may desire.  The

 

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Pledgor further agrees, that, during the continuance of any Event of Default, (w) at the Secured Party’s request, it shall assemble the Collateral and make it available to the Secured Party at places that the Secured Party shall reasonably select, whether at such Pledgor’s premises or elsewhere, (x) without limiting the foregoing, the Secured Party also has the right to require that the Pledgor store and keep any Collateral pending further action by the Secured Party and, while any such Collateral is so stored or kept, provide such guards and maintenance services as shall be necessary to protect the same and to preserve and maintain such Collateral in good condition, (y) until the Secured Party is able to sell, assign, convey or transfer any Collateral, the Secured Party shall have the right to hold or use such Collateral to the extent that it deems appropriate for the purpose of preserving the Collateral or its value or for any other purpose deemed appropriate by the Secured Party and (z) the Secured Party may, if it so elects, seek the appointment of a receiver or keeper to take possession of any Collateral and to enforce any of the Secured Party’s remedies (for the benefit of the Secured Party), with respect to such appointment without prior notice or hearing as to such appointment.  The Secured Party shall not have any obligation to the Pledgor to maintain or preserve the rights of the Pledgor as against third parties with respect to any Collateral while such Collateral is in the possession of the Secured Party.

 

(b)                                 Any proceeds of any disposition by the Secured Party of any interest in the Collateral may be applied by the Secured Party to the payment of expenses of the Secured Party in connection with realizing upon the security interest in the Collateral, including reasonable out-of-pocket legal fees, attorneys’ fees of one firm of counsel and one firm of local counsel in each applicable jurisdiction and sale expenses, and any balance of such proceeds shall be applied by the Secured Party toward the payment of such of the Obligations, in such order of application, as the Secured Party may elect.  The Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if it takes such action for that purpose as the Pledgor requests in writing, but failure of the Secured Party to comply with such request shall not of itself be deemed a failure to exercise reasonable care, and no failure of the Secured Party to preserve or protect any rights with respect to such Collateral against other parties or failure of the Secured Party to do any act with respect to the preservation of such Collateral not so requested by the Pledgor, shall be deemed a failure to exercise reasonable care in the custody and preservation of the Collateral.

 

(c)                                  Secured Party shall have the right to enforce one or more remedies hereunder, successively or concurrently, and such action shall not operate to estop or prevent Secured Party from pursuing any further remedy which it may have, and any repossession or retaking or sale of the Collateral pursuant to the terms hereof shall not operate to release Pledgor until full payment of any deficiency has been made in cash.

 

(d)                                 PLEDGOR ACKNOWLEDGES THAT SECURED PARTY MAY BE UNABLE TO EFFECT A PUBLIC SALE OF ALL OR ANY PART OF THE COLLATERAL AND MAY BE COMPELLED TO RESORT TO ONE OR MORE PRIVATE SALES (IF PERMISSIBLE UNDER APPLICABLE LAW) TO A RESTRICTED GROUP OF PURCHASERS WHO WILL BE OBLIGATED TO AGREE, AMONG OTHER THINGS, TO ACQUIRE THE COLLATERAL FOR THEIR OWN ACCOUNT, FOR INVESTMENT AND NOT WITH A VIEW TO THE DISTRIBUTION OR RESALE THEREOF.  PLEDGOR FURTHER ACKNOWLEDGES THAT ANY SUCH PRIVATE SALES MAY BE AT PRICES AND ON TERMS LESS FAVORABLE

 

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THAN THOSE OF PUBLIC SALES, AND AGREES THAT SUCH PRIVATE SALES CONDUCTED BY THE SECURED PARTY USING COMMERCIALLY REASONABLE PROCEDURES SHALL BE DEEMED TO HAVE BEEN MADE IN A COMMERCIALLY REASONABLE MANNER AND THAT SECURED PARTY HAS NO OBLIGATION TO DELAY SALE OF ANY COLLATERAL TO PERMIT THE ISSUER THEREOF TO REGISTER IT FOR PUBLIC SALE UNDER THE SECURITIES ACT.  PLEDGOR AGREES THAT SECURED PARTY SHALL BE PERMITTED TO TAKE SUCH ACTIONS AS SECURED PARTY DEEMS REASONABLY NECESSARY IN DISPOSING OF THE COLLATERAL TO AVOID CONDUCTING A PUBLIC DISTRIBUTION OF SECURITIES IN VIOLATION OF THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY STATE, AS NOW ENACTED OR AS THE SAME MAY IN THE FUTURE BE AMENDED, AND ACKNOWLEDGES THAT ANY SUCH ACTIONS SHALL BE COMMERCIALLY REASONABLE.  IN ADDITION, PLEDGOR AGREES TO EXECUTE, FROM TIME TO TIME, ANY AMENDMENT TO THIS SECURITY AGREEMENT OR OTHER DOCUMENT AS SECURED PARTY MAY REASONABLY REQUIRE TO EVIDENCE THE ACKNOWLEDGMENTS AND CONSENTS OF PLEDGOR SET FORTH IN THIS SECTION 6.

 

(e)                                  In order to facilitate the sale or disposition of the Collateral hereunder following an Event of Default, the Secured Party is hereby authorized to transfer its rights hereunder to an affiliated entity or nominee and to exercise its rights hereunder through such affiliated entity or nominee.

 

7.                                      Agreement for Collateral Purposes.  This Security Agreement is executed and delivered to the Secured Party for collateral purposes, and constitutes a grant of a security interest only of the rights of the Pledgor with respect to the Collateral and does not constitute a delegation of any duties or obligations of the Pledgor with respect thereto.  The Secured Party does not, by its acceptance of this Security Agreement undertake to perform or discharge and shall not be responsible or liable for the performance or discharge of any duties or responsibilities with respect to the Collateral, and any such assumption or undertaking is hereby expressly disclaimed.  The Secured Party shall exercise reasonable care in the custody of any property at any time(s) in its possession or control hereunder, or otherwise subject to the terms and provisions hereof, but shall be deemed to have exercised reasonable care if such property is accorded treatment substantially equal to that which the Secured Party accords its own property (it being understood that the Secured Party shall have no responsibility for ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any property and whether or not the Secured Party has or is deemed to have knowledge of such matters), or if the Secured Party takes such action with respect to the Collateral as the Pledgor shall reasonably request in writing and to which the Secured Party consents, but no failure to comply with any such request nor any omission to do any such act requested by the Pledgor shall be deemed a failure to exercise reasonable care, nor shall any failure of the Secured Party to take necessary steps to preserve rights against any parties with respect to any Collateral in its control, or otherwise subject to the terms and provisions hereof, be deemed a failure to exercise reasonable care.

 

8.                                      Notice.  All notices hereunder shall be in writing and delivered in accordance with Section 8.6 of the Reimbursement Agreement.

 

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9.                                      Power of Attorney.

 

(a)                                 Effective upon the occurrence of and during the continuance of an Event of Default, the Pledgor hereby irrevocably constitutes and appoints the Secured Party and any officers or agent thereof with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of the Pledgor and in the name of the Pledgor or in its own name, from time to time in the Secured Party’s discretion for the purpose of carrying out the terms of this Security Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Security Agreement and, without limiting the generality of the foregoing, hereby gives the Secured Party the power and right, on behalf of the Pledgor, without notice to or assent by the Pledgor, to do the following:

 

(i)                                     During the continuance of an Event of Default, to ask, demand, collect, receive and give acquittances and receipts for any moneys due or to become due under or with respect to any Collateral, and, in the name of the Pledgor or its own name or otherwise, to file any claim or to take any other action or proceed in any court of law or equity or otherwise as deemed appropriate by the Secured Party for the purpose of collecting any and all such moneys due under any Collateral whenever payable;

 

(ii)                                  During the continuance of an Event of Default, (A) to direct (or cause the Pledgor to direct) any party liable for any payment with respect to any Collateral to make payment of any and all moneys due and to become due thereunder directly to the Secured Party or as the Secured Party shall direct, and (B) to receive payment of and receipt for any and all moneys, claims and other amounts due and to become due at any time in respect of or arising out of any Collateral; and

 

(iii)                               During the continuance of an Event of Default (A) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any part thereof and to enforce any other right in respect of any Collateral, (B) to defend any suit, action or proceeding brought against the Pledgor with respect to any Collateral, (C) to settle, compromise or adjust any suit, action or proceeding described above and, in connection therewith, to give such discharges or releases as the Secured Party may deem appropriate, and (D) generally, to do, at the option of the Secured Party, and at the Pledgor’s cost and expense, at any time, or from time to time, all acts and things which the Secured Party deems necessary to protect, preserve or realize upon the Collateral and the security interest therein, in order to effect the intent of this Security Agreement, all as fully and effectively as the Pledgor might do.

