Exhibit 10.2
AMENDED AND RESTATED
PLEDGE AGREEMENT
THIS AMENDED AND RESTATED PLEDGE AGREEMENT (this "Pledge Agreement") is
entered into as of April 14, 2003 by and among THE PANTRY, INC., a Delaware
corporation (the "Borrower"), the Domestic Subsidiaries of the Borrower from
time to time a party hereto (individually a "Guarantor" and collectively the
"Guarantors"; the Guarantors, together with the Borrower, individually a
"Pledgor" and collectively the "Pledgors") and WACHOVIA BANK, NATIONAL
ASSOCIATION, in its capacity as Administrative Agent under the Credit Agreement
referred to below (in such capacity, the "Administrative Agent") for the several
banks and other financial institutions as may from time to time become parties
to such Credit Agreement (individually a "Secured Party" and collectively the
"Secured Parties").
RECITALS
WHEREAS, pursuant to that certain Amended and Restated Credit Agreement
dated as of January 28, 1999 (as amended, modified, extended, renewed or
replaced, the "Existing Credit Agreement"), among the Borrower, the lenders
party thereto, and the Administrative Agent, the lenders agreed to make loans
and issue letters of credit upon the terms and subject to the conditions set
forth therein;
WHEREAS, pursuant to that certain Amended and Restated Credit Agreement
dated as of the date hereof (as amended, modified, extended, renewed or replaced
from time to time, the "Credit Agreement"), among the Borrower, the Guarantors,
the Secured Parties party thereto, and the Administrative Agent, the Secured
Parties have agreed to refinance the Existing Credit Agreement and make Loans
and issue Letters of Credit upon the terms and subject to the conditions set
forth therein;
WHEREAS, in connection with the Existing Credit Agreement, the Borrower
entered into that certain Company Pledge Agreement dated as of October 23, 1997
and certain of the Guarantors entered into those certain Subsidiary Pledge
Agreements each dated as of January 28, 1999 (as amended, modified, extended,
renewed or replaced, the "Existing Pledge Agreements"); and
WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement and the obligations of the Secured Parties to make their respective
Loans and to issue Letters of Credit under the Credit Agreement that the
Pledgors shall have executed and delivered this Pledge Agreement (which amends
and restates the Existing Pledge Agreements) to the Administrative Agent for the
ratable benefit of the Secured Parties.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to such terms in the Credit Agreement,
and the following terms that
are defined in the Uniform Commercial Code from time to time in effect in the
State of New York (the "UCC") are used herein as so defined: Control,
Entitlement Order, Financial Asset, Securities Account, Security Entitlement,
Securities Intermediary and Security. For purposes of this Pledge Agreement, (a)
the term "Secured Party" shall include any Affiliate of any Secured Party which
has entered into a Hedging Agreement with any Pledgor and (b) the term "Hedging
Agreement" shall mean any Hedging Agreement between any Secured Party and any
Pledgor that is permitted by the terms of the Credit Agreement.
2. Pledge and Grant of Security Interest. To secure the prompt payment and
performance in full when due, whether by lapse of time or otherwise, of the
Pledgor Obligations (as defined in Section 3 hereof), each Pledgor hereby
pledges and assigns to the Administrative Agent, for the ratable benefit of the
Secured Parties, and grants to the Administrative Agent, for the ratable benefit
of the Secured Parties, a continuing security interest in any and all right,
title and interest of such Pledgor in and to the following, whether now owned or
existing or owned, acquired, or arising hereafter (collectively, the "Pledged
Collateral"):
(a) Pledged Capital Stock. (i) 100% (or, if less, the full amount
owned by such Pledgor) of the issued and outstanding Capital Stock of each
Domestic Subsidiary set forth on Schedule 2(a) attached hereto and (ii) 65%
(or, if less, the full amount owned by such Pledgor) of each class of the
issued and outstanding Capital Stock entitled to vote (within the meaning
of Treas. Reg. Section 1.956-2(c)(2)) ("Voting Equity") and 100% (or, if
less, the full amount owned by such Pledgor) of each class of the issued
and outstanding Capital Stock not entitled to vote (within the meaning of
Treas. Reg. Section 1.956-2(c)(2)) ("Non-Voting Equity") of each Foreign
Subsidiary set forth on Schedule 2(a) attached hereto (collectively,
together with the Capital Stock and other interests described in clauses
(y) and (z) and in Sections 2(b) and 2(c) below, the "Pledged Capital
Stock"), including, but not limited to, the following:
(y) subject to the percentage restrictions described above, all
shares, securities, membership interests or other equity interests
representing a dividend on any of the Pledged Capital Stock, or
representing a distribution or return of capital upon or in respect of
the Pledged Capital Stock, or resulting from a stock split, revision,
reclassification or other exchange therefor, and any subscriptions,
warrants, rights or options issued to the holder of, or otherwise in
respect of, the Pledged Capital Stock; and
(z) without affecting the obligations of the Pledgors under any
provision prohibiting such action hereunder or under the Credit
Agreement, in the event of any consolidation or merger involving the
issuer of any Pledged Capital Stock and in which such issuer is not
the surviving entity, all shares of each class of the Capital Stock
attributable to the affected Pledged Capital Stock of the successor
entity formed by or resulting from such consolidation or merger,
subject to the percentage restrictions described above.
