Exhibit 10.5

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this “Security Agreement”), is entered into as of
August 5, 2011, among CARROLS LLC, a Delaware limited liability company (the
“Borrower”), each of the Domestic Subsidiaries of the Borrower from time to time
party hereto (individually a “Guarantor” and collectively the “Guarantors”; the
Guarantors, together with the Borrower, individually an “Obligor” and
collectively the “Obligors”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, in its
capacity as Administrative Agent under the Credit Agreement referred to below
(in such capacity, the “Administrative Agent”) for the several banks and other
financial institutions as may from time to time become parties to such Credit
Agreement (individually a “Lender” and collectively the “Lenders”).

RECITALS

WHEREAS, pursuant to that certain Credit Agreement dated as of the date hereof
(as amended, modified, extended, restated, replaced, or supplemented from time
to time, the “Credit Agreement”), among the Borrower, the Guarantors, the
Lenders party thereto and the Administrative Agent, the Lenders have agreed to
make Loans and to issue and/or acquire participation interests in Letters of
Credit upon the terms and subject to the conditions set forth therein; and

WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement and the obligations of the Lenders to make their respective Loans and
to issue and/or acquire participation interests in Letters of Credit under the
Credit Agreement that the Obligors shall have executed and delivered this
Security Agreement to the Administrative Agent for the ratable benefit of the
Lenders and the other Secured Parties.

NOW, THEREFORE, in consideration of these premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

1. Definitions. Unless otherwise defined herein, capitalized terms used herein
shall have the meanings ascribed to such terms in the Credit Agreement, and the
following terms which are defined in the Uniform Commercial Code from time to
time in effect in the State of New York (the “UCC”) are used herein as so
defined: Accession, Account, As-Extracted Collateral, Chattel Paper, Commercial
Tort Claim, Consumer Good, Deposit Account, Document, Electronic Chattel Paper,
Equipment, Farm Product, Fixture, General Intangible, Good, Instrument,
Inventory, Investment Property, Letter-of-Credit Right, Manufactured Home,
Payment Intangible, Proceeds, Securities Account, Securities Intermediary,
Software, Supporting Obligation and Tangible Chattel Paper.

2. Grant of Security Interest in the Collateral.

(a) To secure the prompt payment and performance in full when due, whether by
lapse of time, acceleration, mandatory prepayment or otherwise, of the Credit
Party Obligations, each Obligor hereby grants to the Administrative Agent, for
the ratable

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benefit of the Secured Parties, a continuing security interest in, and a right
to set off against, any and all right, title and interest of such Obligor in and
to the following, whether now owned or existing or owned, acquired, or arising
hereafter (collectively, the “Collateral”):

(i) all Accounts;

(ii) all cash and Cash Equivalents;

(iii) all Chattel Paper (including Electronic Chattel Paper);

(iv) all Commercial Tort Claims as set forth on Schedule 3.16(d) to the Credit
Agreement (as updated from time to time in accordance with the Credit
Agreement);

(v) all Copyright Licenses;

(vi) all Copyrights;

(vii) all Deposit Accounts;

(viii) all Documents;

(ix) all Equipment;

(x) all Fixtures;

(xi) all General Intangibles;

(xii) all Goods;

(xiii) all Instruments;

(xiv) all Inventory;

(xv) all Investment Property;

(xvi) all Letter-of-Credit Rights;

(xvii) all Material Contracts and all such other agreements, contracts, leases,
licenses, tax sharing agreements or hedging arrangements now or hereafter
entered into by an Obligor, as such agreements may be amended or otherwise
modified from time to time (collectively, the “Assigned Agreements”), including
without limitation, (A) all rights of an Obligor to receive moneys due and to
become due under or pursuant to the Assigned Agreements, (B) all rights of an
Obligor to receive proceeds of any insurance, indemnity, warranty or guaranty

 

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with respect to the Assigned Agreements, (C) claims of an Obligor for damages
arising out of or for breach of or default under the Assigned Agreements and
(D) the right of an Obligor to terminate the Assigned Agreements, to perform
thereunder and to compel performance and otherwise exercise all remedies
thereunder;

(xviii) all Patent Licenses;

(xix) all Patents;

(xx) all Payment Intangibles;

(xxi) all Securities Accounts;

(xxii) all Software;

(xxiii) all Supporting Obligations;

(xxiv) all Trademark Licenses;

(xxv) all Trademarks;

(xxvi) all books, records, ledger cards, files, correspondence, computer
programs, tapes, disks, and related data processing software (owned by such
Obligor or in which it has an interest) that at any time evidence or contain
information relating to any Collateral or are otherwise necessary or helpful in
the collection thereof or realization thereupon;

(xxvii) all other personal property of any kind or type whatsoever owned by such
Obligor; and

(xxviii) to the extent not otherwise included, all Accessions, Proceeds and
products of any and all of the foregoing.

(b) The Obligors and the Administrative Agent, on behalf of the Secured Parties,
hereby acknowledge and agree that the security interest created hereby in the
Collateral (i) constitutes continuing collateral security for all of the Credit
Party Obligations, whether now existing or hereafter arising and (ii) is not to
be construed as a present assignment of any Intellectual Property.

(c) The term “Collateral” shall include any Bank Products and any rights of the
Obligors thereunder only for purposes of this Section 2.

(d) Notwithstanding the foregoing grant of a security interest, (i) no Account,
Instrument, Chattel Paper or other obligation or property of any kind due from,
owed by,

 

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or belonging to, a Sanctioned Person or Sanctioned Entity or (ii) any lease in
which the lessee is a Sanctioned Person or Sanctioned Entity shall be
Collateral.

(e) Notwithstanding the foregoing grant of a security interest, this Security
Agreement shall not constitute a grant of a security interest in (i) any Real
Estate leased by any Obligor whether prior to or after the date hereof, (ii) the
Excluded Real Property (as defined in the Credit Agreement), (iii) the Franchise
Agreements (as defined in the Credit Agreement) (whether entered into prior to
or after the date hereof), (iv) any property to the extent that such grant of a
security interest is prohibited by any Requirements of Law of a Governmental
Authority, requires a consent not obtained of any Governmental Authority
pursuant to such Requirement of Law or is prohibited by, or constitutes a breach
or default under or results in the termination of or requires any consent not
obtained under, any contract, license, agreement, instrument or other document
evidencing or giving rise to such property or, in the case of any Investment
Property or Instruments, any applicable shareholder or similar agreement, except
to the extent that such Requirement of Law or the term in such contract,
license, agreement, instrument or other document or shareholder or similar
agreement providing for such prohibition, breach, default or termination or
requiring such consent is ineffective under applicable law (including, without
limitation, Sections 9-406, 9- 407, 9-408 or 9-409 of the UCC (or any successor
provision or provisions) of any relevant jurisdiction or any other applicable
law or principles of equity); provided, that for purposes of the foregoing, it
is understood and agreed that, upon the request of the Administrative Agent, the
applicable Obligor will use its commercially reasonable efforts to obtain a
consent if permissible by the applicable Requirement of Law or the applicable
contract, license, agreement, instrument or other document and (v) any motor
vehicle or other assets subject to a certificate of title (other than proceeds
thereof), to the extent a security interest in such motor vehicles or other
assets cannot be perfected by filing a UCC Financing Statement.