 

(iv)                              The Pledgor hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof.  This power of attorney is a power coupled with an interest and shall be irrevocable (except at the Secured Party’s sole discretion) so long as any Obligations remain outstanding.

 

(b)                                 The powers conferred on the Secured Party hereunder are solely to protect its interests in the Collateral and shall not impose any duty upon it to exercise any such powers.  The Secured Party shall be accountable only for amounts that it actually receives as a result of

 

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the exercise of such powers, and neither it nor any of its officers, directors, employees or agents shall be responsible to the Pledgor for any act or failure to act, except for any such party’s own willful misconduct or gross negligence.

 

(c)                                  The Pledgor also authorizes the Secured Party, at any time and from time to time, to execute, in connection with any sale or sales provided for in Section 6 of this Security Agreement, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral.

 

10.                               No Waiver.  No delay on the part of the Secured Party in the exercise of any right or remedy shall operate as a waiver thereof, and no single or partial exercise by the Secured Party of any right or remedy shall preclude other or further exercise thereof or the exercise of any other right or remedy.

 

11.                               Duration of Agreement; No Subrogation.  The satisfaction or discharge of less than all of the Obligations shall not in any way satisfy or discharge this Security Agreement, but this Security Agreement shall remain in full force and effect so long as any amount remains unpaid on any of the Obligations.  Notwithstanding any payment made by the Pledgor hereunder or any set-off or application of funds of the Pledgor or Guarantor by the Secured Party, neither the Pledgor nor Guarantor shall be entitled to be subrogated to any of the rights of the Secured Party against the Pledgor or any collateral security or guarantee or right of offset held by the Secured Party for the payment of the Obligations, nor shall the Guarantor seek or be entitled to seek any contribution or reimbursement from the Pledgor in respect of payments made by the Guarantor under the Guaranty, until all amounts owing to the Secured Party on account of the Obligations shall have been indefeasibly paid in full in cash (other than contingent or indemnification obligations not then asserted or due). If any amount shall be paid to the Pledgor on account of such subrogation rights at any time when all of such Obligations shall not have been paid in full, such amount shall be held by the Pledgor in trust for the Secured Party segregated from other funds of the Pledgor, and shall, forthwith upon receipt by the Pledgor, be turned over to the Secured Party in the exact form received by the Pledgor (duly indorsed by the Pledgor to the Secured Party, if required), to be applied against the Obligations, whether matured or unmatured, in such order as the Secured Party may determine. For the avoidance of doubt, nothing in the foregoing agreement by the Pledgor shall operate as a waiver of any subrogation rights..  Upon the full payment and satisfaction of the Obligations and the termination of the Loan Documents, the Secured Party shall, promptly, following the written request of the Pledgor, execute and deliver such instruments as are necessary to terminate the interests of the Secured Party in the Collateral of the Pledgor.

 

12.                               Security Interest Unimpaired by Acts or Omissions of the Secured Party.  The Pledgor acknowledges and agrees that the security interest and assignment herein provided for shall be absolute and unconditional and shall not in any manner be affected or impaired by any acts or omissions whatsoever, and, without limiting the generality of the foregoing, shall not be impaired by any acceptance by the Secured Party of any other security for or guarantees upon any of the Obligations, or by any failure or neglect or omission on the part of the Secured Party to realize upon, collect or protect the Obligations or any part thereof or any collateral security therefor.  The security interest and assignment herein provided for shall not in any manner be affected or impaired by (and the Secured Party, without notice to anyone is hereby authorized to

 

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make from time to time) any sale, pledge, surrender, compromise, settlement, release, renewal, extension, indulgence, alteration, substitution, exchange, change in, modification or disposition of any of the Obligations or of any of the other collateral security therefor, if any, or of any guaranty thereof.  In order to sell, dispose or otherwise realize upon the security interest and assignment herein granted and provided for, and exercise the rights granted Secured Party hereunder and under applicable law, there shall be no obligation on the part of Secured Party at any time to first resort for payment to the obligor on any of the Obligations or to any guaranty of the Obligations or any part thereof or to resort to any collateral security, property, liens or other rights or remedies whatsoever, and the Secured Party shall have the right to enforce the security interest and Agreement herein granted and provided for irrespective of whether or not other proceedings or steps are pending seeking resort to or realization upon or from any of the foregoing.

 

13.                               Binding on Successors.  This Security Agreement shall be binding upon the Pledgor and its legal representatives, successors and permitted assigns and shall inure to the benefit of the Secured Party and its successors, nominees and permitted assigns.  The Pledgor acknowledges that Secured Party shall have the right to assign its rights hereunder to any subsequent holder of the Obligations permitted pursuant to the terms of the Reimbursement Agreement.

 

14.                               Governing Law; Severability.  This Security Agreement and any claims, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Security Agreement and the transactions contemplated hereby and thereby shall be governed by and construed in accordance with the laws of the State of New York (without giving effect to the conflict of laws principles thereof).  Whenever possible each provision of this Security Agreement shall be interpreted in such manner as to be effective and valid under applicable law.  However, all provisions hereof are severable, and if any provision of this Security Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Security Agreement.  The parties hereto agree that New York is the Secured Party’s jurisdiction for purposes of the Uniform Commercial Code.

 

15.                               Indemnification.  Pledgor hereby agrees to indemnify, defend and hold Secured Party, its successors and assigns harmless from and against any and all damages, losses, claims, costs or expenses (including reasonable attorneys’ fees of one firm of counsel and one firm of local counsel in each applicable jurisdiction) and any other liabilities whatsoever the Secured Party or its successors or assigns may incur by reason of this Security Agreement or by reason of any assignment of Pledgor’s right, title and interest in, and to any or all of the Collateral, except to the extent that such damages, losses, claims, costs or expenses or other liabilities are caused by the gross negligence, bad faith or willful misconduct of the Secured Party or any such successors or assign.  The Pledgor shall indemnify and reimburse the Secured Party and its successors and assigns for any and all reasonable costs and expenses (including, without limitation, the reasonable fees and expenses of one firm one counsel and one firm of local counse in each applicable jurisdiction) in connection with any release or termination of the Secured Party’s right, title and interest in the Collateral.

 

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16.                               Counterparts.  This Security Agreement may be executed in multiple counterparts, each of which may be executed by one or more of the parties hereto, but all of which, when taken together, shall constitute a single agreement binding upon all of the parties hereto.  This Security Agreement may be executed and delivered by facsimile or other electronic transmission all with the same force and effect as if same were a fully executed and delivered original manual counterpart.

 

[Remainder of page is intentionally left blank. Signature page follows.]

 

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IN WITNESS WHEREOF, this Security Agreement has been duly executed and delivered as of the day and year first above written.

 

 

	
 
    	
PLEDGOR:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SFX   ENTERTAINMENT, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Sheldon Finkel
    
	
 
    	
 
    	
Name:   Sheldon Finkel
    
	
 
    	
 
    	
Title:   Vice Chairman
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SECURED   PARTY:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
DEUTSCHE   BANK AG, NEW YORK BRANCH
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Corey Kozak
    
	
 
    	
 
    	
Name:   Corey Kozak
    
	
 
    	
 
    	
Title:   Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Kirk Stafford
    
	
 
    	
 
    	
Name:   Kirk Stafford
    
	
 
    	
 
    	
Title:   Vice President
    

 

SIGNATURE PAGE TO

GENERAL PLEDGE AND

SECURITY AGREEMENTExhibit 10.5

 

	
 
    

 

SPRINGING UNCONDITIONAL GUARANTY

 

dated as of December 12, 2013

 

given by

 

ROBERT F.X. SILLERMAN

 

to

 

DEUTSCHE BANK AG, NEW YORK BRANCH

 

	
 
    

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
1.
    	