(b) Additional Interests. (i) 100% (or, if less, the full amount owned
by such Pledgor) of each class of the issued and outstanding Capital Stock
of any Person which
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hereafter becomes a Domestic Subsidiary and (ii) 65% (or, if less, the full
amount owned by such Pledgor) of the Voting Equity and 100% (or, if less,
the full amount owned by such Pledgor) of the Non-Voting Equity of any
Person which hereafter becomes a Foreign Subsidiary, including, without
limitation, the certificates representing such Capital Stock.
(c) Other Equity Interests. Subject to the percentage restrictions
described above, any and all other Capital Stock owned by the Pledgors in
any Domestic Subsidiary or any Foreign Subsidiary.
(d) Proceeds. All proceeds and products of the foregoing, however and
whenever acquired and in whatever form.
Without limiting the generality of the foregoing, it is hereby specifically
understood and agreed that a Pledgor may from time to time hereafter pledge and
deliver additional shares of stock or other interests to the Administrative
Agent as collateral security for the Pledgor Obligations. Upon such pledge and
delivery to the Administrative Agent, such additional shares of stock or other
interests shall be deemed to be part of the Pledged Collateral of such Pledgor
and shall be subject to the terms of this Pledge Agreement whether or not
Schedule 2(a) is amended to refer to such additional shares.
3. Security for Pledgor Obligations. The security interest created hereby
in the Pledged Collateral of each Pledgor constitutes continuing collateral
security for all of the following, whether now existing or hereafter incurred
(the "Pledgor Obligations"): (a) all of the Credit Party Obligations, howsoever
evidenced, created, incurred or acquired, whether primary, secondary, direct,
contingent, or joint and several and (b) all expenses and charges, legal and
otherwise, reasonably incurred by the Administrative Agent and/or the Secured
Parties in collecting or enforcing any of the Credit Party Obligations or in
realizing on or protecting any security therefor, including without limitation
the security granted hereunder.
4. Delivery of the Pledged Collateral; Perfection of Security Interest.
Each Pledgor hereby agrees that:
(a) Delivery of Certificates. Each Pledgor shall deliver to the
Administrative Agent (i) simultaneously with or prior to the execution and
delivery of this Pledge Agreement (or at such later time as the
Administrative Agent may agree), all certificates representing the Pledged
Capital Stock owned by such Pledgor and (ii) promptly upon the receipt
thereof by or on behalf of a Pledgor, all other certificates and
instruments constituting Pledged Collateral owned by a Pledgor. Prior to
delivery to the Administrative Agent, all such certificates and instruments
constituting Pledged Collateral of a Pledgor shall be held in trust by such
Pledgor for the benefit of the Administrative Agent pursuant hereto. All
such certificates shall be delivered in suitable form for transfer by
delivery or shall be accompanied by duly executed instruments of transfer
or assignment in blank, substantially in the form provided in Exhibit 4(a)
attached hereto.
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(b) Additional Securities. If such Pledgor shall receive by virtue of
its being or having been the owner of any Pledged Collateral, any (i)
certificate, including without limitation, any certificate representing a
dividend or distribution in connection with any increase or reduction of
capital, reclassification, merger, consolidation, sale of assets,
combination of shares or membership or equity interests, stock splits,
spin-off or split-off, promissory notes or other instrument; (ii) option or
right, whether as an addition to, substitution for, or an exchange for, any
Pledged Collateral or otherwise; (iii) dividends payable in securities; or
(iv) distributions of securities or other equity interests in connection
with a partial or total liquidation, dissolution or reduction of capital,
capital surplus or paid-in surplus, then such Pledgor shall receive such
certificate, instrument, option, right or distribution in trust for the
benefit of the Administrative Agent, shall segregate it from such Pledgor's
other property and shall deliver it forthwith to the Administrative Agent
in the exact form received together with any necessary endorsement and/or
appropriate stock power duly executed in blank, substantially in the form
provided in Exhibit 4(a), to be held by the Administrative Agent as Pledged
Collateral and as further collateral security for the Pledgor Obligations.
(c) Provisions Relating to Security Entitlements and Securities
Accounts. With respect to any Pledged Collateral consisting of a Security
Entitlement or held in a Securities Account, (i) the applicable Pledgor and
the applicable Securities Intermediary shall enter into an agreement with
the Administrative Agent granting Control to the Administrative Agent over
such Pledged Collateral, such agreement to be in form and substance
satisfactory to the Administrative Agent and (ii) the Administrative Agent
shall be entitled, upon the occurrence and during the continuance of a
Default or an Event of Default, to notify the applicable Securities
Intermediary that it should follow the Entitlement Orders of the
Administrative Agent and no longer follow the Entitlement Orders of the
applicable Pledgor. Upon receipt by a Pledgor of notice from a Securities
Intermediary of its intent to terminate the Securities Account of such
Pledgor held by such Securities Intermediary, prior to the termination of
such Securities Account the Pledged Collateral in such Securities Account
shall be (A) transferred to a new Securities Account which is subject to a
control agreement as provided above or (B) transferred to an account held
by the Administrative Agent (in which it will be held until a new
Securities Account is established).
