Exhibit 10.3

Execution Copy

 

 

 

FIRST LIEN SECURITY AGREEMENT

By

FIESTA RESTAURANT GROUP, INC.,

as Borrower

and

THE GUARANTORS PARTY HERETO

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent

 

 

Dated as of August 5, 2011

 

 

 

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TABLE OF CONTENTS

 

          Page  

PREAMBLE

        1   

RECITALS

        1   

AGREEMENT

        1    ARTICLE I DEFINITIONS AND INTERPRETATION   

SECTION 1.1.

   DEFINITIONS      2   

SECTION 1.2.

   INTERPRETATION      10   

SECTION 1.3.

   RESOLUTION OF DRAFTING AMBIGUITIES      10   

SECTION 1.4.

   PERFECTION CERTIFICATE      10   

ARTICLE II

   GRANT OF SECURITY AND SECURED OBLIGATIONS   

SECTION 2.1.

   GRANT OF SECURITY INTEREST      11   

SECTION 2.2.

   FILINGS      12   

SECTION 2.3.

   FIRST PRIORITY NATURE OF LIENS      13    ARTICLE III PERFECTION;
SUPPLEMENTS; FURTHER ASSURANCES; USE OF PLEDGED COLLATERAL   

SECTION 3.1.

   DELIVERY OF CERTIFICATED SECURITIES COLLATERAL      13   

SECTION 3.2.

   PERFECTION OF UNCERTIFICATED SECURITIES COLLATERAL      14   

SECTION 3.3.

   FINANCING STATEMENTS AND OTHER FILINGS; MAINTENANCE OF PERFECTED SECURITY
INTEREST      14   

SECTION 3.4.

   OTHER ACTIONS      14   

SECTION 3.5.

   JOINDER OF ADDITIONAL GUARANTORS      19   

SECTION 3.6.

   SUPPLEMENTS; FURTHER ASSURANCES      19    ARTICLE IV REPRESENTATIONS,
WARRANTIES AND COVENANTS   

SECTION 4.1.

   TITLE      20   

SECTION 4.2.

   VALIDITY OF SECURITY INTEREST      20   

SECTION 4.3.

   DEFENSE OF CLAIMS; TRANSFERABILITY OF PLEDGED COLLATERAL      20   

SECTION 4.4.

   OTHER FINANCING STATEMENTS      20   

SECTION 4.5.

   LOCATION OF INVENTORY AND EQUIPMENT      21   

SECTION 4.6.

   DUE AUTHORIZATION AND ISSUANCE      21   

SECTION 4.7.

   CONSENTS, ETC.      21   

 

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SECTION 4.8.

   PLEDGED COLLATERAL AND MORTGAGED PROPERTY      21   

SECTION 4.9.

   INSURANCE      21   

SECTION 4.10.

   POST-CLOSING COLLATERAL MATTERS      22   

SECTION 4.11.

   NO IMPAIRMENT OF THE SECURITY INTERESTS      22    ARTICLE V CERTAIN
PROVISIONS CONCERNING SECURITIES COLLATERAL   

SECTION 5.1.

   PLEDGE OF ADDITIONAL SECURITIES COLLATERAL      22   

SECTION 5.2.

   VOTING RIGHTS; DISTRIBUTIONS; ETC.      22   

SECTION 5.3.

   DEFAULTS, ETC      23   

SECTION 5.4.

   CERTAIN AGREEMENTS OF PLEDGORS AS ISSUERS AND HOLDERS OF EQUITY INTERESTS   
  24    ARTICLE VI CERTAIN PROVISIONS CONCERNING INTELLECTUAL PROPERTY
COLLATERAL   

SECTION 6.1.

   GRANT OF INTELLECTUAL PROPERTY LICENSE      24   

SECTION 6.2.

   PROTECTION OF ADMINISTRATIVE AGENT’S SECURITY      24   

SECTION 6.3.

   AFTER-ACQUIRED PROPERTY      25   

SECTION 6.4.

   LITIGATION      25    ARTICLE VII [RESERVED]    ARTICLE VIII TRANSFERS   

SECTION 8.1.

   TRANSFERS OF PLEDGED COLLATERAL OR MORTGAGED PROPERTY      26    ARTICLE IX
REMEDIES   

SECTION 9.1.

   REMEDIES      26   

SECTION 9.2.

   NOTICE OF SALE      28   

SECTION 9.3.

   WAIVER OF NOTICE AND CLAIMS      28   

SECTION 9.4.

   CERTAIN SALES OF PLEDGED COLLATERAL      29   

SECTION 9.5.

   NO WAIVER; CUMULATIVE REMEDIES      30   

SECTION 9.6.

   CERTAIN ADDITIONAL ACTIONS REGARDING INTELLECTUAL PROPERTY      30   

SECTION 9.7.

   [RESERVED]      30   

SECTION 9.8.

   ACTIONS OF ADMINISTRATIVE AGENT      31   

 

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ARTICLE X APPLICATION OF PROCEEDS   

SECTION 10.1.

   APPLICATION OF PROCEEDS      31    ARTICLE XI MISCELLANEOUS   

SECTION 11.1.

   CONCERNING ADMINISTRATIVE AGENT AND THE OTHER SECURITY DOCUMENTS      31   

SECTION 11.2.

   ADMINISTRATIVE AGENT MAY PERFORM; ADMINISTRATIVE AGENT APPOINTED
ATTORNEY-IN-FACT      33   

SECTION 11.3.

   CONTINUING SECURITY INTEREST; ASSIGNMENT      34   

SECTION 11.4.

   TERMINATION; RELEASE      34   

SECTION 11.5.

   MODIFICATION IN WRITING      35   

SECTION 11.6.

   NOTICES      35   

SECTION 11.7.

   GOVERNING LAW, CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY
TRIAL      35   

SECTION 11.8.

   SEVERABILITY OF PROVISIONS      35   

SECTION 11.9.

   EXECUTION IN COUNTERPARTS      36   

SECTION 11.10.

   BUSINESS DAYS      36   

SECTION 11.11.

   NO CREDIT FOR PAYMENT OF TAXES OR IMPOSITION      36   

SECTION 11.12.

   NO CLAIMS AGAINST ADMINISTRATIVE AGENT      36   

SECTION 11.13.

   NO RELEASE      36   

SECTION 11.14.

   OBLIGATIONS ABSOLUTE      37   

SIGNATURES

        S-1   

EXHIBIT 1 Form of Issuer Acknowledgment

  

EXHIBIT 2 Form of Securities Pledge Amendment

  

EXHIBIT 3 Form of Copyright Security Agreement

  

EXHIBIT 4 Form of Patent Security Agreement

  

EXHIBIT 5 Form of Trademark Security Agreement

  

EXHIBIT 6 Form of Perfection Certificate

  

 

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FIRST LIEN SECURITY AGREEMENT

This FIRST LIEN SECURITY AGREEMENT dated as of August 5, 2011 (as amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with the provisions hereof, this “Agreement”) made by FIESTA
RESTAURANT GROUP, INC., a Delaware corporation (the “Borrower”), and the
Guarantors from to time to time party hereto (the “Guarantors”), as pledgors,
assignors and debtors (the Borrower, together with the Guarantors, in such
capacities and together with any successors in such capacities, the “Pledgors,”
and each, a “Pledgor”), in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, in
its capacity as administrative agent pursuant to the Credit Agreement (as
hereinafter defined) (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”).

R E C I T A L S :

A. The Borrower, the Guarantors, the Lenders and the Administrative Agent, in
connection with the execution and delivery of this Agreement, entered into that
certain Credit Agreement, dated as of August 5, 2011 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”) pursuant to which the Administrative Agent and the Lenders have
agreed to make Loans and to issue Letters of Credit upon the terms and subject
to the conditions set forth therein.

B. The Borrower and each Guarantor will receive substantial benefits from the
extensions of credit under the Credit Agreement and each is, therefore, willing
to enter into this Agreement.

C. Each Guarantor has, pursuant to the Credit Agreement, among other things,
unconditionally guaranteed the Secured Obligations.

D. This Agreement is given by each Pledgor in favor of the Administrative Agent
for the benefit of the Secured Parties (as hereinafter defined) to secure the
payment and performance of all of the Secured Obligations.

E. It is a condition to the extension of the Loans and the issuance of the
Letters of Credit that each Pledgor execute and deliver the applicable Security
Documents, including this Agreement.

A G R E E M E N T :

NOW THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Pledgor and the Administrative Agent hereby agree as follows:

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ARTICLE I

DEFINITIONS AND INTERPRETATION

SECTION 1.1. Definitions.

(a) Unless otherwise defined herein or in the Credit Agreement, capitalized
terms used herein that are defined in the UCC shall have the meanings assigned
to them in the UCC; provided that in any event, the following terms shall have
the meanings assigned to them in the UCC:

“Accounts”; “Bank”; “Chattel Paper”; “Commercial Tort Claim”; “Commodity
Account”; “Commodity Contract”; “Commodity Intermediary”; “Documents”;
“Electronic Chattel Paper”; “Entitlement Order”; “Equipment”; “Financial Asset”;
“Fixtures”; “Goods”, “Inventory”; “Letter-of-Credit Rights”; “Letters of
Credit”; “Money”; “Payment Intangibles”; “Proceeds”; “Promissory Notes”; “
Records”; “Securities Account”; “Securities Intermediary”; “Security
Entitlement”; “Supporting Obligations”; and “Tangible Chattel Paper.”

(b) Terms used but not otherwise defined herein that are defined in the Credit
Agreement shall have the meanings given to them in the Credit Agreement.

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

“Account Debtor” shall mean each person who is obligated on a Receivable or
Supporting Obligation related thereto.

“Agreement” shall have the meaning assigned to such term in the Preamble hereof.

“Capital Interests” in any person means any and all shares, interests (including
preferred interests, restricted stock interests and stock options, warrants and
other convertible instruments), participations or other equivalents in the
equity interest (however designated) in such person and any rights (other than
debt securities convertible into an equity interest), warrants or options to
acquire an equity interest in such person

“Collateral Support” shall mean all property (real or personal) assigned,
hypothecated or otherwise securing any Pledged Collateral and shall include any
security agreement or other agreement granting a lien or security interest in
such real or personal property.

“Commodity Account Control Agreement” shall mean a control agreement in a form
that is reasonably satisfactory to the Administrative Agent establishing the
Administrative Agent’s Control with respect to any Commodity Account.

“Contracts” shall mean, collectively, with respect to each Pledgor, all sale,
service, performance, equipment or property lease contracts, agreements and
grants and all other

 

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contracts, agreements or grants (in each case, whether written or oral, or third
party or intercompany), between such Pledgor and any third party, and all
assignments, amendments, restatements, supplements, extensions, renewals,
replacements or modifications thereof.

“Control” shall mean (i) in the case of each Deposit Account, “control,” as such
term is defined in Section 9-104 of the UCC, (ii) in the case of any Security
Entitlement, “control,” as such term is defined in Section 8-106 of the UCC, and
(iii) in the case of any Commodity Contract, “control,” as such term is defined
in Section 9-106 of the UCC.

“Control Agreements” shall mean, collectively, all Deposit Account Control
Agreements, Securities Account Control Agreements and the Commodity Account
Control Agreements.

“Copyrights” shall mean, collectively, with respect to each Pledgor, all
copyrights (whether statutory or common law, whether established or registered
in the United States or any other country or any political subdivision thereof,
whether registered or unregistered and whether published or unpublished) and all
copyright registrations and applications made by such Pledgor, in each case,
whether now owned or hereafter created or acquired by or assigned to such
Pledgor, together with any and all (i) rights and privileges arising under
applicable law with respect to such Pledgor’s use of such copyrights,
(ii) reissues, renewals, continuations and extensions thereof and amendments
thereto, (iii) income, fees, royalties, damages, claims and payments now or
hereafter due and/or payable with respect thereto, including damages and
payments for past, present or future infringements thereof, (iv) rights
corresponding thereto throughout the world and (v) rights to sue for past,
present or future infringements thereof.

“Copyright Security Agreement” shall mean an agreement substantially in the form
of Exhibit 3 hereto.

“Default” or “Event of Default” shall mean a “default” or “event of default”
under the Credit Agreement.

“Deposit Account Control Agreement” shall mean an agreement in a form that is
reasonably satisfactory to the Administrative Agent establishing the
Administrative Agent’s Control with respect to any Deposit Account.

“Deposit Accounts” shall mean, collectively, with respect to each Pledgor,
(i) all “deposit accounts” as such term is defined in the UCC and in any event
shall include all accounts and sub-accounts relating to any of the foregoing
accounts and (ii) all cash, funds, checks, notes and instruments from time to
time on deposit in any of the accounts or sub-accounts described in clause
(i) of this definition.

“Distributions” shall mean, collectively, with respect to each Pledgor, all
dividends, cash, options, warrants, rights, instruments, distributions, returns
of capital or principal, income, interest, profits and other property, interests
(debt or equity) or proceeds, including as a result of a split, revision,
reclassification or other like change of the Pledged Securities, from

 

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time to time received, receivable or otherwise distributed to such Pledgor in
respect of or in exchange for any or all of the Pledged Securities or
Intercompany Notes.

