MEMBERSHIP INTEREST PLEDGE
AGREEMENT
This MEMBERSHIP INTEREST PLEDGE AGREEMENT
(together with all amendments, supplements and modifications, if
any, from time to time hereto, this “ Agreement
”), dated as of July 7, 2009, is made by CKR
ACQUISITION CORP ., a Delaware corporation (hereinafter, the
“ Pledgor ”), in favor of Wells Fargo Bank,
National Association, in its capacity as the collateral agent (in
such capacity, together with its successors and assignees, the
“ Collateral Agent ”) for the Secured Parties
(as defined below).
WHEREAS , Real Mex Restaurants, Inc., a Delaware
corporation (the “ Issuer ”), the guarantors
party to the Indenture (as defined below) and Wells Fargo Bank,
National Association, as trustee (in such capacity, the “
Trustee ”) thereunder, are parties to that certain
indenture, dated as of even date herewith (as amended, restated,
modified, supplemented, renewed, refunded, replaced or refinanced
from time to time, the “ Indenture
”);
WHEREAS , the Collateral Agent, the Trustee and General
Electric Capital Corporation, as Agent, have entered into the
Intercreditor Agreement, dated as of even date herewith (as
amended, supplemented or otherwise modified from time to time, the
“ Intercreditor Agreement ”);
WHEREAS , the Pledgor is the legal and beneficial owner
of not less than one hundred percent (100%) of the membership
interests in each of the limited liability companies set forth in
Schedule 1 attached hereto (collectively, the “
LLCs ”, and each individually, an “ LLC
”);
WHEREAS , the holders of the Note Obligations (the
“ Holders ”) have required, as a condition to
the purchase of the Notes under the Indenture, that the Pledgor
grant to the Collateral Agent for the ratable benefit of the
Collateral Agent, the Trustee and the Holders (collectively, the
“ Secured Parties ”) a security interest in and
to the Collateral (as defined herein); and
WHEREAS , the Pledgor wishes to grant pledges and
security interests in favor of the Collateral Agent, for the
benefit of the Secured Parties, as herein provided.
NOW, THEREFORE , in consideration of the premises contained
herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
Except as otherwise defined in this Agreement,
all capitalized terms used herein without definitions shall have
the respective meanings provided therefor in the Indenture. For
purposes of this Agreement, “ Obligations ”
means all of the Note Obligations (including, without limitation,
the Issuer’s Obligations under or in respect of the Notes
(including any exchange notes issued from time to time pursuant to
any agreement to provide registration rights in respect of the
Notes)) and, in addition, if the Pledgor is a Guarantor of the Note
Obligations, all obligations and liabilities of the Pledgor which
may arise under or in connection with such Guarantee or any other
Note Document to which the Pledgor is a party, whether on account
of guarantee obligations, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to any Secured
Party that are required to be paid by the Pledgor pursuant to the
terms of this Agreement or any other Note Document). Unless
otherwise provided herein, the rules of construction set forth in
Section 1.04 of the Indenture shall be applicable to this
Agreement. Terms used herein and not defined in the Indenture or
otherwise defined herein that are defined in the Uniform Commercial
Code of the State of New York have such defined meanings herein
(with terms used in Article 9 controlling over terms used in
another Article), unless the context otherwise indicates or
requires, and the following terms shall have the following
meanings:
Cash
Collateral . See
§4.2.
Cash
Collateral Account . See
§4.2.
Collateral . The Pledged Interests, the Additional
Interest, the Cash Collateral, the Cash Collateral Account, and all
other property now or hereafter pledged or assigned to the
Collateral Agent for the benefit of the Secured Parties by the
Pledgor hereunder, and all income therefrom, increases therein and
proceeds thereof.
Limited Liability Agreements
. Collectively, each of the
Operating Agreements (in effect on the date hereof and including
any amendments or modifications permitted by §3.2(a) hereof),
as set forth in Schedule 2 attached hereto.
Pledged
Interests . See §2.1
hereof.
Time
Deposits . See
§4.2.
2. PLEDGE OF MEMBERSHIP
INTERESTS .