5. Representations and Warranties. Each Pledgor hereby represents and
warrants to the Administrative Agent, for the benefit of the Secured Parties,
that so long as any of the Pledgor Obligations (other than contingent indemnity
or reimbursement obligations) remains outstanding or any Credit Document or
Hedging Agreement is in effect, and until all of the Commitments shall have been
terminated:
(a) Authorization of Pledged Capital Stock. The Pledged Capital Stock
is duly authorized and validly issued, is fully paid and nonassessable and
is not subject to the preemptive rights of any Person. All other shares of
Capital Stock constituting Pledged Collateral will be duly authorized and
validly issued, fully paid and nonassessable and not subject to the
preemptive rights of any Person.
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(b) Title. Each Pledgor is the legal, record and beneficial owner of
the Pledged Collateral of such Pledgor and will at all times be the legal
and beneficial owner of such Pledged Collateral free and clear of any Lien
except for the security interest created by this Pledge Agreement or the
Security Agreement or Permitted Encumbrances. There exists no "adverse
claim" within the meaning of Section 8-102 of the UCC with respect to the
Pledged Capital Stock of such Pledgor.
(c) Exercising of Rights. The exercise by the Administrative Agent of
its rights and remedies hereunder will not violate any law or governmental
regulation, subject to compliance by the Administrative Agent with the
requirements of any applicable securities laws, or any material contractual
restriction binding on or affecting a Pledgor or any of its property.
(d) Pledgor's Authority. No authorization, approval or action by, and
no notice or filing with any Governmental Authority, the issuer of any
Pledged Capital Stock or third party is required either (i) for the pledge
made by a Pledgor or for the granting of the security interest by a Pledgor
pursuant to this Pledge Agreement or (ii) for the exercise by the
Administrative Agent or the Secured Parties of their rights and remedies
hereunder (except as may be required by laws affecting the offering and
sale of securities).
(e) Security Interest/Priority. This Pledge Agreement creates a valid
security interest in favor of the Administrative Agent for the ratable
benefit of the Secured Parties, in the Pledged Collateral. The taking
possession by the Administrative Agent of the certificates (if any)
representing the Pledged Capital Stock and all other certificates and
instruments constituting Pledged Collateral will perfect and establish the
first priority of the Administrative Agent's security interest in all
certificated Pledged Capital Stock and such certificates and instruments.
Upon the filing of UCC financing statements in the appropriate filing
office in the location of each Pledgor's State of organization or
formation, the Administrative Agent shall have a first priority perfected
security interest in all uncertificated Pledged Capital Stock consisting of
partnership or limited liability company interests that do not constitute a
Security pursuant to Section 8-103(c) of the UCC. With respect to any
Pledged Collateral consisting of uncertificated Securities or a Security
Entitlement or held in a Securities Account, upon execution and delivery by
the applicable Pledgor, the applicable Securities Intermediary or issuer
and the Administrative Agent of an agreement granting Control to the
Administrative Agent over such Pledged Collateral, the Administrative Agent
shall have a first priority perfected security interest in such Pledged
Collateral. Except as set forth in this Section, no action is necessary to
perfect or otherwise protect such security interest.
(f) No Other Capital Stock. Except as set forth on Schedule 2(a)
attached hereto, no Pledgor owns any Capital Stock of any Domestic
Subsidiary of the Borrower.
(g) Partnership and Limited Liability Company Interests. Except as
previously disclosed in writing to the Administrative Agent, none of the
Pledged Capital Stock consisting of partnership or limited liability
company interests (i) is dealt in or
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traded on a securities exchange or in a securities market, (ii) by its
terms expressly provides that it is a Security governed by Article 8 of the
UCC, (iii) is an investment company security, (iv) is held in a Securities
Account or (v) constitutes a Security or a Financial Asset.
6. Covenants. Each Pledgor hereby covenants that, so long as any of the
Pledgor Obligations (other than contingent indemnity or reimbursement
obligations) remains outstanding or any Credit Document or Hedging Agreement is
in effect, and until all of the Commitments shall have been terminated, such
Pledgor shall:
(a) Perfection of Security Interests. Xxxx its books and records (and
shall cause the issuer of the Pledged Capital Stock of such Pledgor to xxxx
its books and records) to reflect the security interest granted to the
Administrative Agent, for the benefit of the Secured Parties, pursuant to
this Pledge Agreement. To the extent permitted by applicable law, each
Pledgor hereby authorizes the Administrative Agent to prepare and file such
financing statements (including continuation statements) or amendments
thereof or supplements thereto or other instruments as the Administrative
Agent may from time to time deem necessary or appropriate in order to
perfect and maintain the security interests granted hereunder in accordance
with the UCC. Each Pledgor hereby agrees that a carbon, photographic or
other reproduction of this Pledge Agreement or any such financing statement
is sufficient for filing as a financing statement by the Administrative
Agent without notice thereof to such Pledgor wherever the Administrative
Agent may reasonably determine is appropriate. Each Pledgor shall also
execute and deliver to the Administrative Agent such agreements,
assignments or instruments (including affidavits, notices, reaffirmations
and amendments and restatements of existing documents, as the
Administrative Agent may reasonably request) and do all such other things
as the Administrative Agent may reasonably deem necessary or appropriate
(i) to assure to the Administrative Agent its security interests hereunder
are perfected, including such financing statements (including continuation
statements) or amendments thereof or supplements thereto or other
instruments as the Administrative Agent may from time to time reasonably
request in order to perfect and maintain the security interests granted
hereunder in accordance with the UCC and any other personal property
security legislation in the appropriate state(s) or province(s), (ii) to
consummate the transactions contemplated hereby and (iii) to otherwise
protect and assure the Administrative Agent of its rights and interests
