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EXHIBIT 4.10
COMPANY SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "AGREEMENT") is dated as of
February 25, 1998, and is entered into by and between AMERICAN RESTAURANT GROUP,
INC., a Delaware corporation (the "GRANTOR"), and U.S. TRUST COMPANY OF
CALIFORNIA, N.A. ("U.S. TRUST"), as collateral agent for and representative of
(in such capacity herein called the "COLLATERAL AGENT") the Secured Parties (as
hereinafter defined).
R E C I T A L S
WHEREAS, pursuant to that certain Indenture dated as of
February 25, 1998 (as supplemented and otherwise amended from time to time, the
"Senior Note Indenture"), by and among the Grantor, the Guarantors (defined
therein), and U.S. Trust, as Trustee thereunder (in such capacity, the
"Indenture Trustee"), the Grantor will issue 11.50% Series A senior secured
notes (and, in connection with the Exchange Offer as defined in the Senior Note
Indenture, the Series B senior secured notes) due on or before 2003 in an
aggregate principal amount of up to $155,000,000 (collectively, the "Senior
Notes") to the holders thereof (the "Senior Note Holders");
WHEREAS, the Grantor, each of the Grantor's subsidiaries, the
lenders listed on the signature pages thereof (the "Lenders") and Bank Boston,
N.A., as agent thereunder (the "Agent"), have entered into that certain Credit
Agreement (as defined in the Intercreditor Agreement referred to below and
together with any loan documents referred to therein, the "New Credit
Facility");
WHEREAS, pursuant to a guaranty included in the Senior Note
Indenture, the Guarantors have guaranteed the obligations of the Grantor under
the Senior Notes, the Senior Note Indenture and the other documents to which the
Grantor is a party;
WHEREAS, the Collateral Agent, the Indenture Trustee and the
Agent have entered into that certain Intercreditor Agreement, dated as of the
date hereof (the "Intercreditor Agreement"), providing for, among other things,
the appointment of the Collateral Agent to administer and enforce the Collateral
Documents and Collateral as provided therein;
WHEREAS, it is a condition precedent to the Senior Note
Indenture and the New Credit Facility that the Grantor shall have entered into
this Agreement and granted the security interests provided herein;
WHEREAS, the Grantor wishes to grant a security interest in
favor of the Collateral Agent for the benefit of the Indenture Trustee, the
Senior Note Holders, the
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Agent and the Lenders and the persons who may in the future become secured
parties in accordance with the terms of the Intercreditor Agreement (all such
beneficially interested parties being herein referred to as the "SECURED
PARTIES"); and
WHEREAS, the rights and obligations of each of the Secured
Parties are further governed by and subject to the Intercreditor Agreement;
NOW, THEREFORE, in consideration of the premises set forth
herein and in order to induce the Senior Note Holders to purchase the Senior
Notes and to induce the Lenders to make loans and other extensions of credit
under the New Credit Facility, the Grantor hereby agrees with the Collateral
Agent for the ratable benefit of the Secured Parties as follows:
SECTION 1. GRANT OF SECURITY. The Grantor, in order to secure
the Secured Obligations (as defined in Section 2), hereby assigns and pledges to
the Collateral Agent for its benefit and for the ratable benefit of the Secured
Parties and hereby grants to the Collateral Agent for its benefit and for the
ratable benefit of the Secured Parties a first-priority security interest in all
of the Grantor's right, title and interest in and to the following, in each case
whether now or hereafter existing or in which the Grantor now has or hereafter
acquires an interest and wherever the same may be located (the "COLLATERAL"):
(a) All items of "equipment" and "fixtures" (as such terms are
defined in Sections 9-109(2) and 9-313 of the Uniform Commercial Code
of the State of New York (the "Code"), respectively) and including all
equipment, machinery, furnishings, fixtures, tools, supplies,
automotive equipment, motor vehicles and other equipment of any kind
and nature, together with all replacements, substitutions, attachments,
parts (including spare parts), modifications, additions, improvements,
upgrades and accessions of, to or upon such items of equipment or
fixtures (together referred to herein as the "EQUIPMENT");
(b) All inventory in all of its forms, wherever located now or
hereafter existing as such term is defined in Section 9-109(4) of the
Code, including, but not limited to, (i) all goods held by the Grantor
for sale or lease or to be furnished under contracts of service or so
leased or furnished, (ii) all raw materials, work in process, finished
goods, and materials used or consumed in the manufacture, packing,
shipping, advertising, selling, leasing, furnishing or production of
such inventory or otherwise used or consumed in the Grantor's business,
(iii) goods in which the Grantor has an interest in mass or a joint or
other interest or right of any kind, (iv) goods which are returned to
or repossessed by the Grantor and (v) all additions and accessions
thereto and replacements thereof (all such inventory, accessions and
products being the "INVENTORY");
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(c) All accounts (as such term is defined in Section 9-106 of
the Code), contract rights, chattel paper (as such term is defined in
Section 9-105(b) of the Code), investment property (as such term is
defined in Section 9-115 of the Code) instruments (as such term is
defined in Section 9-105(1)(i) of the Code), guaranties, letters of
credit, documents (as such term is defined in Section 9- 105(f) of the
Code), drafts, acceptances, tax refunds, insurance claims, rights to
performance, judgments, security agreements, leases, other obligations
or receivables and general intangibles (as such term is defined in
Section 9-106 of the Code) of every nature, including without
limitation, all rights and claims to the payment or receipt of money or
other forms of consideration of any kind included in this clause (c)
(any and all such rights and claims to the payment or receipt of money
or other forms of consideration being the "PAYMENT RIGHTS," and any and
all such leases, security agreements and other contracts being the
"RELATED CONTRACTS");
(d) All United States and foreign trademarks, trademark
rights, service marks, certification marks, collective marks, service
▇▇▇▇ rights, trade names, trade name rights, designs, logos, indicia,
corporate names, company names, business names, fictitious business
names, trade styles and/or other source and/or business identifiers,
registrations and applications pertaining thereto, renewals and
extensions thereof, whether now owned or hereafter acquired or issued,
all common law and other rights in and to the foregoing and the
accompanying goodwill and other like business property rights and the
right (but not the obligation) to register claim under trademark and to
renew and extend such trademarks, and the right (but not the
obligation) to ▇▇▇ in the name of the Grantor for past, present or
future infringement of trademark and all proceeds of the foregoing,
including, without limitation, license royalties, income, payments,
claims, damages, and proceeds of suit ("TRADEMARK PROPERTY");
(e) All United States and foreign common law and/or statutory
copyrights, rights and interests of every kind and nature in copyrights
and works protectable by copyright, whether now owned or hereafter
created or acquired and renewals and extensions of copyrights, and the
right (but not the obligation) to make publication thereof for
copyright purposes, to register claim upon copyright and the right (but
not the obligation) to renew and extend such copyrights, and the right
(but not the obligation) to ▇▇▇ in the name of the Grantor for past,
present and future infringements of copyright, and all proceeds of the
foregoing, including without limitation, royalties, income, payments,
claims, damages, and proceeds of suit ("COPYRIGHT PROPERTY");
(f) All United States and foreign patents and patent
applications now owned or hereafter acquired from time to time, and
licenses and rights in, and the right (but not the obligation) to ▇▇▇
in the name of the Grantor or in the name of
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the Collateral Agent for, all past, present and future infringements of
any such properties, and all reissues, divisions, continuations,
continuations-in-part, extensions, renewals, and reexaminations of any
of the foregoing, and all proceeds of the foregoing including, without
limitation, royalties, income, payments, claims, damages, and proceeds
of suit and the right to ▇▇▇ for past infringements of any of the
foregoing ("PATENT PROPERTY");
(g) All cash, money, currency and all deposit accounts listed
on Schedule I hereto, including demand, time, savings, passbooks or
similar accounts maintained with the Senior Note Holders, the Lenders
or other banks, savings and loan associations or similar entities (the
"PLEDGED DEPOSITS");
(h) All books, records, ledger cards, files, correspondence,
computer programs, tapes, disks and related data processing software
(owned by the Grantor or in which it has an interest) that at any time
evidence or contain information relating to any of the Collateral or
are otherwise necessary or helpful in the collection thereof or
realization thereupon;
(i) all shares of capital stock of any Subsidiary, and all
options or rights to acquire any such shares or interests, in each case
now or hereafter owned by the Grantor, all distributions on such
capital stock (as constituted immediately prior to such distribution)
constituting securities (whether debt or equity securities or
otherwise), and all other or additional stock, notes, securities or
property paid or distributed in respect of capital stock (as
constituted immediately prior to such payment or distribution) (A) by
way of stock-split, spin-off, split-up, reclassification, combination
of shares or similar rearrangement or (B) by reason of any
consolidation, merger, exchange of stock, conveyance of assets,
liquidation, bankruptcy or similar corporate reorganization or other
disposition of capital stock;
(j) all dividends, distributions, payments of interest and
principal and other amounts (whether consisting of securities,
personalty or other property) from time to time received, receivable or
otherwise distributed in respect of or in exchange or substitution for
any capital stock;
(k) the account (which may be a securities account)
established and maintained by U.S. Trust and its successors and
assigns, entitled "American Restaurant Group Collateral Account, U.S.