“Excluded Property” shall mean

(a) any rights or interest in any lease, contract, license or license agreement
covering personal property or Real Property of any Pledgor, so long as under the
terms of such lease, contract, license or license agreement, or applicable law
with respect thereto, the grant of a security interest or lien therein to the
Administrative Agent is prohibited (or would render such lease, contract,
license or license agreement cancelled, invalid or unenforceable) and such
prohibition has not been or is not waived or the consent of the other party to
such lease, contract, license or license agreement has not been or is not
otherwise obtained; provided that, this exclusion shall in no way be construed
to apply if any such prohibition is unenforceable under the UCC or other
applicable law or so as to limit, impair or otherwise affect the Administrative
Agent’s unconditional continuing security interests in and liens upon any rights
or interests of any Pledgor in or to monies due or to become due to and Pledgor
under any such lease, contract, license or license agreement (including any
Receivables);

(b) assets owned by any Pledgor on the date hereof or hereafter acquired and any
proceeds thereof that are subject to a Lien securing any purchase money
Indebtedness or Capital Lease Obligations permitted to be incurred pursuant to
the provisions of the Credit Agreement to the extent and for so long as the
contract or other agreement in which such Lien is granted (or the documentation
providing for such purchase money Indebtedness or Capital Lease Obligation)
validly prohibits the creation of any other Lien on such assets and proceeds
(other than to the extent that such prohibition would be rendered ineffective
pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor
provision or provisions) of any relevant jurisdiction and other than to the
extent all necessary consents to creation, attachment and perfection of the
Administrative Agent’s Liens thereon have been obtained);

(c) any shares entitled to vote (within the meaning of Treasury Regulation
Section 1.956-2) of any direct or indirect Subsidiary of the Issuer that is a
“controlled foreign corporation” in excess of sixty-five (65%) percent of all of
the issued and outstanding Capital Interests in such Subsidiary;

(d) any Capital Interests of any Subsidiary of the Borrower to the extent
necessary for such Subsidiary not to be subject to any requirement pursuant to
Rule 3-16 or Rule 3-10 of Regulation S-X under the Exchange Act, due to the fact
that such Subsidiary’s Capital Interests secures the Obligations, to file
separate financial statements with the Securities and Exchange Commission (or
any other governmental agency);

(e) any intent to use trademark application to the extent and for so long as
creation of a security interest therein would result in the loss of any material
rights therein, provided that upon submission and acceptance by the United
States Patent and

 

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Trademark Office of an amendment to allege use pursuant to 15 U.S.C.
Section 1060(a) (or any successor provision), such intent to use trademark
application shall not be considered Excluded Property; and

(f) any Real Property leased by any Pledgor;

provided, however, that Excluded Property shall not include any Proceeds,
products, substitutions or replacements of any Excluded Property referred to in
clause (a), (b), (c), (d), (e) or (f) (unless such Proceeds, substitutions or
replacements would constitute Excluded Property referred to in clauses (a), (b),
(c), (d), (e) or (f)).

“General Intangibles” shall mean, collectively, with respect to each Pledgor,
all “general intangibles,” as such term is defined in the UCC, of such Pledgor
and, in any event, shall include (i) all of such Pledgor’s rights, title and
interest in, to and under all Contracts and insurance policies (including all
rights and remedies relating to monetary damages, including indemnification
rights and remedies, and claims for damages or other relief pursuant to or in
respect of any Contract), (ii) all know-how and warranties relating to any of
the Pledged Collateral or the Mortgaged Property, (iii) any and all other
rights, claims, choses-in-action and causes of action of such Pledgor against
any other person and the benefits of any and all collateral or other security
given by any other person in connection therewith, (iv) all guarantees,
endorsements and indemnifications on, or of, any of the Pledged Collateral or
any of the Mortgaged Property, (v) all lists, books, records, correspondence,
ledgers, printouts, files (whether in printed form or stored electronically),
tapes and other papers or materials containing information relating to any of
the Pledged Collateral or any of the Mortgaged Property, including all customer
or tenant lists, identification of suppliers, data, plans, blueprints,
specifications, designs, drawings, appraisals, recorded knowledge, surveys,
studies, engineering reports, test reports, manuals, standards, processing
standards, performance standards, catalogs, research data, computer and
automatic machinery software and programs and the like, field repair data,
accounting information pertaining to such Pledgor’s operations or any of the
Pledged Collateral or any of the Mortgaged Property and all media in which or on
which any of the information or knowledge or data or records may be recorded or
stored and all computer programs used for the compilation or printout of such
information, knowledge, records or data, (vi) all licenses, consents, permits,
variances, certifications, authorizations and approvals, however characterized,
now or hereafter acquired or held by such Pledgor, including building permits,
certificates of occupancy, environmental certificates, industrial permits or
licenses and certificates of operation and (vii) all rights to reserves,
deferred payments, deposits, refunds, indemnification of claims and claims for
tax or other refunds against any Governmental Authority.

“Goodwill” shall mean, collectively, with respect to each Pledgor, the goodwill
connected with such Pledgor’s business including all goodwill connected with
(i) the use of and symbolized by any Trademark or Intellectual Property License
with respect to any Trademark in which such Pledgor has any interest, (ii) all
know-how, trade secrets, customer and supplier lists, proprietary information,
inventions, methods, procedures, formulae, descriptions, compositions, technical
data, drawings, specifications, name plates, catalogs, confidential information
and the right to limit the use or disclosure thereof by any person, pricing and
cost information, business

 

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and marketing plans and proposals, consulting agreements, engineering contracts
and such other assets which relate to such goodwill and (iii) all product lines
of such Pledgor’s business.

“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).

“Guarantors” shall have the meaning assigned to such term in the Preamble
hereof.

“Indenture Agreement” shall mean that certain indenture, dated as of August 5,
2011 (as amended, amended and restated, supplemented or otherwise modified from
time to time) among the Borrower as issuer under the Indenture Agreement, the
guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as
trustee and as collateral agent.

“Instruments” shall mean, collectively, with respect to each Pledgor, all
“instruments,” as such term is defined in Article 9, rather than Article 3, of
the UCC, and shall include all promissory notes, drafts, bills of exchange or
acceptances.

“Intellectual Property Collateral” shall mean, collectively, the Patents,
Trademarks, Copyrights, Intellectual Property Licenses and Goodwill.

“Intellectual Property Licenses” shall mean, collectively, with respect to each
Pledgor, all license and distribution agreements with, and covenants not to sue,
any other party with respect to any Patent, Trademark or Copyright or any other
patent, trademark or copyright, whether such Pledgor is a licensor or licensee,
distributor or distributee under any such license or distribution agreement,
together with any and all (i) renewals, extensions, supplements and
continuations thereof, (ii) income, fees, royalties, damages, claims and
payments now and hereafter due and/or payable thereunder and with respect
thereto including damages and payments for past, present or future infringements
or violations thereof, (iii) rights to sue for past, present and future
infringements or violations thereof and (iv) other rights to use, exploit or
practice any or all of the Patents, Trademarks or Copyrights or any other
patent, trademark or copyright.

“Intercompany Notes” shall mean, with respect to each Pledgor, all intercompany
notes described in Schedule 10 to the Perfection Certificate and intercompany
notes hereafter acquired by such Pledgor and all certificates, instruments or
agreements evidencing such intercompany notes, and all assignments, amendments,
restatements, supplements, extensions, renewals, replacements or modifications
thereof to the extent permitted pursuant to the terms hereof.

“Intercreditor Agreement” shall mean that certain intercreditor agreement, dated
as of August 5, 2011 between the Administrative Agent, as First-Lien Agent and
The Bank of

 

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New York Mellon Trust Company, N.A., as Second Lien Agent, as it may be amended,
restated, supplemented or modified from time to time.

“Investment Property” shall mean a security, whether certificated or
uncertificated, Security Entitlement, Securities Account, Commodity Contract or
Commodity Account, excluding, however, the Securities Collateral.

“Leases” shall mean any and all leases, subleases, tenancies, options,
concession agreements, rental agreements, occupancy agreements, franchise
agreements, access agreements and any other agreements (including all
amendments, extensions, replacements, renewals, modifications and/or guarantees
thereof), whether or not of record and whether now in existence or hereafter
entered into, affecting the use or occupancy of all or any portion of any Real
Property.

“Lien” means, with respect to any property or other asset, any mortgage, deed of
trust, deed to secure debt, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien (statutory or otherwise), charge, easement,
encumbrance or other security agreement on or with respect to such property or
other asset (including, without limitation, any conditional sale or other title
retention agreement having substantially the same economic effect as any of the
foregoing).

“Mortgage” has the meaning specified in Section 4.10.

“Mortgage Policy” has the meaning specified in Section 4.10.

“Mortgaged Property” means, collectively, (i) each Real Property listed on
Schedule 7(a) of the Perfection Certificate, (ii) each Real Property, if any,
encumbered by a Mortgage delivered after the Closing Date pursuant to
Section 3.4 and 4.10 and (iii) any other interest in Real Property that secures
the Credit Agreement.

“Patents” shall mean, collectively, with respect to each Pledgor, all patents
issued or assigned to, and all patent applications and registrations made by,
such Pledgor (whether established or registered or recorded in the United States
or any other country or any political subdivision thereof), together with any
and all (i) rights and privileges arising under applicable law with respect to
such Pledgor’s use of any patents, (ii) inventions and improvements described
and claimed therein, (iii) reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof and amendments thereto,
(iv) income, fees, royalties, damages, claims and payments now or hereafter due
and/or payable thereunder and with respect thereto including damages and
payments for past, present or future infringements thereof, (v) rights
corresponding thereto throughout the world and (vi) rights to sue for past,
present or future infringements thereof.

“Patent Security Agreement” shall mean an agreement substantially in the form of
Exhibit 4 hereto.

“Perfection Certificate” means that certain perfection certificate to be
executed and delivered by the Borrower in connection with the execution and
delivery of the Credit

 

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Agreement and the Indenture Agreement, to be dated on or about the Closing Date
and substantially identical to the form attached hereto as Exhibit 6.

“Pledge Amendment” shall have the meaning assigned to such term in Section 5.1
hereof.

“Pledged Collateral” shall have the meaning assigned to such term in Section 2.1
hereof.

“Pledged Securities” shall mean, collectively, with respect to each Pledgor, in
each case other than Excluded Property, (i) all issued and outstanding Equity
Interests of each issuer set forth on Schedules 9(a) and 9(b) to the Perfection
Certificate as being owned by such Pledgor (other than Equity Interests of the
Excluded Subsidiaries) and all options, warrants, rights, agreements and
additional Equity Interests of whatever class of any such issuer acquired by
such Pledgor (including by issuance), together with all rights, privileges,
authority and powers of such Pledgor relating to such Equity Interests in each
such issuer or under any organization document of each such issuer, and the
certificates, instruments and agreements representing such Equity Interests and
any and all interest of such Pledgor in the entries on the books of any
financial intermediary pertaining to such Equity Interests, (ii) all Equity
Interests of any issuer (other than Equity Interests of the Excluded
Subsidiaries), which Equity Interests are hereafter acquired by such Pledgor
(including by issuance) and all options, warrants, rights, agreements and
additional Equity Interests of whatever class of any such issuer acquired by
such Pledgor (including by issuance), together with all rights, privileges,
authority and powers of such Pledgor relating to such Equity Interests or under
any organization document of any such issuer, and the certificates, instruments
and agreements representing such Equity Interests and any and all interest of
such Pledgor in the entries on the books of any financial intermediary
pertaining to such Equity Interests, from time to time acquired by such Pledgor
in any manner, and (iii) all Equity Interests issued in respect of the Equity
Interests referred to in clause (i) or (ii) upon any consolidation or merger of
any issuer of such Equity Interests.

“Pledgor” shall have the meaning assigned to such term in the Preamble hereof.

“Real Property” shall mean, collectively, all right, title and interest
(including any leasehold, mineral or other estate) in and to any and all parcels
of or interests in real property owned, leased or operated by any Person,
whether by lease, license or other means, together with, in each case, all
easements, hereditaments and appurtenances relating thereto, all improvements
and appurtenant fixtures and equipment, all general intangibles and contract
rights and other property and rights incidental to the ownership, lease or
operation thereof.

“Receivables” shall mean all (i) Accounts, (ii) Chattel Paper, (iii) Payment
Intangibles, (iv) General Intangibles, (v) Instruments and (vi) all other rights
to payment, whether or not earned by performance, for goods or other property
sold, leased, licensed, assigned or otherwise disposed of, or services rendered
or to be rendered, regardless of how classified under the UCC together with all
of Pledgors’ rights, if any, in any goods or other property giving rise to

 

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such right to payment and all Collateral Support and Supporting Obligations
related thereto and all Records relating thereto.

“Second Lien Agent” shall mean The Bank of New York Mellon Trust Company, N.A.,
in its capacity as collateral agent under the Indenture Agreement, and its
permitted successors and assigns.

“Second Lien Security Agreement” shall mean that certain security agreement
dated as of August 5, 2011 among the Borrower as issuer under the Indenture
Agreement, the guarantors party thereto and the Second Lien Agent in its
capacity as trustee (the “Trustee”).