2.1. Grant of Security Interests
. The Pledgor hereby
pledges, grants a security interest in, mortgages, collaterally
assigns and transfers and delivers to the Collateral Agent, for the
benefit of the Secured Parties, subject to the terms and conditions
hereinafter set forth, as security for the payment and performance
in full when due of all of the Obligations, all the right, title
and interest of the Pledgor in and to one hundred percent (100%) of
the aggregate membership interests in each of the LLCs, to be held,
to the extent certificated, by the Priority Lien Collateral Agent
as bailee for the Collateral Agent pursuant to the Intercreditor
Agreement, for the benefit of the Secured Parties, wherever located
and whether now owned or hereafter acquired or arising, including,
without limitation, (a) all payments or distributions, whether
in cash, property or otherwise, at any time owing or payable to the
Pledgor on account of its interest as a member in each LLC or in
the nature of a management, investment banking or other fee paid or
payable by any LLC to the Pledgor, (b) all of the
Pledgor’s rights and interests under each Limited Liability
Agreement, including all voting and management rights under the
respective Limited Liability Agreement and all rights to grant or
withhold consents or approvals, (c) all rights of access and
inspection to and use of all books and records, including computer
software and computer software programs, of each LLC, (d) all
other rights, interests, property or claims to which the Pledgor
may be entitled in its capacity as a member of each LLC, and
(e) all proceeds and products of any of the foregoing (all of
the foregoing rights, title and interest described in the foregoing
clauses (a) through (e) being herein referred to
collectively as the “ Pledged Interests
”).
2.2. Additional Interest .
The Pledgor also hereby pledges,
assigns, and grants a security interest in any additional
membership interests in any LLC or any successor of any LLC (the
“ Additional Interest ”), to the Collateral
Agent, for the benefit of the Secured Parties. If the Pledgor shall
acquire any Additional Interests, then the Pledgor shall deliver to
the Priority Lien Collateral Agent as bailee for the Collateral
Agent pursuant to the Intercreditor Agreement to be held by the
Priority Lien Collateral Agent for the benefit of the Secured
Parties forthwith any certificates therefor, accompanied by
appropriate instruments of assignment duly executed by the Pledgor
in blank.
2.3. Pledge of Cash Collateral Account
. The Pledgor also
hereby pledges and assigns to the Collateral Agent, for the benefit
of the Secured Parties, and grants to the Collateral Agent, for the
benefit of the Secured Parties, a security interest in the Cash
Collateral Account and all of the Cash Collateral, subject to the
terms of this Agreement.
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2.4. Waiver of Certain Limited Liability
Agreement Provisions . The Pledgor irrevocably waives any and all
provisions of the Limited Liability Agreements that
(a) prohibit, restrict, condition or otherwise affect the
grant hereunder of any lien, security interest or encumbrance on
any of the Collateral or any enforcement action which may be taken
in respect of any such lien, security interest or encumbrance, or
(b) otherwise conflict with the terms of this
Agreement.
2.5. Security for Obligations
. This Agreement and the security
interest in and pledge of the Collateral hereunder are
unconditionally made with and granted to the Collateral Agent, for
the benefit of the Secured Parties, as security for the payment and
performance in full of all the Obligations. Notwithstanding the
foregoing provisions of this §2.5, such grant of security
interest shall not extend to, and the term “Collateral”
shall not include, any Excluded Assets.
2.6. Tender of Members’ Consents
. The Pledgor has
tendered to the Collateral Agent the consent of any other member of
the LLCs that is necessary or appropriate for the consummation of
the transactions contemplated hereby.
2.7. Authorization to File Financing
Statement . The
Pledgor hereby irrevocably authorizes the Collateral Agent at any
time and from time to time to file in any filing office in any
Uniform Commercial Code jurisdiction any initial financing
statements and amendments thereto that (a) indicate the
collateral as the Collateral, and (b) provide any other
information required by part 5 of Article 9 of the Uniform
Commercial Code of the State of New York or such other jurisdiction
for the sufficiency or filing office acceptance of any financing
statement or amendment, including whether the Pledgor is an
organization, the type of organization and any organizational
identification number issued to the Pledgor. The Pledgor agrees to
furnish any such information to the Collateral Agent promptly upon
request. The financing statement may indicate some or all of the
Collateral on the financing statements and any amendments thereto.
The Pledgor also ratifies its authorization for the Collateral
Agent to have filed in any Uniform Commercial Code jurisdiction any
like initial financing statements if filed prior to the date
hereof.
3. REPRESENTATIONS, WARRANTIES
AND COVENANTS OF PLEDGOR .
3.1. Representations and Warranties
. The Pledgor hereby
represents and warrants to the Secured Parties, as
follows:
(a) Each LLC is duly organized, validly
existing, and in good standing under the laws of the state in which
it is organized and all other jurisdictions where such LLC does
business. Each Limited Liability Agreement is in full force and
effect; the Pledgor is a duly constituted member of each LLC; the
persons and entities listed as members in each Limited Liability
Agreement are the only members of each LLC as of the date hereof;
and the Pledged Interests are validly issued, non-assessable and
fully paid membership interests in each LLC.
(b) The Pledgor has all requisite corporate
(or equivalent company) right, power and authority to make this
Agreement (including the provisions enabling the Collateral Agent
or its nominee, upon the occurrence of an Event of Default, to
exercise the voting or other rights provided for herein) and under
applicable law, without the consent, approval or authorization of,
or notice to, any other person, including any regulatory authority
or any person having any interest in any LLC.