3. Provisions Relating to Accounts, Contracts and Agreements.

(a) Anything herein to the contrary notwithstanding, each of the Obligors shall
remain liable under each of its Accounts, contracts and agreements to observe
and perform in all material respects all of the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of any
agreement giving rise to each such Account or the terms of such contract or
agreement. Neither the Administrative Agent nor any Secured Party shall have any
obligation or liability under any Account (or any agreement giving rise
thereto), contract or agreement by reason of or arising out of this Security
Agreement or the receipt by the Administrative Agent or any Secured Party of any
payment relating to such Account, contract or agreement pursuant hereto, nor
shall the Administrative Agent or any Secured Party be obligated in any manner
to perform any of the obligations of an Obligor under or pursuant to any Account
(or any agreement giving rise thereto), contract or agreement, to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party under
any Account (or any agreement giving rise thereto), contract or agreement, to
present or file any claim, to take any action

 

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to enforce any performance or to collect the payment of any amounts which may
have been assigned to it or to which it may be entitled at any time or times.

(b) The Administrative Agent hereby authorizes the Obligors to collect the
Accounts; provided, that the Administrative Agent may curtail or terminate such
authority at any time after the occurrence and during the continuance of an
Event of Default. If required by the Administrative Agent at any time after the
occurrence and during the continuation of an Event of Default, any payments of
Accounts, when collected by the Obligors (i) shall be forthwith (and in any
event within two (2) Business Days) deposited by the Obligors in a collateral
account maintained under the sole dominion and control of the Administrative
Agent, subject to withdrawal by the Administrative Agent for the account of the
Secured Parties only as provided in Section 12 hereof, and (ii) until so turned
over, shall be held by the Obligors in trust for the Administrative Agent and
the Secured Parties, segregated from other funds of the Obligors.

(c) At any time after the occurrence and during the continuance of an Event of
Default, the Administrative Agent shall have the right, but not the obligation,
to make test verifications of the Accounts in any manner and through any medium
that it reasonably considers advisable, and the Obligors shall use their
commercially reasonable efforts to furnish all such assistance and information
as the Administrative Agent may reasonably require in connection with such test
verifications. Upon the Administrative Agent’s request after the occurrence and
during the continuance of an Event of Default and at the expense of the
Obligors, the Obligors shall cause independent public accountants or others
satisfactory to the Administrative Agent to furnish to the Administrative Agent
reports showing reconciliations, aging and test verifications of, and trial
balances for, the Accounts. The Administrative Agent in its own name or in the
name of others may, after the occurrence and during the continuance of an Event
of Default, communicate with account debtors on the Accounts to verify with them
to the Administrative Agent’s satisfaction the existence, amount and terms of
any Accounts.

4. Representations and Warranties. Each Obligor hereby represents and warrants
to the Administrative Agent, for the benefit of the Secured Parties, that so
long as any of the Credit Party Obligations (other than contingent indemnity
obligations that survive termination of the Credit Documents pursuant to the
stated terms thereof) remain outstanding or any Credit Document is in effect,
and until all of the Commitments shall have been terminated:

(a) Chief Executive Office; Books & Records; Legal Name; State of Formation. No
Obligor has in the four (4) months preceding the Closing Date changed its name,
been party to a merger, consolidation or other change in structure or used any
tradename not disclosed on Schedule 4(a) attached hereto (as updated from time
to time).

(b) Ownership. Each Obligor is the legal and beneficial owner of its Collateral
and, subject to Section 2(e), has the right to pledge, sell, assign or transfer
the same, subject to the Burger King Rights.

 

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(c) Security Interest/Priority. This Security Agreement creates a valid security
interest in favor of the Administrative Agent, for the benefit of the Secured
Parties, in the Collateral of such Obligor and, when properly perfected by
filing, obtaining possession, the granting of control to the Administrative
Agent or otherwise, shall constitute a valid first priority, perfected security
interest in such Collateral, to the extent such security interest can be
perfected by (i) filing, obtaining possession, the granting of control or
otherwise under the UCC, (ii) by filing an appropriate notice with the United
States Patent and Trademark Office or the United States Copyright Office, or
(iii) such other action as may be required pursuant to any applicable
jurisdictions’ certificate of title statute, free and clear of all Liens except
for Permitted Liens.

(d) Consents. Except for (i) the filing or recording of UCC financing
statements, (ii) the filing of appropriate notices with the United States Patent
and Trademark Office, the United States Copyright Office and the Canadian
Intellectual Property Office, (iii) obtaining control to perfect the Liens
created by this Security Agreement, (iv) compliance with the Federal Assignment
of Claims Act or comparable state law, and/or (v) the filing, registration or
other action required pursuant to any applicable certificate of title statute,
no consent or authorization of, filing with, or other act by or in respect of,
any arbitrator or Governmental Authority and no consent of any other Person
(including, without limitation, any stockholder, member or creditor of such
Obligor) is required (A) for the grant by such Obligor of the security interest
in the Collateral granted hereby or for the execution, delivery or performance
of this Security Agreement by such Obligor or (B) except for the Burger King
Rights, for the perfection of such security interest or the exercise by the
Administrative Agent of the rights and remedies provided for in this Security
Agreement.

(e) Types of Collateral. None of the Collateral consists of, or is the Proceeds
of, As-Extracted Collateral, Farm Products, Manufactured Homes or standing
timber (as such term is used in the UCC).

(f) Inventory. No Inventory in excess of $500,000 of an Obligor is held by a
third party (other than an Obligor) pursuant to consignment, sale or return,
sale on approval or similar arrangement.

(g) Intellectual Property.

(i) Each of the Obligors and its Subsidiaries owns, or has the legal right to
use, all Intellectual Property, tradenames, technology, know-how and processes
necessary for each of them to conduct its business as currently conducted.

(ii) Except as disclosed in Schedule 3.16(a) to the Credit Agreement and other
than as provided in the Franchise Agreements, (A) each Obligor has the right to
use its material Intellectual Property in perpetuity and without payment of
royalties, (B) all registrations with and applications to Governmental
Authorities in respect of such material Intellectual Property are valid and in
full force and

 

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effect and are not subject to the payment of any taxes or maintenance fees or
the taking of any interest therein, held by any of the Obligors to maintain
their validity or effectiveness, and (C) other than the Burger King Rights,
there are no restrictions on the direct or indirect transfer of any Contractual
Obligation, or any interest therein, held by any of the Obligors in respect of
such owned Intellectual Property which has not been obtained except where such
restriction could reasonably be expected to have a Material Adverse Effect.

(iii) None of the Obligors is in default under any license to use its
Intellectual Property except for any default that could not reasonably be
expected to have a Material Adverse Effect; no claim has been asserted and is
pending by any Person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor do the Obligors or any of their Subsidiaries know of any such
claim; and, to the knowledge of the Obligors or any of their Subsidiaries, the
use of such Intellectual Property by any of the Obligors or any of its
Subsidiaries does not materially infringe on the rights of any Person.