Trust Company of California, N.A., as collateral agent, secured party",
and any successor account and all funds, securities and other property
or other items from time to time credited to such account and all
interest, income and distributions thereon (the "COLLATERAL ACCOUNT");
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(l) all rights to payment for goods sold or leased or services
rendered, whether or not earned by performance and all rights in
respect of the account debtor, including without limitation all such
rights constituting or evidenced by any account, chattel paper or
instrument, together with (a) any collateral assigned, hypothecated or
held to secure any of the foregoing and the rights under any security
agreement granting a security interest in such collateral, (b) all
goods, the sale of which gave rise to any of the foregoing, including,
without limitation, all rights in any returned or repossessed goods and
unpaid seller's rights, (c) all guarantees, endorsements and
indemnifications on, or of, any of the foregoing and (d) all powers of
attorney for the execution of any evidence of indebtedness or security
or other writing in connection therewith (the "RECEIVABLES");
(m) all original copies of all documents, instruments or other
writings evidencing the Receivables, all books, correspondence, credit
or other files, records, ledge sheets or cards, invoices, and other
papers relating to Receivables, including without limitation all tapes,
cards, computer tapes, computer discs, computer runs, record keeping
systems and other papers and documents relating to the Receivables,
whether in the possession or under the control of the Grantor or any
computer bureau or agent from time to time acting for the Grantor or
otherwise and all credit information, reports and memoranda relating
thereto (the "RECEIVABLES RECORDS");
(n) all interest rate or currency protection or hedging
arrangements, including without limitation, caps, collars, floors,
forwards and any other similar or dissimilar interest rate or currency
exchange agreements or other interest rate or currency hedging
arrangements;
(o) all insurance policies;
(p) all motor vehicles, tractors, trailers and other like
property, if title thereto is governed by a certificate of title
ownership; and
(q) All proceeds of any and all of the foregoing Collateral
and, to the extent not otherwise included, all payments under insurance
(whether or not the Collateral Agent or any other Secured Party is the
loss payee thereof), or any indemnity, warranty or guaranty, payable by
reason of loss or damage to or otherwise with respect to any of the
foregoing Collateral. For purposes of this Agreement, the term
"proceeds" includes whatever is receivable or received when Collateral
or proceeds are sold, collected, exchanged or otherwise disposed of,
whether such disposition is voluntary or involuntary, and includes,
without limitation, all rights to payment, including returned premiums,
with respect to any insurance relating thereto.
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SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures, and the
Collateral is collateral security for, the prompt payment or performance in full
when due, whether at stated maturity, by acceleration or otherwise, (including
the payment of amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
Section 362(a)) of all obligations of every nature of the Grantor under (a) the
Senior Note Indenture and the Senior Notes, (b) the New Credit Facility, and (c)
any instrument governing other indebtedness of the Grantor which is then secured
by the Collateral in accordance with the terms of the Intercreditor Agreement,
whether for principal, interest (including, without limitation, interest that,
but for the filing of a petition in bankruptcy with respect to the Grantor,
would accrue on such obligations), fees, expenses or otherwise, whether now
existing or hereafter arising, voluntary or involuntary, whether or not jointly
owed with others, direct or indirect, absolute or contingent, liquidated or
unliquidated, and whether or not from time to time decreased or extinguished and
later increased, created or incurred and all or any portion of such obligations
that are paid, to the extent all or any part of such payment is avoided or
recovered directly or indirectly from the Collateral Agent as a preference,
fraudulent transfer or otherwise (all such obligations being the "UNDERLYING
DEBT"), and all obligations of every nature of the Grantor now or hereafter
existing under this Agreement (all such obligations of the Grantor, together
with the Underlying Debt, being the "SECURED OBLIGATIONS").
SECTION 3. THE GRANTOR REMAINS LIABLE. Anything herein to the
contrary notwithstanding, (a) the Grantor shall remain liable under any
contracts and agreements included in the Collateral, to the extent set forth
therein, to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by the
Collateral Agent of any of its rights hereunder shall not release the Grantor
from any of its duties or obligations under the contracts and agreements
included in the Collateral and (c) neither the Collateral Agent nor any Secured
Party shall have any obligation or liability under any contracts and agreements
included in the Collateral by reason of this Agreement, nor shall the Collateral
Agent or any Secured Party be obligated to perform any of the obligations or
duties of the Grantor thereunder or to take any action to collect or enforce any
claim for payment assigned hereunder.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Grantor represents
and warrants as follows:
(a) Location of Equipment and Inventory; Office Locations;
Fictitious Names. As of the Closing Date, all of the Equipment and
Inventory (other than Equipment and Inventory which, either singly or in
the aggregate, is not material) is located at the places specified on
Schedule I hereto. As of the Closing Date, the chief place of business and
the chief executive office of the Grantor is located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. As of
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the Closing Date, the offices where the Grantor keeps its material records
regarding the Payment Rights and all originals of all chattel paper that
evidence Payment Rights are set forth on Schedule II hereto. As of the
Closing Date, the Grantor does not do business under any trade name or
fictitious business name except as set forth on Schedule II hereto and
does not have any UCC-1 financing statements filed against it under any
trade name or fictitious business name.
(b) Delivery of Certain Collateral. All chattel paper, notes and
other instruments (excluding checks) comprising any or all of the items of
Collateral have been delivered to the Collateral Agent duly endorsed and
accompanied by duly executed instruments of transfer or assignment in
blank.
(c) Payment Rights Valid. Each material Payment Right constitutes
the legally valid and binding obligation of the party obligated to pay the
same (the "ACCOUNT GRANTOR") except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
limiting creditors' rights generally or by general principles of equity
relating to enforceability. To the knowledge of the Grantor, no Account
Grantor has any material defense, set off, claim or counterclaim against
the Grantor which can be asserted against the Collateral Agent whether in
a proceeding to enforce the Collateral Agent's rights in the Collateral or
otherwise. Each such material Payment Right complies in all material
respects with the provisions of all applicable laws and regulations,
whether federal, state or local, applicable thereto (including, without
limitation, any usury law, the Federal Truth and Lending Act and
Regulation C of the Federal Reserve System). None of the Payment Rights is
evidenced by a promissory note or other instrument, other than a check,
that has not been delivered to the Collateral Agent.
(d) Ownership of Collateral. Except for the security interest
created by this Agreement and Liens permitted by each of the agreements
governing the Underlying Debt secured hereby from time to time in effect,
including without limitation the Senior Note Indenture and the New Credit
Facility (collectively, "PERMITTED LIENS"), the Grantor owns the
Collateral free and clear of any Lien. Except as may have been filed in
favor of the Collateral Agent relating to this Agreement or in connection
with Permitted Liens, no effective financing statement or other instrument
similar in effect covering all or any part of the Collateral is on file in
any filing or recording office.
(e) Perfection. Subject only to Permitted Liens, in the case of
existing Collateral, this Agreement creates, and in the case of after
acquired Collateral, at the time the Grantor first has rights in such
after acquired Collateral, this Agreement will create, in each case upon
the making of the filings described in clause (f) below or the taking of
possession by Collateral Agent with respect to
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security interests in Collateral which can only be perfected by taking
possession of such Collateral, for all Collateral other than the Pledged
Deposits and, upon the Collateral Agent's giving proper notice pursuant to
the Agency Account Agreement, dated the date hereof, among the Collateral
Agent, the Agent, ▇▇▇▇▇ Fargo Bank, N.A., the Grantor, and certain
subsidiaries of the Grantor (the "Agency Account Agreement") or in the
form of Exhibit A hereto to ▇▇▇▇▇ Fargo Bank, National Association with
respect to account no. 4001-197235 (the "Collection Account") and the
holders of the other accounts listed on Schedule I hereto, for the Pledged
Deposits held in the Collection Account and the accounts listed on
Schedule I hereto, a valid, perfected, first priority security interest,
in each case securing the payment and performance of the Secured
Obligations. Upon making the filings described in clause (f) below or the
taking of possession by Collateral Agent with respect to security
interests in Collateral which can only be perfected by taking possession
of such Collateral, in each case for all Collateral other than the Pledged
Deposits, and upon the Collateral Agent's giving proper notice to the
holders of the Pledged Deposits held in the Collection Account and the
accounts listed on Schedule I hereto, for the Pledged Deposits held in the
Collection Account and the accounts listed on Schedule I hereto, all
filings and other actions necessary or desirable to protect and to perfect
the security interests referenced above shall have been duly taken;
provided that the security interest granted hereunder in the Trademark
Property, Copyright Property and Patent Property shall only be perfected
to the extent such interests can be perfected by filing Uniform Commercial
Code financing statements in the jurisdictions set forth on Schedule III
annexed hereto and the filing of the Trademark Collateral Agreement in the
United States Patent and Trademark Office and, in the case of Copyright
Property, the filing of appropriate documentation in the United States
Copyright Office and in the case of Patent Property, the filing of
appropriate documentation in the United States Patent and Trademark
Office. As of the Closing Date, the Grantor has no interest in any
Copyright Property or Patent Property.