hereunder. To that end, each Pledgor hereby irrevocably makes, constitutes
and appoints the Administrative Agent, its nominee or any other person whom
the Administrative Agent may designate, as such Pledgor's attorney-in-fact
with full power and for the limited purpose to sign in the name of such
Pledgor any documents which in the Administrative Agent's reasonable
discretion would be necessary or appropriate in order to perfect and
maintain perfection of the security interests granted hereunder, such
power, being coupled with an interest, being and remaining irrevocable so
long as any of the Pledgor Obligations remain outstanding (other than
contingent indemnity or reimbursement obligations) or any Credit Document
or Hedging Agreement (to the extent the obligations of such Pledgor
thereunder constitute Pledgor Obligations) is in effect, and until all of
the Commitments shall have terminated. In the event for any reason the law
of any jurisdiction other than New York becomes or is applicable to the
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Collateral of any Pledgor or any part thereof, or to any of the Pledgor
Obligations, such Pledgor agrees to execute and deliver all such
instruments and to do all such other things as the Administrative Agent
reasonably deems necessary or appropriate to preserve, protect and enforce
the security interests of the Administrative Agent under the law of such
other jurisdiction (and, if any Pledgor shall fail to do so promptly upon
the request of the Administrative Agent, then the Administrative Agent may
execute any and all such requested documents on behalf of such Pledgor
pursuant to the power of attorney granted hereinabove).
(b) Defense of Title. Warrant and defend title to and ownership of the
Pledged Collateral of such Pledgor at its own expense against the claims
and demands of all other parties claiming an interest therein, keep the
Pledged Collateral free from all Liens, except for Permitted Liens, and not
sell, exchange, transfer, assign, lease or otherwise dispose of Pledged
Collateral of such Pledgor or any interest therein, except as permitted
under the Credit Agreement and the other Credit Documents; provided that in
the event a Pledgor makes a sale of Pledged Collateral that is permitted by
the terms of the Credit Agreement, the Administrative Agent shall release
the Pledged Collateral that is the subject of such sale free and clear of
any Lien and security interest under this Pledge Agreement or any other
Credit Document concurrently with the consummation of such sale.
(c) Further Assurances. Promptly execute and deliver at its expense
all further instruments and documents and take all further action that may
be necessary and desirable or that the Administrative Agent may reasonably
request in order to (i) perfect and protect the security interest created
hereby in the Pledged Collateral of such Pledgor (including, without
limitation, any and all action necessary to reasonably satisfy the
Administrative Agent that the Administrative Agent has obtained a first
priority perfected security interest in all Pledged Capital Stock); (ii)
enable the Administrative Agent to exercise and enforce its rights and
remedies hereunder in respect of the Pledged Collateral of such Pledgor;
and (iii) otherwise effect the purposes of this Pledge Agreement,
including, without limitation and if requested by the Administrative Agent,
delivering to the Administrative Agent irrevocable proxies in respect of
the Pledged Collateral of such Pledgor.
(d) Amendments. Not make or consent to any amendment or other
modification or waiver with respect to any of the Pledged Collateral of
such Pledgor or enter into any agreement or allow to exist any restriction
with respect to any of the Pledged Collateral of such Pledgor other than
pursuant hereto or as may be permitted under the Credit Agreement.
(e) Compliance with Securities Laws. File all reports and other
information now or hereafter required to be filed by such Pledgor with the
United States Securities and Exchange Commission and any other state,
federal or foreign agency in connection with the ownership of the Pledged
Collateral of such Pledgor.
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(f) Issuance or Acquisition of Capital Stock. Not without executing
and delivering, or causing to be executed and delivered, to the
Administrative Agent such agreements, documents and instruments as the
Administrative Agent may reasonably require, issue or acquire any Capital
Stock consisting of an interest in a partnership or a limited liability
company that (i) is dealt in or traded on a securities exchange or in a
securities market, (ii) by its terms expressly provides that it is a
Security governed by Article 8 of the UCC, (iii) is an investment company
security, (iv) is held in a Securities Account or (v) constitutes a
Security or a Financial Asset.
7. Performance of Obligations; Advances by Administrative Agent. On failure
of any Pledgor to perform any of the covenants and agreements contained herein,
the Administrative Agent may, at its sole option and in its sole discretion,
perform or cause to be performed the same and in so doing may expend such sums
as the Administrative Agent may reasonably deem advisable in the performance
thereof, including, without limitation, the payment of any insurance premiums,
the payment of any taxes, a payment to obtain a release of a Lien or potential
Lien, expenditures made in defending against any adverse claim and all other
expenditures which the Administrative Agent may make for the protection of the
security hereof or which may be compelled to make by operation of law. All such
sums and amounts so expended shall be repayable by the Pledgors on a joint and
several basis promptly upon timely notice thereof and demand therefor, shall
constitute additional Pledgor Obligations and shall bear interest from the date
said amounts are expended at the default rate for Alternate Base Rate Loans set
forth in Section 2.11 of the Credit Agreement. No such performance of any
covenant or agreement by the Administrative Agent on behalf of any Pledgor, and
no such advance or expenditure therefor, shall relieve the Pledgors of any
default under the terms of this Pledge Agreement, the other Credit Documents or
any Hedging Agreement. The Administrative Agent may make any payment hereby
authorized in accordance with any xxxx, statement or estimate procured from the
appropriate public office or holder of the claim to be discharged without
inquiry into the accuracy of such xxxx, statement or estimate or into the
validity of any tax assessment, sale, forfeiture, tax lien, title or claim
except to the extent such payment is being contested in good faith by a Pledgor
in appropriate proceedings and against which adequate reserves are being
maintained in accordance with GAAP.