Certain Definitions
    	
1
    
	
2.
    	
Unconditional Guaranty
    	
3
    
	
3.
    	
Certain Waivers
    	
4
    
	
4.
    	
Certain Lender Actions
    	
5
    
	
5.
    	
No Reduction
    	
6
    
	
6.
    	
Absolute and Unconditional Guaranty
    	
6
    
	
7.
    	
Continuing Guaranty
    	
6
    
	
8.
    	
No Inducement
    	
6
    
	
9.
    	
Certain Representations
    	
6
    
	
10.
    	
Unencumbered Liquid Assets
    	
9
    
	
11.
    	
Reports; Access
    	
9
    
	
12.
    	
Certain Additional Covenants of Guarantor
    	
9
    
	
13.
    	
Notices
    	
10
    
	
14.
    	
Subrogation
    	
12
    
	
15.
    	
Events of Default; Remedies
    	
13
    
	
16.
    	
Remedies, etc.
    	
13
    
	
17.
    	
Crediting of Monies Recovered
    	
14
    
	
18.
    	
Claims
    	
14
    
	
19.
    	
Statute of Limitations
    	
15
    
	
20.
    	
Separate Causes of Actions
    	
15
    
	
21.
    	
Failure to Act, etc.
    	
15
    
	
22.
    	
GOVERNING LAW
    	
15
    
	
23.
    	
Binding Nature, etc.
    	
16
    
	
24.
    	
Jury Trial Waiver; No Marshalling of Assets; Submission to   Jurisdiction
    	
16
    
	
25.
    	
Arm’s Length
    	
17
    
	
26.
    	
Severability
    	
17
    
	
27.
    	
Expenses
    	
17
    
	
28.
    	
Cumulative Rights
    	
17
    
	
29.
    	
Section Headings
    	
17
    
	
30.
    	
Modifications
    	
17
    
	
31.
    	
USA Patriot Act Notice
    	
17
    
	
32.
    	
Document Completion
    	
18
    

 

 

SPRINGING UNCONDITIONAL GUARANTY

 

THIS SPRINGING UNCONDITIONAL GUARANTY, dated as of December 12, 2013 (as same may be amended, supplemented, renewed, extended, replaced, or restated from time to time, this “Guaranty”), is entered into by ROBERT F.X. SILLERMAN, an individual person (“Guarantor”) in favor of DEUTSCHE BANK AG, NEW YORK BRANCH (“Lender”).

 

In consideration of financial accommodations given or to be given or continued to SFX Entertainment, Inc., a Delaware corporation (“Borrower”), by Lender pursuant to the Reimbursement Agreement (as defined in Section 1 hereof), the receipt and sufficiency of which consideration are hereby acknowledged, and in order to induce Lender to make financial accommodations available to Borrower, Guarantor hereby agrees with Lender as follows:

 

1.                                      Certain Definitions.  In this Guaranty, all words and terms defined in the Reimbursement Agreement shall have the respective meanings and be construed as provided therein, unless a different meaning clearly appears from the context.  Reference herein to, or citation herein of, any provisions of the Reimbursement Agreement shall be deemed to incorporate such provisions as a part hereof in the same manner and with the same effect as if the same were fully set forth herein.  In addition, the following terms shall have the following meanings for all purposes when used in this Guaranty, and in any note, certificate, report or other document made or delivered in connection with this Guaranty:

 

“Account Statements” means, collectively, true and correct copies of third party provided bank account statements (including, without limitation, checking account statements and savings account statements), investment account statements, cash management account statements, brokerage account statements, and other similar account and financial information of Guarantor with respect to his assets and properties, all as produced or maintained by the third parties holding such assets and properties.

 

“Bankruptcy Code” means the United States Bankruptcy Reform Act of 1978, as amended, 11 U.S.C. Section 101, et seq.

 

“Cash and Cash Equivalents” means (i) unrestricted and unencumbered cash, (ii) unrestricted and unencumbered marketable direct obligations issued or unconditionally guaranteed by the United States government and backed by the full faith and credit of the United States government; and (iii) unrestricted and unencumbered domestic and Eurodollar certificates of deposit and time deposits, bankers’ acceptances and floating rate certificates of deposit issued by any commercial bank organized under the laws of the United States, any state thereof, the District of Columbia, any foreign bank, or its branches or agencies (fully protected against currency fluctuations), which, at the time of acquisition, are rated A-1 (or better) by S&P or P-1 (or better) by Moody’s; provided that the maturities of such Cash and Cash Equivalents shall not exceed one (1) year from the date of calculation.

 

“Event of Default” is defined in Section 15 hereof.

 

 

“Guaranteed Obligations” shall mean the prompt and unconditional obligation of Guarantor to pay, in respect of the Borrower, as and when the same become due and payable, whether at stated maturity, acceleration or otherwise, (i) the Letter of Credit Obligations, (ii) all interest which accrues on the Letter of Credit Obligations, whether at the Default Rate (as defined in the Reimbursement Agreement) or otherwise, together with any prepayment, breakage, yield maintenance and other fees and expenses and all other sums of any kind or nature owing to the Lender under the Reimbursement Agreement and all other Loan Documents, (iii) all expenses incurred or paid by Lender at any time in connection with the enforcement and administration of this Guaranty (whether before or after the existence of any Event of Default), (iv) all taxes (including all unpaid taxes, penalties and charges owing in arrears), (v) Intentionally Omitted, (vi) all sums required to be disgorged by Lender in connection with any bankruptcy proceeding of Borrower related to the foregoing, and (vii) all of the other Obligations (as defined in the Reimbursement Agreement).

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

“Reimbursement Agreement”  means that certain Letter of Credit and Reimbursement Agreement dated as of the date hereof by and between Borrower and Lender, as same may be amended, supplemented, renewed, extended, replaced, or restated from time to time.

 

“S&P” means Standard & Poor’s Rating Services, a division of the McGraw & Hill Companies, Inc. and any successor thereto.

 

“Solvent” means, when used with respect to any Person, that at the time of determination: (i) the fair value of the assets of such Person, will exceed its debts and liabilities, subordinated, contingent or otherwise, (ii) the present fair saleable value of the property of such Person will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured, and (iii) such Person will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured.  For the purposes of determining whether a Person is Solvent, the amount of any contingent liability shall be computed as the amount that, in light of all the facts and circumstances existing at such time, represents the amount that reasonably can be expected to become an actual or matured liability.

 

“Unencumbered Liquid Assets” means the following assets owned by Guarantor which (i) are not the subject of any Lien or other arrangement with any creditor to have its claim satisfied out of the asset (or proceeds thereof) prior to the general creditors of Guarantor, and (ii) may be converted to cash within five (5) Business Days: (A) Cash and Cash Equivalents, (B) securities issued, guaranteed or insured by the United States of America or any of its agencies with maturities of not more than one year from the date acquired; (C) certificates of deposit with maturities of not more than one year from the date acquired and issued by a United States federal or state chartered commercial bank of recognized standing, which has capital and unimpaired surplus in excess of $500,000,000 and which bank or its holding company has a short-term commercial paper rating of at least A-2 or the equivalent by S&P or at least P-2 or the equivalent by Moody’s; (D) investments in money market funds registered under the Investment

 

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Company Act of 1940, which have net assets of at least $500,000,000 and at least 85% of whose assets consist of securities and other obligations of the type described in clauses (A) through (C) above, (E) marketable and liquid equity and debt securities from companies with long-term senior unsecured indebtedness ratings of at least A- from S&P or A3 from Moody’s, (F) municipal bonds that are rated A- from S&P or A3 from Moody’s and are either insured or the proceeds of which are escrowed in 100% United States government securities.  For the purposes of testing the applicable financial covenant in Section 10 hereof, the Unencumbered Liquid Assets set forth in clauses (E) and (F) above shall be marked to market on the date of the applicable test, or as soon prior to the date of such test as possible.