(f) Governmental Authorizations. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required either (i) for the grant by the Grantor of the
security interest granted hereby or for the execution, delivery or
performance of this Agreement by the Grantor or (ii) for the perfection of
(except as otherwise specified in paragraph (e) of this Section 4), or the
exercise by, the Collateral Agent of its rights and remedies hereunder,
except for the filing of a Uniform Commercial Code financing statement
with the appropriate authorities in the jurisdictions listed on Schedule
III hereto, and in the case of Trademark Property the filing of the
Trademark Collateral Agreement in the United States Patent and Trademark
Office and, in the case of Copyright Property, the filing of appropriate
documentation in the United States Copyright Office and in the case of
Patent
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Property, the filing of appropriate documentation in the United States
Patent and Trademark Office.
(g) Other Information. All information heretofore, herein or
hereafter supplied to the Collateral Agent by, or on behalf of, the
Grantor with respect to the Collateral (in each case, as such information
has been amended, supplemented or updated as of the date this
representation is deemed made) is accurate and complete in all material
respects.
(h) Receivables. Each Receivable (i) is and will be the genuine,
legal, valid and binding obligation of the account debtor in respect
thereof, representing an unsatisfied obligation of such account debtor,
(ii) is and will be enforceable in accordance with its terms, (iii) is and
will be in full force and effect and is not and will not be subject to any
setoffs, defenses, taxes, counterclaims (except (x) with respect to
refunds, returns and allowances in the ordinary course of business and (y)
to the extent that such Receivable may not yet have been earned by
performance) and (iv) is and will be in compliance with all applicable
laws, whether federal, state, local or foreign. The representations and
warranties contained in this Section 4(h) shall be deemed to be repeated
by the Grantor as of the time when each Receivable arises.
SECTION 5. FURTHER ASSURANCES.
(a) The Grantor agrees that from time to time, at the expense of the
Grantor, the Grantor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be
necessary or desirable, or that the Collateral Agent may reasonably
request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable the Collateral Agent to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Without limiting the generality of the foregoing, the Grantor
will: (i) at the reasonable request of the Collateral Agent, ▇▇▇▇
conspicuously each chattel paper included in the material Payment Rights
and each material Related Contract and each of its material records
pertaining to the Collateral with a legend, in form and substance
reasonably satisfactory to the Collateral Agent, indicating that such
items are subject to the security interest granted hereby; (ii) if any
Payment Right shall be evidenced by a promissory note or other instrument
(excluding checks), deliver and pledge to the Collateral Agent hereunder
for the benefit of the Secured Parties such note or instrument duly
endorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to the Collateral
Agent; (iii) at the request of the Collateral Agent, deliver and pledge to
the Collateral Agent all promissory notes and other instruments (including
checks if an Event of Default shall have occurred and be continuing) and
all original counterparts of chattel
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paper constituting Collateral duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to the Collateral Agent; (iv) upon the reasonable request of
the Collateral Agent, execute and file with the registrar of motor
vehicles or other appropriate authority of any jurisdiction under the law
of which indication of a security interest on a certificate of title is
required as a condition of perfection an application or other document
requesting the notation or other indication of the security interest
created hereunder on such certificate of title and will deliver to the
Collateral Agent copies of all such applications or other documents filed
and copies of all such certificates of title issued indicating the
security interest created hereunder in such Collateral; (v) execute and
file such financing or continuation statements, or amendments thereto, and
such other instruments or notices, as may be necessary or desirable, or as
the Collateral Agent may reasonably request, in order to perfect and
preserve the security interests granted or purported to be granted hereby,
(vi) at any reasonable time and upon reasonable notice, upon demand by the
Collateral Agent exhibit the Collateral to and allow inspection of the
Collateral by the Collateral Agent, or persons designated by the
Collateral Agent and (vii) at the Collateral Agent's reasonable request,
appear in and defend any action or proceeding that may affect the
Grantor's title to or the Collateral Agent's security interest in the
Collateral.
(b) The Grantor agrees that, with respect to the Pledged Deposits,
the Grantor shall (i) provide the Collateral Agent with notice within
thirty days after establishing any deposit accounts after the date hereof
and (ii) maintain all Pledged Deposits with banks or other financial
institutions located within the State of California or in a jurisdiction
where all action required by Section 5(a) hereof to perfect the security
interest of Collateral Agent in the Pledged Deposits shall have been taken
to the extent possible under the applicable law of such jurisdiction.
(c) The Grantor hereby authorizes the Collateral Agent to file one
or more financing or continuation statements, and amendments thereto,
relative to all or any part of the Collateral without the signature of the
Grantor where permitted by law. A carbon, photographic or other
reproduction of this Agreement or a financing statement signed by the
Grantor shall be sufficient as a financing statement where permitted by
law.
(d) The Grantor will furnish to the Collateral Agent from time to
time statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as the
Collateral Agent may reasonably request, all in reasonable detail.
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SECTION 6. COVENANTS OF THE GRANTOR. The Grantor shall:
(a) Not use or permit any Collateral to be used in violation of any
provision of this Agreement, or any applicable statute, regulation or
ordinance or any policy of insurance covering the Collateral (unless such
violation together with all previous other violations does not and could
not reasonably be expected to have a material adverse effect on the value
or use of any material portion of the Collateral);
(b) Notify the Collateral Agent of any change in the Grantor's name,
trade names, fictitious business names, identity or corporate structure at
least thirty days prior to such change; and
(c) Give the Collateral Agent thirty days' prior written notice of
any change in the location of the Grantor's (i) chief place of business,
(ii) chief executive office and (iii) offices where the Grantor's material
records regarding Payment Rights and the originals of all chattel paper
that evidence Payment Rights are kept.
SECTION 7. SPECIAL COVENANTS WITH RESPECT TO EQUIPMENT AND
INVENTORY. The Grantor shall:
(a) Keep the Equipment and Inventory (other than Inventory sold in
the ordinary course of business and other than such Equipment and
Inventory which either singly or in the aggregate is not material) at the
places therefor specified on Schedule I hereto or at such other places in
jurisdictions where all action has been taken that may be necessary or
desirable, or that the Collateral Agent may reasonably request, in order
to perfect and protect any security interest granted or purported to be
granted hereby or to enable the Collateral Agent to exercise and enforce
its rights and remedies hereunder with respect to such Equipment and
Inventory;
(b) Keep records of the Inventory which are correct and accurate in
all material respects, itemizing and describing the kind, type and
quantity of Inventory and the Grantor's cost therefor all in accordance
with the past practices of the Grantor; and
(c) If any Inventory is in possession or control of any of the
Grantor's agents or processors, then upon the occurrence and during the
continuance of an Event of Default, at the request of the Collateral
Agent, instruct such agent or processor to hold all such Inventory for the
account of the Collateral Agent and subject to the instructions of the
Collateral Agent.
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SECTION 8. INSURANCE.
(a) Unless otherwise agreed in writing by Collateral Agent, each
insurance policy covering the Collateral shall (i) name the Grantor and
the Collateral Agent as insured parties thereunder (without any
representation or warranty by or obligation upon the Collateral Agent) as
their interests may appear, (ii) contain an agreement by the insurer that,
to the extent provided in the Collateral Documents, any loss thereunder
shall be payable to the Collateral Agent notwithstanding any action,
inaction or breach of representation or warranty by the Grantor, (iii)
have attached thereto a lender's loss payable endorsement or its
equivalent, or a loss payable clause acceptable to the Collateral Agent,
for the benefit of the Secured Parties, (iv) provide that there shall be
no recourse against the Collateral Agent for payment of premiums or other
amounts with respect thereto and (v) provide that at least thirty days'
prior written notice of cancellation or lapse, material amendment, or
material reduction in scope or limits of coverage shall be given to the
Collateral Agent by the insurer. The Grantor shall, if so requested by the
Collateral Agent, deliver to the Collateral Agent original or duplicate
policies of such insurance and, as often as the Collateral Agent may
reasonably request (but, unless an Event of Default shall have occurred
and be continuing, in no event more than once each calendar year), a
report of a reputable insurance broker with respect to such insurance.
Further, the Grantor shall, at the request of the Collateral Agent, duly
execute and deliver instruments of assignment of such insurance policies
to comply with the requirements of Section 5 hereof and use its best
efforts to cause the respective insurers to acknowledge notice of such
assignment.
(b) Reimbursement under any liability insurance maintained by the
Grantor may be paid directly to the person who shall have incurred
liability covered by such insurance. In case of any material loss
involving damage to Equipment or Inventory when subsection (c) of this
Section 8 is not applicable, any proceeds of insurance maintained by the
Grantor pursuant to this Section 8 shall be paid to the Grantor and the
Grantor shall use such proceeds to make the necessary repairs or
replacements of such Equipment or Inventory or to purchase additional
Equipment or Inventory or other property of equivalent value and
constituting Collateral hereunder or under the other Collateral Documents.
(c) Upon the occurrence and during the continuance of an Event of
Default, at the request of the Collateral Agent, all insurance payments in
respect of such Equipment and Inventory shall be paid to and applied by
the Collateral Agent as specified in Section 18.