(iv) The Obligors have recorded or deposited with and paid to the United States
Copyright Office, the Register of Copyrights, the Copyrights Royalty Tribunal or
other Governmental Authority, all notices, statements of account, royalty fees
and other documents and instruments required under the terms and conditions of
any Contractual Obligation of the Obligors and/or under Title 17 of the United
States Code and the rules and regulations issued thereunder (collectively, the
“Copyright Act”), and are not liable to any Person for copyright infringement
under the Copyright Act or any other law, rule, regulation, contract or license
as a result of their business operations.

(v) All Intellectual Property of each Obligor is valid, subsisting, unexpired,
enforceable and has not been abandoned, and each Obligor is legally entitled to
use each of its tradenames.

(vi) Except as set forth in Schedule 3.16(a) to the Credit Agreement and other
than pursuant to the Franchise Agreements, none of the Intellectual Property of
the Obligors is the subject of any licensing or franchise agreement.

(vii) No holding, decision or judgment has been rendered by any Governmental
Authority which would limit, cancel or question the validity of any Intellectual
Property of the Obligors.

(viii) No action or proceeding is pending seeking to limit, cancel or question
the validity of any Intellectual Property of the Obligors, or which, if
adversely determined, would have a material adverse effect on the value of any
such Intellectual Property.

 

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(ix) All applications pertaining to the Intellectual Property of each Obligor
have been duly and properly filed, and all registrations or letters pertaining
to such Intellectual Property have been duly and properly filed and issued, and
all of such Intellectual Property is valid and enforceable.

(x) No Obligor has made any assignment or entered into any agreement in conflict
with the security interest of the Administrative Agent in the Intellectual
Property of each Obligor hereunder other than the Franchise Agreements.

(h) Documents, Instruments and Chattel Paper. All material Documents,
Instruments and Chattel Paper describing, evidencing or constituting Collateral
are, to the Obligors’ knowledge, complete, valid, and genuine.

(i) Equipment. With respect to each Obligor’s material Equipment necessary in
the conduct of its business: (i) such Obligor has good and marketable title
thereto; and (ii) all such Equipment is in normal operating condition and
repair, ordinary wear and tear alone excepted (subject to casualty events), and
is suitable for the uses to which it is customarily put in the conduct of such
Obligor’s business.

5. Covenants. Each Obligor covenants that, so long as any of the Credit Party
Obligations (other than contingent indemnity obligations that survive
termination of the Credit Documents pursuant to the stated terms thereof) remain
outstanding or any Credit Document is in effect other than Letters of Credit
that extend beyond the Maturity Date and are properly treated in accordance with
Section 2.3(k) of the Credit Agreement, and until all of the Commitments shall
have been terminated, such Obligor shall:

(a) Perfection of Security Interest by Filing, Etc. Execute and deliver to the
Administrative Agent and/or file such agreements, assignments or instruments
(including affidavits, notices, reaffirmations, amendments and restatements of
existing documents, and any document as may be necessary if the law of any
jurisdiction other than New York becomes or is applicable to the Collateral or
any portion thereof, in each case, as the Administrative Agent may reasonably
request) and do all such other things as the Administrative Agent may reasonably
deem necessary (i) to assure to the Administrative Agent its security interests
hereunder are perfected, including (A) such financing statements (including
continuation statements) or amendments thereof or supplements thereto or other
instruments as the Administrative Agent may from time to time reasonably request
in order to perfect and maintain the security interests granted hereunder in
accordance with the UCC and any other personal property security legislation in
the appropriate state(s) or province(s), (B) with regard to Copyrights, a Notice
of Grant of Security Interest in Copyrights for filing with the United States
Copyright Office and the Canadian Intellectual Property Office, as applicable in
the form of Exhibit A attached hereto, (C) with regard to Patents, a Notice of
Grant of Security Interest in Patents for filing with the United States Patent
and Trademark Office and the Canadian Intellectual Property Office, as
applicable in the form of Exhibit B attached hereto and (D) with regard to
Trademarks, a Notice of Grant of Security Interest in

 

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Trademarks for filing with the United States Patent and Trademark Office and the
Canadian Intellectual Property Office, as applicable in the form of Exhibit C
attached hereto, (ii) to consummate the transactions contemplated hereby and
(iii) to otherwise protect and assure the Administrative Agent of its rights and
interests hereunder. Each Obligor hereby authorizes the Administrative Agent to
prepare and file such financing statements (including continuation statements)
or amendments thereof or supplements thereto or other instruments as the
Administrative Agent may from time to time deem necessary or appropriate in
order to perfect and maintain the security interests granted hereunder in
accordance with the UCC, including, without limitation but subject to the Burger
King Rights, any financing statement that describes the Collateral as “all
personal property” or “all assets” of such Obligor or that describes the
Collateral in some other manner as the Administrative Agent deems necessary or
advisable. Each Obligor agrees to mark its books and records to reflect the
security interest of the Administrative Agent in the Collateral.

(b) Perfection of Security Interest by Possession. If (i) any amount payable
under or in connection with any of the Collateral in excess of $500,000 shall be
or become evidenced by any Document, Instrument, Tangible Chattel Paper or
Supporting Obligation or (ii) any Collateral in excess of $500,000 shall be
stored or shipped subject to a Document or (iii) any Collateral in excess of
$500,000 shall consist of Investment Property in the form of certificated
securities, promptly notify the Administrative Agent of the existence of such
Collateral and deliver such Instrument, Chattel Paper, Supporting Obligation,
Document or Investment Property to the Administrative Agent, duly endorsed in a
manner satisfactory to the Administrative Agent, to be held as Collateral
pursuant to this Security Agreement.

(c) Perfection of Security Interest Through Control. If any Collateral in excess
of $500,000 shall consist of Deposit Accounts, Electronic Chattel Paper,
Letter-of-Credit Rights, Securities Accounts or uncertificated Investment
Property, execute and deliver (and, with respect to any Collateral consisting of
a Securities Account or uncertificated Investment Property, cause the Securities
Intermediary or the issuer, as applicable, with respect to such Investment
Property to execute and deliver) to the Administrative Agent all control
agreements, assignments, instruments or other documents as reasonably requested
by the Administrative Agent for the purposes of obtaining and maintaining
control of such Collateral. If any Collateral shall consist of Deposit Accounts
or Securities Accounts, comply with Section 6.14 of the Credit Agreement.

(d) Other Liens. Use its commercially reasonable efforts to defend its interests
in the Collateral against the claims and demands of all other parties claiming
an interest therein and keep the Collateral free from all Liens, except for
Permitted Liens. Neither the Administrative Agent nor any Secured Party
authorizes any Obligor to, and no Obligor shall, sell, exchange, transfer,
assign, lease or otherwise dispose of the Collateral or any interest therein,
except as permitted under the Credit Agreement.