“Secured Obligations” means any principal, premium, interest (including any
interest accruing subsequent to the filing of a petition in bankruptcy,
reorganization or similar proceeding at the rate provided for in the
documentation with respect thereto, whether or not such interest is an allowed
claim under applicable state, federal or foreign law), penalties, fees,
indemnifications, reimbursements (including reimbursement obligations with
respect to letters of credit and banker’s acceptances), damages and other
liabilities, and guarantees of payment of such principal, interest, penalties,
fees, indemnifications, reimbursements, damages and other liabilities, payable
under any of the Credit Agreement, the Security Documents or any other Credit
Document.

“Secured Parties” shall mean, collectively, the Administrative Agent, the
Lenders, the Bank Product Providers and the Issuing Bank.

“Securities Account Control Agreement” shall mean an agreement in a form that is
reasonably satisfactory to the Administrative Agent establishing the
Administrative Agent’s Control with respect to any Securities Account.

“Securities Act” shall mean the Securities Act of 1933, as amended.

“Securities Collateral” shall mean, collectively, the Pledged Securities, the
Intercompany Notes and the Distributions.

“Subsidiary” means, with respect to any person, any corporation, limited or
general partnership, trust, association or other business entity of which an
aggregate of at least a majority of the outstanding Voting Interests therein is,
at the time, directly or indirectly, owned by such Person and/or one or more
Subsidiaries of such Person.

“Title Company” shall mean any title insurance company as shall be retained by
any Pledgor and reasonably acceptable to the Administrative Agent.

“Trademarks” shall mean, collectively, with respect to each Pledgor, all
trademarks (including service marks), slogans, logos, certification marks, trade
dress, uniform resource locations (URL’s), domain names, corporate names and
trade names, whether registered or unregistered, owned by or assigned to such
Pledgor and all registrations and applications for the foregoing (whether
statutory or common law and whether established or registered in the

 

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United States or any other country or any political subdivision thereof),
together with any and all (i) rights and privileges arising under applicable law
with respect to such Pledgor’s use of any trademarks, (ii) reissues,
continuations, extensions and renewals thereof and amendments thereto,
(iii) income, fees, royalties, damages and payments now and hereafter due and/or
payable thereunder and with respect thereto, including damages, claims and
payments for past, present or future infringements thereof, (iv) rights
corresponding thereto throughout the world and (v) rights to sue for past,
present and future infringements thereof.

“Trademark Security Agreement” shall mean an agreement substantially in the form
of Exhibit 5 hereto.

“UCC” shall mean the Uniform Commercial Code as in effect from time to time in
the State of New York; provided, however, that, at any time, if by reason of
mandatory provisions of law, any or all of the perfection or priority of the
Administrative Agent’s and the Secured Parties’ security interest in any item or
portion of the Pledged Collateral is governed by the Uniform Commercial Code as
in effect in a jurisdiction other than the State of New York, the term “UCC”
shall mean the Uniform Commercial Code as in effect, at such time, in such other
jurisdiction for purposes of the provisions hereof relating to such perfection
or priority and for purposes of definitions relating to such provisions.

“Voting Interests” means, with respect to any person, securities of any class or
classes of Capital Interests in such person entitling the holders thereof
generally to vote on the election of members of the board of directors or
comparable body of such person.

SECTION 1.2. Interpretation. The rules of interpretation specified in the Credit
Agreement (including Section 1.2 thereof) shall be applicable to this Agreement.

SECTION 1.3. Resolution of Drafting Ambiguities. Each Pledgor acknowledges and
agrees that it was represented by counsel in connection with the execution and
delivery hereof, that it and its counsel reviewed and participated in the
preparation and negotiation hereof and that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party (i.e., the
Administrative Agent) shall not be employed in the interpretation hereof.

SECTION 1.4. Perfection Certificate. The Administrative Agent, each Secured
Party and each Pledgor agree that the Perfection Certificate and all
descriptions of Pledged Collateral and Mortgaged Property, schedules, amendments
and supplements thereto are and shall at all times remain a part of this
Agreement.

 

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ARTICLE II

GRANT OF SECURITY AND SECURED OBLIGATIONS

SECTION 2.1. Grant of Security Interest. As collateral security for the payment
and performance in full of all the Secured Obligations, each Pledgor hereby
pledges and grants to the Administrative Agent for the benefit of the Secured
Parties, a lien on and security interest in all of the right, title and interest
of such Pledgor in, to and under the following property, wherever located, and
whether now existing or hereafter arising or acquired from time to time
(collectively, the “Pledged Collateral”):

 

  (i) all Accounts;

 

  (ii) all Equipment, Goods, Inventory and Fixtures;

 

  (iii) all Documents, Instruments, Promissory Notes and Chattel Paper;

 

  (iv) all Letters of Credit and Letter-of-Credit Rights;

 

  (v) all Securities Collateral;

 

  (vi) all Investment Property;

 

  (vii) all Intellectual Property Collateral;

 

  (viii) the Commercial Tort Claims described on Schedule 12 to the Perfection
Certificate;

 

  (ix) all General Intangibles;

 

  (x) all Money and all Deposit Accounts, Securities Accounts and Commodities
Accounts;

 

  (xi) all Supporting Obligations;

 

  (xii) all Bank Products;

 

  (xiii) any assets of Pledgor that now or hereafter come into the possession,
custody, or control of Administrative Agent (or its agent or designee);

 

  (xiv) all books and records relating to the Pledged Collateral; and

 

  (xv)

to the extent not covered by clauses (i) through (xiv) of this sentence, all
other personal property of such Pledgor, whether tangible or intangible, and all
Proceeds and products of each of the foregoing and all accessions to,
substitutions and replacements for, and rents, profits and products of,

 

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  each of the foregoing, any and all Proceeds of any insurance, indemnity,
warranty or guaranty payable to such Pledgor from time to time with respect to
any of the foregoing.

Notwithstanding anything to the contrary contained in clauses (i) through
(xv) above, the security interest created by this Agreement shall not extend to,
and the term “Pledged Collateral” shall not include, any Excluded Property from
and after the Closing Date, no Pledgor shall permit to become effective in any
document creating, governing or providing for any permit, license or agreement a
provision that would prohibit the creation of a Lien on such permit, license or
agreement in favor of the Administrative Agent unless such Pledgor believes, in
its reasonable judgment, that such prohibition is usual and customary in
transactions of such type.

SECTION 2.2. Filings. (i) Each Pledgor hereby irrevocably authorizes the
Administrative Agent at any time and from time to time to file in any relevant
jurisdiction any financing statements (including fixture filings) and amendments
thereto that contain the information required by Article 9 of the UCC of each
applicable jurisdiction for the filing of any financing statement or amendment
relating to the Pledged Collateral, including (i) whether such Pledgor is an
organization, the type of organization and any organizational identification
number issued to such Pledgor, (ii) any financing or continuation statements or
other documents without the signature of such Pledgor where permitted by law,
including the filing of a financing statement describing the Pledged Collateral
as “all assets now owned or hereafter acquired by the Pledgor or in which
Pledgor otherwise has rights” and (iii) in the case of a financing statement
filed as a fixture filing or covering Pledged Collateral constituting minerals
or the like to be extracted or timber to be cut, a sufficient description of the
real property to which such Pledged Collateral relates. Each Pledgor agrees to
provide all information described in the immediately preceding sentence to the
Administrative Agent promptly upon request by the Administrative Agent.

(a) Each Pledgor hereby ratifies its authorization for the Administrative Agent
to file in any relevant jurisdiction any financing statements relating to the
Pledged Collateral if filed prior to the date hereof.

(b) Each Pledgor hereby further authorizes the Administrative Agent to file
filings with the United States Patent and Trademark Office or United States
Copyright Office (or any successor office or any similar office in any other
country), including, the Copyright Security Agreement, the Patent Security
Agreement and the Trademark Security Agreement, or other documents for the
purpose of perfecting, confirming, continuing, enforcing or protecting the
security interest granted by such Pledgor hereunder, without the signature of
such Pledgor, and naming such Pledgor, as debtor, and the Administrative Agent,
as secured party.

(c) Notwithstanding the foregoing authorizations, in no event shall the
Administrative Agent be obligated to prepare or file any financing statements
whatsoever, or to maintain the perfection of the security interest granted
hereunder. Each Pledgor agrees to prepare, record and file, at its own expense,
financing statements (and continuation statements when applicable) with respect
to the Collateral now existing or hereafter created meeting the requirements

 

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of applicable state law in such manner and in such jurisdictions as are
necessary to perfect and maintain perfected the Collateral, and to deliver a
file stamped copy of each such financing statement or other evidence of filing
to the Administrative Agent. Neither the Trustee nor the Administrative Agent
shall be under any obligation whatsoever to file any such financing or
continuation statements or to make any other filing under the UCC in connection
with this Agreement.

SECTION 2.3. First Priority Nature of Liens. Notwithstanding anything herein to
the contrary, the lien and security interest granted to the Administrative Agent
pursuant to this Agreement shall be a first priority lien on and security
interest in the Pledged Collateral. The exercise of any right or remedy by the
Administrative Agent hereunder is subject to the provisions of the Intercreditor
Agreement. In the event of any conflict between the terms of the Intercreditor
Agreement and this Agreement, the terms of the Intercreditor Agreement shall
govern and control.

ARTICLE III

PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;

USE OF PLEDGED COLLATERAL

SECTION 3.1. Delivery of Certificated Securities Collateral. Each Pledgor
represents and warrants that all certificates, agreements or instruments
representing or evidencing the Securities Collateral in existence on the date
hereof, have been delivered to the Administrative Agent for the benefit of the
Administrative Agent in suitable form for transfer by delivery or accompanied by
duly executed instruments of transfer or assignment in blank, and that the
Administrative Agent has a perfected first priority security interest therein.
Each Pledgor hereby agrees that all certificates, agreements or instruments
representing or evidencing Securities Collateral acquired by such Pledgor after
the date hereof shall promptly (but in any event within thirty (30) days after
receipt thereof by such Pledgor) be delivered to and held by or on behalf of the
Administrative Agent pursuant hereto. The requirements in the preceding two
sentences shall not apply to the extent that the face value of the Securities
Collateral (other than any Subsidiary Equity Interests) does not exceed
$1,000,000 in the aggregate for all Pledgors. All certificated Securities
Collateral shall be in suitable form for transfer by delivery or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to the Administrative Agent. The
Administrative Agent shall have the right, at any time upon the occurrence and
during the continuance of any Event of Default, to endorse, assign or otherwise
transfer to or to register in the name of the Administrative Agent or any of its
nominees or endorse for negotiation any or all of the Securities Collateral,
without any indication that such Securities Collateral is subject to the
security interest hereunder. In addition, upon the occurrence and during the
continuance of an Event of Default, the Administrative Agent shall have the
right at any time to exchange certificates representing or evidencing Securities
Collateral for certificates of smaller or larger denominations.

 

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SECTION 3.2. Perfection of Uncertificated Securities Collateral. Each Pledgor
represents and warrants that the Administrative Agent has a perfected first
priority security interest in all uncertificated Pledged Securities pledged by
it hereunder that are in existence on the date hereof. Each Pledgor hereby
agrees that if any of the Pledged Securities are at any time not evidenced by
certificates of ownership, then each applicable Pledgor shall, to the extent
permitted by applicable law, (i) cause the issuer to execute and deliver to the
Administrative Agent an acknowledgment of the pledge of such Pledged Securities
substantially in the form of Exhibit 1 hereto, (ii) if necessary or desirable to
perfect a security interest in such Pledged Securities, cause such pledge to be
recorded on the equityholder register or the books of the Borrower, execute any
customary pledge forms or other documents necessary or appropriate to complete
the pledge and give the Administrative Agent the right to transfer such Pledged
Securities under the terms hereof, and (iii) after the occurrence and during the
continuance of any Event of Default, upon request by the Administrative Agent,
(A) cause the organization documents of each such Borrower that is a Subsidiary
of the Borrower to be amended to provide that such Pledged Securities shall be
treated as “securities” for purposes of the UCC and (B) cause such Pledged
Securities to become certificated and delivered to the Administrative Agent in
accordance with the provisions of Section 3.1.

SECTION 3.3. Financing Statements and Other Filings; Maintenance of Perfected
Security Interest. Each Pledgor represents and warrants that all financing
statements, agreements, instruments and other documents necessary to perfect the
security interest granted by it to the Administrative Agent in respect of the
Pledged Collateral have been delivered to the Administrative Agent in completed
and, to the extent necessary, duly executed form for filing in each
governmental, municipal or other office specified in Schedule 6 to the
Perfection Certificate. Each Pledgor agrees that at the sole cost and expense of
the Pledgors, such Pledgor will maintain the security interest created by this
Agreement in the Pledged Collateral as a perfected first priority security
interest subject only to Permitted Liens and file all UCC-3 continuation
statements necessary to continue the perfection of the security interest created
by this Agreement.