8. Events of Default. The occurrence of an event that under the Credit
Agreement would constitute an Event of Default shall be an event of default
hereunder (an "Event of Default").
9. Remedies.
(a) General Remedies. Upon the occurrence of an Event of Default and
during the continuation thereof, the Administrative Agent shall have, in
respect of the Pledged Collateral of any Pledgor, in addition to the rights
and remedies provided herein, in the other Credit Documents or by law, the
rights and remedies of a secured party under the UCC or any other
applicable law.
(b) Sale of Pledged Collateral. Upon the occurrence of an Event of
Default and during the continuation thereof, without limiting the
generality of this Section and upon ten (10) days written notice by the
Administrative Agent of the time and place for a
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public sale or of the time after which a private sale may take place, given
in accordance with the notice provisions of Section 9.2 of the Credit
Agreement, the Administrative Agent may, in its sole discretion, sell or
otherwise dispose of or realize upon the Pledged Collateral, or any part
thereof, in one or more parcels, at public or private sale, at any exchange
or broker's board or elsewhere, at such price or prices and on such other
terms as the Administrative Agent deems advisable, for cash, credit or for
future delivery or otherwise in accordance with applicable law. To the
extent permitted by law, any Secured Party may in such event, bid for the
purchase of such securities. The Administrative Agent shall not be
obligated to make any sale of Pledged Collateral of such Pledgor regardless
of notice of sale having been given. The Administrative Agent may adjourn
any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.
(c) Registration Rights. If the Administrative Agent shall determine
to exercise its right to sell all or any of the Pledged Collateral, each
Pledgor agrees that, upon request of the Administrative Agent (which
request may be made by the Administrative Agent in its sole discretion),
such Pledgor will, at its own expense:
(i) execute and deliver, and use its best efforts to cause each
issuer of the Pledged Collateral contemplated to be sold and the
directors and officers thereof to execute and deliver, all such
instruments and documents, and do or cause to be done all such other
acts and things, as may be necessary or, in the opinion of the
Administrative Agent, advisable to file a registration statement
covering such Pledged Collateral under the provisions of the
Securities Act of 1933 and to use its best efforts to cause the
registration statement relating thereto to become effective and to
remain effective for such period as prospectuses are required by law
to be furnished, and to make all amendments and supplements thereto
and to the related prospectus which, in the opinion of the
Administrative Agent, are necessary or advisable, all in conformity
with the requirements of the Securities Act of 1933 and the rules and
regulations of the Securities and Exchange Commission applicable
thereto;
(ii) use its best efforts to qualify the Pledged Collateral under
all applicable state securities or "Blue Sky" laws and to obtain all
necessary governmental approvals for the sale of the Pledged
Collateral, as requested by the Administrative Agent;
(iii) cause each issuer to make available to its security
holders, as soon as practicable, an earnings statement which will
satisfy the provisions of Section 11(a) of the Securities Act of 1933;
(iv) to use its best efforts to do or cause to be done all such
other acts and things as may be necessary to make such sale of the
Pledged Collateral or any part thereof valid and binding and in
compliance with applicable law; and
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(v) bear all costs and expenses, including reasonable attorneys'
fees, of carrying out its obligations under this Section 12.
Each Pledgor further agrees that a breach of any of the covenants contained
in this Section 9(c) will cause irreparable injury to the Administrative
Agent, that Administrative Agent has no adequate remedy at law in respect
of such breach and, as a consequence, that each and every covenant
contained in this Section 9(c) shall be specifically enforceable against
such Pledgor, and such Pledgor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants
except for a defense that no default has occurred giving rise to the
Pledgor Obligations becoming due and payable prior to their stated
maturities. Nothing in this Section 9(c) shall in any way alter the other
rights of the Administrative Agent under this Pledge Agreement.
In the event of any public sale described in this Section 9(c), each
Pledgor agrees to indemnify and hold harmless the Administrative Agent and
the Secured Parties and each of their respective directors, officers,
employees and agents from and against any loss, fee, cost, expense, damage,
liability or claim, joint or several, to which any such persons may become
subject or for which any of them may be liable, under the Securities Act of
1933 or otherwise, insofar as such losses, fees, costs, expenses, damages,
liabilities or claims (or any litigation commenced or threatened in respect
thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any preliminary
prospectus, registration statement, prospectus or other such document
published or filed in connection with such public sale, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading and will
reimburse Administrative Agent and such other persons for any legal or
other expenses reasonably incurred by the Administrative Agent and such
other persons in connection with any litigation, of any nature whatsoever,
commenced or threatened in respect thereof (including all fees, costs and
expenses whatsoever reasonably incurred by the Administrative Agent and
such other persons and counsel for the Administrative Agent and such other
persons in investigating, preparing for, defending against or providing
evidence, producing documents or taking any other action in respect of, any
such commenced or threatened litigation or any claims asserted). This
indemnity shall be in addition to any liability which any Pledgor may
otherwise have and shall extend upon the same terms and conditions to each
person, if any, that controls the Administrative Agent or such persons
within the meaning of the Securities Act of 1933.