 

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(e) Preservation of Collateral. Keep the Collateral in good order, condition and
repair in all material respects, ordinary wear and tear excepted; not use the
Collateral in violation of the provisions of this Security Agreement or any
other agreement relating to the Collateral or any policy insuring the Collateral
or any applicable Requirement of Law; not permit any Collateral to be or become
a fixture to real property or an accession to other personal property unless the
Administrative Agent has a valid, perfected and first priority security interest
for the benefit of the Secured Parties in such real or personal property,
subject to the Burger King Rights; and not, except if such Collateral is being
disposed of as permitted by the Credit Agreement, without the prior written
consent of the Administrative Agent, alter or remove any identifying symbol or
number on its Equipment.

(f) Changes in Structure or Location. Except as permitted pursuant to
Section 6.8 of the Credit Agreement, no Obligor may (i) alter its legal
existence or, in one transaction or a series of transactions, merge into or
consolidate with any other entity, or sell all or substantially all of its
assets, (ii) change its state of incorporation or organization, or (iii) change
its registered legal name.

(g) Collateral Held by Warehouseman, Bailee, etc. If any Collateral, in excess
of $500,000 is at any time in the possession or control of a warehouseman,
bailee or any agent or processor of such Obligor, (i) upon the request of the
Administrative Agent, notify the Administrative Agent of such possession,
(ii) notify such Person of the Administrative Agent’s security interest for the
benefit of the Secured Parties in such Collateral, (iii) upon the request of the
Administrative Agent, instruct such Person to hold all such Collateral for the
Administrative Agent’s account subject to the Administrative Agent’s
instructions and (iv) obtain an acknowledgment from such Person that it is
holding such Collateral for the benefit of the Administrative Agent.

(h) Treatment of Accounts. Maintain at its principal place of business a record
of Accounts consistent with customary business practices.

(i) Covenants Relating to Inventory.

(i) Maintain, keep and preserve its Inventory in good salable condition at its
own cost and expense, subject to normal wear and tear and the discarding of
perishable goods that are usable, consumed or consumable in any Obligor’s
ordinary course of business.

(ii) Comply with all reporting requirements set forth in the Credit Agreement
with respect to Inventory.

(iii) If any of the Inventory in excess of $500,000 is at any time evidenced by
a document of title, promptly notify the Administrative Agent thereof and, upon
the request of the Administrative Agent, deliver such document of title to the
Administrative Agent.

 

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(j) Covenants Relating to Copyrights.

(i) Employ the Copyright for each material Work with such notice of copyright as
may be required by law to secure copyright protection.

(ii) Not do any act or knowingly omit to do any act whereby any Copyright may
become invalidated and (A) not do any act, or knowingly omit to do any act,
whereby any Copyright may become injected into the public domain; (B) notify the
Administrative Agent immediately if it knows, or has reason to know, that any
Copyright could reasonably be expected to become injected into the public domain
or of any adverse determination or development (including, without limitation,
the institution of, or any such determination or development in, any proceeding
in any court or tribunal in the United States, Canada or any other country)
regarding an Obligor’s ownership of any such Copyright or its validity; (C) take
all necessary steps as it shall deem appropriate under the circumstances to
maintain and pursue each application (and to obtain the relevant registration)
and to maintain each registration of each Copyright owned by an Obligor
including, without limitation, filing of applications for renewal where
necessary; and (D) promptly notify the Administrative Agent of any material
infringement of any Copyright of an Obligor of which it becomes aware and take
such actions as it shall reasonably deem appropriate under the circumstances to
protect such Copyright, including, where appropriate, the bringing of suit for
infringement, seeking injunctive relief and seeking to recover any and all
damages for such infringement.

(iii) Not make any assignment or agreement in conflict with the security
interest in the Copyrights of each Obligor hereunder.

(k) Covenants Relating to Patents and Trademarks.

(i)(A) Continue to use each Trademark in order to maintain such Trademark in
full force free from any claim of abandonment for non-use, (B) maintain as in
the past the quality of products and services offered under such Trademark,
(C) employ such Trademark with the appropriate notice of registration, (D) not
adopt or use any mark which is confusingly similar or a colorable imitation of
such Trademark unless the Administrative Agent, for the ratable benefit of the
Secured Parties, shall obtain a perfected security interest in such mark
pursuant to this Security Agreement, and (E) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby any
Trademark may become invalidated.

(ii) Not do any act, or omit to do any act, whereby any Patent may become
abandoned or dedicated.

(iii) Promptly notify the Administrative Agent if it knows, or has reason to
know, that any application or registration relating to any Patent or

 

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Trademark may become abandoned or dedicated, or of any adverse determination or
development (including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the Canadian Intellectual Property Office or any court or
tribunal in any country) regarding an Obligor’s ownership of any such Patent or
Trademark or its right to register the same or to keep, maintain and use the
same.

(iv) Take all reasonable and necessary steps, including, without limitation, in
any proceeding before the United States Patent and Trademark Office, or any
similar office or agency in any other country or any political subdivision
thereof, to maintain and pursue each application, to obtain the relevant
registration and to maintain each registration of the Patents and Trademarks,
including, without limitation, filing of applications for renewal, affidavits of
use and affidavits of incontestability.

(v) Promptly notify the Administrative Agent after it learns that any Patent or
Trademark included in the Collateral is infringed, misappropriated or diluted by
a third party and promptly sue for infringement, misappropriation or dilution,
to seek injunctive relief where appropriate and to recover any and all damages
for such infringement, misappropriation or dilution, or take such other actions
as it shall reasonably deem appropriate under the circumstances to protect such
Patent or Trademark.

(vi) Not make any assignment or agreement in conflict with the security interest
in the Patents or Trademarks of any Obligor hereunder.

(l) New Patents, Copyrights and Trademarks. In accordance with Section 5.2(c) of
the Credit Agreement, provide the Administrative Agent with (i) a listing of all
applications, if any, for new Patents or Trademarks (together with a listing of
application numbers), which new applications and issued registrations or letters
shall be subject to the terms and conditions hereunder, and (ii) (A) with
respect to Copyrights, a duly executed Notice of Grant of Security Interest in
Copyrights, (B) with respect to Patents, a duly executed Notice of Grant of
Security Interest in Patents, (C) with respect to Trademarks, a duly executed
Notice of Grant of Security Interest in Trademarks or (D) such other duly
executed documents as the Administrative Agent may request in a form acceptable
to counsel for the Administrative Agent and suitable for recording to evidence
the security interest of the Administrative Agent on behalf of the Secured
Parties in the Copyright, Patent or Trademark which is the subject of such new
application, and the goodwill and General Intangibles of such Obligor relating
thereto or represented thereby.

(m) Intellectual Property Generally. Upon request of the Administrative Agent,
execute and deliver any and all agreements, instruments, documents, and papers
as the Administrative Agent may reasonably request to evidence the
Administrative Agent’s security interest in the Intellectual Property and the
general intangibles relating thereto including, without limitation, the goodwill
of the Obligors and their Subsidiaries

 

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relating thereto or represented thereby (or such other Intellectual Property or
the general intangibles relating thereto or represented thereby as the
Administrative Agent may reasonably request).