SECTION 3.4. Other Actions. In order to further ensure the attachment,
perfection and priority of, and the ability of the Administrative Agent to
enforce, the Administrative Agent’s security interest in the Pledged Collateral,
each Pledgor represents and warrants (as to itself) as follows and agrees, in
each case at such Pledgor’s own expense, to take the following actions with
respect to the following Pledged Collateral:

(a) Instruments and Tangible Chattel Paper. As of the date hereof, no amounts
payable under or in connection with any of the Pledged Collateral are evidenced
by any Instrument or Tangible Chattel Paper other than such Instruments and
Tangible Chattel Paper listed in Schedule 10 to the Perfection Certificate. Each
Instrument and each item of Tangible Chattel Paper listed in Schedule 10 to the
Perfection Certificate has been properly endorsed, assigned and delivered to the
Administrative Agent, accompanied by instruments of transfer or assignment duly
executed in blank. At any time such requirements apply, the applicable Pledgor
shall give notice thereof to the Administrative Agent in accordance with
Section 9.2 of the Credit Agreement and the Administrative

 

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Agent shall not be charged with any knowledge that such requirements are
applicable unless such notice has been given. If any amount then payable under
or in connection with any of the Pledged Collateral shall be evidenced by any
Instrument or Tangible Chattel Paper, and such amount, together with all amounts
payable evidenced by any Instrument or Tangible Chattel Paper not previously
delivered to the Administrative Agent exceeds $1,000,000 in the aggregate for
all Pledgors, the Pledgor acquiring such Instrument or Tangible Chattel Paper
shall promptly (but in any event within thirty (30) days after receipt thereof)
endorse, assign and deliver the same to the Administrative Agent, accompanied by
such instruments of transfer or assignment duly executed in blank as the
Administrative Agent may from time to time specify.

(b) Deposit Accounts. As of the date hereof, no Pledgor has any Deposit Accounts
other than the accounts listed in Schedule 13 to the Perfection Certificate.
Within forty-five (45) days after the Closing Date (or such longer period of
time as agreed to by the Administrative Agent in its sole discretion), the
Administrative Agent will have a first priority security interest in each such
Deposit Account, which security interest will be, upon the execution and
delivery of a Deposit Account Control Agreement with respect thereto perfected
by Control. No Pledgor shall hereafter establish and maintain any Deposit
Account with any Bank unless such Bank and such Pledgor shall have duly executed
and delivered to the Administrative Agent a Deposit Account Control Agreement
with respect to such Deposit Account. At any time such requirements apply, the
applicable Pledgor shall give notice thereof to the Administrative Agent in
accordance with Section 9.2 of the Credit Agreement and the Administrative Agent
shall not be charged with any knowledge that such requirements are applicable
unless such notice has been given. The Administrative Agent agrees with each
Pledgor that the Administrative Agent shall not give any instructions directing
the disposition of funds from time to time credited to any Deposit Account or
withhold any withdrawal rights from such Pledgor with respect to funds from time
to time credited to any Deposit Account unless an Event of Default has occurred
and is continuing. Each Pledgor agrees that once the Administrative Agent sends
an instruction or notice to a Bank exercising its Control over any Deposit
Account such Pledgor shall not give any instructions or orders with respect to
such Deposit Account including, without limitation, instructions for
distribution or transfer of any funds in such Deposit Account. No Pledgor shall
grant Control of any Deposit Account to any person other than the Administrative
Agent.

(c) Securities Accounts and Commodity Accounts. (a) As of the date hereof, no
Pledgor has any Securities Accounts or Commodity Accounts other than those
listed in Schedule 13 to the Perfection Certificate. Within forty-five (45) days
after the Closing Date (or such longer period of time as agreed by the
Administrative Agent in its sole discretion), the Administrative Agent will have
a first priority security interest in each such Securities Account and Commodity
Account, which security interest will be, in the case of Securities Accounts,
upon the execution and delivery of a Securities Account Control Agreement with
respect thereto, perfected by Control. No Pledgor shall hereafter establish and
maintain any Securities Account or Commodity Account with any Securities
Intermediary or Commodity Intermediary unless such Securities Intermediary or
Commodity

 

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Intermediary, as the case may be, and such Pledgor shall have duly executed and
delivered a Control Agreement with respect to such Securities Account or
Commodity Account, as the case may be. At any time such requirements apply, the
applicable Pledgor shall give notice thereof to the Administrative Agent in
accordance with Section 9.2 of the Credit Agreement and the Administrative Agent
shall not be charged with any knowledge that such requirements are applicable
unless such notice has been given. Each Pledgor shall accept any cash and
Investment Property in trust for the benefit of the Administrative Agent and
within five (5) Business Days of actual receipt thereof, deposit any and all
cash and Investment Property received by it into a Deposit Account or Securities
Account subject to Administrative Agent’s Control. The Administrative Agent
agrees with each Pledgor that the Administrative Agent shall not give any
Entitlement Orders or instructions or directions to any Borrower of
uncertificated securities, Securities Intermediary or Commodity Intermediary,
and shall not withhold its consent to the exercise of any withdrawal or dealing
rights by such Pledgor, unless an Event of Default has occurred and is
continuing or, after giving effect to any such investment and withdrawal rights,
would occur. Each Pledgor agrees that once the Administrative Agent sends an
instruction or notice to a Securities Intermediary or Commodity Intermediary
exercising its Control over any Securities Account and Commodity Account such
Pledgor shall not give any instructions or orders with respect to such
Securities Account and Commodity Account including, without limitation,
instructions for investment, distribution or transfer of any Investment Property
or financial asset maintained in such Securities Account or Commodity Account.
No Pledgor shall grant Control over any Investment Property to any person other
than the Administrative Agent. As between the Administrative Agent and the
Pledgors, the Pledgors shall bear the investment risk with respect to the
Investment Property and Pledged Securities, and the risk of loss of, damage to,
or the destruction of the Investment Property and Pledged Securities, whether in
the possession of, or maintained as a Security Entitlement or deposit by, or
subject to the Control of, the Administrative Agent, a Securities Intermediary,
a Commodity Intermediary, any Pledgor or any other person.

(d) Electronic Chattel Paper and Transferable Records. As of the date hereof, no
amount under or in connection with any of the Pledged Collateral is evidenced by
any Electronic Chattel Paper or any “transferable record” (as that term is
defined in Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act, or in Section 16 of the Uniform Electronic Transactions
Act as in effect in any relevant jurisdiction) other than such Electronic
Chattel Paper and transferable records listed in Schedule 10 to the Perfection
Certificate. If any amount payable under or in connection with any of the
Pledged Collateral shall be evidenced by any Electronic Chattel Paper or any
transferable record, the Pledgor acquiring such Electronic Chattel Paper or
transferable record shall promptly notify the Administrative Agent thereof and
shall take such action as is reasonably necessary to vest in the Administrative
Agent control of such Electronic Chattel Paper under Section 9-105 of the UCC or
control under Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act or, as the case may be, Section 16 of the Uniform
Electronic Transactions Act, as so in effect in such jurisdiction, of such
transferable record. The requirement in the preceding sentence shall not apply

 

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to the extent that such amount, together with all amounts payable evidenced by
Electronic Chattel Paper or any transferable record in which the Administrative
Agent has not been vested control within the meaning of the statutes described
in the immediately preceding sentence, does not exceed $3,000,000 in the
aggregate for all Pledgors. At any time such requirement applies, the applicable
Pledgor shall give notice thereof to the Administrative Agent in accordance with
Section 9.2 of the Credit Agreement and the Administrative Agent shall not be
charged with any knowledge that such requirements are applicable unless such
notice has been given. The Pledgors may make alterations to the Electronic
Chattel Paper or transferable record, provided that such alterations are
permitted under Section 9-105 of the UCC or Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act or Section 16 of the
Uniform Electronic Transactions Act, as determined by the Borrower, and unless
an Event of Default has occurred and is continuing.

(e) Letter-of-Credit Rights. If any Pledgor is at any time a beneficiary under a
Letter of Credit now or hereafter issued, such Pledgor shall promptly (but in
any event within thirty (30) days after receipt thereof by such Pledgor) notify
the Administrative Agent thereof and such Pledgor shall, either (i) use
commercially reasonable efforts to arrange for the Borrower and any confirmer of
such Letter of Credit to consent to an assignment to the Administrative Agent of
the proceeds of any drawing under the Letter of Credit or (ii) arrange for the
Administrative Agent to become the transferee beneficiary of such Letter of
Credit, with the Administrative Agent agreeing, in each case, that the proceeds
of any drawing under the Letter of Credit are to be applied as provided in the
Credit Agreement. The actions in the preceding sentence shall not be required to
the extent that the amount of any such Letter of Credit, together with the
aggregate amount of (a) all other Letters of Credit for which the actions
described above in clause (i) and (ii) have not been taken and (b) all
Commercial Tort Claims in which the Administrative Agent does not have a
perfected security interest and (c) all motor vehicles (and any such other
Equipment covered by certificates of title or ownership) as to which any Pledgor
has not delivered a certificate of title or ownership to the Administrative
Agent, does not exceed $5,000,000 in the aggregate for all Pledgors. At any time
such action is required, the applicable Pledgor shall give notice thereof to the
Administrative Agent in accordance with Section 9.2 of the Credit Agreement and
the Administrative Agent shall not be charged with any knowledge that such
requirement is applicable unless such notice has been given.

(f) Commercial Tort Claims. As of the date hereof, each Pledgor hereby
represents and warrants that it holds no Commercial Tort Claims other than those
listed in Schedule 12 to the Perfection Certificate. If any Pledgor shall at any
time hold or acquire a Commercial Tort Claim, such Pledgor shall promptly, and
in any event within thirty (30) days, notify the Administrative Agent in writing
signed by such Pledgor of the brief details thereof and grant to the
Administrative Agent in such writing a security interest therein and in the
Proceeds thereof, all upon the terms of this Agreement, with such writing to be
in such form and substance as is reasonably necessary to grant a security
interest in such Commercial Tort Claim. The requirement in the preceding
sentence shall not apply

 

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to the extent that the amount of such Commercial Tort Claim, together with the
amount of (a) all other Commercial Tort Claims held by any Pledgor in which the
Administrative Agent does not have a perfected security interest, (b) all
Letters of Credit (except to the extent constituting Supporting Obligations) in
which the Administrative Agent does not have a perfected security interest and
(c) all motor vehicles (and any such other Equipment covered by certificates of
title or ownership) as to which any Pledgor has not delivered a certificate of
title or ownership to the Administrative Agent, does not exceed $5,000,000 in
the aggregate for all Pledgors. At any time such requirement applies, the
applicable Pledgor shall give notice thereof to the Administrative Agent in
accordance with Section 9.2 of the Credit Agreement and the Administrative Agent
shall not be charged with any knowledge that such requirement is applicable
unless such notice has been given.

(g) Each Pledgor shall deliver to the Administrative Agent originals of the
certificates of title or ownership for the motor vehicles (and any other
Equipment covered by certificates of title or ownership) owned by it, with the
Administrative Agent listed as lienholder therein. Such requirement shall not
apply to the extent the aggregate amount of (a) all motor vehicles (and any such
other Equipment covered by certificates of title or ownership) as to which any
Pledgor has not delivered a certificate of title or ownership to the
Administrative Agent, (b) all Commercial Tort Claims in which the Administrative
Agent does not have a perfected security interest and (c) all Letters of Credit
(except to the extent constituting Supporting Obligations) in which the
Administrative Agent does not have a perfected security, does not exceed
$5,000,000 in the aggregate for all Pledgors.

(h) After-Acquired Collateral. Unless otherwise provided, upon the acquisition
by the Borrower or any Guarantor after the date hereof (1) any after-acquired
assets, including, but not limited to, any after-acquired Real Property or any
Equipment or Fixtures which constitute accretions, additions or technological
upgrades to the Equipment or Fixtures or any working capital assets that, in any
such case, form part of the Collateral, or (2) any replacement assets, the
Borrower or such Pledgor shall execute and deliver, (i) with regard to any Real
Property that is acquired for the purpose of serving as a restaurant, mortgages
and related documentation and opinions as specified in Section 4.10 hereof
within 365 days of the date of acquisition, (ii) with regard to any other Real
Property, mortgages and related documentation and opinions as specified in
Section 4.10 within 180 days of the date of acquisition (or such later date as
any applicable regulatory approvals have been obtained) and (iii) to the extent
required by the Security Documents, any information, documentation, financing
statements or other certificates as may be necessary to vest in the
Administrative Agent a perfected security interest, subject only to Permitted
Liens, in such after-acquired Property (other than Excluded Property and
Collateral that the Borrower or such Guarantor is not required to take actions
to perfect) and to have such after-acquired Property added to the Collateral,
and thereupon all provisions of the Credit Agreement, the Security Documents and
the Intercreditor Agreement relating to the Collateral shall be deemed to relate
to such after-acquired Property to the same extent and with the same force and
effect.

 

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SECTION 3.5. Joinder of Additional Guarantors. The Pledgors shall cause each
Subsidiary of the Borrower which, from time to time, after the date hereof shall
be required to pledge any assets to the Administrative Agent for the benefit of
the Secured Parties pursuant to the provisions of Sections 5.10 and 5.12 of the
Credit Agreement, to execute and deliver to the Administrative Agent a joinder
agreement in the form of Exhibit 1.1(c) to the Credit Agreement.