(d) Prior to the expiration of each insurance policy with respect to
the Equipment and Inventory, upon written request of the Collateral Agent,
the
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Grantor shall furnish the Collateral Agent with evidence satisfactory to
the Collateral Agent of the reissuance of a policy continuing insurance in
force as required by this Agreement and at or prior to the date payment of
the premium therefor is due, evidence satisfactory to the Collateral Agent
of such payment. In the event the Grantor fails to provide, maintain, keep
in force or deliver and furnish to the Collateral Agent the policies of
insurance required by this Section 8, the Collateral Agent, upon thirty
(30) days' prior written notice to the Grantor, may (but shall not be
obligated to) procure such insurance or single interest insurance for such
risks covering Secured Parties' interests, and the Grantor will pay all
premiums thereon promptly upon demand by the Collateral Agent, together
with interest thereon at 13.50% per annum, from the date of expenditure by
the Collateral Agent until reimbursement by the Grantor.
SECTION 9. SPECIAL COVENANTS WITH RESPECT TO PAYMENT RIGHTS AND
RELATED CONTRACTS.
(a) The Grantor shall keep its chief place of business and chief
executive office and the office where it keeps its material records
concerning the Payment Rights and Related Contracts, and all originals of
all chattel paper that evidence Payment Rights, at the location therefor
specified in Section 4 or at such other locations in a jurisdiction where
all action that may be necessary or desirable, or that the Collateral
Agent may request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Collateral
Agent to exercise and enforce its rights and remedies hereunder with
respect to such Payment Rights and Related Contracts. The Grantor will
hold and preserve such material records and chattel paper in accordance
with Grantor's past practice and will permit representatives of the
Collateral Agent at any time during normal business hours and upon
reasonable notice to inspect and make abstracts from such records and
chattel paper and the Grantor agrees to render to the Collateral Agent, at
the Grantor's cost and expense, such clerical and other assistance as may
be reasonably requested with regard thereto. Promptly upon the request of
the Collateral Agent, the Grantor shall deliver to, or make available for
review by, the Collateral Agent complete and correct copies of each
Related Contract.
(b) The Grantor shall, for not less than three years from the date
on which such Payment Rights arose, maintain substantially complete and
accurate records with respect to the material Payment Rights in accordance
with its customary practices as of the date hereof.
(c) The Grantor shall duly fulfill all obligations on its part to be
fulfilled under or in connection with the Payment Rights and the Related
Contracts except to the extent that the failure to fulfill its obligations
could not
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reasonably be expected to, either singly or in the aggregate, have a
material adverse effect on the value or use of any material portion of the
Collateral, and shall do nothing to materially impair the rights of the
Collateral Agent with respect to any Payment Right or Related Contract.
(d) Except as otherwise provided in this subsection (d) of this
Section 9, the Grantor shall continue to collect, at its own expense, all
amounts due or to become due the Grantor under the Payment Rights and
Related Contracts. In connection with such collections, the Grantor may
take (and, if an Event of Default shall have occurred and be continuing,
at the Collateral Agent's direction, shall take) such action as the
Grantor (or, if an Event of Default shall have occurred and be continuing,
the Collateral Agent) may deem necessary or advisable to enforce
collection of the Payment Rights; provided, however, that the Collateral
Agent shall have the right at any time, if an Event of Default shall have
occurred and be continuing, and upon written notice to the Grantor of its
intention to do so, to notify the account debtors or obligors under any
Payment Rights of the assignment of such Payment Rights to the Collateral
Agent and to direct such account debtors or obligors to make payment of
all amounts due or to become due to the Grantor thereunder directly to the
Collateral Agent, to notify each Person maintaining a lock box or similar
arrangement to which account debtors or obligors under any Payment Rights
have been directed to make payment to remit all amounts representing
collections on checks and other payment items from time to time sent to or
deposited in such lock box or other arrangement directly to the Collateral
Agent and, upon such notification and at the expense of the Grantor, to
enforce collection of any such Payment Rights and to adjust, settle or
compromise the amount or payment thereof, in the same manner and to the
same extent as the Grantor might have done. After receipt by the Grantor
of the notice from the Collateral Agent referred to in the proviso to the
preceding sentence, (i) all amounts and proceeds (including checks and
other instruments) received by the Grantor in respect of the Payment
Rights and the Related Contracts shall be received in trust for the
benefit of the Collateral Agent and the Secured Parties hereunder, shall
be segregated from other funds of the Grantor and shall be forthwith paid
over or delivered to the Collateral Agent in the same form as so received
(with any necessary endorsement) to be held as cash collateral in the
Collateral Account and either (x) released to the Grantor so long as no
Event of Default shall have occurred and be continuing or (y) if any Event
of Default shall have occurred and be continuing, applied as provided by
Section 18 hereof, and (ii) the Grantor shall not adjust, settle or
compromise the amount or payment of any Payment Right, or release wholly
or partly any account debtor or obligor thereof, or allow any credit or
discount thereon.
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SECTION 10. DEPOSIT ACCOUNTS; COLLATERAL ACCOUNT.
(a) Deposit Accounts. (i) Grantor shall (x) cause all cash proceeds
of Receivables, all cash payments received in the ordinary course of
Grantor's restaurant business and all other cash of Grantor to be
deposited only into the Collection Account and the other accounts listed
in Schedule I and (y) direct all depository institutions holding Pledged
Deposits to cause all such Pledged Deposits to be transferred no less
frequently than once each day to, and only to, the Collection Account,
with the Collateral Agent or Agent having the right so to direct such
depository institutions (which notice may be given by the Collateral Agent
or the Agent at any time following the occurrence of an Event of Default,
regardless of whether or not such Event of Default has been cured or
waived). So long as no Event of Default shall have occurred and no notice
shall have been given by the the Collateral Agent or the Agent, the
Grantor shall be entitled to receive, retain and use any and all interest
or other distributions paid in respect of the Pledged Deposits.
(ii) Upon the occurrence and during the continuance of an
Event of Default and upon notice (as provided in clause (y) of the
previous paragraph) having been given by the Collateral Agent or the
Agent, (A) all interest or other distributions in respect of the
Pledged Deposits shall be received in trust for the benefit of the
Collateral Agent and the Secured Parties, and upon written notice
from the Collateral Agent or from the Agent to Grantor shall be
segregated from other funds of the Grantor and shall be forthwith
paid over from the Collection Account to (x) prior to the full and
final payment of all of the Secured Obligations under the New Credit
Facility, the termination of all commitments to lend thereunder and
the cancellation or expiration of all letters of credit issued,
extended or renewed thereunder, the Agent as Collateral in the same
form as so received (with any necessary endorsement) for deposit in
the Grantor's account No. 546-11302 with the Agent or such other
account as the Agent may specify in writing (the "Agent Account")
and (y) upon the full and final payment of all of the Secured
Obligations under the New Credit Facility, the termination of all
commitments to lend thereunder and the cancellation or expiration of
all letters of credit issued, extended or reversed thereunder, the
Collateral Agent for deposit in the Collateral Account as Collateral
in the same form as so received (with any necessary endorsement),
and (B) the Requisite Party (as defined in the Intercreditor
Agreement) may exercise dominion and control over, and refuse to
permit further withdrawals (whether of money, securities,
instruments or other property) from deposit accounts maintained with
the Agent, the Collateral Agent, any Secured Party or any other
person constituting part of the Collateral.
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(b) Collateral Account. (i) There is hereby established with the
Collateral Agent the Collateral Account. The Collateral Account shall be
under the sole and exclusive dominion and control of the Collateral Agent
and the Grantor shall not have any rights with respect to the Collateral
Account other than with respect to the receipt of proceeds of Collateral
deposited therein upon the termination of this Agreement and the full and
final payment of all of the Secured Obligations and the termination of all
commitments to lend under the New Credit Facility and the cancellation or
expiration of all letters of credit issued, extended or reversed
thereunder. Without limiting the generality of the foregoing, Grantor
shall not have any right of withdrawal or transfer from the Collateral
Account.
(ii) Subject to the terms of the Intercreditor Agreement,
there shall be deposited in the Collateral Account from time to time
the cash proceeds (as defined in Section 9-306(1) of the UCC) of any
of the Collateral (including insurance proceeds thereon and
excluding amounts paid to the Agent Account pursuant to Section
10(a)) required to be delivered to the Collateral Agent pursuant
hereto, under the Senior Note Indenture, the New Credit Facility or
any other Security Document. All amounts and investments and other
items credited to the Collateral Account from time to time shall
constitute Collateral hereunder and shall not constitute payment of
the Secured Obligations until applied as hereinafter provided. So
long as no Event of Default has occurred and is continuing, the
Collateral Agent shall, upon five business days' prior written
notice from the Grantor (which notice shall be accompanied by a
certificate (in form and substance satisfactory to the Collateral
Agent) executed by a senior officer of the Grantor as to the absence
of any such Event of Default) release funds then credited to the
Collateral Account to the Grantor. At any time following the
occurrence and during the continuance of an Event of Default, the
Collateral Agent may in its discretion apply or cause to be applied
(subject to collection) the balance from time to time outstanding to
the credit of the Collateral Account to the payment of the Secured
Obligations in the manner specified herein.