(n) Commercial Tort Claims; Notice of Litigation. Promptly (i) forward to the
Administrative Agent written notification of any and all Commercial Tort Claims
of the Obligors in excess of $500,000 and (ii) execute and deliver such
statements, documents and notices and do and cause to be done all such things as
may be reasonably required by the Administrative Agent, or required by law,
including all things which may from time to time be necessary under the UCC to
fully create, preserve, perfect and protect the priority of the Administrative
Agent’s security interest in any Commercial Tort Claims.

(o) Status of Collateral as Personal Property. At all times maintain the
Collateral as personal property and not affix any of the Collateral to any real
property in a manner which would change its nature from personal property to
real property or a Fixture, unless the Administrative Agent has a first
priority, perfected Lien on such real property or Fixture.

(p) Regulatory Approvals. If an Event of Default shall have occurred and be
continuing, each Obligor shall take any action which the Administrative Agent
may reasonably request in order to transfer and assign to the Administrative
Agent, or to such one or more third parties as the Administrative Agent may
designate, or to a combination of the foregoing, each Governmental Approval of
such Obligor. To enforce the provisions of this subsection, upon the occurrence
and during the continuance of an Event of Default, the Administrative Agent is
empowered to request the appointment of a receiver from any court of competent
jurisdiction. Such receiver shall be instructed to seek from the Governmental
Authority an involuntary transfer of control of each such Governmental Approval
for the purpose of seeking a bona fide purchaser to whom control will ultimately
be transferred. Each Obligor hereby agrees to authorize such an involuntary
transfer of control upon the request of the receiver so appointed, and, if such
Obligor shall refuse to authorize the transfer, its approval may be required by
the court. Upon the occurrence and continuance of an Event of Default, such
Obligor shall further use its reasonable best efforts to assist in obtaining
Governmental Approvals, if required, for any action or transaction contemplated
by this Security Agreement, including, without limitation, the preparation,
execution and filing with the Governmental Authority of such Obligor’s portion
of any necessary or appropriate application for the approval of the transfer or
assignment of any portion of the assets (including any Governmental Approval) of
such Obligor. Because each Obligor agrees that the Administrative Agent’s remedy
at law for failure of such Obligor to comply with the provisions of this
subsection would be inadequate and that such failure would not be adequately
compensable in damages, such Obligor agrees that the covenants contained in this
subsection may be specifically enforced, and such Obligor hereby waives and
agrees not to assert any defenses against an action for specific performance of
such covenants.

 

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(q) Insurance. Insure, repair and replace the Collateral of such Obligor as set
forth in the Credit Agreement. All proceeds derived from insurance on the
Collateral shall be subject to the security interest of the Administrative Agent
hereunder.

(r) Covenants Relating to the Assigned Agreements.

(i) Upon the request of the Administrative Agent, each Obligor shall, at its
expense, (A) furnish to the Administrative Agent copies of all notices, requests
and other documents received by such Obligor under or pursuant to the Assigned
Agreements, and such other information and reports regarding the Assigned
Agreements and (B) to the extent such Obligor believes it is necessary in the
prudent conduct of its business, make to any other party to any Assigned
Agreement such demands and requests for information and reports or for action as
an Obligor is entitled to make thereunder.

(ii) Unless the applicable Obligor believes it is necessary in the prudent
conduct of its business, no Obligor shall (A) cancel or terminate any Assigned
Agreement of such Obligor or consent to or accept any cancellation or
termination thereof; (B) amend or otherwise modify any Assigned Agreement of
such Obligor or give any consent, waiver or approval thereunder; (C) waive any
default under or breach of any Assigned Agreement of such Obligor; or (D) take
any other action in connection with any Assigned Agreement of such Obligor which
would impair the value of the interest or rights of such Obligor thereunder or
which would impair the interests or rights of the Administrative Agent.

(s) Material Contracts. Upon the request of the Administrative Agent, with
respect to any Material Contract, each Obligor will (i) execute and deliver (or
cause to be executed and delivered) to the Administrative Agent a collateral
assignment of such Material Contract and a consent to such collateral
assignment, in each case in a form acceptable to the Administrative Agent,
(ii) use commercially reasonable efforts to cause the other parties to such
Material Contract to execute such consent and (iii) do any act or execute any
additional documents required by the Administrative Agent to ensure to the
Administrative Agent the effectiveness and first priority of its security
interest in such Material Contract.

(t) Intercreditor Agreement. Upon the request of the Administrative Agent, the
Obligors will use their commercially reasonable efforts to cooperate with and
assist the Administrative Agent in obtaining from Burger King Corporation an
intercreditor agreement, in form and substance reasonably satisfactory to the
Administrative Agent, among the Administrative Agent, Burger King Corporation
and the applicable Obligor, to permit the exercise of rights and remedies by the
Administrative Agent hereunder, subject to such rights that Burger King
Corporation may have under the Franchise Agreements, including, without
limitation, any of the Burger King Rights; provided, however, that no such
intercreditor agreement will be required to the extent that as a condition of
obtaining the intercreditor agreement, Burger King Corporation will impose any
obligations on any of the Obligors, or take away any of such Obligor’s rights,
under

 

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the Franchise Agreements (or documents related thereto) prior to any exercise of
remedies pursuant to the Loan Documents which, individually or in the aggregate,
will be material and adverse to such Obligor under any such Franchise Agreement.

6. License of Intellectual Property. Except for any Intellectual Property
licensed or used by the Obligors pursuant to the Franchise Agreements, the
Obligors hereby assign, transfer and convey to the Administrative Agent,
effective upon the occurrence and during the continuance of any Event of
Default, the nonexclusive right and license to use all Intellectual Property
owned or used by any Obligor that relate to the Collateral and any other
collateral granted by the Obligors as security for the Credit Party Obligations,
together with any goodwill associated therewith, all to the extent necessary to
enable the Administrative Agent to use, possess and realize on the Collateral
and to enable any successor or assign to enjoy the benefits of the Collateral.
This right and license shall inure to the benefit of all successors, assigns and
transferees of the Administrative Agent and its successors, assigns and
transferees, whether by voluntary conveyance, operation of law, assignment,
transfer, foreclosure, deed in lieu of foreclosure or otherwise. Such right and
license is granted free of charge, without requirement that any monetary payment
whatsoever be made to the Obligors.

7. Special Provisions Regarding Inventory. Notwithstanding anything to the
contrary contained in this Security Agreement, each Obligor may, unless and
until an Event of Default occurs and is continuing and the Administrative Agent
instructs such Obligor otherwise, without further consent or approval of the
Administrative Agent, use, consume, sell, lease and exchange or in the case of
perishable goods that are unable, consumed or consumable in the business,
dispose of, to the extent such goods are no longer usable or consumable, its
Inventory in the ordinary course of its business as presently conducted,
whereupon, in the case of such a sale or exchange, the security interest created
hereby in the Inventory so sold or exchanged (or disposed of) (but not in any
Proceeds arising from such sale or exchange) shall cease immediately without any
further action on the part of the Administrative Agent.