SECTION 3.6. Supplements; Further Assurances. Each Pledgor shall take such
further actions, and execute and/or deliver to the Administrative Agent such
additional financing statements, amendments, assignments, agreements,
supplements, powers and instruments, as is reasonably necessary in order to
create, perfect, preserve and protect the security interest in and lien on the
Pledged Collateral and the Mortgaged Property as provided herein and the rights
and interests granted to the Administrative Agent hereunder, to carry into
effect the purposes hereof or better to assure and confirm the validity,
enforceability and priority of the Administrative Agent’s security interest in
and lien on the Pledged Collateral and Mortgaged Property or permit the
Administrative Agent to exercise and enforce its rights, powers and remedies
hereunder and the other Security Documents with respect to any Pledged
Collateral and Mortgaged Property, including the filing of financing statements,
continuation statements and other documents (including this Agreement) under the
UCC (or other similar laws) in effect in any jurisdiction with respect to the
security interest created hereby and the execution and delivery of Control
Agreements, in form reasonably satisfactory to the Administrative Agent and in
such offices (including the United States Patent and Trademark Office and the
United States Copyright Office) wherever required by law to perfect, continue
and maintain the validity, enforceability and priority of the security interest
in and lien on the Pledged Collateral and Mortgaged Property as provided herein
and the other Security Documents and to preserve the other rights and interests
granted to the Administrative Agent hereunder and the other Security Documents,
as against third parties, with respect to the Pledged Collateral and Mortgaged
Property. Without limiting the generality of the foregoing, each Pledgor shall
make, execute, endorse, acknowledge, file or refile and/or deliver to the
Administrative Agent from time to time upon reasonable request by the
Administrative Agent such lists, schedules, descriptions and designations of the
Pledged Collateral and Mortgaged Property, copies of warehouse receipts,
receipts in the nature of warehouse receipts, bills of lading, documents of
title, vouchers, invoices, schedules, confirmatory assignments, supplements,
additional security agreements, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, reports and other assurances or
instruments as the Administrative Agent shall reasonably request. If an Event of
Default has occurred and is continuing, the Administrative Agent may institute
and maintain, in its own name or in the name of any Pledgor, such suits and
proceedings as the Administrative Agent may be advised by counsel shall be
necessary or expedient to prevent any impairment of the security interest in or
lien on or the perfection thereof in the Pledged Collateral and Mortgaged
Property. All of the foregoing shall be at the sole cost and expense of the
Pledgors.

 

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ARTICLE IV

REPRESENTATIONS, WARRANTIES AND COVENANTS

Each Pledgor represents, warrants and covenants as follows:

SECTION 4.1. Title. Except for the security interest granted to the
Administrative Agent for the benefit of the Secured Parties pursuant to this
Agreement and Permitted Liens, such Pledgor owns and has rights and, as to
Pledged Collateral acquired by it from time to time after the date hereof, will
own and have rights in each item of Pledged Collateral pledged by it hereunder,
free and clear of any and all Liens. In addition, no Liens or claims exist on
the Securities Collateral, other than as permitted by Section 6.2 of the Credit
Agreement.

SECTION 4.2. Validity of Security Interest. The security interest in and Lien on
the Pledged Collateral granted to the Administrative Agent for the benefit of
the Secured Parties hereunder constitutes (a) a legal and valid security
interest in all the Pledged Collateral securing the payment and performance of
the Secured Obligations, and (b) subject to the filings and other actions
described in Schedule 6 to the Perfection Certificate (to the extent required to
be listed on the schedules to the Perfection Certificate as of the date this
representation is made or deemed made), a perfected security interest in all the
Pledged Collateral. The security interest and Lien granted to the Administrative
Agent for the benefit of the Secured Parties pursuant to this Agreement in and
on the Pledged Collateral will at all times constitute a perfected, continuing
security interest therein, prior to all other Liens on the Pledged Collateral
except for Permitted Liens.

SECTION 4.3. Defense of Claims; Transferability of Pledged Collateral. Each
Pledgor shall, at its own cost and expense, defend title to the Pledged
Collateral pledged by it hereunder and the security interest therein and Lien
thereon granted to the Administrative Agent and the priority thereof against all
claims and demands of all persons, at its own cost and expense, at any time
claiming any interest therein adverse to the Administrative Agent or any other
Secured Party other than Permitted Liens. There is no agreement (other than with
respect to a Permitted Lien), order, judgment or decree, and no Pledgor shall
enter into any agreement (other than with respect to a Permitted Lien) or take
any other action, that would restrict the transferability of any of the Pledged
Collateral or otherwise impair or conflict with such Pledgor’s obligations or
the rights of the Administrative Agent hereunder.

SECTION 4.4. Other Financing Statements. It has not filed, nor authorized any
third party to file (nor will there be), any valid or effective financing
statement (or similar statement, instrument of registration or public notice
under the law of any jurisdiction) covering or purporting to cover any interest
of any kind in the Pledged Collateral, except such as have been filed in favor
of the Administrative Agent or in favor of the Second Lien Agent pursuant to
this Agreement or in favor of any holder of a Permitted Lien with respect to
such Lien or financing statements or public notices relating to the termination
statements listed on Schedule 8 to the Perfection Certificate. No Pledgor shall
execute, authorize or permit to be filed in any public

 

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office any financing statement (or similar statement, instrument of registration
or public notice under the law of any jurisdiction) relating to any Pledged
Collateral, except financing statements and other statements and instruments
filed or to be filed in respect of and covering the security interests granted
by such Pledgor to the holders of the Permitted Liens.

SECTION 4.5. Location of Inventory and Equipment. It shall not move any
Equipment or Inventory with a fair market value in excess of $3,000,000 in the
aggregate to any location, other than any location that is listed in the
relevant Schedules to the Perfection Certificate, unless it shall have given the
Administrative Agent not less than 30 days’ prior written notice of its
intention so to do, clearly describing such new location and confirming the
attachment of the Lien and security interest created by this Agreement to the
Collateral located in the new location, and confirming further that each Pledgor
has executed and filed any instruments or statements necessary to create,
preserve or perfect the Administrative Agent’s security interest in such
relocated Collateral; provided that in no event shall any Equipment or Inventory
be moved to any location outside of the continental United States.

SECTION 4.6. Due Authorization and Issuance. All of the Pledged Securities
existing on the date hereof have been, and to the extent any Pledged Securities
are hereafter issued, such Pledged Securities will be, upon such issuance, duly
authorized, validly issued and fully paid and non-assessable to the extent
applicable. To the knowledge of the Pledgors, there is no amount or other
obligation owing by any Pledgor to any Borrower of the Pledged Securities in
exchange for or in connection with the issuance of the Pledged Securities or any
Pledgor’s status as a partner or a member of any Borrower of the Pledged
Securities.

SECTION 4.7. Consents, etc. In the event that the Administrative Agent desires
to exercise any remedies, voting or consensual rights or attorney-in-fact powers
set forth in this Agreement or the other Security Documents and determines it
necessary to obtain any approvals or consents of any Governmental Authority or
any other person therefor, then, upon the reasonable request of the
Administrative Agent, such Pledgor agrees to use its commercially reasonable
efforts to assist and aid the Administrative Agent to obtain as soon as
practicable any necessary approvals or consents for the exercise of any such
remedies, rights and powers.

SECTION 4.8. Pledged Collateral and Mortgaged Property. All information set
forth herein, including the schedules hereto, and all information contained in
any documents, schedules and lists heretofore delivered to any Secured Party,
including the Perfection Certificate and the schedules thereto, in connection
with this Agreement, in each case, relating to the Pledged Collateral and
Mortgaged Property, is accurate and complete in all material respects. The
Pledged Collateral and Mortgaged Property described on the schedules to the
Perfection Certificate constitutes all of the property of such type of Pledged
Collateral and Mortgaged Property owned or held by the Pledgors.

SECTION 4.9. Insurance. In the event that the proceeds of any insurance claim
are paid to any Pledgor after the Administrative Agent has exercised its right
to foreclose after an Event of Default, such Net Cash Proceeds shall, subject to
the Intercreditor Agreement, be held in trust for the benefit of the
Administrative Agent and promptly after receipt thereof shall be

 

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paid to the Administrative Agent for application in accordance with
Section 2.7(b)(iv) of the Credit Agreement.

SECTION 4.10. Post-Closing Collateral Matters. The Administrative Agent shall
have received from the Borrower and each applicable Pledgor all post-closing
deliverables required to be delivered pursuant to Section 5.13(e) of the Credit
Agreement.

SECTION 4.11. No Impairment of the Security Interests. No Pledgor shall take any
action, or knowingly or negligently omit to take any action, which action or
omission might or would have the result of materially impairing the security
interest with respect to the Pledged Collateral or Mortgaged Property.

ARTICLE V

CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL

SECTION 5.1. Pledge of Additional Securities Collateral. Upon obtaining any
Pledged Securities or Intercompany Notes of any Person, each Pledgor shall
maintain such Pledged Securities or Intercompany Notes in trust for the benefit
of the Administrative Agent. For any such Pledged Securities or Intercompany
Notes having a face value in excess of $3,000,000 (other than any Equity
Interests of a Subsidiary), each Pledgor shall promptly (but in any event within
thirty (30) days after receipt thereof) deliver to the Administrative Agent a
pledge amendment in substantially the form of Exhibit 1 hereto (each, a “Pledge
Amendment”), and the certificates and other documents required under Section 3.1
and Section 3.2. Each Pledgor shall confirm the attachment of the Lien hereby
created on and in respect of such additional Pledged Securities or Intercompany
Notes. Each Pledgor hereby authorizes the Administrative Agent to attach each
Pledge Amendment to this Agreement and agrees that all Pledged Securities or
Intercompany Notes listed on any such Pledge Amendment shall for all purposes
hereunder be considered Pledged Collateral.

SECTION 5.2. Voting Rights; Distributions; etc.

(a) So long as no Event of Default shall have occurred and be continuing:

(i) Each Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Securities Collateral or any part thereof
for any purpose not inconsistent with the terms or purposes hereof, the Credit
Agreement or any other document evidencing the Secured Obligations.

(ii) Each Pledgor shall be entitled to receive and retain, and to utilize free
and clear of the Lien hereof, any and all Distributions, but only if and to the
extent made in accordance with the provisions of the Credit Agreement; provided,
however, that any and all such Distributions consisting of rights or interests
in the form of securities shall be forthwith delivered to the Administrative
Agent to hold as Pledged Collateral and shall, if

 

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received by any Pledgor, be received in trust for the benefit of the
Administrative Agent, be segregated from the other property or funds of such
Pledgor and be promptly (but in any event within five days after receipt
thereof) delivered to the Administrative Agent as Pledged Collateral in the same
form as so received (with any necessary endorsement).

(b) So long as no Event of Default shall have occurred and be continuing, the
Administrative Agent shall be deemed without further action or formality to have
granted to each Pledgor all necessary consents relating to voting rights and
shall, if necessary, upon written request of any Pledgor and at the sole cost
and expense of the Pledgors, from time to time execute and deliver (or cause to
be executed and delivered) to such Pledgor all such instruments as such Pledgor
may reasonably request in order to permit such Pledgor to exercise the voting
and other rights which it is entitled to exercise pursuant to Section 5.2(a)(i)
hereof and to receive the Distributions which it is authorized to receive and
retain pursuant to Section 5.2(a)(ii) hereof.

(c) Upon the occurrence and during the continuance of any Event of Default and
upon notice from the Administrative Agent:

(i) All rights of each Pledgor to exercise the voting and other consensual
rights it would otherwise be entitled to exercise pursuant to Section 5.2(a)(i)
hereof shall immediately cease, and all such rights shall thereupon become
vested in the Administrative Agent, which shall thereupon have the sole right to
exercise such voting and other consensual rights.

(ii) All rights of each Pledgor to receive Distributions which it would
otherwise be authorized to receive and retain pursuant to Section 5.2(a)(ii)
hereof shall immediately cease and all such rights shall thereupon become vested
in the Administrative Agent, which shall thereupon have the sole right to
receive and hold as Pledged Collateral such Distributions.

(d) Each Pledgor shall, at its sole cost and expense, from time to time execute
and deliver to the Administrative Agent appropriate instruments as the
Administrative Agent may request in order to permit the Administrative Agent to
exercise the voting and other rights which it may be entitled to exercise
pursuant to Section 5.2(c)(i) hereof and to receive all Distributions which it
may be entitled to receive under Section 5.2(c)(ii) hereof.

(e) All Distributions which are received by any Pledgor contrary to the
provisions of Section 5.2(a)(ii) hereof shall be received in trust for the
benefit of the Administrative Agent, shall be segregated from other funds of
such Pledgor and shall immediately be paid over to the Administrative Agent as
Pledged Collateral in the same form as so received (with any necessary
endorsement).