(iii) Subject to the terms of the Intercreditor Agreement, if
an Event of Default shall not then have occurred and be continuing,
substantially all amounts credited to the Collateral Account shall
be invested from time to time by the Collateral Agent upon the
direction of the Company in Cash Equivalents reasonably satisfactory
to the Collateral Agent and in which the Collateral Agent shall have
a first priority perfected security interest, which accounts,
investments, instruments and securities shall be held in the name
and be under the control of the Collateral Agent. If an Event of
Default shall have occurred and be continuing, all amounts credited
to the Collateral Account shall be
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invested by the Collateral Agent in such accounts (interest-bearing
or otherwise), investments, instruments and securities as the
Collateral Agent shall elect in its sole discretion. The Collateral
Agent shall have no responsibility or liability for any losses in
connection with any investment in connection with the Collateral
Account, including, without limitation, losses incurred in
connection with the liquidation of any such investments.
SECTION 11. LICENSE OF TRADEMARKS AND TRADE NAMES. The Grantor
hereby assigns, transfers and conveys to the Collateral Agent, effective upon
the occurrence of, and during the continuance of, any Event of Default, the
nonexclusive right and license to use all trademarks, trade names and copyrights
owned or used by the Grantor that relate to the Collateral and any other
collateral granted by the Grantor as security for the Secured Obligations,
together with any goodwill associated therewith, all to the extent necessary to
enable the Collateral Agent to use, possess and realize on the Collateral and
any successor or assignee to enjoy the benefits of the Collateral. This right
and license shall inure to the benefit of the Collateral Agent and its
successors, assigns and transferees, whether by voluntary conveyance, operation
of law, assignment, transfer, foreclosure, deed in lieu of foreclosure or
otherwise. Such right and license is granted free of charge, without requirement
that any monetary payment whatsoever be made to the Grantor. If (a) an Event of
Default shall have occurred and, by reason of waiver, modification, amendment or
otherwise, no longer be continuing, (b) no other Event of Default shall be
continuing, (c) an assignment to the Collateral Agent shall have been previously
made pursuant to this Section 11, and (d) the Secured Obligations shall not have
become immediately due and payable, upon the written request of the Grantor, the
Collateral Agent shall promptly execute and deliver to the Grantor such
assignments as may be necessary to reassign to the Grantor any rights, title and
interests as may have been assigned pursuant to this Section 11, subject to any
disposition thereof that may have been made by the Collateral Agent pursuant
hereto; provided that, after giving effect to such reassignment, the Collateral
Agent's security interest and conditional assignment granted pursuant to this
Section 11, as well as all other rights and remedies of the Collateral Agent
granted hereunder, shall continue to be in full force and effect; and provided,
further, that the rights, title and interests so reassigned shall be free and
clear of all Liens other than Liens (if any) encumbering such rights, title and
interest at the time of their assignment to the Collateral Agent.
SECTION 12. TRANSFERS AND OTHER LIENS. The Grantor shall not:
(a) Except as permitted by each of the agreements governing the
Underlying Debt secured hereby from time to time in effect (including
without limitation the Senior Note Indenture and the New Credit Facility),
sell, assign (by operation of law or otherwise) or otherwise dispose of
any of the Collateral.
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(b) Except as permitted by each of the agreements governing the
Underlying Debt secured hereby from time to time in effect (including
without limitation the Senior Note Indenture and the New Credit Facility),
create or suffer to exist any Lien upon or with respect to any of the
Collateral to secure the indebtedness or other obligations of any person
or entity.
In the event any Collateral is sold, transferred or otherwise
disposed of in an Asset Sale or other transaction permitted by the Senior Note
Indenture and the New Credit Facility (as long as both such agreements are in
effect, otherwise by whichever agreement remains in effect), such Collateral
shall, concurrently therewith, be automatically released from the lien and
security interest under this Agreement and the Collateral Agent shall, at the
Grantor's expense, execute and deliver to the Grantor such documents as the
Grantor shall reasonably request to evidence such release; provided that
arrangements satisfactory to the Collateral Agent have been made for delivery to
the Collateral Agent of the amounts, if any, required to be paid to the Secured
Parties out of the net proceeds of such disposition.
SECTION 13. THE COLLATERAL AGENT. The Collateral Agent has been
appointed as the Collateral Agent hereunder pursuant to the Intercreditor
Agreement. The Collateral Agent shall be obligated, and 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,
without limitation, the release or substitution of Collateral) solely in
accordance with the Intercreditor Agreement. The Collateral Agent may resign and
a successor Collateral Agent may be appointed in the manner provided for in the
Intercreditor Agreement for resignation and appointment of a successor
Collateral Agent. Upon the acceptance of any appointment as the Collateral Agent
by a successor Collateral Agent, the successor Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Collateral Agent under this Agreement, and the retiring
Collateral Agent shall thereupon be discharged from its duties and obligations
under this Agreement and shall deliver any Collateral in its possession to the
successor Collateral Agent. After any retiring Collateral Agent's resignation,
the provisions of this Agreement shall inure to its benefit as to any actions
taken or omitted to be taken by it under this Agreement while it was the
Collateral Agent.
SECTION 14. THE COLLATERAL AGENT APPOINTED Attorney-in-Fact. The
Grantor hereby irrevocably appoints the Collateral Agent the Grantor's
attorney-in-fact, with full authority in the place and stead of the Grantor and
in the name of the Grantor, the Collateral Agent or otherwise, from time to time
in the Collateral Agent's reasonable discretion to take any action and to
execute any instrument that the Collateral Agent may deem necessary or
advisable, subject to the terms and conditions of this Agreement, to accomplish
the purposes of this Agreement, including, without limitation:
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(a) Subject to the last sentence of Section 8(d) hereof, and after
consultation with the Grantor, to obtain and adjust insurance required to
be maintained by the Grantor or paid to the Collateral Agent pursuant to
Section 8 hereof;
(b) Upon the occurrence of, and during the continuance of, an Event
of Default, to ask, demand, collect, ▇▇▇ for, recover, compound, receive
and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;
(c) Upon the occurrence of, and during the continuance of, an Event
of Default, to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clauses (a)
and (b) above;
(d) Upon the occurrence of, and during the continuance of, an Event
of Default, to file any claims or take any action or institute any
proceedings that the Collateral Agent may deem necessary or desirable for
the collection of any of the Collateral or otherwise to enforce the rights
of the Collateral Agent with respect to any of the Collateral;
(e) After consultation with the Grantor, to pay or discharge taxes
(other than taxes not then required to be paid or discharged by any of the
agreements governing the Underlying Debt secured hereby, from time to time
in effect including without limitation the Senior Note Indenture and the
New Credit Facility) or Liens (other than Permitted Liens), levied or
placed upon or threatened against the Collateral, the legality or validity
thereof and the amounts necessary to discharge the same to be determined
by the Collateral Agent in its reasonable discretion, and such payments
made by the Collateral Agent to become obligations of the Grantor to the
Collateral Agent, due and payable immediately without demand;
(f) Upon the occurrence of, and during the continuance of, an Event
of Default, to sign and endorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with accounts and
other documents relating to the Collateral; and
(g) Upon the occurrence of, and during the continuance of, an Event
of Default, generally to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though the Collateral Agent were the absolute owner thereof
for all purposes, and to do, at the Collateral Agent's option and the
Grantor's expense, at any time, or from time to time, all acts and things
that the Collateral Agent deems necessary to protect,
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preserve or realize upon the Collateral and the Collateral Agent's
security interest therein, in order to effect the intent of this
Agreement, all as fully and effectively as the Grantor might do.
SECTION 15. COLLATERAL AGENT MAY PERFORM. If the Grantor fails to
perform any agreement contained herein, the Collateral Agent may, upon thirty
days' prior written notice to the Grantor (unless otherwise expressly set forth
in this Agreement or an Event of Default shall have occurred and be continuing,
in which case, no such notice shall be required), itself perform, or cause
performance of, such agreement, and the expenses of the Collateral Agent
incurred in connection therewith shall be payable by the Grantor under Section
18 hereof.
SECTION 16. THE COLLATERAL AGENT'S DUTIES AND LIABILITIES.
(a) The powers conferred on the Collateral Agent hereunder are
solely to protect its interest in the Collateral and shall not impose any
duty upon it to exercise any such powers. Except for the safe custody of
any Collateral in its possession and the accounting for moneys actually
received by it hereunder, the Collateral Agent shall have no duty as to
any Collateral or as to the taking of any necessary steps to preserve
rights against prior parties or any other rights pertaining to any
Collateral. The Collateral Agent shall be deemed to exercise reasonable
care in the custody and preservation of such Collateral if such Collateral
is accorded treatment substantially equivalent to that which the
Collateral Agent accords its own property.
(b) The Collateral Agent shall not be liable to the Grantor (i) for
any loss or damage sustained by it, or (ii) for any loss, damage,
depreciation or other diminution in the value of any of the Collateral,
that may occur as a result of, in connection with or that is in any way
related to (x) any exercise by the Collateral Agent of any right or remedy
under this Agreement or (y) any other act of or failure to act by the
Collateral Agent, except to the extent that the same shall be determined
by a judgment of a court of competent jurisdiction to be the result of
acts or omissions on the part of the Collateral Agent constituting gross
negligence or willful misconduct.
