EXHIBIT IV
----------
AMENDMENT NO. 2
TO
SECURITY AGREEMENT
------------------
dated as of December 17, 2004
THIS AMENDMENT NO. 2 dated as of December 17, 2004 (this "Amendment") to
the Security Agreement (as defined below) is entered into among Elephant &
Castle Group Inc. (the "Company") and its Subsidiaries signatories hereto (the
"Subsidiaries") and GE Investment Private Placement Partners II, a Limited
Partnership ("GEIPPPII").
W I T N E S S E T H:
-------------------
WHEREAS, the Company and GEIPPPII desire to amend and restate that
certain Note, Stock Purchase and Warrant Agreement dated as of November 30, 1995
and amended as of December 12, 2001 (as amended, the "Agreement");
WHEREAS, in connection with amendment and restatement of the Agreement,
the Company, the Subsidiaries and GEIPPPII desire to amend that certain Security
Agreement (US) dated as of October 6, 1999 and amended as of December 12, 2001
(the "Security Agreement");
WHEREAS, capitalized terms unless otherwise defined herein shall have the
meaning attributed thereto in the Security Agreement;
WHEREAS, it is a condition to GEIPPPII's entering into the Agreement that
the Company, the Subsidiaries and GEIPPPII execute this Amendment;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company, the Subsidiaries and GEIPPPII hereby agree as
follows:
1. Amendment. (a) Recitals to the Security Agreement are hereby
deleted in their entirety and the following recitals are inserted in lieu
thereof:
"WHEREAS, the Debtor and the Secured Party have decided to amend
and restate that certain Note, Stock Purchase and Warrant Agreement dated
November 30, 1995 and amended as of December 12, 2001 (as amended and
restated, the "Note and Stock Purchase Agreement") and, pursuant to the
Note and Stock Purchase Agreement, the Debtor has executed and delivered
to the Secured Party New Restated and Amended Senior Secured Notes in the
principal amount of $4,203,879 (the "Notes"). Terms used herein not
otherwise defined shall have the meaning ascribed thereto in the Note and
Stock Purchase Agreement.
1
WHEREAS, the Secured Party and the Debtor desire to continue the
security interest in the Collateral in full force and effect as security
for the repayment of the Notes."
(b) Section 2.1 of the Security Agreement is hereby amended by
adding the following paragraph immediately at the end thereof:
"In consideration of the continuation of the Security Interest
hereunder and continuation of the security interest granted pursuant to
the Canadian Documents, the Secured Party hereby waives and forgives
unpaid interest on (i) the Amended and Restated Senior Secured
Convertible Notes due September 1, 2005 in the aggregate principal
amount, as of the date hereof, of $5,000,000 and (ii) the Amended and
Restated Junior Secured Convertible Notes due September 1, 2005 in the
aggregate principal amount, as of the date hereof, of $5,000,000, in the
aggregate amount equal $1,208,811.
(c) Section 2.2 of the Security Agreement is hereby deleted in its
entirety and the following new Section 2.2 is hereby inserted in lieu thereof:
"2.2 This Agreement is being executed and delivered to secure, and
the Security Interests herein granted shall secure: (a) full payment and
performance of all of the indebtedness and obligations owing to the
Secured Party by the Debtor under the Note and Stock Purchase Agreement
and the Notes, whether for principal, interest, costs, fees, expenses or
otherwise, (b) all covenants of the Debtor and the Subsidiaries under
this Agreement and all covenants, obligations and conditions to be
performed by the Debtor and the Subsidiaries under the Note and Stock
Purchase Agreement, in each case including all renewals, extensions and
modifications thereof, and (c) all reasonable costs and expenses incurred
by the Secured Party in collecting the indebtedness evidenced by the
Notes or otherwise enforcing its rights under this Agreement, the Note
and Stock Purchase Agreement or the Notes, including without limitation,
reasonable attorneys' fees. All of such debts, indebtedness, liabilities,
covenants, and duties referred to in (a), (b) and (c) of this Section 2.2
are hereinafter collectively referred to as the "Secured Obligations"."
2. Conditions Precedent. GEIPPPII's obligation to enter into this
Amendment is subject to satisfaction, on or prior to the date hereof, of the
following conditions:
(a) GEIPPPII and the Company shall have entered into the
Agreement; and
(b) The Security Agreement (Canada) among the Company, Elephant
and Castle Canada Inc. and GEIPPPII dated as of October 6, 1999 and amended as
of December 12, 2001 and documents related thereto shall have been amended as
provided in the Agreement.
2
3. Reconfirmation. The Company and GEIPPPII hereby reconfirm their
rights and obligations under the Security Agreement as amended and restated
hereby.
4. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute one and the same instrument.
5. Governing Law. THIS AMENDMENT SHALL IN ALL RESPECTS BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Company, the Subsidiaries and GEIPPPII have each
caused this Amendment to be duly executed and delivered as of the day and year
first above written.
GE INVESTMENT PRIVATE PLACEMENT
PARTNERS II, a LIMITED PARTNERSHIP
By: GE Asset Management
Incorporated, its General Partner
By: /s/ Xxxxx X. Xxxxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Vice President
ELEPHANT & CASTLE GROUP INC.
By: /s/ Xxxxxxx Xxxxxx
---------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President and Chief Executive Officer
ELEPHANT & CASTLE, INC.
By: /s/ Xxxxxxx Xxxxxx
---------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President and Chief Executive Officer
3
ELEPHANT AND CASTLE OF PENNSYLVANIA, INC.
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President and Chief Executive
Officer
E & C PUB, INC.
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President and Chief Executive
Officer
MASSACHUSETTS ELEPHANT & CASTLE GROUP, INC.
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President and Treasurer
ELEPHANT & CASTLE INTERNATIONAL, INC.
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President and Chief Executive
Officer
4