SECTION 5.3. Defaults, etc. Each Pledgor hereby represents and warrants that
(i) such Pledgor is not in default in the payment of any portion of any
mandatory capital contribution, if any, required to be made under any agreement
to which such Pledgor is a party relating to the Pledged Securities pledged by
it, (ii) no Securities Collateral pledged by such Pledgor is subject to any
defense, offset or counterclaim, nor have any of the foregoing been asserted or

 

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alleged against such Pledgor by any person with respect thereto, and (iii) as of
the date hereof, there are no certificates, instruments, documents or other
writings (other than the organization documents that have been delivered to the
Administrative Agent and certificates representing such Pledged Securities that
have been delivered to the Administrative Agent) which evidence any Pledged
Securities of such Pledgor.

SECTION 5.4. Certain Agreements of Pledgors As Issuers and Holders of Equity
Interests. In the case of each Pledgor which is an issuer of Securities
Collateral, such Pledgor agrees to be bound by the terms of this Agreement
relating to the Securities Collateral issued by it and will comply with such
terms insofar as such terms are applicable to it.

(b) In the case of each Pledgor which is a partner, shareholder or member, as
the case may be, in a partnership, limited liability company or other entity,
such Pledgor hereby consents to the extent required by the applicable
organization document to the pledge by each other Pledgor, pursuant to the terms
hereof, of the Pledged Securities in such partnership, limited liability company
or other entity and, upon the occurrence and during the continuance of an Event
of Default, to the transfer of such Pledged Securities to the Administrative
Agent or its nominee and to the substitution of the Administrative Agent or its
nominee as a substituted partner, shareholder or member in such partnership,
limited liability company or other entity with all the rights, powers and duties
of a general partner, limited partner, shareholder or member, as the case may
be.

ARTICLE VI

CERTAIN PROVISIONS CONCERNING INTELLECTUAL

PROPERTY COLLATERAL

SECTION 6.1. Grant of Intellectual Property License. For the purpose of enabling
the Administrative Agent, during the continuance of an Event of Default, to
exercise rights and remedies under Article IX hereof at such time as the
Administrative Agent shall be lawfully entitled to exercise such rights and
remedies, and for no other purpose, each Pledgor hereby grants to the
Administrative Agent, to the extent assignable, an irrevocable, non-exclusive
license to use, assign, license or sublicense any of the Intellectual Property
Collateral now owned or hereafter acquired by such Pledgor, wherever the same
may be located. Such license shall include access to all media in which any of
the licensed items may be recorded or stored and to all computer programs used
for the compilation or printout hereof.

SECTION 6.2. Protection of Administrative Agent’s Security. On a continuing
basis, each Pledgor shall, at its sole cost and expense, (i) promptly following
its becoming aware thereof, notify the Administrative Agent of any adverse
determination in any proceeding or the institution of any proceeding in any
federal, state or local court or administrative body or in the United States
Patent and Trademark Office or the United States Copyright Office regarding any
Intellectual Property Collateral, such Pledgor’s right to register such
Intellectual Property Collateral or its right to keep and maintain such
registration in full force and effect to the extent that

 

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such Intellectual Property Collateral exceeds $1,000,000 (ii) maintain all
Intellectual Property Collateral as presently used and operated, (iii) not
permit to lapse or become abandoned any Intellectual Property Collateral, and
not settle or compromise any pending or future litigation or administrative
proceeding with respect to any such Intellectual Property Collateral, in either
case except as shall be consistent with commercially reasonable business
judgment, (iv) upon such Pledgor obtaining knowledge thereof, promptly notify
the Administrative Agent in writing of any event which may be reasonably
expected to materially and adversely affect the value or utility of any
Intellectual Property Collateral or the rights and remedies of the
Administrative Agent in relation thereto including a levy or threat of levy or
any legal process against any Intellectual Property Collateral, (v) not license
any Intellectual Property Collateral other than licenses entered into by such
Pledgor in, or incidental to, the ordinary course of business, or amend or
permit the amendment of any of the licenses in a manner that materially and
adversely affects the right to receive payments thereunder, or in any manner
that would materially impair the value of any Intellectual Property Collateral
or the Lien on and security interest in the Intellectual Property Collateral
created therein hereby and (vi) diligently keep adequate records respecting all
Intellectual Property Collateral.

SECTION 6.3. After-Acquired Property. If any Pledgor shall at any time after the
date hereof (i) obtain any rights to any additional Intellectual Property
Collateral or (ii) become entitled to the benefit of any additional Intellectual
Property Collateral or any renewal or extension thereof, including any reissue,
division, continuation, or continuation-in-part of any Intellectual Property
Collateral, or any improvement on any Intellectual Property Collateral, or if
any intent-to use trademark application is no longer subject to clause (d) of
the definition of Excluded Property, the provisions hereof shall automatically
apply thereto and any such item enumerated in the preceding clause (i) or
(ii) shall automatically constitute Intellectual Property Collateral as if such
would have constituted Intellectual Property Collateral at the time of execution
hereof and be subject to the Lien and security interest created by this
Agreement without further action by any party. Each Pledgor shall promptly (and
in any event within 30 days) provide to the Administrative Agent written notice
of any of the foregoing and confirm the attachment of the Lien and security
interest created by this Agreement to any rights described in clauses (i) and
(ii) above by execution of an instrument in form reasonably necessary to grant
such a security interest to the Administrative Agent and the filing of any
instruments or statements as shall be reasonably necessary to create, preserve,
protect or perfect the Administrative Agent’s security interest in such
Intellectual Property Collateral. Further, each Pledgor agrees to modify this
Agreement by amending Schedules 11(a) and 11(b) to the Perfection Certificate to
include any Intellectual Property Collateral of such Pledgor acquired or arising
after the date hereof.

SECTION 6.4. Litigation. Unless there shall occur and be continuing any Event of
Default, each Pledgor shall have the right to commence and prosecute in its own
name, as the party in interest, for its own benefit and at the sole cost and
expense of the Pledgors, such applications for protection of the Intellectual
Property Collateral and suits, proceedings or other actions to prevent the
infringement, counterfeiting, unfair competition, dilution, diminution in value
or other damage as are necessary to protect the Intellectual Property
Collateral. Upon the occurrence and during the continuance of any Event of
Default, the Administrative Agent shall have the right but shall in no way be
obligated to file applications for protection of the Intellectual Property
Collateral and/or bring suit in the name of any Pledgor, the Administrative
Agent or the Secured Parties to enforce the Intellectual

 

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Property Collateral and any license thereunder. In the event of such suit, each
Pledgor shall, at the reasonable request of the Administrative Agent, do any and
all lawful acts and execute any and all documents requested by the
Administrative Agent in aid of such enforcement and the Pledgors shall promptly
reimburse and indemnify the Administrative Agent for all costs and expenses
incurred by the Administrative Agent in the exercise of its rights under this
Section 6.4 in accordance with Section 9.5 of the Credit Agreement. In the event
that the Administrative Agent shall elect not to bring suit to enforce the
Intellectual Property Collateral, each Pledgor agrees, at the reasonable request
of the Administrative Agent, to take all commercially reasonable actions
necessary, whether by suit, proceeding or other action, to prevent the
infringement, counterfeiting, unfair competition, dilution, diminution in value
of or other damage to any of the Intellectual Property Collateral by any person.

ARTICLE VII

[RESERVED]

ARTICLE VIII

TRANSFERS

SECTION 8.1. Transfers of Pledged Collateral or Mortgaged Property. No Pledgor
shall sell, convey, assign or otherwise dispose of, or grant any option with
respect to, any of the Pledged Collateral or Mortgaged Property pledged by it
hereunder except as expressly permitted by the Credit Agreement.

ARTICLE IX

REMEDIES

SECTION 9.1. Remedies. Subject to the terms of the Intercreditor Agreement, upon
the occurrence and during the continuance of any Event of Default, the
Administrative Agent may, but shall not be obligated to, from time to time
exercise in respect of the Pledged Collateral, in addition to the other rights
and remedies provided for herein or otherwise available to it, the following
remedies:

(i) Personally, or by agents or attorneys, immediately take possession of the
Pledged Collateral or any part thereof, from any Pledgor or any other person who
then has possession of any part thereof with or without notice or process of
law, and for that purpose may enter upon any Pledgor’s premises where any of the
Pledged Collateral is located, remove such Pledged Collateral, remain present at
such premises to receive copies of all communications and

 

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remittances relating to the Pledged Collateral and use in connection with such
removal and possession any and all services, supplies, aids and other facilities
of any Pledgor;

(ii) Demand, sue for, collect or receive any money or property at any time
payable or receivable in respect of the Pledged Collateral including instructing
the obligor or obligors on any agreement, instrument or other obligation
constituting part of the Pledged Collateral to make any payment required by the
terms of such agreement, instrument or other obligation directly to the
Administrative Agent, and in connection with any of the foregoing, compromise,
settle, extend the time for payment and make other modifications with respect
thereto; provided, however, that in the event that any such payments are made
directly to any Pledgor, prior to receipt by any such obligor of such
instruction, such Pledgor shall segregate all amounts received pursuant thereto
in trust for the benefit of the Administrative Agent and shall promptly (but in
no event later than three (3) Business Days after receipt thereof) pay such
amounts to the Administrative Agent;

(iii) Sell, assign, grant a license to use or otherwise liquidate, or direct any
Pledgor to sell, assign, grant a license to use or otherwise liquidate, any and
all investments made in whole or in part with the Pledged Collateral or any part
thereof, and take possession of the proceeds of any such sale, assignment,
license or liquidation;

(iv) Take possession of the Pledged Collateral or any part thereof, by directing
any Pledgor in writing to deliver the same to the Administrative Agent at any
place or places so designated by the Administrative Agent, in which event such
Pledgor shall at its own expense: (A) forthwith cause the same to be moved to
the place or places designated by the Administrative Agent and therewith
delivered to the Administrative Agent, (B) store and keep any Pledged Collateral
so delivered to the Administrative Agent at such place or places pending further
action by the Administrative Agent and (C) while the Pledged Collateral shall be
so stored and kept, provide such security and maintenance services as shall be
necessary to protect the same and to preserve and maintain them in good
condition. Each Pledgor’s obligation to deliver the Pledged Collateral as
contemplated in this Section 9.1(iv) is of the essence hereof. Upon application
to a court of equity having jurisdiction, the Administrative Agent shall be
entitled to a decree requiring specific performance by any Pledgor of such
obligation;

(v) Withdraw all moneys, instruments, securities and other property in any bank,
financial securities, deposit or other account of any Pledgor constituting
Pledged Collateral for application to the Secured Obligations as provided in
Article X hereof;

(vi) Retain and apply the Distributions to the Secured Obligations as provided
in Article X hereof;

(vii) Exercise any and all rights as beneficial and legal owner of the Pledged
Collateral, including perfecting assignment of and exercising any and all
voting, consensual and other rights and powers with respect to any Pledged
Collateral; and

(viii) Exercise all the rights and remedies of a secured party on default under
the UCC, and the Administrative Agent may also in its sole discretion, without
notice except as

 

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specified in Section 9.2 hereof, sell, assign or grant a license to use the
Pledged Collateral or any part thereof in one or more parcels at public or
private sale, at any exchange, broker’s board or at any of the Administrative
Agent’s offices or elsewhere, for cash, on credit or for future delivery, and at
such price or prices and upon such other terms as are commercially reasonable.
The Administrative Agent or any other Secured Party or any of their respective
Affiliates may be the purchaser, licensee, assignee or recipient of the Pledged
Collateral or any part thereof at any such sale and shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Pledged Collateral sold, assigned or licensed at such
sale, to use and apply any of the Secured Obligations owed to such person as a
credit on account of the purchase price of the Pledged Collateral or any part
thereof payable by such person at such sale. Each purchaser, assignee, licensee
or recipient at any such sale shall acquire the property sold, assigned or
licensed absolutely free from any claim or right on the part of any Pledgor, and
each Pledgor hereby waives, to the fullest extent permitted by law, all rights
of redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
The Administrative Agent shall not be obligated to make any sale of the Pledged
Collateral or any part thereof regardless of notice of sale having been given.
The Administrative Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. Each Pledgor hereby waives, to the fullest extent permitted by law,
any claims against the Administrative Agent arising by reason of the fact that
the price at which the Pledged Collateral or any part thereof may have been
sold, assigned or licensed at such a private sale was less than the price which
might have been obtained at a public sale, even if the Administrative Agent
accepts the first offer received and does not offer such Pledged Collateral to
more than one offeree.

SECTION 9.2. Notice of Sale. Each Pledgor acknowledges and agrees that, to the
extent notice of sale or other disposition of the Pledged Collateral or any part
thereof shall be required by law, ten (10) days’ prior notice to such Pledgor of
the time and place of any public sale or of the time after which any private
sale or other intended disposition is to take place shall be commercially
reasonable notification of such matters. No notification need be given to any
Pledgor if it has signed, after the occurrence of an Event of Default, a
statement renouncing or modifying any right to notification of sale or other
intended disposition.