(c) Except to the extent resulting from acts or omissions on the
part of the Collateral Agent or its affiliates, directors, officers,
employees, attorneys, or agents constituting gross negligence or willful
misconduct, no claim may be made by the Grantor against the Collateral
Agent or its affiliates, directors, officers, employees, attorneys or
agents for any special, indirect, or consequential damages in respect of
any breach or wrongful conduct (whether the claim therefor is based on
contract, tort or duty imposed by law) in connection with, arising out of
or in any way related to the transactions contemplated and relationship
established by
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this Agreement, or any act, omission or event occurring in connection
therewith; and the Grantor hereby waives, releases and agrees not to ▇▇▇
upon any such claim for any such damages, whether or not accrued and
whether or not known or suspected to exist in its favor.
SECTION 17. REMEDIES UPON DEFAULT; DECISIONS RELATING TO EXERCISE OF
REMEDIES.
(a) Events of Default. The occurrence of any "EVENT OF DEFAULT" as
defined in any of the agreements governing the Underlying Debt secured
hereby from time to time in effect (including without limitation the
Senior Note Indenture and the New Credit Facility) shall constitute an
Event of Default under this Agreement.
(b) Remedies Upon an Event of Default. If any Event of Default shall
have occurred and be continuing, the Collateral Agent may exercise in
respect of the Collateral, (i) all the rights and remedies of a secured
party on default under the Uniform Commercial Code as in effect in any
applicable jurisdiction (the "Applicable UCC") (whether or not the
Applicable UCC applies to the affected Collateral), (ii) all of the rights
and remedies provided for in this Agreement, the Senior Note Indenture,
the New Credit Facility, and any other agreement between the Grantor and
any Secured Party and (iii) such other rights and remedies as may be
provided by law or otherwise (such rights and remedies of any Secured
Party to be cumulative and non-exclusive). If an Event of Default shall
have occurred and be continuing, the Collateral Agent also may (i) require
the Grantor to, and the Grantor hereby agrees that it will, at its expense
and upon request of the Collateral Agent forthwith, assemble all or part
of the Collateral as directed by the Collateral Agent and make it
available to the Collateral Agent at a place to be designated by the
Collateral Agent that is reasonably convenient to both parties, (ii) enter
onto the property where any Collateral is located and take possession
thereof with or without judicial process, (iii) prior to the disposition
of the Collateral, store, process, repair or recondition the Collateral or
otherwise prepare the Collateral for disposition in any manner to the
extent the Collateral Agent deems appropriate, (iv) take possession of the
Grantor's premises or place custodians in exclusive control thereof,
remain on such premises and use the same and any of the Grantor's
equipment for the purpose of completing any work in process, taking any
actions described in the preceding clause (iii) and collecting any Secured
Obligation, and (v) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private
sale, at any of the Collateral 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 the Collateral Agent may deem commercially reasonable. The
Grantor agrees that, to the extent notice of sale shall be required at
law, at least ten days' prior written notice to the Grantor
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of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. The
Collateral Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Collateral 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.
If an Event of Default shall have occurred and be continuing, the
Collateral Agent may retain any of the Grantor's directors, officers and
employees, in each case upon such terms as the Collateral Agent and any
such person may agree, notwithstanding the provisions of any employment,
confidentiality or non-disclosure agreement between any such person and
the Grantor, and the Grantor hereby waives its rights under any such
agreement and consents to each such retention.
(c) Decisions Relating to Exercise of Remedies. Notwithstanding
anything in this Agreement to the contrary, as provided in the
Intercreditor Agreement, the Collateral Agent shall exercise, or shall
refrain from exercising any remedy provided for in Section 17(b) in
accordance with the instructions of the Requisite Party (as defined in the
Intercreditor Agreement) and the Secured Parties shall be bound by such
instructions; and the sole rights of the Secured Parties under this
Agreement shall be to be secured by the Collateral and to receive the
payments provided for in Section 18 hereof.
SECTION 18. APPLICATION OF PROCEEDS. All proceeds received by the
Collateral Agent in respect of any sale of, collection from or other realization
upon all or any part of the Collateral may, in the discretion of the Collateral
Agent, be held by the Collateral Agent as Collateral for, and/or then, or at any
other time thereafter applied, in full or in part by the Collateral Agent
against the Secured Obligations in the following order of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization and all other expenses, liabilities and
advances made or incurred by the Collateral Agent in connection therewith
and all amounts for which the Collateral Agent is entitled to
indemnification hereunder and all advances made by the Collateral Agent
hereunder for the account of the Grantor and for the payment of all costs
and expenses paid or incurred by the Collateral Agent in connection with
the exercise of any right or remedy hereunder, all in accordance with
Section 19 hereof;
SECOND: To the payment of the Secured Obligations as provided in
Section 4 of the Intercreditor Agreement; and
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THIRD: After payment in full of the amounts specified in the
preceding subparagraphs, to the payment to, or upon the order of, the
Grantor, or whosoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct, of any surplus then remaining
from such proceeds.
SECTION 19. INDEMNITY AND EXPENSES.
(a) The Grantor agrees to indemnify the Collateral Agent and each
Secured Party and each of the officers, directors, agents, employees and
affiliates of each of them (each an "INDEMNITEE") from and against any and
all claims, losses and liabilities growing out of or resulting from this
Agreement (including, without limitation, enforcement of this Agreement).
The foregoing indemnification shall apply whether or not such claims,
losses or liabilities are in any way or to any extent owed, in whole or in
part, under any claim or theory of strict liability, or are caused, in
whole or in part, by any negligent act or omission of any Indemnitee;
provided only that no Indemnitee shall be entitled to receive
indemnification for that portion, if any, of any claims, losses or
liabilities proximately cased by such Indemnitee's gross negligence or
willful misconduct.
(b) The Grantor will upon demand pay to the Collateral Agent the
amount of any and all reasonable expenses, including the reasonable fees
and disbursements of its counsel and of any experts and agents, that
Collateral Agent may incur in connection with (i) the administration of
this Agreement, (ii) the custody, preservation, use or operation of, or
the sale of, collection from, or other realization upon, any of the
Collateral, (iii) the exercise or enforcement of any of the rights of the
Collateral Agent hereunder or (iv) the failure by the Grantor to perform
or observe any of the provisions hereof.
(c) The obligations of Grantor in this Section 19 hereof shall
survive termination of this Agreement and the discharge of Grantor's other
obligations under this Agreement, the Senior Note Indenture, the New
Credit Facility and other Collateral Documents.
SECTION 20. CONTINUING SECURITY INTEREST; TERMINATION. This
Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until the indefeasible payment in full
of the Secured Obligations and termination of the Lenders' obligations to lend
and extend credit under the New Credit Facility and the cancellation or
expiration of all outstanding letters of credit, (b) be binding upon the
Grantor, its successors and assigns and (c) inure, together with the rights and
remedies of the Collateral Agent and the Secured Parties hereunder, to the
benefit of the Collateral Agent and the Secured Parties and the successors,
transferees and assigns of each. Without limiting the generality of the
foregoing clause (c), any Secured Party may, subject to the provisions of the
Senior Note Indenture and the New Credit
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Facility , as applicable, assign or otherwise transfer any Senior Note or loan,
or portion thereof, held by them, respectively, or any other obligations secured
hereby and any agreements or instruments executed in connection therewith to any
other person or entity, and such other person or entity shall thereupon become
vested with all the benefits in respect thereof granted to that Secured Party
herein or otherwise. Upon the indefeasible payment in full of the Secured
Obligations and termination of the Lenders' obligations to lend or extend credit
under the New Credit Facility and the cancellation or expiration of all
outstanding letters of credit, the security interest granted hereby shall
terminate and all rights to the Collateral shall revert to the Grantor. Upon any
such termination, the Collateral Agent will, at the Grantor's expense, execute
and deliver to the Grantor, against receipt and without recourse to or warranty
by Collateral Agent, such documents as the Grantor shall reasonably request to
evidence such termination.
SECTION 21. SECURITY INTEREST ABSOLUTE. All rights of the Collateral
Agent on its behalf and on behalf of the Secured Parties, assignments and
pledges made and created hereunder, and all obligations of the Grantor, shall be
absolute and unconditional, irrespective of:
(a) Any lack of validity or enforceability of any of the Secured
Obligations or any agreement or instrument relating thereto;
(b) 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, any
agreement or instrument relating to the Secured Obligations;
(c) Any exchange, release, subordination or nonperfection of any
other collateral, or any release or amendment or waiver of or consent to
any departure from any guaranty, for all or any of the Secured
Obligations; or
(d) Any other circumstance (including, but not limited to, any
statute of limitations) which might otherwise constitute a defense
available to, or a discharge of, the Grantor or a third party grantor or a
security interest.
SECTION 22. AMENDMENTS; ETC. No amendment or waiver of any provision
of this Agreement nor consent to any departure by the Grantor herefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Grantor and the Collateral Agent on behalf of the Requisite Party (as defined in
the Intercreditor Agreement), and then such waiver or consent shall be effective
only in the specified instance and for the specific purpose for which given.
