This STOCK PLEDGE AGREEMENT (together
with all amendments, supplements and modifications, if any, from
time to time hereto, this “ Agreement ”) is made
as of July 7, 2009, by the undersigned (each, a “
Grantor ” and, collectively, the “
Grantors ”) 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 , each Grantor is either the Issuer, the parent
of the Issuer, or a direct or indirect subsidiary of the Issuer and
as such will derive direct and indirect economic benefits from the
issuance of the Notes under the Indenture;
WHEREAS , the Grantors are the direct or indirect legal
and beneficial owners of all of the issued and outstanding shares
of each class of the capital stock of each of the corporations
described on Annex A (the “ Subsidiaries
”);
WHEREAS , the holders of the Note Obligations (the
“ Holders ”) have required, as a condition to
the purchase of the Notes under the Indenture, that each Grantor
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 Stock Collateral (as defined herein); and
WHEREAS , the Grantors wish 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:
1. Pledge
of Stock, etc .
1.1 Pledge of Stock
. Each Grantor hereby pledges,
assigns, grants a security interest in, and delivers to the
Collateral Agent, for the benefit of the Secured Parties, all of
the shares of capital stock of each Subsidiary of every class owned
by such Grantor, as more fully described on Annex A hereto,
which shares of capital stock shall be held by the Priority Lien
Collateral Agent as bailee for the Collateral Agent pursuant to the
Intercreditor Agreement, for the benefit of the Secured Parties,
subject to the terms and conditions hereinafter set forth. The
certificates for such shares, accompanied by stock powers or other
appropriate instruments of assignment thereof duly executed in
blank by such Grantor, have been delivered to the Priority Lien
Collateral Agent as bailee for the Collateral Agent pursuant to the
Intercreditor Agreement.
1.2 Additional Stock
. In case any Grantor shall acquire
any additional shares of the capital stock of any Subsidiary or
corporation which is the successor of any Subsidiary, or any
securities exchangeable for or convertible into shares of such
capital stock of any class of any Subsidiary, or any capital stock
of any other corporation by purchase, stock dividend, stock split
or otherwise, then such shares or other securities shall be subject
to the pledge, assignment and security interest granted to the
Priority Lien Collateral Agent as bailee for the Collateral Agent
pursuant to the Intercreditor Agreement, for the benefit of the
Secured Parties, under this Agreement and such Grantor shall
deliver to the Collateral Agent forthwith any certificates
therefor, accompanied by stock powers or other appropriate
instruments of assignment duly executed by such Grantor in blank.
The Grantors agree that the Collateral Agent may from time to time
attach as Annex A hereto an updated list of the shares of
capital stock or securities at the time pledged with the Collateral
Agent hereunder.
1.3 Pledge of Cash Collateral
Account . The
Grantors also hereby (i) pledge, assign and grant a security
interest in the Cash Collateral Account and all of the Cash
Collateral, as such terms are hereinafter defined, to the
Collateral Agent, for the benefit of the Secured Parties, and
(ii) deliver to the Priority Lien Collateral Agent as bailee
for the Collateral Agent pursuant to the Intercreditor Agreement
the Cash Collateral Account and all of the Cash
Collateral.
1.4 Delivery of Stock
Collateral . All
certificates and all promissory notes and instruments evidencing
the Stock Collateral, shall be delivered to and held by or on
behalf of the Priority Lien Collateral Agent as bailee for the
Collateral Agent pursuant to the Intercreditor Agreement, for the
benefit of the Secured Parties, pursuant hereto. All certificates
and all promissory notes and instruments evidencing the Stock
Collateral shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance
satisfactory to the Collateral Agent.
2. Definitions
. 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,
with respect to any Grantor that is a Guarantor of the Note
Obligations, all obligations and liabilities of such Grantor which
may arise under or in connection with such Guarantee or any other
Note Document to which such Grantor is a party, in each case
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 such
Grantor 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.
Cash Collateral Account . See §4.
Stock . Includes the shares of stock described in
Annex A attached hereto and any additional shares of stock
at the time pledged with the Collateral Agent hereunder.
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Stock Collateral . The property at any time pledged to the
Collateral Agent hereunder (whether described herein or not) and
all income therefrom, increases therein and proceeds thereof,
including without limitation that included in Cash Collateral, but
excluding from the definition of “Stock Collateral” any
income, increases or proceeds received by the Grantors to the
extent expressly permitted by §6.