SECTION 9.3. Waiver of Notice and Claims. Each Pledgor hereby waives, to the
fullest extent permitted by applicable law, notice or judicial hearing in
connection with the Administrative Agent’s taking possession or the
Administrative Agent’s disposition of the Pledged Collateral or any part
thereof, including any and all prior notice and hearing for any prejudgment
remedy or remedies and any such right which such Pledgor would otherwise have
under law, and each Pledgor hereby further waives, to the fullest extent
permitted by applicable law: (i) all damages occasioned by such taking of
possession, (ii) all other requirements as to the time, place and terms of sale
or other requirements with respect to the enforcement of the Administrative
Agent’s rights hereunder and (iii) all rights of redemption, appraisal,
valuation, stay, extension or moratorium now or hereafter in force under any
applicable law. The Administrative Agent shall not be liable for any incorrect
or improper payment made pursuant to this Article IX in the absence of gross
negligence or willful misconduct on the part of the Administrative Agent.

 

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Any sale of, or the grant of options to purchase, or any other realization upon,
any Pledged Collateral shall operate to divest all right, title, interest, claim
and demand, either at law or in equity, of the applicable Pledgor therein and
thereto, and shall be a perpetual bar both at law and in equity against such
Pledgor and against any and all persons claiming or attempting to claim the
Pledged Collateral so sold, optioned or realized upon, or any part thereof,
from, through or under such Pledgor.

SECTION 9.4. Certain Sales of Pledged Collateral.

(a) Each Pledgor recognizes that, by reason of certain prohibitions contained in
law, rules, regulations or orders of any Governmental Authority, the
Administrative Agent may be compelled, with respect to any sale of all or any
part of the Pledged Collateral, to limit purchasers to those who meet the
requirements of such Governmental Authority. Each Pledgor acknowledges that any
such sales may be at prices and on terms less favorable to the Administrative
Agent than those obtainable through a public sale without such restrictions,
and, notwithstanding such circumstances, agrees that any such restricted sale
shall be deemed to have been made in a commercially reasonable manner and that,
except as may be required by applicable law, the Administrative Agent shall have
no obligation to engage in public sales.

(b) Each Pledgor recognizes that, by reason of certain prohibitions contained in
the Securities Act, and applicable state securities laws, the Administrative
Agent may be compelled, with respect to any sale of all or any part of the
Securities Collateral and Investment Property, to limit purchasers to persons
who will agree, among other things, to acquire such Securities Collateral or
Investment Property for their own account, for investment and not with a view to
the distribution or resale thereof. Each Pledgor acknowledges that any such
private sales may be at prices and on terms less favorable to the Administrative
Agent than those obtainable through a public sale without such restrictions
(including a public offering made pursuant to a registration statement under the
Securities Act), and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner and that the Administrative Agent shall have no obligation to engage in
public sales and no obligation to delay the sale of any Securities Collateral or
Investment Property for the period of time necessary to permit the issuer
thereof to register it for a form of public sale requiring registration under
the Securities Act or under applicable state securities laws, even if such
issuer would agree to do so.

(c) If the Administrative Agent determines to exercise its right to sell any or
all of the Securities Collateral or Investment Property, upon written request,
the applicable Pledgor shall determine and inform the Administrative Agent of
the number of securities included in the Securities Collateral or Investment
Property which may be sold by the Administrative Agent as exempt transactions
under the Securities Act and the rules of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect.

(d) Each Pledgor further agrees that a breach of any of the covenants contained
in this Section 9.4 will cause irreparable injury to the Administrative Agent
and the other Secured Parties, that the Administrative Agent and the other
Secured Parties have no adequate

 

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remedy at law in respect of such breach and, as a consequence, that each and
every covenant contained in this Section 9.4 shall be specifically enforceable
against such Pledgor, and such Pledgor hereby waives and agrees not to assert
any defenses against an action for specific performance of such covenants except
for a defense that no Event of Default has occurred and is continuing.

SECTION 9.5. No Waiver; Cumulative Remedies.

(a) No failure on the part of the Administrative Agent to exercise, no course of
dealing with respect to, and no delay on the part of the Administrative Agent in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power,
privilege or remedy hereunder preclude any other or further exercise thereof or
the exercise of any other right, power, privilege or remedy; nor shall the
Administrative Agent be required to look first to, enforce or exhaust any other
security, collateral or guaranties. All rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies provided by law or
otherwise available.

(b) In the event that the Administrative Agent shall have instituted any
proceeding to enforce any right, power, privilege or remedy under this Agreement
or any other Security Document by foreclosure, sale, entry or otherwise, and
such proceeding shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Administrative Agent, then and in
every such case, the Pledgors, the Administrative Agent and each other Secured
Party shall be restored to their respective former positions and rights
hereunder with respect to the Pledged Collateral, and all rights, remedies,
privileges and powers of the Administrative Agent and the other Secured Parties
shall continue as if no such proceeding had been instituted.

SECTION 9.6. Certain Additional Actions Regarding Intellectual Property. If any
Event of Default shall have occurred and be continuing, upon the written demand
of the Administrative Agent, each Pledgor shall execute and deliver to the
Administrative Agent an assignment or assignments of the registered Patents,
Trademarks and/or Copyrights and Goodwill and such other documents as are
necessary or appropriate to carry out the intent and purposes hereof; provided
that such assignments shall cease to be valid and shall become void at such time
as all Events of Default have been cured or waived in accordance with the Credit
Agreement. Within five (5) Business Days of written notice thereafter from the
Administrative Agent, each Pledgor shall make available to the Administrative
Agent, to the extent within such Pledgor’s power and authority, such personnel
in such Pledgor’s employ on the date of the Event of Default as the
Administrative Agent may reasonably designate to permit such Pledgor to
continue, directly or indirectly, to produce, advertise and sell the products
and services sold by such Pledgor under the registered Patents, Trademarks
and/or Copyrights, and such persons shall be available to perform their prior
functions on the Administrative Agent’s behalf.

SECTION 9.7. [Reserved]

 

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SECTION 9.8. Actions of Administrative Agent. The Applicable Authorized
Representative shall direct the Administrative Agent in exercising any right,
power, discretionary duty or other remedy available to the Administrative Agent
under this Agreement or any Security Document and the other Secured Parties
shall not have a right to take any actions with respect to the Pledged
Collateral or Mortgaged Property. If the Administrative Agent shall not have
received appropriate instruction within 10 days of a request therefor from the
Applicable Authorized Representative (or such shorter period as reasonably may
be specified in such notice or as may be necessary under the circumstances) it
may, but shall be under no duty to, take or refrain from taking such action as
it shall deem to be in the best interests of the Secured Parties and the
Administrative Agent shall have no liability to any Person for such action or
inaction. “Applicable Authorized Representative” shall mean (i) the
Administrative Agent so long as the Obligations under the Credit Agreement
constitute Secured Obligations hereunder.

ARTICLE X

APPLICATION OF PROCEEDS

SECTION 10.1. Application of Proceeds. The proceeds received by the
Administrative Agent in respect of any sale of, collection from or other
realization upon all or any part of the Pledged Collateral or Mortgaged Property
pursuant to the exercise by the Administrative Agent of its remedies shall be
applied as set forth in Section 2.11(b) of the Credit Agreement.

ARTICLE XI

MISCELLANEOUS

SECTION 11.1. Concerning Administrative Agent and the other Security Documents.

(a) The Administrative Agent has been appointed as administrative agent pursuant
to the Credit Agreement. The actions of the Administrative Agent hereunder are
subject to the provisions of the Credit Agreement. The Administrative Agent
shall have the right hereunder to make demands, to give notices, to exercise or
refrain from exercising any rights, and to take or refrain from taking action
(including the release or substitution of the Pledged Collateral or Mortgaged
Property), in accordance with this Agreement, the Credit Agreement, the other
Security Documents and the other Credit Documents. The Administrative Agent may
employ agents and attorneys-in-fact in connection herewith and shall not be
liable for the negligence of any such agents or attorneys-in-fact selected by it
in good faith. The Administrative Agent may resign in the manner provided in the
Credit Agreement. A successor Administrative Agent may be appointed in the
manner provided in the Credit Agreement. Upon the acceptance of any appointment
as the Administrative Agent by a successor Administrative Agent, that successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers,

 

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privileges and duties of the retiring Administrative Agent under this Agreement
and the other Security Documents, and the retiring Administrative Agent shall
thereupon be discharged from its duties and obligations under this Agreement and
the other Security Documents. After any retiring Administrative Agent’s
resignation, the provisions hereof shall inure to its benefit as to any actions
taken or omitted to be taken by it under this Agreement while it was the
Administrative Agent.

(b) The Administrative Agent shall be deemed to have exercised reasonable care
in the custody and preservation of the Pledged Collateral or Mortgaged Property
in its possession if such Pledged Collateral or Mortgaged Property is accorded
treatment substantially equivalent to that which the Administrative Agent, in
its individual capacity, accords its own property consisting of similar
instruments or interests, it being understood that neither the Administrative
Agent nor any of the Secured Parties shall have responsibility for
(i) ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Securities Collateral,
whether or not the Administrative Agent or any other Secured Party has or is
deemed to have knowledge of such matters or (ii) taking any necessary steps to
preserve rights against any person with respect to any Pledged Collateral or
Mortgaged Property.

(c) The Administrative Agent shall be entitled to rely upon any written notice,
statement, certificate, order or other document or any telephone message
believed by it to be genuine and correct and to have been signed, sent or made
by the proper person, and, with respect to all matters pertaining to this
Agreement and the other Security Documents and its duties hereunder and
thereunder, upon advice of counsel selected by it.

(d) If any item of Pledged Collateral or Mortgaged Property also constitutes
collateral granted to the Administrative Agent under any other deed of trust,
mortgage, security agreement, pledge or instrument of any type, in the event of
any conflict between the provisions hereof and the provisions of such other deed
of trust, mortgage, security agreement, pledge or instrument of any type in
respect of such collateral, the Administrative Agent, in its sole discretion,
shall select which provision or provisions shall control.

(e) Anything herein contained to the contrary notwithstanding, (i) each Pledgor
shall remain liable under this Agreement and under each of the underlying
contracts to which such Pledgor a party described herein to perform all of its
duties and obligations thereunder to the same extent as if this Agreement had
not been executed, (ii) the exercise by the Administrative Agent or the Secured
Parties of any of their rights, remedies or powers hereunder shall not release
any Pledgor from any of its duties or obligations under this Agreement or such
underlying contracts described herein and (iii) neither the Trustee or the
Administrative Agent shall have any obligation or liability under such
underlying contracts by reason of or arising out of this Agreement, nor shall
the Noteholders, the Trustee or the Administrative Agent be obligated to perform
any of the obligations or duties of any of the Pledgors hereunder or any of the
contracts described herein.

 

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(f) The Administrative Agent shall not be responsible for the existence,
genuineness or value of any of the Pledged Collateral or Mortgaged Property or
for the validity, perfection, priority or enforceability of the Liens in any of
the Pledged Collateral or Mortgaged Property, whether impaired by operation of
law or by reason of any of any action or omission to act on its part hereunder,
except to the extent such action or omission constitutes gross negligence or
willful misconduct on the part of the Administrative Agent. Nor shall the
Administrative Agent be responsible for the validity or sufficiency of the
Pledged Collateral or Mortgaged Property or any agreement or assignment
contained therein, for the validity of the title of the Pledgors to the Pledged
Collateral or Mortgaged Property, for insuring the Pledged Collateral or
Mortgaged Property or for the payment of taxes, charges, assessments or Liens
upon the Pledged Collateral or Mortgaged Property or otherwise as to the
maintenance of the Pledged Collateral or Mortgaged Property.

(g) In the event that the Administrative Agent is required to acquire title to
an asset for any reason, or take any managerial action of any kind in regard
thereto, in order to carry out any duty for the benefit of another, which in the
Administrative Agent’s sole discretion may cause it to be considered an “owner
or operator” under the provisions of the Comprehensive Environmental Response,
Compensation and Liability Act (“CERCLA”), 42 U.S.C. §9601, et seq., or
otherwise cause it to incur liability under CERCLA or any other federal, state
or local law, the Administrative Agent reserves the right, instead of taking
such action, to either resign as or arrange for the transfer of the title or
control of the asset to a court-appointed receiver. The Administrative Agent
shall not be liable to any person for any environmental claims or contribution
actions under any federal, state or local law, rule or regulation by reason of
the Administrative Agent’s actions and conduct as authorized, empowered and
directed hereunder or relating to the discharge, release or threatened release
of hazardous materials into the environment. If at any time it is necessary or
advisable for any real property to be possessed, owned, operated or managed by
any person, the Required Lenders shall direct the Administrative Agent to
appoint an appropriately qualified person to possess, own, operate or manage, as
the case may be, such real property.

(h) In acting under and by virtue of this Agreement and the other Security
Documents, the Administrative Agent shall have all of the rights, protections
and immunities granted to the Administrative Agent and the Trustee under the
Credit Agreement (including but not limited to the right to be indemnified under
Section 7.07), and all such rights, protections and immunities are incorporated
by reference herein, mutatis mutandis.

(i) Notwithstanding anything in this Agreement to the contrary and for the
avoidance of doubt, the Administrative Agent shall have no duty to act outside
of the United States in respect of any collateral located in another
jurisdiction other than the United States.