 

2.                                      Unconditional Guaranty.

 

(a)                                 Unconditional Guaranty.  Guarantor hereby absolutely and unconditionally guarantees to Lender the payment in full when due and owing, whether at stated maturity, by acceleration, demand or otherwise, of any and all Guaranteed Obligations, together with all actual out-of-pocket fees, costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses and expenses of collection) (both pre- and post-judgment) incurred by Lender in enforcing any of such obligations or any of the terms hereof.  This is a guaranty of payment and not of collection; Guarantor undertakes such guaranty as primary obligor and not merely as surety; and Lender may enforce this Guaranty against Guarantor without any prior enforcement of the Guaranteed Obligations or any security therefor or other guaranty thereof.

 

(b)                                 Indemnified Matters.  Guarantor hereby absolutely and unconditionally guarantees to Lender the payment in full of, and shall defend, save harmless and indemnify Lender from and against any and all liens, damages (including, without limitation, punitive or exemplary damages), losses, liabilities (including, without limitation, strict liability), obligations, settlement payments, penalties, fines, assessments, citations, claims, litigation, demands, defenses, judgments, suits, proceedings, costs, and expenses of any kind whatsoever (including reasonable attorneys’, consultants’ and experts’ fees and disbursements actually incurred in investigating, defending, settling or prosecuting any claim or proceeding or enforcing any term of this Guaranty) which may at any time be imposed upon, incurred by or asserted against Lender as a result of the following (collectively, the “Indemnified Matters”):

 

(i)                                     Fraud, material misrepresentation or failure to disclose a material fact by Borrower or any of its principals, officers, general partners or members, any guarantor, any indemnitor, or any agent, employee or other person authorized or apparently authorized to make statements, representations or disclosures on behalf of such persons in connection with the Obligations;

 

(ii)                                  Damage to the assets of Borrower as a result of the intentional misconduct or gross negligence of Borrower or any of its principals, officers, or any agent or employee of such persons, or any relocation of the assets of Borrower, to the full extent of the losses or damages incurred by Lender on account of such occurrence; and

 

(iii)                               The enforcement of Guarantor’s subrogation rights pursuant to Section 14 including any action Lender takes on behalf of Guarantor in connection therewith.

 

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(c)                                  Bankruptcy.  Guarantor hereby absolutely and unconditionally guarantees payment to Lender in full when due and owing, whether at stated maturity, by acceleration, demand or otherwise, of any and all Guaranteed Obligations if any of the following occurs after the date hereof: (i) a voluntary bankruptcy filing by Borrower or any general partner or managing member or majority shareholder of Borrower, or (ii) any involuntary bankruptcy proceeding against Borrower based upon petition (or its equivalent) filed by or on behalf of (1) Borrower, (2) any direct or indirect owner of Borrower, (3) Guarantor, (4) any Affiliate of any party described in clauses (1) through (3), or (5) any non-Affiliate of any party described in clauses (1) through (4) acting in concert with any such party.

 

3.                                      Certain Waivers.  Except to the extent expressly required by the provisions of the Loan Documents, Guarantor waives, to the fullest extent permitted by the provisions of applicable law, all of the following (including, without limitation, all defenses, counterclaims and other rights of any nature based upon any of the following):

 

(a)                                 presentment, demand for payment and protest of nonpayment of any of the Guaranteed Obligations, and notice of protest, dishonor or nonperformance;

 

(b)                                 notice of acceptance of this Guaranty and notice that credit has been extended in reliance on Guarantor’s guaranty of the Guaranteed Obligations;

 

(c)                                  notice of any default under the Reimbursement Agreement or of any inability to enforce performance of the obligations of Borrower or of any other Person with respect to any Loan Document or notice of any acceleration of maturity of any Guaranteed Obligations;

 

(d)                                 demand for performance or observance of, and any enforcement of any provision of, the Reimbursement Agreement, any other Loan Document or the Guaranteed Obligations or any pursuit or exhaustion of rights or remedies against Borrower or any other Person in respect of the Guaranteed Obligations or any requirement of diligence or promptness on the part of Lender in connection with any of the foregoing;

 

(e)                                  any act or omission on the part of Lender which may impair or prejudice the rights of Guarantor, including, without limitation, rights to obtain subrogation, exoneration, contribution, indemnification or any other reimbursement from Borrower or any other Person, or otherwise operate as a deemed release or discharge;

 

(f)                                   any statute of limitations or any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than the obligation of the principal;

 

(g)                                  any “single action” or “anti-deficiency” law which would otherwise prevent Lender from bringing any action, including, without limitation, any claim for a deficiency, against Guarantor before or after the commencement or completion of any foreclosure action, whether judicially, by exercise of power of sale or otherwise, or any other law which would otherwise require any election of remedies by Lender;

 

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(h)                                 any merger, consolidation or amalgamation of Borrower (if Borrower is not a natural person) into or with any other Person, or any sale, lease or transfer of any of the assets of Borrower to any other Person, or any other change of form, structure, or status under any law in respect of Borrower or any change in the interests in Borrower;

 

(i)                                     any increase in principal amount of, or extension of the time for payment of the principal of or interest on, any Guaranteed Obligation;

 

(j)                                    all demands and notices of every kind with respect to the foregoing; and

 

(k)                                 to the extent not referred to above, all defenses (other than payment) which Borrower may now or hereafter have to the payment of the Guaranteed Obligations, together with all suretyship defenses, which could otherwise be asserted by Guarantor.

 

Guarantor represents that Guarantor has obtained the advice of counsel as to the extent to which suretyship and other defenses may be available to Guarantor with respect to the obligations of Guarantor hereunder in the absence of the waivers contained in this Section 3.

 

4.                                      Certain Lender Actions.  Lender may at any time and from time to time (whether or not after termination of this Guaranty) without the consent of, or notice (except any notice required by applicable statute that cannot be waived) to, Guarantor, without incurring responsibility to Guarantor, without impairing or releasing any of the obligations of Guarantor hereunder, upon or without any terms or conditions and in whole or in part:

 

(a)                                 change the manner, place or terms of payment, and/or change or extend the time of payment of, renew, accelerate or alter, any of the Guaranteed Obligations, any security therefor or other guaranty thereof, or any liability incurred directly or indirectly in respect thereof, or otherwise modify, amend, waive, change, or consent to departure from, any term of the Reimbursement Agreement or any other Loan Document (other than this Guaranty) or any other guaranty of any of the Guaranteed Obligations, and the guaranty herein made shall apply to the Guaranteed Obligations as so changed, extended, renewed, accelerated or altered;

 

(b)                                 sell, exchange, release, waive, surrender, realize upon, or otherwise deal with in any manner and in any order any property by whomsoever at any time pledged or mortgaged to secure, or howsoever securing, any of the Guaranteed Obligations or any liabilities (including, without limitation, any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and/or any offset there against;

 

(c)                                  exercise or refrain from exercising any rights against Borrower, Guarantor of any Guaranteed Obligations, or any other Person or otherwise act or refrain from acting;

 

(d)                                 settle, release, collect, compromise or otherwise liquidate any of the Guaranteed Obligations, any security therefor or other guaranty thereof or any liability (including, without limitation, any of those hereunder) incurred directly or indirectly in respect thereof, or subordinate the payment of all or any part thereof to the payment of any liability (whether due or not) of Borrower to creditors of Borrower other than Lender and Guarantor; or

 

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(e)                                  apply any sums by whomsoever paid or howsoever realized to any of the Guaranteed Obligations regardless of what Guaranteed Obligations remain unpaid.

 

5.                                      No Reduction.  Neither the liabilities of Guarantor hereunder, nor Lender’s rights hereunder, shall be reduced, limited, terminated or in any other way affected by reason of any guaranty executed in favor of Lender by any other Person (and this Guaranty shall be enforceable against Guarantor without regard to such other guaranty or guaranties or any release or consent to departure from, or any amendment or waiver of, any such other guaranty or guaranties).