SECTION 23. ADDRESSES FOR NOTICES. Unless otherwise specifically
provided herein, any notice or other communication herein required or permitted
to be
24
25
given shall be in writing and may be personally served, telecopied, telexed or
sent by United States mail or courier service and shall be deemed to have been
given when delivered in person, upon receipt (in the case of telecopy or telex)
or four business days after depositing it in the United States mail, registered
or certified, with postage prepaid and properly addressed; provided that any
notice sent to the Collateral Agent shall not be effective until received. For
purposes hereof, the addresses of the parties hereto (until notice of a change
thereof) is delivered as provided in this Section 23 shall be as set forth under
each party's name on the signature pages hereof.
SECTION 24. CONSENT TO JURISDICTION AND SERVICE OF Process. All
judicial proceedings brought against the Grantor with respect to this Agreement
may be brought in any state or Federal court of competent jurisdiction sitting
in New York, New York and by execution and delivery of this Agreement the
Grantor accepts for itself and in connection with the Collateral, generally and
unconditionally, the nonexclusive jurisdiction of the aforesaid courts and
irrevocably agrees to be bound by any judgement rendered thereby in connection
with this Agreement. The Grantor designates and appoints The ▇▇▇▇▇▇▇▇-▇▇▇▇
Corporation System, Inc., ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and such
other Person as may be hereafter selected by the Grantor irrevocably agreeing in
writing to so serve, as its agent to receive on its behalf service of all
process in any proceedings in any court sitting in New York, New York, such
service being hereby acknowledged by the Grantor to be effective and binding
service in every respect. A copy of any such process so served shall be mailed
by registered mail to the Grantor, at its address specified in Section 23
hereof, except that unless otherwise provided by applicable law, any failure to
mail such copy shall not affect the validity of service of process. If any agent
appointed by the Grantor refuses to accept service, the Grantor hereby agrees
that service upon it by mail shall constitute sufficient notice. Nothing herein
shall affect the right to serve process in any other manner permitted by law or
shall limit the right of the Collateral Agent to bring proceedings against the
Grantor in the courts of any other jurisdiction.
SECTION 25. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES), EXCEPT
TO THE EXTENT THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR
REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise
defined herein, terms used in Article 9 of the Code are used herein as therein
defined.
SECTION 26. WAIVER OF JURY TRIAL. THE GRANTOR AND THE COLLATERAL
AGENT HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED
25
26
UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this waiver is intended to
be all-encompassing of any and all disputes that may be filed in any court and
that relate to the subject matter of this transaction, including without
limitation, contract claims, tort claims, breach of duty claims, and all other
common law and statutory claims. The Grantor and the Collateral Agent each
acknowledge that this waiver is a material inducement for the Grantor and the
Collateral Agent to enter into a business relationship, that the Grantor and the
Collateral Agent have already relied on the waiver in entering into this
Agreement and that each will continue to rely on the waiver in their related
future dealings. The Grantor and the Collateral Agent further warrant and
represent that each has reviewed this waiver with its legal counsel, and that
each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
In the event of litigation, this Agreement may be filed as a written consent to
a trial by the court.
SECTION 27. WAIVER. Except as otherwise expressly provided herein,
the Grantor hereby waives promptness, diligence, notice of acceptance and any
other notice with respect to any of the Secured Obligations and this Agreement
and any requirement that the Collateral Agent or any Secured Party protect,
secure, perfect or insure any security interest or lien or any property subject
thereto or exhaust any right or take any action against the Grantor or any other
person or entity or any of the Collateral.
SECTION 28. NO WAIVER. No failure on the part of the Collateral
Agent to exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; and no single or partial exercise by the Collateral Agent of any right,
power or remedy hereunder shall preclude any other or further exercise thereof
or the exercise of any other right, power or remedy. The remedies herein
provided are to the fullest extent permitted by law cumulative, and are not
exclusive of any remedies provided by law.
SECTION 29. MARSHALLING; PAYMENT SET ASIDE. The Collateral Agent
shall not be under any obligation to marshal any assets in favor of the Grantor
or any other party or against or in payment of any or all of the Secured
Obligations. To the extent that the Grantor makes a payment or payments to the
Collateral Agent or the Collateral Agent enforces its security interests or
exercises its rights of setoff, and such payment or payments or the proceeds of
such enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, state
or Federal law, common law or equitable cause, then to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied,
and all Liens, rights and
26
27
remedies therefor, shall be revived and continued in full force and effect as if
such payment had not been made or such enforcement or setoff had not occurred.
SECTION 30. HEADINGS. Section and subsection headings in
this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement or be given any
substantive effect.
SECTION 31. SEVERABILITY. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation and in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 32. COUNTERPARTS. This Agreement, and any amendments,
waivers, consents or supplements, may be executed in one or more counterparts,
each of which when so executed and delivered shall be deemed an original and all
of which together shall constitute one and the same Agreement.
27
28
IN WITNESS WHEREOF, the Grantor and the Collateral Agent have caused
this Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
AMERICAN RESTAURANT GROUP, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇.
--------------------------------------
Title: Vice President and
Chief Financial Officer
NOTICE ADDRESS:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chairman and Chief
Executive Officer
With copies to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
American Restaurant Group, Inc.
▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
29
U.S. TRUST COMPANY OF CALIFORNIA,
N.A., AS COLLATERAL AGENT
By:/s/
------------------------------------
Title: Authorized Officier
--------------------------------
NOTICE ADDRESS:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
30
SCHEDULE I
TO COMPANY SECURITY AGREEMENT
Locations of Deposit Accounts: Set forth on Annex A hereto.
Locations of Equipment and Inventory:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(American Restaurant Group corporate offices)
1
31
ANNEX A
CORPORATE
_____________________________________________________________________
UNIT 90900
______________________________________________
______________________________________________
NAME MAIN CONCENTRATION
______________________________________________
______________________________________________
BANK ▇▇▇▇▇ FARGO BANK
______________________________________________
______________________________________________
ADDRESS ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
CITY, STATE, ZIP ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
TELEPHONE (▇▇▇) ▇▇▇-▇▇▇▇
______________________________________________
______________________________________________
ACCOUNT 4001-197235
______________________________________________
______________________________________________________________________
▇▇▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
NAME OVERLAND SWEEP
______________________________________________
______________________________________________
BANK ▇▇▇▇▇ FARGO BANK
______________________________________________
______________________________________________
ADDRESS ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
CITY, STATE, ZIP ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
TELEPHONE (▇▇▇) ▇▇▇-▇▇▇▇
______________________________________________
______________________________________________
ACCOUNT 4417-800414
______________________________________________
______________________________________________________________________
▇▇▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
NAME MONEY MARKET
______________________________________________
______________________________________________
BANK ▇▇▇▇▇ FARGO BANK
______________________________________________
______________________________________________
ADDRESS ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
CITY, STATE, ZIP ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
TELEPHONE (▇▇▇) ▇▇▇-▇▇▇▇
______________________________________________
______________________________________________
ACCOUNT 6001-720937
______________________________________________
32
_____________________________________________________________________
▇▇▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
NAME CREDIT CARD FUNDING
______________________________________________
______________________________________________
BANK ▇▇▇▇▇ FARGO BANK
______________________________________________
______________________________________________
ADDRESS ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
CITY, STATE, ZIP ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
TELEPHONE (▇▇▇) ▇▇▇-▇▇▇▇
______________________________________________
______________________________________________
ACCOUNT 4001-197201
______________________________________________
______________________________________________________________________
▇▇▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
NAME ACCOUNTS PAYABLE
______________________________________________
______________________________________________
BANK ▇▇▇▇▇ FARGO BANK
______________________________________________
______________________________________________
ADDRESS ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
CITY, STATE, ZIP ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
TELEPHONE (▇▇▇) ▇▇▇-▇▇▇▇
______________________________________________
______________________________________________
ACCOUNT 4759-000334
______________________________________________
______________________________________________________________________
UNIT 90900
______________________________________________
______________________________________________
NAME PAYROLL - DATACCOUNT
______________________________________________
______________________________________________
BANK ▇▇▇▇▇ FARGO BANK
______________________________________________
______________________________________________
ADDRESS ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
CITY, STATE, ZIP ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
TELEPHONE (▇▇▇) ▇▇▇-▇▇▇▇
______________________________________________
______________________________________________
ACCOUNT 4759-011752
______________________________________________
______________________________________________________________________
UNIT 90900
______________________________________________
______________________________________________
NAME PAYROLL - PROBUSINESS
______________________________________________
______________________________________________
BANK ▇▇▇▇▇ FARGO BANK
______________________________________________
______________________________________________
ADDRESS ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
CITY, STATE, ZIP ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
TELEPHONE (▇▇▇) ▇▇▇-▇▇▇▇
______________________________________________
______________________________________________
ACCOUNT 4759-007925
______________________________________________
33
_____________________________________________________________________
▇▇▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
NAME GENERAL AMERICAN
______________________________________________
______________________________________________
BANK ▇▇▇▇▇ FARGO BANK
______________________________________________
______________________________________________
ADDRESS ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