8. Performance of Obligations; Advances by Administrative Agent. On failure of
any Obligor to perform any of the covenants and agreements contained herein, the
Administrative Agent may, at its sole option and in its sole discretion, perform
or cause to be performed the same and in so doing may expend such sums as the
Administrative Agent may reasonably deem advisable in the performance thereof,
including, without limitation, the payment of any insurance premiums, the
payment of any taxes, a payment to obtain a release of a Lien or potential Lien
(other than with respect to the Burger King Rights), expenditures made in
defending against any adverse claim and all other expenditures which the
Administrative Agent may make for the protection of the security interest hereof
or may be compelled to make by operation of law. All such sums and amounts so
expended shall be repayable by the Obligors on a joint and several basis
promptly upon timely notice thereof and demand therefor, shall constitute
additional Credit Party Obligations and shall bear interest from the date said
amounts are expended at the Default Rate. No such performance of any covenant or
agreement by the Administrative Agent on behalf of any Obligor, and no such
advance or expenditure therefor, shall relieve the Obligors of any default under
the terms of this Security Agreement or the other Credit Documents. The
Administrative Agent may make any payment hereby authorized in accordance with
any bill, statement or estimate procured from the appropriate public office or

 

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holder of the claim to be discharged without inquiry into the accuracy of such
bill, statement or estimate or into the validity of any tax assessment, sale,
forfeiture, tax lien, title or claim except to the extent such payment is being
contested in good faith by an Obligor in appropriate proceedings and against
which adequate reserves are being maintained in accordance with GAAP.

9. Events of Default.

The occurrence of an event which under the Credit Agreement would constitute an
Event of Default shall be an event of default hereunder (an “Event of Default”).

10. Remedies.

(a) General Remedies. Upon the occurrence of an Event of Default and during
continuation thereof, the Administrative Agent and the Secured Parties shall
have, in addition to the rights and remedies provided herein, in the Credit
Documents or by law (including, but not limited to, levy of attachment,
garnishment and the rights and remedies set forth in the UCC of the jurisdiction
applicable to the affected Collateral), the rights and remedies of a secured
party under the UCC (regardless of whether the UCC is the law of the
jurisdiction where the rights and remedies are asserted and regardless of
whether the UCC applies to the affected Collateral), and further, the
Administrative Agent may, with or without judicial process or the aid and
assistance of others, and subject to the Burger King Rights, (i) enter on any
premises on which any of the Collateral may be located and, without resistance
or interference by the Obligors, take possession of the Collateral, (ii) dispose
of any Collateral on any such premises, (iii) require the Obligors to assemble
and make available to the Administrative Agent at the expense of the Obligors
any Collateral at any place and time designated by the Administrative Agent
which is reasonably convenient to both parties, (iv) remove any Collateral from
any such premises for the purpose of effecting the sale or other disposition
thereof, and/or (v) without demand and without advertisement, notice, hearing or
process of law, all of which each of the Obligors hereby waives to the fullest
extent permitted by law, at any place and time or times, sell and deliver any or
all Collateral held by or for it at public or private sale, by one or more
contracts, in one or more parcels, for cash, upon credit or otherwise, at such
prices and upon such terms as the Administrative Agent deems advisable, in its
sole discretion (subject to any and all mandatory legal requirements). Neither
the Administrative Agent’s compliance with any applicable state or federal law
in the conduct of such sale, nor its disclaimer of any warranties relating to
the Collateral, shall be considered to adversely affect the commercial
reasonableness of such sale. In addition to all other sums due the
Administrative Agent and the Secured Parties with respect to the Credit Party
Obligations, the Obligors shall pay the Administrative Agent and each of the
Secured Parties all reasonable documented costs and expenses incurred by the
Administrative Agent or any such Secured Party, including, but not limited to,
reasonable attorneys’ fees and court costs, in obtaining or liquidating the
Collateral, in enforcing payment of the Credit Party Obligations, or in the
prosecution or defense of any action or proceeding by or against the
Administrative Agent or the Secured Parties or the Obligors concerning

 

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any matter arising out of or connected with this Security Agreement, any
Collateral or the Credit Party Obligations, including, without limitation, any
of the foregoing arising in, arising under or related to a case under the
Bankruptcy Code. To the extent the rights of notice cannot be legally waived
hereunder, each Obligor agrees that any requirement of reasonable notice shall
be met if such notice is personally served on or mailed, postage prepaid, to the
Borrower in accordance with the notice provisions of Section 9.2 of the Credit
Agreement at least ten (10) days before the time of sale or other event giving
rise to the requirement of such notice. The Administrative Agent and the Secured
Parties shall not be obligated to make any sale or other disposition of the
Collateral regardless of notice having been given. To the extent permitted by
law and subject to the Burger King Rights, any Secured Party may be a purchaser
at any such sale. To the extent permitted by applicable law, each of the
Obligors hereby waives all of its rights of redemption with respect to any such
sale. Subject to the provisions of applicable law and subject to the Burger King
Rights, the Administrative Agent and the Secured Parties may postpone or cause
the postponement of the sale of all or any portion of the Collateral by
announcement at the time and place of such sale, and such sale may, without
further notice, to the extent permitted by law, be made at the time and place to
which the sale was postponed, or the Administrative Agent and the Secured
Parties may further postpone such sale by announcement made at such time and
place.

(b) Remedies Relating to Accounts. Upon the occurrence of an Event of Default
and during the continuation thereof, whether or not the Administrative Agent has
exercised any or all of its rights and remedies hereunder, the Administrative
Agent shall have the right to enforce any Obligor’s rights against any account
debtors and obligors on such Obligor’s Accounts. Each Obligor acknowledges and
agrees that the Proceeds of its Accounts remitted to or on behalf of the
Administrative Agent in accordance with the provisions of this Section shall be
solely for the Administrative Agent’s own convenience and that such Obligor
shall not have any right, title or interest in such Proceeds or in any such
other amounts except as expressly provided herein. After the occurrence and
during the continuance of an Event of Default, to the extent required by the
Administrative Agent, each Obligor agrees to execute any document or instrument,
and to take any action, necessary under applicable law (including the Federal
Assignment of Claims Act) in order for the Administrative Agent to exercise its
rights and remedies (or be able to exercise its rights and remedies at some
future date) with respect to any Accounts of such Obligor where the account
debtor is a Governmental Authority. The Administrative Agent and the Secured
Parties shall have no liability or responsibility to any Obligor for acceptance
of a check, draft or other order for payment of money bearing the legend
“payment in full” or words of similar import or any other restrictive legend or
endorsement or be responsible for determining the correctness of any remittance.

(c) Access. In addition to the rights and remedies hereunder, upon the
occurrence of an Event of Default and during the continuation thereof, the
Administrative Agent shall, subject to the Burger King Rights, have the right to
enter and remain upon the various premises of the Obligors without cost or
charge to the Administrative Agent, and use the same, together with materials,
supplies, books and records of the Obligors for the purpose of collecting and
liquidating the Collateral, or for preparing for sale and

 

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conducting the sale of the Collateral, whether by foreclosure, auction or
otherwise. In addition, the Administrative Agent may remove Collateral, or any
part thereof, from such premises and/or any records with respect thereto, in
order to effectively collect or liquidate such Collateral. If the Administrative
Agent exercises its right to take possession of the Collateral, each Obligor
shall also at its expense perform any and all other steps reasonably requested
by the Administrative Agent to preserve and protect the security interest hereby
granted in the Collateral, such as placing and maintaining signs indicating the
security interest of the Administrative Agent, appointing overseers for the
Collateral and maintaining inventory records.