 

6.                                      Absolute and Unconditional Guaranty.  This is an absolute and unconditional guaranty and no invalidity, illegality, irregularity, unenforceability, avoidance or contractual or other subordination of all or any part of the Guaranteed Obligations, or of any security therefor, guaranty thereof, or right of offset with respect thereto, or of this Guaranty, or of any part of the Reimbursement Agreement or any other Loan Document, nor any regulation, order or ruling, or judicial or administrative directive of any kind, nor any election, in any proceeding instituted under Chapter 11 of the Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy Code, nor any borrowing or grant of a security interest by Borrower, as debtor-in-possession, under Section 364 of the Bankruptcy Code, nor the disallowance, under Section 502 of the Bankruptcy Code, of all or any portion of Lender’s claim(s) for repayment of the Guaranteed Obligations, nor any change in respect of any obligor of any of the Guaranteed Obligations (including without limitation, as a result of any merger, consolidation, dissolution, liquidation, recapitalization or other change of name, identity, structure or status), nor the operation of any anti-deficiency statute, nor any other circumstance which might otherwise constitute a legal or equitable discharge or defense of Guarantor, or any defense which Borrower could assert with respect to its Obligations (including, without limitation, failure of consideration, breach of warranty, fraud, payment, accord and satisfaction, strict foreclosure, statute of frauds, bankruptcy, infancy, statute of limitations, Lender liability and usury) shall impair, be a defense to, or otherwise affect, this Guaranty.

 

7.                                      Continuing Guaranty.  This Guaranty is a continuing guaranty and all liabilities to which it applies or may apply under the terms hereof shall be conclusively presumed to have been created in reliance hereon.

 

8.                                      No Inducement.  Guarantor hereby acknowledges and confirms to Lender that Guarantor has not been induced to execute, deliver or make this Guaranty as a result of, and is not relying upon, any representation, warranty, agreement or condition, whether express or implied or written or oral, by Lender, Borrower or any other Person.

 

9.                                      Certain Representations.  In order to induce Lender to accept this Guaranty and to enter into the Reimbursement Agreement and the transactions thereunder, Guarantor hereby makes the following representations and warranties:

 

(a)                                 Legal Right and Capacity.  Guarantor is a natural person and citizen of the United States of America, is of sound mind and has all requisite capacity to execute and deliver this Guaranty and to perform his Guaranteed Obligations hereunder.  Guarantor has his principal residence at 151 East 72nd Street, New York, New York 10021 (such address is also the location

 

6

 

where Guarantor keeps his personal records and financial information).  Furthermore, Guarantor will not change his residence as aforesaid without giving Lender at least thirty (30) days prior written notice.  Guarantor has all necessary right and capacity to perform his obligations under this Guaranty and the Loan Documents to which he is a party, and to perform all obligations arising or created under this Guaranty and the Loan Documents to which he is a party.

 

(b)                                 Benefits to Guarantor.  Guarantor will obtain material direct or indirect benefit by reason of the extension of credit by Lender to Borrower pursuant to the Reimbursement Agreement;

 

(c)                                  No Conflicts or Consents.  None of the execution and delivery of this Guaranty or the other Loan Documents applicable to Guarantor, the consummation of any of the transactions herein or therein contemplated, or the compliance with the terms and provisions hereof or with the terms and provisions thereof, will contravene or conflict, in any material respect, with any Legal Requirement to which Guarantor is subject or any judgment, license, order, or permit applicable to Guarantor or any indenture, mortgage, deed of trust, or other agreement or instrument to which Guarantor is a party or by which Guarantor may be bound, or to which Guarantor may be subject, to the extent such contravention or conflict could reasonably be expected to have a Material Adverse Effect.  No consent, approval, authorization, or order of any court or Governmental Authority or third party is required in connection with the execution and delivery by Guarantor of the Loan Documents applicable to Guarantor or to consummate the transactions contemplated hereby or thereby which has not been obtained.

 

(d)                                 Enforceable Obligations.  This Guaranty and the other Loan Documents to which Guarantor is a party are the legal, valid and binding obligations of Guarantor, enforceable in accordance with their respective terms, subject to Debtor Relief Laws.

 

(e)                                  Approvals and Consents.  All consents, licenses, approvals and authorizations of, and registrations, declarations and other filings with, any Governmental Authority which Guarantor is required to obtain in connection with the execution, delivery, performance or validity of, or payment under, this Guaranty and the other Loan Documents applicable to him have been duly obtained and are in full force and effect.

 

(f)                                   Litigation.  There is no suit, legal action or proceeding pending against, or to the knowledge of Guarantor threatened against or affecting, Guarantor or Borrower, before any court or arbitrator or any governmental body, agency or official which, if adversely determined, could have a Material Adverse Effect.

 

(g)                                  No Defaults.  No event has occurred or failed to occur and no condition exists which, upon the execution and delivery of this Guaranty and the other Loan Documents would constitute an Event of Default or would, with the giving of notice or the lapse of time, or both, constitute an Event of Default.  Guarantor is not in violation of any Legal Requirement or any agreement or other instrument to which he is a party or by which he or any of his assets or properties is bound, which violation might in any way have a Material Adverse Effect.  There are no “Events of Default” by Guarantor or Borrower under, and as such term or similar term is defined in, any outstanding debt instruments, agreements or other instruments covering the

 

7

 

payment of borrowed money from Lender or any Affiliate of Lender to which Guarantor and/or Borrower is a party.

 

(h)                                 Financial Statements.  Guarantor has furnished to Lender his most recent unaudited financial statements as of June 30, 2013, as prepared by Guarantor in form and substance acceptable to Lender.  Such financial statements are true and correct in all material respects and present fairly the financial condition of Guarantor as of the date of such financial statements.  Since such date, there has been no material adverse change in the financial condition of Guarantor.

 

(i)                                     No Change in Facts or Circumstances; Disclosure.  There is no fact which has not been disclosed in writing to Lender which has, or, as far as Guarantor can now reasonably foresee, will have a Material Adverse Effect.  Furthermore, there has been no material adverse change in any condition, fact, circumstance or event that would make the financial statements, reports, certificates or other documents submitted by Guarantor in connection with this Guaranty inaccurate, incomplete or otherwise misleading in any material respect or that would reasonably be expected to cause a Material Adverse Effect.

 

(j)                                    Taxes.  Guarantor has filed all foreign and United States federal income tax returns and all other material tax returns which are required to be filed by Guarantor and has paid all taxes due pursuant to such returns.  As of the date hereof, other than taxes which are currently being contested in good faith by proper proceedings, Guarantor does not know of any threatened contest or dispute with respect to any taxes due pursuant to such returns or pursuant to any assessments received by Guarantor, and if he shall do so in the future they shall be contested in good faith by proper proceedings for which adequate reserves are maintained.

 

(k)                                 Solvent.  Guarantor has not entered into the transactions hereunder or any Loan Document applicable to him with the actual intent to hinder, delay, or defraud any creditor and has received reasonably equivalent value in exchange for his obligations hereunder and under such Loan Documents.  On the date hereof and after and giving effect to the Guaranteed Obligations, Guarantor is and will be Solvent.

 

(l)                                     Not an Investment Company or Holding Company.  Guarantor is not an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

(m)                             Foreign Trade Regulations.  Guarantor is not (a) a person included within the definition of “designated foreign country” or “national” of a “designated foreign country” in Executive Order No. 8389, as amended, in Executive Order No. 9193, as amended, in the Foreign Assets Control Regulations (31 C.F.R., Chapter V, Part 500, as amended), in the Cuban Assets Control Regulations of the United States Treasury Department (31 C.F.R., Chapter V, Part 515, as amended) or in the Regulations of the Office of Alien Property, Department of Justice (8 C.F.R., Chapter II, Part 507, as amended) or within the meanings of any of the said Orders or Regulations, or of any regulations, interpretations, or rulings issued thereunder, or in violation of said Orders or Regulations or of any regulations, interpretations or rulings issued thereunder; or (b) an entity listed in Section 520.101 of the Foreign Funds Control Regulations (31 C.F.R., Chapter V, Part 520, as amended).