CITY, STATE, ZIP ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
TELEPHONE (▇▇▇) ▇▇▇-▇▇▇▇
______________________________________________
______________________________________________
ACCOUNT 4759-005267
______________________________________________
______________________________________________________________________
▇▇▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
NAME VPA - CALIFORNIA
______________________________________________
______________________________________________
BANK ▇▇▇▇▇ FARGO BANK
______________________________________________
______________________________________________
ADDRESS ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
CITY, STATE, ZIP ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
TELEPHONE (▇▇▇) ▇▇▇-▇▇▇▇
______________________________________________
______________________________________________
ACCOUNT 4518-083969
______________________________________________
______________________________________________________________________
▇▇▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
NAME VPA - O/S CALIFORNIA
______________________________________________
______________________________________________
BANK ▇▇▇▇▇ FARGO BANK
______________________________________________
______________________________________________
ADDRESS ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
CITY, STATE, ZIP ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
TELEPHONE (▇▇▇) ▇▇▇-▇▇▇▇
______________________________________________
______________________________________________
ACCOUNT 4518-064134
______________________________________________
______________________________________________________________________
▇▇▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
NAME PAYROLL TAX FUNDING
______________________________________________
______________________________________________
BANK ▇▇▇▇▇ FARGO BANK
______________________________________________
______________________________________________
ADDRESS ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
CITY, STATE, ZIP ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
TELEPHONE (▇▇▇) ▇▇▇-▇▇▇▇
______________________________________________
______________________________________________
ACCOUNT 4600-084586
______________________________________________
34
_____________________________________________________________________
▇▇▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
NAME SALES TAX FUNDING
______________________________________________
______________________________________________
BANK ▇▇▇▇▇ FARGO BANK
______________________________________________
______________________________________________
ADDRESS ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
CITY, STATE, ZIP ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
TELEPHONE (▇▇▇) ▇▇▇-▇▇▇▇
______________________________________________
______________________________________________
ACCOUNT 4518-053137
______________________________________________
______________________________________________________________________
▇▇▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
NAME ▇▇▇▇▇▇▇▇ FUNDING
______________________________________________
______________________________________________
BANK ▇▇▇▇▇ FARGO BANK
______________________________________________
______________________________________________
ADDRESS ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
CITY, STATE, ZIP ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
TELEPHONE (▇▇▇) ▇▇▇-▇▇▇▇
______________________________________________
______________________________________________
ACCOUNT 4518-081138
______________________________________________
______________________________________________________________________
▇▇▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
NAME CORPORATE CHECKING
______________________________________________
______________________________________________
BANK ▇▇▇▇▇ FARGO BANK
______________________________________________
______________________________________________
ADDRESS ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
CITY, STATE, ZIP ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
______________________________________________
______________________________________________
TELEPHONE (▇▇▇) ▇▇▇-▇▇▇▇
______________________________________________
______________________________________________
ACCOUNT 4643-067945
______________________________________________
______________________________________________________________________
35
SCHEDULE II
TO COMPANY SECURITY AGREEMENT
Address of offices where records regarding Payment Rights and Chattel Paper are
maintained:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇'▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Trade names and/or fictitious business names under which business is conducted:
-None-
1
36
SCHEDULE III
TO COMPANY SECURITY AGREEMENT
Filing Jurisdictions
American Restaurant Group, Inc.
Secretary of the Department of Natural Resources, Alaska
Secretary of State, Arizona
Secretary of State, California
Secretary of State, Colorado
Secretary of State, Delaware
Secretary of State, Florida
Bureau of Conveyances, Hawaii
Secretary of State, Idaho
Secretary of State, Indiana
Secretary of State, Kansas
Secretary of State, Minnesota
Secretary of State, Nevada
Secretary of State, New Mexico
County Clerk of Oklahoma County, Oklahoma
Secretary of State, Oregon
Secretary of State, Texas
Secretary of State, Utah
State Department of Licensing, Washington
1
37
Exhibit A - Form of Deposit Account Notice
February __, 1998
[Name and Address of the Bank]
Attention:
Re: American Restaurant Group, Inc.
$155,000,000 Senior Secured Notes
Ladies & Gentlemen:
American Restaurant Group, Inc., a Delaware corporation (the
"Corporation"), has entered into a Company Security Agreement with U.S. Trust
Company of California, N.A. (the "Secured Party") for the benefit of certain
parties, including BankBoston, N.A., as Agent, U.S. Trust Company of California,
N.A., as Indenture Trustee, certain lenders and certain noteholders, dated as of
February 25, 1998. You are hereby notified [pursuant to Section 9-302 of the
Uniform Commercial Code as in effect in the State of California (California
Commercial Code Section 9-302)] that the Corporation granted to the Secured
Party for the benefit of certain parties, including BankBoston, N.A., as Agent,
U.S. Trust Company of California, N.A., as Indenture Trustee, certain lenders
and certain noteholders, a continuing lien on and security interest in all of
the right, title and interest of the Corporation now or hereafter existing in,
to and under the accounts listed on Exhibit A hereto (the "Accounts") and all
monies and other funds, certificates, securities, other instruments, general
intangibles, and other items, property and assets now or hereafter credited to
or received or deposited in the Accounts from time to time, to secure the
Secured Obligations (as defined in the Company Security Agreement).
With respect to the Accounts, you are hereby instructed and by your
signature below hereby agree as follows:
We hereby irrevocably instruct you, and you hereby agree, that upon
receiving notice (the "Notice") from the Secured Party or its agent, BankBoston,
N.A. (the "Agent") substantially in the form attached hereto as Exhibit B: (i)
the name of the holder of each Account listed in such notice will be changed to
"U.S. Trust Company of
38
[Name and Address of the Bank]
[Date]
California, N.A." (or to the name of any designee of the Secured Party specified
by the Secured Party or the Agent), (ii) the Agent and/or its designee will have
exclusive access to and control over such Account, and neither we nor any of our
affiliates will have any control of such Account or any access thereto, (iii)
you will transfer monies on deposit in the Account, at any time, to ▇▇▇▇▇ Fargo
Bank, National Association with respect to account no. 4001-197235 or such other
account the Agent and/or its designee may direct from time to time, and (iv) all
services to be performed by you under this agreement will be performed by you as
agent for and on behalf of the Secured Party and the Agent. We hereby agree that
the Secured Party or the Agent may deliver such Notice at any time and from time
to time. We agree, however, to continue to pay all fees and other assessments
due to you at any time until the each applicable Account is closed.
Copies of all correspondence, notices, account statements or other
information which you are otherwise obligated to send to us (by law, agreement
or otherwise) will be sent to the Secured Party at the following address:
U.S. Trust Company of California, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
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Attention: Corporate Trust Department
with a copy to the Agent at:
Bank Boston, N.A.
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Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
You hereby acknowledge that, except pursuant to court order, monies
or other property deposited in the Accounts will not be subject to deduction,
setoff, banker's lien or any other lien, claim, encumbrance or right you may
have against us or against the Corporation.
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[Name and Address of the Bank]
[Date]
This letter agreement and the rights and obligations of the parties
hereunder will be governed by and construed and interpreted in accordance with
the internal laws of the State of [_______].
This letter agreement contains the entire agreement among the
parties, and may not be altered, modified, terminated or amended in any respect,
nor may any right, power or privilege of any party hereunder be waived or
released or discharged, except upon execution by all parties hereto of a written
instrument so providing. In the event that any provision in this letter
agreement is in conflict with, or inconsistent with, any provision of the
Company Security Agreement or any agreement among you and the Corporation to
which the Secured Party is not a party, this letter agreement will exclusively
govern and control. Each party agrees to take all actions reasonably requested
by any other party to carry out the purposes of this letter agreement or to
preserve and protect the rights of each party hereunder.
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[Name and Address of the Bank]
[Date]
Please indicate your agreement to the terms of this letter agreement
by signing in the space provided below. This letter agreement may be executed in
any number of counterparts and all of such counterparts taken together will be
deemed to constitute one and the same instrument. This letter agreement will
become effective immediately upon execution of a counterpart of this letter
agreement by all parties hereto.
Very truly yours,
American Restaurant Group, Inc.
By__________________________________
Name:_______________________________
Title:______________________________
U.S. Trust Company of California, N.A.
By__________________________________
Name:_______________________________
Title:______________________________
5
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[Name and Address of the Bank]
[Date]
Acknowledged, consented and
agreed to
[the Bank]
By__________________________________
Name:_______________________________
Title:______________________________
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Exhibit A
The Accounts
Account Number Account Name
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EXHIBIT B
Form of Notice of Control
[from Secured Party or Agent]
___________, 19__
[Name and Address of Bank]
______________________________
______________________________
______________________________
Re: American Restaurant Group $155,000,000 Senior Secured
Notes
Ladies and Gentlemen:
We hereby notify you that we are exercising our rights pursuant to
that certain letter agreement among [insert name of debtor], you and us, dated
February 25, 1998 (the "Agreement") a copy of which is attached to have the name
of, and to have exclusive ownership and control of, account number (the
"Account") maintained with you, transferred to us. The Account will henceforth
be a zero-balance account, and funds deposited in the Account should be sent at
the end of each day to . You are hereby instructed to send a copy of this letter
to [insert name of Corporation] at the address and in the manner provided in the
Agreement.
We appreciate your cooperation in this matter.
Very truly yours,
[the Secured Party]/[Agent]
By__________________________________
Name:_______________________________
Title:______________________________
cc: American Restaurant Group, Inc.