(d) Private Sale. Upon the occurrence of an Event of Default and
during the continuation thereof, the Pledgors recognize that the
Administrative Agent may deem it impracticable to effect a public sale of
all or any part of the Pledged Collateral and that the Administrative Agent
may, therefore, determine to make one or more private sales of any such
Pledged Collateral to a restricted group of purchasers who will be
obligated to agree, among other things, to acquire such Pledged Collateral
for their own account, for investment and not with a view to the
distribution or resale thereof. Each Pledgor acknowledges that any such
private sale may be at prices and on terms less favorable to
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the seller than the prices and other terms which might have been obtained
at a public sale and, notwithstanding the foregoing, agrees that such sale
shall not be deemed to be not commercially reasonable solely because it was
conducted as a private sale and that the Administrative Agent shall have no
obligation to delay sale of any such Pledged Collateral for the period of
time necessary to permit the issuer of such Pledged Collateral to register
such Pledged Collateral for public sale under the Securities Act of 1933.
Each Pledgor further acknowledges and agrees that any offer to sell such
Pledged Collateral which has been (i) publicly advertised on a bona fide
basis in a newspaper or other publication of general circulation in New
York, New York (to the extent that such offer may be advertised without
prior registration under the Securities Act of 1933), or (ii) made
privately in the manner described above shall be deemed to involve a
"public sale" under the UCC, notwithstanding that such sale may not
constitute a "public offering" under the Securities Act of 1933, and the
Administrative Agent may, in such event, bid for the purchase of such
Pledged Collateral.
(e) Retention of Pledged Collateral. In addition to the rights and
remedies hereunder, upon the occurrence of an Event of Default and during
the continuation thereof, the Administrative Agent may, after providing the
notices required by Sections 9-620 and 9-621 (or similar provision) of the
UCC (or any successor sections of the UCC) or otherwise complying with the
notice requirements of applicable law of the relevant jurisdiction, accept
or retain all or any portion of the Pledged Collateral in satisfaction of
the Pledgor Obligations. Unless and until the Administrative Agent shall
have provided such notices, however, the Administrative Agent shall not be
deemed to have retained any Pledged Collateral in satisfaction of any
Pledgor Obligations for any reason.
(f) Deficiency. In the event that the proceeds of any sale, collection
or realization are insufficient to pay all amounts to which the
Administrative Agent or the Secured Parties are legally entitled, the
Pledgors shall be jointly and severally liable for the deficiency, together
with interest thereon at the default rate for Alternate Base Rate Loans set
forth in Section 2.11 of the Credit Agreement, together with the costs of
collection and the reasonable fees of any attorneys employed by the
Administrative Agent to collect such deficiency. Any surplus remaining
after the full payment and satisfaction of the Pledgor Obligations shall be
returned to the Pledgors or to whomsoever a court of competent jurisdiction
shall determine to be entitled thereto.
(g) Other Security. To the extent that any of the Pledgor Obligations
are now or hereafter secured by property other than the Pledged Collateral
(including, without limitation, real and other personal property owned by a
Pledgor), or by a guarantee, endorsement or property of any other Person,
then the Administrative Agent shall have the right to proceed against such
other property, guarantee or endorsement upon the occurrence of any Event
of Default, and the Administrative Agent shall have the right, in its sole
discretion, to determine which rights, security, Liens, security interests
or remedies the Administrative Agent and the Secured Parties shall at any
time pursue, relinquish, subordinate, modify or take with respect thereto,
without in any way modifying or affecting any of them or any of the
Administrative Agent's and the Secured
11
Parties' rights or the Pledgor Obligations under this Pledge Agreement,
under any other of the Credit Documents or under any Hedging Agreement.