 

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(n)                                 Office of Foreign Assets Control.  Guarantor is not a person (i) whose property or interest in property is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) who engages in any dealings or transactions prohibited by Section 2 of such executive order, or, to its knowledge, is otherwise associated with any such person in any manner violative of Section 2, or (iii) on the list of Specially Designated Nationals and Blocked Persons or subject to the limitations or prohibitions under any other U.S. Department of Treasury’s Office of Foreign Assets Control regulation or executive order.

 

(o)                                 Foreign Person.  Guarantor is not a “foreign person” within the meaning of Section 1445(f)(3) of the Internal Revenue Code.

 

(p)                                 No Setoff.  Other than the statutory right of setoff provided by applicable Legal Requirements, there exists no right of setoff, deduction or counterclaim on the part of Guarantor against Lender or any of its Affiliates.

 

(q)                                 Certain Information.  Guarantor is presently informed of the financial condition of Borrower and each other and of all other circumstances that a diligent inquiry would reveal and that bear upon the risk of nonpayment of the Guaranteed Obligations.

 

10.                               Unencumbered Liquid Assets.  Guarantor shall hold at all times during the term hereunder Unencumbered Liquid Assets maintained at Lender and/or Affiliates of Lender having an aggregate market value of not less than Ten Million Dollars ($10,000,000).

 

11.                               Reports; Access.  Guarantor covenants and agrees that he shall (a) keep and maintain complete and accurate books and records and (b) permit Lender and any authorized representatives of Lender to have access to and to inspect, examine and make copies of the books and records, any and all accounts, data and other documents of Guarantor, during normal business hours, upon the giving of reasonable notice of such intent.  Lender shall have the right, at any time and from time to time upon the occurrence and continuation of an Event of Default hereunder after expiration of any applicable notice and cure periods, to audit all the books and records of Guarantor.  In the event that Lender audits any such books and records, Lender shall have the right, in its reasonable discretion, to choose the auditor.  Guarantor shall cooperate with Lender in connection with any such audit, and shall be obligated to pay for the cost of any such audit.  In addition, Guarantor shall deliver to Lender such other information relating to Guarantor and Borrower as Lender may from time to time reasonably request, including, without limitation, bank statements and/or brokerage statements, within three (3) Business Days of such request.

 

12.                               Certain Additional Covenants of Guarantor.  Guarantor further covenants, represents and warrants to Lender that:

 

(a)                                 Certain Notices.  Guarantor shall provide to Lender as soon as possible, and in any event no later than three (3) Business Days after the occurrence of an Event of Default, or an event which with notice or lapse of time or both would constitute an Event of Default continuing on the date of such statement, a statement of Guarantor setting forth the details of such Event of Default or event, and the action which Guarantor proposes to take with

 

9

 

respect thereto.  Guarantor shall also provide to Lender promptly after Guarantor receives actual knowledge of the commencement thereof, notice of (i) any material adverse change in the financial condition of Guarantor, or (ii) any action or proceeding relating to Guarantor by or before any court, governmental agency or arbitral tribunal as to which, if adversely determined, would have a Material Adverse Effect.

 

(b)                                 Compliance with Legal Requirements.  Guarantor shall, during the term hereunder, comply with all Legal Requirements if failure to comply with such Legal Requirements, individually or in the aggregate, would have a Material Adverse Effect.

 

(c)                                  No Obligations.  Lender is not obligated to give or to continue any financial accommodation to Borrower or any other Person (including Guarantor) except for the Reimbursement Agreement and thereunder.

 

(d)                                 No Other Representations.  In connection with the transactions contemplated by the Loan Documents, no Person, including Lender and Borrower, has made any representation to Guarantor as to any matter which may affect or in any way relate to the financial condition, relationships or transactions of Guarantor or any other Person, including the business, assets, liabilities, type or value of any security therefor, financial condition, management or control of Guarantor or any other Person.

 

(e)                                  No Obligation to Notify.  Lender is not obligated to notify Guarantor or any other Person of any change in the business, assets, liabilities, type or value of any security therefor, financial condition, management or control of Borrower, Guarantor or of any other Person, and none of such changes shall release or otherwise impair any of the rights of Lender against Guarantor.

 

(f)                                   No Release.  Neither failure by Lender to obtain, perfect, protect, preserve, insure or realize upon any security for any of the Guaranteed Obligations or any liability of any other Person nor any failure to obtain any other guaranty nor any other act or failure to act by Lender shall release or otherwise impair any of the obligations of Guarantor under this Guaranty.

 

(g)                                  Staying Informed, etc.  Guarantor will continue to keep informed of Borrower’s financial condition, the status of any other guarantor, and of all other circumstances that bear upon the risk of nonpayment.  Guarantor waives any obligation which may now or hereafter exist on the part of Lender to inform Guarantor of the risks being undertaken by making this Guaranty or of any changes in such risks.

 

13.                               Notices.  Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing and shall be deemed to be effective: (a) if by hand delivery, telecopy or other facsimile transmission, on the day and at the time on which delivered to such party at the address or fax numbers specified below, and if such day is not a Business Day, delivery shall be deemed to have been made on the next succeeding Business Day; (b) if by mail, on the day on which it is received by the receiving party after being deposited, postage prepaid, in the United States registered or certified mail, return receipt requested, addressed to such party at the address specified below; or (c) if by Federal

 

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Express or other reputable express mail service, on the next Business Day following the delivery to such express mail service, addressed to such party at the address set forth below;:

 

(a)                                 if to Guarantor, to:

 

Robert F.X. Sillerman
 151 East 72nd Street
 New York, New York 10021
 Telephone:                                   (212) 231-0091 
 Fax:                                                                       (646) 349-5988

 

and with a copy to (which will not constitute notice to Guarantor):

 

Dornbush, Schaeffer, Strongin & Venaglia, LLP
 747 Third Avenue
 New York, New York 10017
 Attention:                                         Landey Strongin, Esq.
 Telephone:                                   (212) 759-3300
 Fax:                                                                       (212) 753-7673

 

(b)                                 If to Lender:

 

Deutsche Bank AG, New York Branch
 345 Park Avenue, 14th Floor
 New York, New York 10154
 Attention:                                         Corey Kozak
 Telephone:                                   (212) 454-1084
 Fax:                                                                       (646) 867-1802

 

with copies to (which will not constitute notice to Lender):

 

Deutsche Bank AG, New York Branch
 60 Wall Street, 41st Floor
 New York, New York 10005
 Attention:                                         Lauryn Hart, Esq., Director and Counsel
 Telephone:                                   (212) 250-8229
 Fax:                                                                       (212) 797-3363

 

and with a copy to (which will not constitute notice to Lender):

 

Loeb & Loeb LLP
 345 Park Avenue 
 New York, New York 10154
 Attention:                                         Kevin M. Eisenberg, Esq.
 Telephone:                                   (212) 407-4123
 Fax:                                                                       (212) 504-9579

 

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Any party may change its address for purposes of this Guaranty by giving notice of such change to the other parties pursuant to this Section 13.  When determining the prior days’ notice required for any notice to be provided by Guarantor, the day the notice is delivered to Lender shall not be counted, but the day of relevant action shall be counted.  All communications shall be in the English language.

 

14.                               Subrogation.

 

(a)                                 In addition to all such rights of indemnity and subrogation as Guarantor may have under applicable law (but subject to Section 14(b)), Borrower agrees that (i) in the event a payment shall be made by Guarantor under this Guaranty in respect of any Guaranteed Obligation, Borrower shall indemnify Guarantor for the full amount of such payment and Guarantor shall be subrogated to the rights of the Lender or other Person to whom such payment shall have been made to the extent of such payment and (ii) in the event any assets of Guarantor shall be sold pursuant to any Loan Document to satisfy in whole or in part a Guaranteed Obligation, the Borrower shall indemnify Guarantor in an amount equal to the greater of the book value or the fair market value of the assets so sold.

 

(b)                                 Any and all rights and claims of Guarantor against Borrower or any property of Borrower against any other Person, arising by reason of any payment by Guarantor to Lender pursuant to the provisions, or in respect, of this Guaranty shall be subordinate, junior and subject in right of payment to the prior and indefeasible payment in full of all Guaranteed Obligations to Lender, and until such time, Guarantor shall have no right of subrogation, contribution or any similar right and hereby waive any right to enforce any remedy Lender may now or hereafter have against Borrower, any endorser or Guarantor of all or any part of the Guaranteed Obligations and any right to participate in, or benefit from, any security given to Lender to secure any Guaranteed Obligations.