(d) Nonexclusive Nature of Remedies. Failure by the Administrative Agent or the
Secured Parties to exercise any right, remedy or option under this Security
Agreement, any other Credit Document or as provided by law, or any delay by the
Administrative Agent or the Secured Parties in exercising the same, shall not
operate as a waiver of any such right, remedy or option. No waiver hereunder
shall be effective unless it is in writing, signed by the party against whom
such waiver is sought to be enforced and then only to the extent specifically
stated, which in the case of the Administrative Agent or the Secured Parties
shall only be granted as provided herein. To the extent permitted by law,
neither the Administrative Agent, the Secured Parties, nor any party acting as
attorney for the Administrative Agent or the Secured Parties, shall be liable
hereunder for any acts or omissions or for any error of judgment or mistake of
fact or law other than their gross negligence or willful misconduct hereunder.
The rights and remedies of the Administrative Agent and the Secured Parties
under this Security Agreement shall be cumulative and not exclusive of any other
right or remedy which the Administrative Agent or the Secured Parties may have.

(e) Retention of Collateral. In addition to the rights and remedies hereunder,
upon the occurrence of an Event of Default and during the continuation thereof,
the Administrative Agent may, after providing the notices required by Sections
9-620 and 9-621 of the UCC (or any successor sections of the UCC) or otherwise
complying with the notice requirements of applicable law of the relevant
jurisdiction, accept or retain all or any portion of the Collateral in
satisfaction of the Credit Party Obligations, subject to the Burger King Rights.
Unless and until the Administrative Agent shall have provided such notices,
however, the Administrative Agent shall not be deemed to have retained any
Collateral in satisfaction of any Credit Party Obligations for any reason.

(f) Deficiency. In the event that the proceeds of any sale, collection or
realization are insufficient to pay all amounts to which the Administrative
Agent or the Secured Parties are legally entitled, the Obligors shall be jointly
and severally liable for the deficiency, together with interest thereon at the
Default Rate, together with the costs of collection and the reasonable fees of
any attorneys employed by the Administrative Agent to collect such deficiency.
Any surplus remaining after the full payment and satisfaction of the Credit
Party Obligations shall be returned to the Obligors or to whomsoever a court of
competent jurisdiction shall determine to be entitled thereto.

 

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(g) Other Security. To the extent that any of the Credit Party Obligations are
now or hereafter secured by property other than the Collateral (including,
without limitation, real and other personal property and securities owned by an
Obligor), or by a guarantee, endorsement or property of any other Person, then
the Administrative Agent shall have the right to proceed against such other
property, guarantee or endorsement upon the occurrence and during the
continuation of any Event of Default, and the Administrative Agent shall have
the right, in its sole discretion, to determine which rights, security, Liens,
security interests or remedies the Administrative Agent shall at any time
pursue, relinquish, subordinate, modify or take with respect thereto, without in
any way modifying or affecting any of them or any of the Administrative Agent’s
and the Secured Parties’ rights or the Credit Party Obligations under this
Security Agreement or under any other of the Credit Documents, subject in all
cases to the Burger King Rights.

11. Rights of the Administrative Agent.

(a) Power of Attorney. Each Obligor hereby designates and appoints the
Administrative Agent, on behalf of the Secured Parties, and each of its
designees or agents, as attorney-in-fact of such Obligor, irrevocably and with
power of substitution, with authority to take any or all of the following
actions upon the occurrence and during the continuation of an Event of Default:

(i) to demand, collect, settle, compromise, adjust and give discharges and
releases concerning the Collateral of such Obligor, all as the Administrative
Agent may reasonably determine in respect of such Collateral;

(ii) to commence and prosecute any actions at any court for the purposes of
collecting any Collateral and enforcing any other right in respect thereof;

(iii) to defend, settle, adjust or compromise any action, suit or proceeding
brought with respect to the Collateral and, in connection therewith, give such
discharge or release as the Administrative Agent may deem reasonably
appropriate;

(iv) to receive, open and dispose of mail addressed to an Obligor and endorse
checks, notes, drafts, acceptances, money orders, bills of lading, warehouse
receipts or other instruments or documents evidencing payment, shipment or
storage of the goods giving rise to the Collateral of such Obligor, or securing
or relating to such Collateral, on behalf of and in the name of such Obligor;

(v) subject to the Burger King Rights, to sell, assign, transfer, make any
agreement in respect of, or otherwise deal with or exercise rights in respect
of, any Collateral or the goods or services which have given rise thereto, as
fully and completely as though the Administrative Agent were the absolute owner
thereof for all purposes;

 

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(vi) to adjust and settle claims under any insurance policy relating to the
Collateral;

(vii) to execute and deliver and/or file all assignments, conveyances,
statements, financing statements, continuation financing statements, security
agreements, affidavits, notices and other agreements, instruments and documents
that the Administrative Agent may determine necessary in order to perfect and
maintain the security interests and Liens granted in this Security Agreement and
in order to fully consummate all of the transactions contemplated herein;

(viii) subject to the Burger King Rights, to institute any foreclosure
proceedings that the Administrative Agent may deem appropriate;

(ix) subject to the Burger King Rights, to execute any document or instrument,
and to take any action, necessary under applicable law (including the Federal
Assignment of Claims Act) in order for the Administrative Agent to exercise its
rights and remedies (or to be able to exercise its rights and remedies at some
future date) with respect to any Account of an Obligor where the account debtor
is a Governmental Authority; and

(x) subject to the Burger King Rights, to do and perform all such other acts and
things as the Administrative Agent may reasonably deem to be necessary, proper
or convenient in connection with the Collateral.

This power of attorney is a power coupled with an interest and shall be
irrevocable for so long as any of the Credit Party Obligations (other than
contingent indemnity obligations that survive termination of the Credit
Documents pursuant to the stated terms thereof) remain outstanding or any Credit
Document is in effect, and until all of the Commitments shall have been
terminated. The Administrative Agent shall be under no duty to exercise or
withhold the exercise of any of the rights, powers, privileges and options
expressly or implicitly granted to the Administrative Agent in this Security
Agreement, and shall not be liable for any failure to do so or any delay in
doing so. The Administrative Agent shall not be liable for any act or omission
or for any error of judgment or any mistake of fact or law in its individual
capacity or its capacity as attorney-in-fact except acts or omissions resulting
from its gross negligence or willful misconduct. This power of attorney is
conferred on the Administrative Agent solely to perfect, protect, preserve and
realize upon its security interest in the Collateral.

(b) Assignment by the Administrative Agent. The Administrative Agent may from
time to time assign the Credit Party Obligations or any portion thereof and/or
the Collateral or any portion thereof to a successor Administrative Agent in
accordance with the terms of the Credit Agreement, and the assignee shall be
entitled to all of the rights and remedies of the Administrative Agent under
this Security Agreement in relation thereto.