3. Security for
Obligations . This
Agreement and the security interest in and pledge of the Stock
Collateral hereunder are 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 §3, such
grant of security interest shall not extend to, and the term
“Stock Collateral” shall not include, any Excluded
Assets.
4.
Liquidation, Recapitalization, etc.
4.1 Distributions Paid to Collateral
Agent . Any sums or
other property paid or distributed upon or with respect to any of
the Stock, whether by dividend or redemption or upon the
liquidation or dissolution of the issuer thereof or otherwise,
shall, except to the limited extent provided in §6, be paid
over and delivered 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, as security for the payment and performance in
full of all of the Obligations. In case, pursuant to the
recapitalization or reclassification of the capital of the issuer
thereof or pursuant to the reorganization thereof, any distribution
of capital shall be made on or in respect of any of the Stock or
any property shall be distributed upon or with respect to any of
the Stock, the property so distributed shall be delivered to the
Priority Lien Collateral Agent as bailee for the Collateral Agent
pursuant to the Intercreditor Agreement, to be held by it as
security for the Obligations. Except to the limited extent provided
in §6, all sums of money and property paid or distributed in
respect of the Stock, whether as a dividend or upon such a
liquidation, dissolution, recapitalization or reclassification or
otherwise, that are received by the Grantors shall, until paid or
delivered to the Priority Lien Collateral Agent as bailee for the
Collateral Agent pursuant to the Intercreditor Agreement, be held
in trust for the Collateral Agent, for the benefit of the Secured
Parties, as security for the payment and performance in full of all
of the Obligations.
4.2 Cash Collateral Account
. All sums of money that are
delivered pursuant to this §4 to the Priority Lien Collateral
Agent as bailee for the Collateral Agent pursuant to the
Intercreditor Agreement shall be deposited into an interest bearing
account with the Priority Lien Collateral Agent or, if the Priority
Lien Collateral Agent is not the depositary bank, to an interest
bearing account in the name of the Priority Lien Collateral Agent,
for the benefit of the Secured Parties, as customer with a
depositary bank satisfactory to the Priority Lien Collateral Agent
(any such account, whether maintained with the Priority Lien
Collateral Agent or in the Priority Lien Collateral Agent’s
name as customer being herein referred to as the “ Cash
Collateral Account ”). Some or all of the funds from time
to time in the Cash Collateral Account may be invested in time
deposits, including, without limitation, certificates of deposit
issued by the Collateral Agent (such certificates of deposit or
other time deposits being hereinafter referred to, collectively, as
“ Time Deposits ”), that are reasonably
satisfactory to the Collateral Agent after consultation with the
Grantors, provided , that, in each such case, arrangements
reasonably satisfactory to the Collateral Agent are made and are in
place to perfect and to insure the first priority of the Collateral
Agent’s security interest therein (subject, as to priority,
only to Permitted Prior Liens). Interest earned on the Cash
Collateral Account and on the Time Deposits, and the principal of
the Time Deposits at maturity that is not invested in new Time
Deposits, shall be deposited in the Cash Collateral Account. The
Cash Collateral Account, all sums from time to time standing to the
credit of the Cash Collateral Account, any and all Time Deposits,
any and all instruments or other writings evidencing Time Deposits
and any and all proceeds of any thereof are hereinafter referred to
as the “ Cash Collateral .”
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4.3 Grantor’s Rights to Cash
Collateral, etc . Except as otherwise expressly provided in
§15, the Grantors shall have no right to withdraw sums from
the Cash Collateral Account, to receive any of the Cash Collateral
or to require the Priority Lien Collateral Agent as bailee for the
Collateral Agent pursuant to the Intercreditor Agreement to part
with the Priority Lien Collateral Agent’s possession of any
instruments or other writings evidencing any Time
Deposits.