10. Rights of the Administrative Agent.
(a) Power of Attorney. In addition to other powers of attorney
contained herein, each Pledgor hereby designates and appoints the
Administrative Agent, on behalf of the Secured Parties, and each of its
designees or agents as attorney-in-fact of such Pledgor, irrevocably and
with power of substitution, with authority to take any or all of the
following actions upon the occurrence and during the continuation of an
Event of Default:
(i) to demand, collect, settle, compromise, adjust and give
discharges and releases concerning the Pledged Collateral of such
Pledgor, all as the Administrative Agent may reasonably determine in
respect of the Pledged Collateral;
(ii) to commence and prosecute any actions at any court for the
purposes of collecting any of the Pledged Collateral of such Pledgor
and enforcing any other right in respect thereof;
(iii) to defend, settle, adjust or compromise any action, suit or
proceeding brought and, in connection therewith, give such discharge
or release as the Administrative Agent may deem reasonably appropriate
in respect of the Pledged Collateral;
(iv) to pay or discharge taxes, Liens, security interests, or
other encumbrances levied or placed on or threatened against the
Pledged Collateral of such Pledgor;
(v) to direct any parties liable for any payment under any of the
Pledged Collateral to make payment of any and all monies due and to
become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct;
(vi) to receive payment of and receipt for any and all monies,
claims, and other amounts due and to become due at any time in respect
of or arising out of any Pledged Collateral of such Pledgor;
(vii) to sign and endorse any drafts, assignments, proxies, stock
powers, verifications, notices and other documents relating to the
Pledged Collateral of such Pledgor;
(viii) to execute and deliver and/or file all assignments,
conveyances, statements, financing statements, continuation
statements, pledge agreements, affidavits, notices and other
agreements, instruments and documents that the
12
Administrative Agent may determine necessary in order to perfect and
maintain the security interests and Liens granted in this Pledge
Agreement and in order to fully consummate all of the transactions
contemplated herein;
(ix) to exchange any of the Pledged Collateral of such Pledgor or
other property upon any merger, consolidation, reorganization,
recapitalization or other readjustment of the issuer thereof and, in
connection therewith, deposit any of the Pledged Collateral of such
Pledgor with any committee, depository, transfer agent, registrar or
other designated agency upon such terms as the Administrative Agent
may determine;
(x) to vote for a shareholder, partner or member resolution, or
to sign an instrument in writing, sanctioning the transfer of any or
all of the Pledged Capital Stock of such Pledgor into the name of the
Administrative Agent or into the name of any transferee to whom the
Pledged Capital Stock of such Pledgor or any part thereof may be sold
pursuant to Section 9 hereof; and
(xi) to do and perform all such other acts and things as the
Administrative Agent may reasonably deem to be necessary, proper or
convenient in connection with the Pledged Collateral of such Pledgor.
This power of attorney is a power coupled with an interest and shall be
irrevocable for so long as any of the Pledgor Obligations remain
outstanding (other than contingent indemnity or reimbursement obligations),
any Credit Document or Hedging Agreement is in effect and until all of the
Commitments shall have been terminated. The Administrative Agent shall be
under no duty to exercise or withhold the exercise of any of the rights,
powers, privileges and options expressly or implicitly granted to the
Administrative Agent in this Pledge Agreement, and shall not be liable for
any failure to do so or any delay in doing so. The Administrative Agent
shall not be liable for any act or omission or for any error of judgment or
any mistake of fact or law in its individual capacity or its capacity as
attorney-in-fact except acts or omissions resulting from its gross
negligence or willful misconduct. This power of attorney is conferred on
the Administrative Agent solely to protect, preserve and realize upon its
security interest in the Pledged Collateral.
(b) Assignment by the Administrative Agent. The Administrative Agent
may from time to time assign the Pledgor Obligations or any portion thereof
and/or the Pledged Collateral or any portion thereof, and the assignee
shall be entitled to all of the rights and remedies of the Administrative
Agent under this Pledge Agreement in relation thereto.
(c) The Administrative Agent's Duty of Care. Other than the exercise
of reasonable care to ensure the safe custody of the Pledged Collateral
while being held by the Administrative Agent hereunder, the Administrative
Agent shall have no duty or liability to preserve rights pertaining
thereto, it being understood and agreed that Pledgors shall be responsible
for preservation of all rights in the Pledged Collateral of
13
such Pledgor, and the Administrative Agent shall be relieved of all
responsibility for Pledged Collateral upon surrendering it or tendering the
surrender of it to the Pledgors. The Administrative Agent shall be deemed
to have exercised reasonable care in the custody and preservation of the
Pledged Collateral in its possession if such Pledged Collateral is accorded
treatment substantially equal to that which the Administrative Agent
accords its own property, which shall be no less than the treatment
employed by a reasonable and prudent agent in the industry, it being
understood that the Administrative Agent shall not have responsibility for
(i) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relating to any Pledged
Collateral, whether or not the Administrative Agent has or is deemed to
have knowledge of such matters; or (ii) taking any necessary steps to
preserve rights against any parties with respect to any Pledged Collateral.
(d) Voting Rights in Respect of the Pledged Collateral.
(i) So long as no Default or Event of Default shall have occurred
and be continuing, to the extent permitted by law, each Pledgor may
exercise any and all voting and other consensual rights pertaining to
the Pledged Collateral of such Pledgor or any part thereof for any
purpose not inconsistent with the terms of this Pledge Agreement or
the Credit Agreement; provided, however, that Pledgor shall not
exercise or shall refrain from exercising any such right if the
Administrative Agent shall have notified the Pledgor that, in the
Administrative Agent's judgment, such action would have a material
adverse effect on the value of the Pledged Collateral or any part
thereof. It is understood, however, that neither (A) the voting by
Pledgor of any Pledged Collateral for or Pledgor's consent to the
election of directors at a regularly scheduled annual or other meeting
of stockholders or with respect to incidental matters at any such
meeting nor (B) Pledgor's consent to or approval of any action
otherwise permitted under this Pledge Agreement and the Credit
Agreement shall be deemed inconsistent with the terms of this Pledge
Agreement or the Credit Agreement within the meaning of this Section
10(d)(i); and
(ii) Upon the occurrence and during the continuance of a Default
or an Event of Default, each Pledgor hereby grants to the
Administrative Agent an irrevocably proxy to exercise the voting and
other consensual rights which it would otherwise be entitled to
exercise pursuant to paragraph (i) of this subsection (d) and each
Pledgor agrees that during such time it will not exercise such voting
and other consensual rights.