SECTION 11.2. Administrative Agent May Perform; Administrative Agent Appointed
Attorney-in-Fact. If any Pledgor shall fail to perform any covenants contained
in this Agreement (including such Pledgor’s covenants to (i) pay the premiums in
respect of all required insurance policies hereunder, (ii) pay and discharge any
taxes, assessments and special assessments, levies, fees and governmental
charges imposed upon or assessed against, and

 

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landlords’, carriers’, mechanics’, workmen’s, repairmen’s, laborers’,
materialmen’s, suppliers’ and warehousemen’s Liens and other claims arising by
operation of law against, all or any portion of the Pledged Collateral or
Mortgaged Property, (iii) make repairs, (iv) discharge Liens or (v) pay or
perform any obligations of such Pledgor under any Pledged Collateral or
Mortgaged Property or if any representation or warranty on the part of any
Pledgor contained herein shall be breached, the Administrative Agent may (but
shall not be obligated to) do the same or cause it to be done or remedy any such
breach, and may expend funds for such purpose; provided, however, that the
Administrative Agent shall in no event be bound to inquire into the validity of
any tax, Lien, imposition or other obligation which such Pledgor fails to pay or
perform as and when required hereby and which such Pledgor does not contest in
accordance with the provisions of the Credit Agreement. Any and all amounts so
expended by the Administrative Agent shall be paid by the Pledgors in accordance
with the provisions of Section 7.7 of the Credit Agreement. Neither the
provisions of this Section 11.2 nor any action taken by the Administrative Agent
pursuant to the provisions of this Section 11.2 shall prevent any such failure
to observe any covenant contained in this Agreement nor any breach of
representation or warranty from constituting an Event of Default. Each Pledgor
hereby appoints the Administrative Agent its attorney-in-fact, with full power
and authority in the place and stead of such Pledgor and in the name of such
Pledgor, or otherwise, from time to time in the Administrative Agent’s
discretion to take any action and to execute any instrument consistent with the
terms of the Credit Agreement, this Agreement and the other Security Documents
which the Administrative Agent may deem necessary or advisable to accomplish the
purposes hereof (but the Administrative Agent shall not be obligated to and
shall have no liability to such Pledgor or any third party for failure to so do
or take action). The foregoing grant of authority is a power of attorney coupled
with an interest and such appointment shall be irrevocable for the term hereof.
Each Pledgor hereby ratifies all that such attorney shall lawfully do or cause
to be done by virtue hereof.

SECTION 11.3. Continuing Security Interest; Assignment. This Agreement shall
create a continuing security interest in the Pledged Collateral and shall (i) be
binding upon the Pledgors, their respective successors and assigns and
(ii) inure, together with the rights and remedies of the Administrative Agent
hereunder, to the benefit of the Administrative Agent and the other Secured
Parties and each of their respective successors, transferees and assigns. No
other persons (including any other creditor of any Pledgor) shall have any
interest herein or any right or benefit with respect hereto. Without limiting
the generality of the foregoing clause (ii), any Secured Party may assign or
otherwise transfer any indebtedness held by it secured by this Agreement to any
other person, and such other person shall thereupon become vested with all the
benefits in respect thereof granted to such Secured Party, herein or otherwise,
subject however, to the provisions of the Credit Agreement. Each of the Pledgors
agrees that its obligations hereunder and the security interest created
hereunder shall continue to be effective or be reinstated, as applicable, if at
any time payment, or any part thereof, of all or any part of the Secured
Obligations is rescinded or must otherwise be restored by the Secured Party upon
the bankruptcy or reorganization of any Pledgor or otherwise.

SECTION 11.4. Termination; Release. When all the Secured Obligations have been
paid in full (other than contingent liabilities not then due and payable), this
Agreement shall

 

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terminate. Upon termination of this Agreement the Pledged Collateral shall be
released from the Lien of this Agreement. Upon such release or any release of
Pledged Collateral or any part thereof in accordance with the provisions of the
Credit Agreement, the Administrative Agent shall, upon the request and at the
sole cost and expense of the Pledgors, assign, transfer and deliver to Pledgor,
against receipt and without recourse to or warranty by the Administrative Agent,
such of the Pledged Collateral or any part thereof to be released (in the case
of a release) as may be in possession of the Administrative Agent and as shall
not have been sold or otherwise applied pursuant to the terms hereof, and, with
respect to any other Pledged Collateral, proper documents and instruments
acknowledging the termination hereof or the release of such Pledged Collateral,
as the case may be.

SECTION 11.5. Modification in Writing. No amendment, modification, supplement,
termination or waiver of or to any provision hereof, nor consent to any
departure by any Pledgor therefrom, shall be effective unless the same shall be
made in accordance with the terms of the Credit Agreement and unless in writing
and signed each of the parties hereto and in compliance with the terms of the
Intercreditor Agreement (including, without limitation, Section 8.3 thereof).
The Administrative Agent shall be entitled to receive an Opinion and Officers’
Certificate stating that such amendment, modification, supplement or waiver is
authorized or permitted by the Credit Agreement, this Security Agreement and any
other Credit Document and that all conditions precedent to the execution of such
have been satisfied. Any amendment, modification or supplement of or to any
provision hereof, any waiver of any provision hereof and any consent to any
departure by any Pledgor from the terms of any provision hereof in each case
shall be effective only in the specific instance and for the specific purpose
for which made or given. Except where notice is specifically required by this
Agreement or any other document evidencing the Secured Obligations, no notice to
or demand on any Pledgor in any case shall entitle any Pledgor to any other or
further notice or demand in similar or other circumstances.

SECTION 11.6. Notices. Unless otherwise provided herein or in the Credit
Agreement, any notice or other communication herein required or permitted to be
given shall be given in the manner and become effective as set forth in the
Credit Agreement, as to any Pledgor, addressed to it at the address of the
Borrower set forth in the Credit Agreement, as to the Administrative Agent,
addressed to it at the address set forth in the Credit Agreement, or in each
case at such other address as shall be designated by such party in a written
notice to the other party complying as to delivery with the terms of this
Section 11.6.

SECTION 11.7. Governing Law, Consent to Jurisdiction and Service of Process;
Waiver of Jury Trial. Sections 9.12, 9.13 and 9.16 of the Credit Agreement are
incorporated herein, mutatis mutandis, as if a part hereof.

SECTION 11.8. Severability of Provisions. Any provision hereof which is invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without invalidating the remaining provisions hereof or affecting the validity,
legality or enforceability of such provision in any other jurisdiction.

 

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SECTION 11.9. Execution in Counterparts. This Agreement and any amendments,
waivers, consents or supplements hereto may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original, but all
such counterparts together shall constitute one and the same agreement. Delivery
of any executed counterpart of a signature page of this Agreement by facsimile
or other electronic transmission shall be effective as delivery of a manually
executed counterpart of this Agreement.

SECTION 11.10. Business Days. In the event any time period or any date provided
in this Agreement ends or falls on a day other than a Business Day, then such
time period shall be deemed to end and such date shall be deemed to fall on the
next succeeding Business Day, and performance herein may be made on such
Business Day, with the same force and effect as if made on such other day.

SECTION 11.11. No Credit for Payment of Taxes or Imposition. Such Pledgor shall
not be entitled to any credit against the principal, premium, if any, or
interest payable under the Credit Agreement, and such Pledgor shall not be
entitled to any credit against any other sums which may become payable under the
terms thereof or hereof, by reason of the payment of any Taxes on the Pledged
Collateral or Mortgaged Property or any part thereof.

SECTION 11.12. No Claims Against Administrative Agent. Nothing contained in this
Agreement shall constitute any consent or request by the Administrative Agent,
express or implied, for the performance of any labor or services or the
furnishing of any materials or other property in respect of the Pledged
Collateral or Mortgaged Property or any part thereof, nor as giving any Pledgor
any right, power or authority to contract for or permit the performance of any
labor or services or the furnishing of any materials or other property in such
fashion as would permit the making of any claim against the Administrative Agent
in respect thereof or any claim that any Lien based on the performance of such
labor or services or the furnishing of any such materials or other property is
prior to the Lien hereof.

SECTION 11.13. No Release. Nothing set forth in this Agreement or any other
Security Document, nor the exercise by the Administrative Agent of any of the
rights or remedies hereunder, shall relieve any Pledgor from the performance of
any term, covenant, condition or agreement on such Pledgor’s part to be
performed or observed under or in respect of any of the Pledged Collateral or
Mortgaged Property or from any liability to any person under or in respect of
any of the Pledged Collateral or Mortgaged Property or shall impose any
obligation on the Administrative Agent or any other Secured Party to perform or
observe any such term, covenant, condition or agreement on such Pledgor’s part
to be so performed or observed or shall impose any liability on the
Administrative Agent or any other Secured Party for any act or omission on the
part of such Pledgor relating thereto or for any breach of any representation or
warranty on the part of such Pledgor contained in this Agreement, the Credit
Agreement, the other Security Documents and any other Credit Documents or under
or in respect of the Pledged Collateral or Mortgaged Property or made in
connection herewith or therewith. Anything herein to the contrary
notwithstanding, neither the Administrative Agent nor any other Secured Party
shall have any obligation or liability under any contracts, agreements and other
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Pledged Collateral by reason of this Agreement, nor shall the Administrative
Agent or any other Secured Party be obligated to perform any of the obligations
or duties of any Pledgor thereunder or to take any action to collect or enforce
any such contract, agreement or other document included in the Pledged
Collateral hereunder. The obligations of each Pledgor contained in this
Section 11.13 shall survive the termination hereof and the discharge of such
Pledgor’s other obligations under this Agreement, the Credit Agreement and the
other Security Documents.

SECTION 11.14. Obligations Absolute. All obligations of each Pledgor hereunder
shall be absolute and unconditional irrespective of:

(i) any bankruptcy, insolvency, reorganization, arrangement, readjustment,
composition, liquidation or the like of any other Pledgor;

(ii) any lack of validity or enforceability of the Credit Agreement, any
Security Document or any other Credit Document, or any other agreement or
instrument relating thereto;

(iii) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Secured Obligations, or any other amendment or waiver
of or any consent to any departure from the Credit Agreement, any Security
Document, any other Credit Document, or any other agreement or instrument
relating thereto;

(iv) any pledge, exchange, release or non-perfection of any other collateral, or
any release or amendment or waiver of or consent to any departure from any
guarantee, for all or any of the Secured Obligations;

(v) any exercise, non-exercise or waiver of any right, remedy, power or
privilege under or in respect hereof, the Credit Agreement, any Security
Document, any other Credit Document, or any other agreement or instrument
relating thereto except as specifically set forth in a waiver granted pursuant
to the provisions of Section 11.5 hereof; or

(vi) any other circumstances which might otherwise constitute a defense
available to, or a discharge of, any Pledgor.

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IN WITNESS WHEREOF, each Pledgor and the Administrative Agent have caused this
Agreement to be duly executed and delivered by their duly authorized officers as
of the date first above written.

 

FIESTA RESTAURANT GROUP, INC.,

as Pledgor

By:   /s/ Joseph A. Zirkman   Name: Joseph A. Zirkman
Title: Vice President

CABANA BEVERAGES, INC.

as Guarantor and Pledgor

By:   /s/ Shanna M. Ramirez  

Name: Shanna M. Ramirez

Title: President

CABANA BEVCO LLC.

as Guarantor and Pledgor

By:   /s/ Shanna M. Ramirez  

Name: Shanna M. Ramirez

Title: Manager

GET REAL, INC.

as Guarantor and Pledgor

By:   /s/ Julio Murillo  

Name: Julio Murillo

Title: Vice President

 

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POLLO FRANCHISE, INC.

as Guarantor and Pledgor

By:   /s/ Joseph A. Zirkman  

Name: Joseph A. Zirkman

Title: Vice President

POLLO OPERATIONS, INC.

as Guarantor and Pledgor

By:   /s/ Joseph A. Zirkman  

Name: Joseph A. Zirkman

Title: Vice President

TACO CABANA, INC.

as Guarantor and Pledgor

By:   /s/ Joseph A. Zirkman  

Name: Joseph A. Zirkman

Title: Vice President

TP ACQUISITION CORP.

as Guarantor and Pledgor

By:   /s/ Joseph A. Zirkman  

Name: Joseph A. Zirkman

Title: Vice President

 

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TC BEVCO LLC.

as Guarantor and Pledgor

By:   /s/ Shanna M. Ramirez  

Name: Shanna M. Ramirez

Title: Manager

T.C. MANAGEMENT, INC.

as Guarantor and Pledgor

By:   /s/ Joseph A. Zirkman  

Name: Joseph A. Zirkman

Title: Vice President

TC LEASE HOLDINGS III, V AND VI, INC.

as Guarantor and Pledgor

By:   /s/ Joseph A. Zirkman  

Name: Joseph A. Zirkman

Title: Vice President

TEXAS TACO CABANA, L.P.

as Guarantor and Pledgor

By: T.C. Management, Inc., its General Partner By:   /s/ Joseph A. Zirkman  

Name: Joseph A. Zirkman

Title: Vice President

 

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TPAQ HOLDING CORPORATION

as Guarantor and Pledgor

By:   /s/ Julio Murillo  

Name: Julio Murillo

Title: Vice President

 

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WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent By:   /s/ Tim G. Loyd  

Name: Tim G. Loyd

Title: Managing Director

 

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