5. Warranty of Title;
Authority . Each
Grantor hereby represents and warrants to the Secured Parties that:
(i) such Grantor has good and marketable title to, and is the
sole record and beneficial owner of, the Stock described in
Annex A as being owned by such Grantor, subject to no
pledges, Liens, security interests, charges, options, restrictions
or other encumbrances except the pledge and security interest
created by this Agreement and Permitted Prior Liens, (ii) all
of the Stock described in §1 is validly issued, fully paid and
non-assessable, (iii) such Grantor has full power, authority
and legal right to execute, deliver and perform its obligations
under this Agreement and to pledge and grant a security interest in
all of its Stock Collateral pursuant to this Agreement, and the
execution, delivery and performance hereof and the pledge of and
granting of a security interest in its Stock Collateral hereunder
have been duly authorized by all necessary corporate or other
action and do not contravene any law, rule or regulation or any
provision of such Grantor’s charter documents or by-laws or
of any judgment, decree or order of any tribunal or of any
agreement or instrument to which such Grantor is a party or by
which it or any of their property is bound or affected or
constitute a default thereunder, and (iv) the information set
forth in Annex A hereto relating to the Stock is true,
correct and complete in all respects. The Grantors covenant that
they will defend the rights of the Secured Parties and security
interest of the Collateral Agent, for the benefit of the Secured
Parties, in such Stock against the claims and demands of all other
persons whomsoever. The Grantors further covenant that they will
have the like title to and right to pledge and grant a security
interest in the Stock Collateral hereafter pledged by the Grantors
or in which a security interest is granted to the Collateral Agent
hereunder by the Grantors and will likewise defend the rights,
pledge and security interest thereof and therein of the Secured
Parties.
6. Dividends, Voting, etc., Prior to
Maturity . So long as
no Event of Default shall have occurred and be continuing, the
Grantors shall be entitled to receive all cash dividends paid in
respect of the Stock, to vote the Stock and to give consents,
waivers and ratifications in respect of the Stock; provided
, however , that no vote shall be cast or consent, waiver or
ratification given by the Grantors if the effect thereof would
impair any of the Stock Collateral or result in an Event of
Default. All such rights of the Grantors to receive cash dividends
shall cease in case an Event of Default shall have occurred and be
continuing. All such rights of the Grantors to vote and give
consents, waivers and ratifications with respect to the Stock
shall, at the Collateral Agent’s option, as evidenced by the
Collateral Agent’s notifying the Grantors of such election,
cease in case an Event of Default shall have occurred and be
continuing.
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7.1 In General . If an Event of Default shall have occurred and
be continuing, subject to the Intercreditor Agreement, the
Collateral Agent shall have the following rights and remedies (to
the extent permitted by applicable law) in addition to the rights
and remedies of a secured party under the Uniform Commercial Code
of the State of New York or any other applicable jurisdiction, all
such rights and remedies being cumulative, not exclusive, and
enforceable alternatively, successively or concurrently, at such
time or times as the Collateral Agent deems expedient:
(a) if the Collateral Agent so elects and
gives notice of such election to the Grantors, the Collateral Agent
may vote any or all shares of the Stock (whether or not the same
shall have been transferred into its name or the name of its
nominee or nominees) for any lawful purpose, including, without
limitation, if the Collateral Agent so elects, for the liquidation
of the assets of the issuer thereof, and give all consents, waivers
and ratifications in respect of the Stock and otherwise act with
respect thereto as though it were the outright owner thereof (the
Grantors hereby irrevocably constituting and appointing the
Collateral Agent the proxy and attorney-in-fact of the Grantors,
with full power of substitution, to do so);
(b) the Collateral Agent may demand, sue
for, collect or make any compromise or settlement the Collateral
Agent deems suitable in respect of any Stock Collateral;
(c) the Collateral Agent may sell, resell,
assign and deliver, or otherwise dispose of any or all of the Stock
Collateral, for cash or credit or both and upon such terms at such
place or places, at such time or times and to such entities or
other persons as the Collateral Agent thinks expedient, all without
demand for performance by the Grantors or any notice or
advertisement whatsoever except as expressly provided herein or as
may otherwise be required by law;
(d) the Collateral Agent may cause all or
any part of the Stock held by it to be transferred into its name or
the name of its nominee or nominees; and
(e) the Collateral Agent may set off
against the Obligations any and all sums deposited with it or held
by it, including without limitation, any sums standing to the
credit of the Cash Collateral Account and any Time Deposits issued
by the Collateral Agent.
7.2 Sale of Stock Collateral
. In the event of any disposition of
the Stock Collateral as provided in clause (c) of §7.1,
the Collateral Agent shall give to the Grantors at least six
(6) Business Days prior written notice of the time and place
of any public sale of the Stock Collateral or of the time after
which any private sale or any other intended disposition is to be
made. Each Grantor hereby acknowledges that six Business Days prior
written
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