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(c) The execution, delivery, and
performance of this Agreement and the transactions contemplated
hereby (i) have been duly authorized by all necessary
corporate or other action on behalf of the Pledgor, (ii) do
not conflict with or result in any breach or contravention of any
applicable law, regulation, judicial order or decree to which the
Pledgor is subject, (iii) do not conflict or violate any
provision of the Pledgor’s governing documents, and
(iv) do not violate, conflict with, constitute a default or
event of default under, or result in any rights to accelerate or
modify any obligations under any agreement, instrument, lease,
mortgage or indenture to which the Pledgor is party or subject, or
to which any of its assets are subject.
(d) This Agreement has been duly executed
and delivered by the Pledgor and is the legal, valid, and binding
obligation of the Pledgor enforceable against it in accordance with
the terms hereof except as enforceability is limited by bankruptcy,
insolvency, reorganization, moratorium, or other laws relating to
or affecting generally the enforcement of creditors’ rights
and except to the extent that availability of the remedy of
specific performance or injunctive relief is subject to the
discretion of the court before which any case or proceeding
therefor may be brought.
(e) The Pledgor is the sole, direct, legal
and beneficial owner of all Pledged Interests, which Pledged
Interests constitute not less than one hundred percent (100%) of
the membership interests in each LLC, as of the date hereof, and
has good and marketable title thereto, free from any right or claim
of any person or any Lien, except for the security interest created
by this Agreement and other Permitted Liens; and the liens and
security interests hereunder, constitute valid and perfected first
priority liens and security interests (subject, as to priority,
only to Permitted Prior Liens).
(f) If the Pledgor is an organization, the
Pledgor’s type and jurisdiction of organization and the
Pledgor’s organizational identification number, if the
Pledgor has one, is set forth below the Pledgor’s signature
to this Agreement. The Pledgor’s principal place of business,
chief executive office, and the place where its records concerning
the Collateral are kept is located at 5660 Katella Avenue,
Suite 100, Cypress, California 90630.
(g) The Pledgor has no further obligation
to make any contribution or other payment to any LLC with respect
to the Pledged Interests.
(h) The copy of each Limited Liability
Agreement attached hereto as Exhibit A is a true,
correct, and complete copy thereof, and none of the Limited
Liability Agreements has been amended or modified in any respect,
except for such amendments or modifications as are attached to the
copy thereof delivered to the Collateral Agent and attached hereto
as Exhibit A .
3.2.
Covenants . The
Pledgor covenants to the Secured Parties as follows:
(a) The Pledgor will not amend or modify
any of the existing Limited Liability Agreements (except for
ministerial or other non-substantive amendments or modifications)
as in effect on the date hereof (or any other governing document
with respect to the Pledged Interests or any Additional Interest),
including any amendment or modification which would cause
Article 8 of the UCC to govern any of the Pledged Interest, or
waive any rights or benefits under any Limited Liability Agreement
(or such other governing document), without the prior written
consent of the Collateral Agent which consent shall not be
unreasonably withheld.
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(b) The Pledgor will not sell, dispose of
or assign, beneficially or of record, or grant, create, permit or
suffer, any Lien on any of the Pledged Interests, or withdraw as a
member of any LLC or permit the dissolution or merger of such LLC,
except as permitted under the Indenture.
(c) The Pledgor shall not cast any vote or
give or grant any consent, waiver or ratification or take any other
action which could reasonably be expected to (i) directly or
indirectly authorize or permit the dissolution, liquidation or sale
of any LLC or the sale, lease, assignment, transfer or other
disposition of any of the assets of any LLC (except any disposal in
the ordinary course of business or otherwise as permitted under the
Indenture and so long as no Event of Default has occurred and is
continuing), whether by operation of law or otherwise,
(ii) have the result of materially and adversely affecting any
of the Collateral Agent’s or any of the other Secured
Parties’ rights under this Agreement or under any of the
other Note Documents, (iii) violate the terms of this
Agreement or any of the other Note Documents, (iv) have the
effect of impairing the validity, perfection or priority of the
security interest of the Collateral Agent, for the benefit of the
Secured Parties, in any manner whatsoever, or (v) cause an
Event of Default.
(d) The Pledgor will comply in all material
respects with all laws, regulations, judicial orders or decrees
applicable to the Collateral or any portion thereof, and perform
and observe its duties under each Limited Liability Agreement or
other governing documents with respect to the Pledged
Interests.
(e) The Pledgor will (i) keep and
maintain at its own cost and expense at its address set forth above
satisfactory and complete records of the Collateral including a
record of all payments received and all other dealings of a
material nature with the Collateral, and (ii) mark its books
and records pertaining to the Collateral and its books and records
kept in its jurisdiction of organization to evidence this Agreement
and the liens and security interests granted hereby.