 

(c)                                  Upon the full payment and satisfaction of the Guaranteed Obligations by Guarantor as described in Section 14(b) herein, Guarantor shall be fully subrogated to all rights and remedies of Lender under the Loan Documents and, following the written request of Guarantor and at the sole cost and expense of Guarantor, Lender shall use its best efforts to, without any liability to Guarantor or any other Person in connection therewith, execute and deliver such instruments prepared by Guarantor and take all reasonable actions in furtherance of such subrogation rights including continuing Lender’s security interest in the Collateral in favor of Guarantor as subrogated as contemplated herein and allowing for Guarantor to assume without interruption the rights and remedies of Lender under the Loan Documents.  Notwithstanding the foregoing, if any claim is ever made upon Lender for repayment or recovery of any amount or amounts received by Lender in payment or on account of any of the Obligations or the Guaranteed Obligations, (i) any and all rights (including any security interest in the Collateral) that have been assigned or otherwise transferred by Lender to Guarantor in connection with Guarantor’s subrogation rights shall automatically, without any further action by Guarantor or Lender, be assigned and transferred back to Lender and (ii) Guarantor, at the sole cost and expense of Guarantor, shall execute and deliver any and all documents, agreements and instruments requested by Lender in furtherance of the foregoing.

 

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15.                               Events of Default; Remedies.  The following shall constitute events of default hereunder (collectively, the “Events of Default”, and individually, an “Event of Default”):

 

(a)                                 Failure to Pay.  Guarantor shall fail to make any payment, when due, in respect of any Guaranteed Obligation pursuant to the terms hereof;

 

(b)                                 Failure to Perform Generally.  Guarantor shall fail to perform or observe any covenant, agreement or provision to be performed or observed under this Guaranty or any other Loan Document applicable to Guarantor after taking into account any applicable grace or forbearance period; provided, however, a breach by Guarantor of Section 10 hereof shall not constitute an Event of Default hereunder;

 

(c)                                  Misrepresentation.  Any representation or warranty made by Guarantor in this Guaranty or in any Loan Document applicable to him shall prove to have been false or misleading in any material respect at the time made or intended to be effective and such misrepresentation has a Material Adverse Effect;

 

(d)                                 Reimbursement Agreement.  An “Event of Default” shall occur under and as defined in the Reimbursement Agreement; or

 

(e)                                  Death or Incompetency.  The death or adjudicated incompetency of Guarantor.

 

16.                               Remedies, etc.

 

(a)                                 General.  Upon the occurrence and continuation of an Event of Default and at any time thereafter Lender shall have all rights and remedies available hereunder and at law or in equity, including, but not limited to, the right to (i) cause all Guaranteed Obligations to be immediately due and payable, whereupon the same shall become immediately due and payable; (ii) exercise its rights under the Loan Documents; (iii) take any other action available either at law or in equity to enforce performance or collect any amounts due or thereafter to become due under this Guaranty; and (iv) enforce the observance of any of the covenants or obligations of Guarantor under this Guaranty and the other Loan Documents.  It is further understood and agreed that upon any Event of Default described in Section 7.1(f) of the Reimbursement Agreement, all Guaranteed Obligations shall immediately and automatically become due and payable, without notice or demand, and Guarantor hereby expressly waives any such notice or demand, anything contained herein or in any other Loan Document to the contrary notwithstanding.

 

(b)                                 Lender.  Upon the occurrence and continuation of an Event of Default, all or any one or more of the rights, powers, privileges and other remedies available to Lender against Guarantor under this Guaranty or any of the other Loan Documents executed and delivered by, or applicable to, Guarantor or at law or in equity may be exercised by Lender at any time and from time to time, whether or not all or any of the Obligations shall be declared due and payable, and whether or not Lender shall have commenced any proceeding against Borrower or other action for the enforcement of its rights and remedies under any of the Loan Documents.  Any such actions taken by Lender shall be cumulative and concurrent and may be pursued independently, singly, successively, together or otherwise, at such time and in such order as

 

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Lender may determine in its sole discretion, to the fullest extent permitted by law, without impairing or otherwise affecting the other rights and remedies of Lender permitted by law, equity or contract or as set forth herein or in the other Loan Documents to which Guarantor is a party.

 

(c)                                  No Duty to Mitigate Damages.  Lender shall not be required to do any act whatsoever or exercise any diligence whatsoever to mitigate any damages if any Event of Default shall occur and be continuing hereunder.

 

(d)                                 No Additional Waiver Implied by One Waiver; Cumulative Rights.  In the event any agreement, warranty, representation or covenant contained in this Guaranty shall be breached by Guarantor and thereafter waived by Lender, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder.  The failure or delay of Lender to require performance by Guarantor of any provision of this Guaranty or any other Loan Document shall not affect its right to require performance of such provision unless and until such performance has been waived in writing by Lender in accordance with the terms hereof.  Each and every right or remedy granted to Lender hereunder or under any other document or instrument delivered hereunder or in connection herewith, or allowed to Lender at law or in equity or by statute, shall be cumulative and may be exercised from time to time, it being the intention of the parties hereto that no right or remedy hereunder is exclusive of any other right or remedy or remedies, and that each and every such right or remedy shall be in addition to any other right or remedy given hereunder and under the Loan Documents or now or hereafter existing at law or in equity or by statute.

 

(e)                                  Set Offs.  In addition to (and without limitation of) any right of set off, bankers’ lien or counterclaim Lender or assignee of Lender or Affiliate of Lender may otherwise have, each of Lender or assignee of Lender or any Affiliate of Lender shall be entitled, at its option, to the fullest extent permitted by law to set off and apply any and all balances and deposits (general or special, time or demand, provisional or final) at any time held and all other indebtedness owing by Lender or assignee of Lender or Affiliate of Lender, respectively, to or for the credit or account of Guarantor whether or not such balances, deposits or other indebtedness are then due against any and all of the obligations of Guarantor now or hereafter existing under this Guaranty or the other Loan Documents upon the failure of Guarantor to pay when due any amount due and owing pursuant to this Guaranty.  Lender or assignee of Lender or Affiliate of Lender, respectively, shall give Guarantor notice thereof promptly following any such set off; provided, however, that any failure of Lender or assignee of Lender or any Affiliate of Lender, respectively, to give such notice shall not affect the validity thereof.

 

17.                               Crediting of Monies Recovered.  Any amounts recovered from Guarantor or any other Person after an Event of Default shall be applied by Lender toward the payment of the Guaranteed Obligations and/or any other amounts due under the Loan Documents in such order, priority and proportions as Lender in its sole discretion shall determine.

 

18.                               Claims.  If any claim is ever made upon Lender for repayment or recovery of any amount or amounts received by Lender in payment or on account of any of the Guaranteed Obligations, including, without limitation, claims in connection with any insolvency, bankruptcy or reorganization of Borrower, and claims of invalid, fraudulent or preferential transfers, and Lender repays all or part of said amount by reason of (a) any judgment, decree or order of any

 

14

 

court or administrative body having jurisdiction over Lender or any of its property, or (b) any settlement or compromise of any such claim effected by Lender with any such claimant (including, without limitation, Borrower), then and in such event Guarantor agrees that any such judgment, decree, order, settlement or compromise shall be binding upon Guarantor, notwithstanding any revocation or termination hereof or the cancellation of the Reimbursement Agreement or any other instrument evidencing any Guaranteed Obligation, and Guarantor shall be and remain liable to Lender hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by Lender.

 

19.                               Statute of Limitations.  Any acknowledgment or new promise, whether by payment of principal or interest or otherwise and whether by Borrower or others (including Guarantor), with respect to any of the Guaranteed Obligations shall, if the statute of limitations in favor of Guarantor against Lender shall have commenced to run, toll the running of such statute of limitations and, if the period of such statute of limitations shall have expired, prevent the operation of such statute of limitations.