 

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(c) The Administrative Agent’s Duty of Care. Other than the exercise of
reasonable care to assure the safe custody of the Collateral while being held by
the Administrative Agent hereunder, the Administrative Agent shall have no duty
or liability to preserve rights pertaining thereto, it being understood and
agreed that the Obligors shall be responsible for preservation of all rights in
the Collateral, and the Administrative Agent shall be relieved of all
responsibility for the Collateral upon surrendering it or tendering the
surrender of it to the Obligors. The Administrative Agent shall be deemed to
have exercised reasonable care in the custody and preservation of the Collateral
in its possession if the Collateral is accorded treatment substantially equal to
that which the Administrative Agent accords its own property, which shall be no
less than the treatment employed by a reasonable and prudent agent in the
industry, it being understood that the Administrative Agent shall not have
responsibility for taking any necessary steps to preserve rights against any
parties with respect to any of the Collateral. In the event of a public or
private sale of Collateral pursuant to Section 10 hereof, the Administrative
Agent shall have no obligation to clean-up, repair or otherwise prepare the
Collateral for sale.

12. Application of Proceeds. After the exercise of remedies by the
Administrative Agent or the Secured Parties pursuant to Section 7.2 of the
Credit Agreement (or after the Commitments shall automatically terminate and the
Loans (with accrued interest thereon) and all other amounts under the Credit
Documents (including without limitation the maximum amount of all contingent
liabilities under Letters of Credit) shall automatically become due and payable
in accordance with the terms of such Section), any proceeds of the Collateral,
when received by the Administrative Agent or any of the Secured Parties in cash
or its equivalent, will be applied in reduction of the Credit Party Obligations
in the order set forth in Section 2.11(b) of the Credit Agreement, and each
Obligor irrevocably waives the right to direct the application of such payments
and proceeds and acknowledges and agrees that the Administrative Agent shall,
subject to the Burger King Rights, have the continuing and exclusive right to
apply and reapply any and all such proceeds in the Administrative Agent’s sole
discretion, notwithstanding any entry to the contrary upon any of its books and
records.

13. Continuing Agreement.

(a) This Security Agreement shall be a continuing agreement in every respect and
shall remain in full force and effect so long as any of the Credit Party
Obligations (other than contingent indemnity obligations that survive
termination of the Credit Documents pursuant to the stated terms thereof and
Letters of Credit that extend beyond the Maturity Date and are treated in
accordance with Section 2.3(k) of the Credit Agreement) remain outstanding or
any Credit Document is in effect, and until all of the Commitments shall have
been terminated. Upon such payment and termination, this Security Agreement
shall be automatically terminated and the Administrative Agent and the Secured
Parties shall, upon the request and at the expense of the Obligors, forthwith
release all of the Liens and security interests granted hereunder and shall
execute and/or deliver all UCC termination statements and/or other documents
reasonably requested by the Obligors evidencing such termination.
Notwithstanding the foregoing all releases and indemnities provided hereunder
shall survive termination of this Security Agreement.

 

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(b) This Security Agreement shall continue to be effective or be automatically
reinstated, as the case may be, if at any time payment, in whole or in part, of
any of the Credit Party Obligations is rescinded or must otherwise be restored
or returned by the Administrative Agent or any Secured Party as a preference,
fraudulent conveyance or otherwise under any bankruptcy, insolvency or similar
law, all as though such payment had not been made; provided that in the event
that payment of all or any part of the Credit Party Obligations is rescinded or
must be restored or returned, all reasonable costs and expenses (including
without limitation any reasonable legal fees and disbursements) incurred by the
Administrative Agent or any Secured Party in defending and enforcing such
reinstatement shall be deemed to be included as a part of the Credit Party
Obligations.

14. Amendments; Waivers; Modifications. This Security Agreement and the
provisions hereof may not be amended, waived, modified, changed, discharged or
terminated except as set forth in Section 9.1 of the Credit Agreement.

15. Successors in Interest. This Security Agreement shall create a continuing
security interest in the Collateral and shall be binding upon each Obligor, its
successors and assigns and shall inure, together with the rights and remedies of
the Administrative Agent and the Secured Parties hereunder, to the benefit of
the Administrative Agent and the Secured Parties and their successors and
permitted assigns; provided, however, that none of the Obligors may assign its
rights or delegate its duties hereunder except as permitted by the Credit
Agreement.

16. Notices. All notices required or permitted to be given under this Security
Agreement shall be in conformance with Section 9.2 of the Credit Agreement.

17. Counterparts. This Security Agreement may be executed in any number of
counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Security Agreement to produce or
account for more than one such counterpart. Delivery of executed counterparts of
the Security Agreement by telecopy or other electronic means shall be effective
as an original and shall constitute a representation that an original shall be
delivered upon the request of the Administrative Agent.

18. Headings. The headings of the sections and subsections hereof are provided
for convenience only and shall not in any way affect the meaning, construction
or interpretation of any provision of this Security Agreement.

19. Governing Law; Submission to Jurisdiction and Service of Process; Waiver of
Jury Trial; Venue. THIS SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK. The terms of Sections 9.13 and 9.16 of
the Credit Agreement are incorporated herein by reference, mutatis mutandis, and
the parties hereto agree to such terms.

 

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20. Severability. If any provision of this Security Agreement is determined to
be illegal, invalid or unenforceable, such provision shall be fully severable
and the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.

21. Entirety. This Security Agreement and the other Credit Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to this Security Agreement, the other Credit
Documents or the transactions contemplated herein and therein.

22. Survival. All representations and warranties of the Obligors hereunder shall
survive the execution and delivery of this Security Agreement and the other
Credit Documents, the delivery of the Notes and the making of the Loans and the
issuance of the Letters of Credit under the Credit Agreement.

23. Joint and Several Obligations of Obligors.

(a) Each of the Obligors is accepting joint and several liability hereunder in
consideration of the financial accommodations to be provided by the Lenders
under the Credit Agreement, for the mutual benefit, directly and indirectly, of
each of the Obligors and in consideration of the undertakings of each of the
Obligors to accept joint and several liability for the obligations of each of
them.

(b) Each of the Obligors jointly and severally hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Obligors with respect to the payment and
performance of all of the Credit Party Obligations, it being the intention of
the parties hereto that all the Credit Party Obligations shall be the joint and
several obligations of each of the Obligors without preferences or distinction
among them.

(c) Notwithstanding any provision to the contrary contained herein, in any other
of the Credit Documents, to the extent the obligations of an Obligor shall be
adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of such Obligor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation, the
Bankruptcy Code).

24. Rights of Required Lenders. All rights of the Administrative Agent
hereunder, if not exercised by the Administrative Agent, may be exercised by the
Required Lenders.

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Each of the parties hereto has caused a counterpart of this Security Agreement
to be duly executed and delivered as of the date first above written.

 

BORROWER:     CARROLS LLC,     a Delaware limited liability company       By:
/s/ Joseph A. Zirkman                                                      Name:
Joseph A. Zirkman     Title: Vice President, General Counsel and Secretary
GUARANTORS:     None    

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Accepted and agreed to as of the date first above written.

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent By: /s/ Thomas
P. Tansi                                              Name: Thomas P. Tansi
Title: Managing Director