(f) Subject to the provisions of
Section 4.05 of the Indenture, the Pledgor will pay promptly
when due any taxes, assessments, and governmental charges or levies
imposed upon the Collateral or in respect of its income or profits
therefrom, as well as all claims of any kind.
(g) The Pledgor will advise the Collateral
Agent promptly, in reasonable detail, of (i) any Lien made or
asserted against any of the Collateral except to the extent such
Lien is a Permitted Lien; (ii) any material change in the
composition of the Collateral; (iii) the occurrence of any
other event or condition which to its knowledge is likely to have a
material adverse effect on the validity, perfection or priority of
the liens and security interests granted hereunder; and
(iv) any bankruptcy or litigation case or proceeding relating
to any of the Collateral.
(h) The Pledgor will not (i) if the
Pledgor is an organization, change its type or jurisdiction of
organization or, if it has one, its organizational identification
number, (ii) change its principal place of business or chief
executive office or the location of the records concerning the
Collateral without giving prior written notice to the Collateral
Agent and taking such actions as may be necessary or appropriate in
the reasonable opinion of the Collateral Agent duly to perfect and
continue the perfection of the Collateral Agent’s first
priority lien and security interest (subject, as to priority, only
to Permitted Prior Liens), for the benefit of the Secured Parties,
in the Collateral pursuant to the laws of any jurisdiction into
which such place of business, chief executive office, or records is
or are transferred, and (iii) change its name in any manner
that might make any financing statement filed hereunder misleading
or invalid unless, in each case, the Pledgor shall have notified
the Collateral Agent thereof prior to the occurrence thereof and
taken all such actions as may be necessary or appropriate in the
reasonable opinion of the Collateral Agent to make any financing
statement filed in favor of the Collateral Agent not misleading or
invalid.
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(i) The Pledgor shall do or cause to be
done all things necessary to preserve, renew and keep in full force
and effect its legal existence and that of each LLC, the power and
authority of the Pledgor to own its property and carry on its
business, the qualification of each of the Pledgor and each LLC to
do business in its jurisdiction of organization, and the
qualification of the Pledgor to do business in each other
jurisdiction where such qualification is necessary except where the
failure so to qualify would not have a material adverse effect on
the rights and interests of the Collateral Agent or any of the
other Secured Parties hereunder.
(j) Without limiting the provisions of
§2.7 above, the Pledgor shall maintain the security interest
created by this Agreement as a perfected security interest having
priority over all other Liens other than Permitted Prior Liens and,
in furtherance of, but without limiting, the foregoing, except as
otherwise expressly permitted by this Agreement, shall (i) no
later than the later of the date hereof and within one
(1) Business Day of the date on which any Collateral that
would not be covered by previously filed Uniform Commercial Code
financing statements is acquired, file, or cause to be filed,
Uniform Commercial Code financing statements (or amendments to
existing Uniform Commercial Code financing statements) (or such
other statements as may be required under applicable law) in such
manner and in such places as may be required under applicable law
to fully preserve, maintain, and protect the security interest of
the Collateral Agent and the priority thereof in the Collateral
granted hereunder, including the filing of Uniform Commercial Code
financing statements in the jurisdiction of organization of the
Pledgor, naming the Pledgor as the debtor, naming the Collateral
Agent as the secured party and describing the collateral as the
Collateral and (ii) to the extent that the security interest
granted hereunder with respect to the applicable assets remains in
effect at such time, file Uniform Commercial Code continuation
statements (or such other statements as may be required under
applicable law to continue the priority of the security interests
described in clause (i)) in the jurisdiction of organization of the
Pledgor and in any other location as necessary or appropriate under
applicable law to continue such security interest and the priority
thereof, no earlier than six (6) months and no later than
thirty (30) days prior to the date on which the financing
statements described in clause (i) would otherwise lapse or
become ineffective under applicable law. The Pledgor agrees to
deliver to each of the Trustee and the Collateral Agent copies of
all Uniform Commercial Code financing statements (including
continuation statements) and other statements filed pursuant to
this §3.2(j) within ten (10) days after the filing
thereof.
4. RIGHTS OF COLLATERAL
AGENT .
4.1. Collateral Agent Appointed
Attorney-in-Fact . Upon the occurrence and during the continuance
of an Event of Default, subject to the Intercreditor Agreement, the
Pledgor hereby irrevocably constitutes and appoints the Collateral
Agent, its successors and assigns, its true and lawful
attorney-in-fact, with power and authority and with full power of
substitution, at the expense of the Pledgor, either in the
Collateral Agent’s own name or in the name of the Pledgor,
for the purpose of carrying out the terms of this Agreement, to
take any and all appropriate action and to execute any and all
documents and instruments that may reasonably be necessary or
desirable to accomplish the purposes of this Agreement and, without
limiting t
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