 

20.                               Separate Causes of Actions.  Each and every default in respect of the Guaranteed Obligations and each and every default hereunder shall give rise to a separate cause of action hereunder, and separate suits may be brought hereunder as each cause of action arises, but nothing herein shall preclude Lender from accelerating payment of the Guaranteed Obligations upon the occurrence of any Event of Default beyond any applicable grace, notice or cure period, or of the liabilities of Guarantor as herein provided.

 

21.                               Failure to Act, etc.  No failure or delay on the part of Lender in exercising any of its options, powers, rights or remedies, whether arising hereunder or otherwise, and no partial or single exercise thereof, shall constitute a waiver thereof or preclude any other or further exercise thereof or the exercise of any other right.  No waiver of any of Lender’s rights hereunder, and no modification, amendment, supplement or discharge of this Guaranty, shall be deemed to be made by Lender unless the same shall be in writing, shall be duly signed on behalf of Lender, and shall expressly refer to this Guaranty, and each such waiver, if any, shall apply only with respect to the specific instance involved, and shall in no way impair the rights of Lender or the obligations of Guarantor to Lender in any other respect at any other time.  No notice to or demand on Guarantor in any case shall entitle Guarantor to any other further notice or demand in similar or other circumstances.

 

22.                               GOVERNING LAW.  THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK.  GUARANTOR IRREVOCABLY (A) AGREES THAT ANY SUIT, ACTION OR OTHER LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY MAY BE BROUGHT IN A COURT OF RECORD IN THE CITY AND COUNTY OF NEW YORK OR IN THE COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE SOUTHERN DISTRICT OF NEW YORK, (B) CONSENTS TO THE JURISDICTION OF EACH SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY AND THE REMAINING LOAN DOCUMENTS AND (C) WAIVES ANY OBJECTION WHICH IT MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY AND THE REMAINING LOAN

 

15

 

DOCUMENTS IN ANY OF SUCH COURTS AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.  GUARANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY AND THE REMAINING LOAN DOCUMENTS BY SERVICE OF COPIES OF SUCH PROCESS TO GUARANTOR AT ITS ADDRESS PROVIDED IN SECTION 13 OF THIS GUARANTY.  NOTHING IN THIS SECTION 22, HOWEVER, SHALL AFFECT THE RIGHT OF LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF LENDER TO BRING ANY SUIT, ACTION OR PROCEEDING AGAINST GUARANTOR OR HIS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTIONS.

 

23.                               Binding Nature, etc.  This Guaranty is binding upon Guarantor and any heirs, executors, administrators, successors and assigns of Guarantor (except that Guarantor may not assign or transfer in any manner any of the obligations of Guarantor hereunder to any Person without the prior written consent of Lender), and shall inure to the benefit of Lender and its successors and assigns.  Any agreement, instrument or document evidencing or securing any Guaranteed Obligations may be transferred, and the benefit of the obligations of Guarantor hereunder shall extend to each holder of any such agreement, instrument or document evidencing or securing the Guaranteed Obligations automatically and without notice to Guarantor.

 

24.                               Jury Trial Waiver; No Marshalling of Assets; Submission to Jurisdiction.

 

(a)                                 Waiver of Trial by Jury; No Marshalling of Assets.

 

(i)                                     GUARANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING HEREUNDER OR UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND GUARANTOR HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING HEREUNDER OR UNDER ANY LOAN DOCUMENT SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS GUARANTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

 

(ii)                                  FURTHERMORE, GUARANTOR HEREBY WAIVES ANY DEFENSE OR CLAIM BASED ON MARSHALLING OF ASSETS OR ELECTION OF REMEDIES OR GUARANTIES.

 

(b)                                 SUBMISSION TO JURISDICTION AND WAIVERS.  GUARANTOR HEREBY SUBMITS FOR HIMSELF AND HIS PROPERTY IN ANY LEGAL ACTION OR

 

16

 

PROCEEDING RELATING TO THIS GUARANTY AND THE OTHER LOAN DOCUMENTS TO WHICH HE IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NONEXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, COUNTY OF NEW YORK, THE COURTS OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF.  GUARANTOR CONSENTS THAT ANY SUCH ACTION OR PROCEEDING RELATING TO THIS GUARANTY AND THE OTHER LOAN DOCUMENTS TO WHICH HE IS A PARTY MAY BE BROUGHT IN SUCH COURTS AND WAIVE ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING RELATING TO THIS GUARANTY AND THE OTHER LOAN DOCUMENTS TO WHICH HE IS A PARTY WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME.

 

25.                               Arm’s Length.  This Guaranty has been executed and delivered by Guarantor after arms’-length negotiations between Guarantor or duly authorized representatives of Guarantor and Lender, Guarantor having been represented by counsel of choice of Guarantor during such negotiations, and this Guaranty shall not be construed against Lender on the ground that Lender has prepared the same.

 

26.                               Severability.  In case one or more of the provisions contained in this Guaranty shall be or shall be deemed to be void, voidable, invalid, illegal or unenforceable in any respect in any jurisdiction, the effectiveness, validity, legality and enforceability of such provisions shall not be affected or impaired in any other jurisdiction, nor shall the remaining provisions contained herein in any way be affected or impaired thereby.

 

27.                               Expenses.  Guarantor agrees to pay promptly all actual and invoiced out-of-pocket costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) in connection with (i) any and all amounts that Lender has paid relative to the curing of any default resulting from the acts or omissions of Guarantor under this Guaranty, (ii) the execution and delivery of this Guaranty and any amendment or modification of, or waiver under, this Guaranty, and (iii) the perfection and preservation of, and the enforcement of, Lender’s rights hereunder.

 

28.                               Cumulative Rights.  The rights, remedies, powers and privileges of Lender hereunder are cumulative and not exclusive of any other rights, remedies, powers or privileges now or hereafter existing at law or in equity.

 

29.                               Section Headings.  The Section headings hereof are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Guaranty.

 

30.                               Modifications.  This Guaranty may not be modified, changed, waived or discharged orally, but only by a writing signed by Guarantor and Lender and constitutes the entire agreement of the parties with respect to the subject matter hereof.

 

31.                               USA Patriot Act Notice.  Lender hereby notifies Guarantor that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that

 

17

 

identifies Guarantor, which information includes the name and address of Guarantor and other information that will allow Lender to identify Guarantor in accordance with the Patriot Act.

 

32.                               Document Completion.  Upon Lender’s request from time to time, Guarantor shall promptly complete or cause to be completed any and all clerical errors contained in the Loan Documents (collectively, the “Authorized Actions”).  Additionally, Guarantor authorizes and gives Lender an irrevocable power of attorney, coupled with an interest, to perform the Authorized Actions on behalf of Guarantor and, where appropriate, insert replacement pages in this Guaranty reflecting the Authorized Actions, in each case without the re-execution of this Guaranty by Guarantor.  Lender shall promptly forward to Guarantor (or to counsel for Borrower) any and all replacement pages inserted in this Guaranty pursuant to the provisions of this paragraph.  Guarantor hereby ratifies the Loan Documents, as same may be changed in accordance with the terms hereof.

 

[Remainder of Page Intentionally Blank.
 Signature Page Follows.]

 

18

 

IN WITNESS WHEREOF, Guarantor has duly executed this Guaranty as of the date set forth above.

 

 

	
 
    	
GUARANTOR:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Robert F.X. Sillerman
    
	
 
    	
ROBERT   F.X. SILLERMAN
    
	
 
    	
 
    
	
STATE   OF NEW YORK
    	
)
    	
 
    
	
 
    	
)   ss:
    	
 
    
	
COUNTY   OF NEW YORK
    	
)
    	
 
    

 

On the 6th day of December, 2013, before me, the undersigned, a Notary Public in and for said State, personally appeared Robert F.X. Sillerman, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual executed the instrument.

 

 

	
 
    	
/s/   Alyson G. Muldoon
    
	
 
    	
Notary   Public
    

 

SIGNATURE PAGE TO
 SPRINGING UNCONDITIONAL GUARANTY
 (SFX ENTERTAINMENT)

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