(e) Dividend and Distribution Rights in Respect of the Pledged
Collateral.
14
(i) So long as no Event of Default shall have occurred and be
continuing and subject to Section 4(b) hereof, each Pledgor may
receive and retain any and all dividends (other than stock or
ownership interest dividends and other dividends constituting Pledged
Collateral which are addressed hereinabove), distributions or interest
paid in respect of the Pledged Collateral to the extent they are
allowed under the Credit Agreement.
(ii) Upon the occurrence and during the continuation of an Event
of Default:
(A) all rights of a Pledgor to receive the dividends,
distributions and interest payments which it would otherwise be
authorized to receive and retain pursuant to paragraph (i) of
this subsection (e) shall cease and all such rights shall
thereupon be vested in the Administrative Agent which shall then
have the sole right to receive and hold as Pledged Collateral
such dividends, distributions and interest payments; and
(B) all dividends, distributions and interest payments which
are received by a Pledgor contrary to the provisions of clause
(A) of this subsection (ii) shall be received in trust for the
benefit of the Administrative Agent, shall be segregated from
other property or funds of such Pledgor, and shall be forthwith
paid over to the Administrative Agent as Pledged Collateral in
the exact form received, to be held by the Administrative Agent
as Pledged Collateral and as further collateral security for the
Pledgor Obligations.
(f) Release of Pledged Collateral. The Administrative Agent may
release any of the Pledged Collateral from this Pledge Agreement or may
substitute any of the Pledged Collateral for other Pledged Collateral
without altering, varying or diminishing in any way the force, effect,
Lien, pledge or security interest of this Pledge Agreement as to any
Pledged Collateral not expressly released or substituted, and this Pledge
Agreement shall continue as a first priority Lien on all Pledged Collateral
not expressly released or substituted.
11. Application of Proceeds. Upon the occurrence and during the
continuation of an Event of Default, any payments in respect of the Pledgor
Obligations and any proceeds of any Pledged Collateral, when received by the
Administrative Agent or any of the Secured Parties in cash or its equivalent,
will be applied in reduction of the Pledgor Obligations in the order set forth
in Section 2.13(b) of the Credit Agreement, and each Pledgor irrevocably waives
the right to direct the application of such payments and proceeds and
acknowledges and agrees that the Administrative Agent shall have the continuing
and exclusive right to apply and reapply any and all such payments and proceeds
in the Administrative Agent's sole discretion (but subject in all events to
Section 2.13(b) of the Credit Agreement), notwithstanding any entry to the
contrary upon any of its books and records.
15
12. Costs of Counsel. If at any time hereafter, whether upon the occurrence
of an Event of Default or not, the Administrative Agent employs counsel to
prepare or consider amendments, waivers or consents with respect to this Pledge
Agreement, or to take action or make a response in or with respect to any legal
or arbitral proceeding relating to this Pledge Agreement or relating to the
Pledged Collateral, or to protect the Pledged Collateral or exercise any rights
or remedies under this Pledge Agreement or with respect to the Pledged
Collateral, then the Pledgors agree to promptly pay upon demand any and all such
reasonable documented costs and expenses of the Administrative Agent or the
Secured Parties, all of which costs and expenses shall constitute Pledgor
Obligations hereunder.
13. Continuing Agreement.
(a) Upon this Pledge Agreement becoming effective in accordance with
the terms hereof and of the other Credit Documents, the Existing Pledge
Agreements shall be deemed amended and restated by this Pledge Agreement.
This Pledge Agreement shall be a continuing agreement in every respect and
shall remain in full force and effect so long as any of the Pledgor
Obligations remain outstanding (other than contingent indemnity or
reimbursement obligations) or any Credit Document or Hedging Agreement is
in effect, and until all of the Commitments thereunder shall have
terminated. Upon such payment and termination, this Pledge Agreement shall
be automatically terminated and the Administrative Agent shall, upon the
request and at the expense of the Pledgors, forthwith release all of its
Liens and security interests hereunder and shall deliver all UCC
termination statements and/or other documents reasonably requested by the
Pledgors evidencing such termination. Notwithstanding the foregoing, all
releases and indemnities provided hereunder shall survive termination of
this Pledge Agreement.
(b) This Pledge Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time payment, in
whole or in part, of any of the Pledgor Obligations is rescinded or must
otherwise be restored or returned by the Administrative Agent or any
Secured Party as a preference, fraudulent conveyance or otherwise under any
bankruptcy, insolvency or similar law, all as though such payment had not
been made; provided that in the event payment of all or any part of the
Pledgor Obligations is rescinded or must be restored or returned, all
reasonable costs and expenses (including without limitation any reasonable
legal fees and disbursements) incurred by the Administrative Agent or any
Secured Party in defending and enforcing such reinstatement shall be deemed
to be included as a part of the Pledgor Obligations.
14. Amendments; Waivers; Modifications. This Pledge Agreement and the
provisions hereof may not be amended, waived, modified, changed, discharged or
terminated except as set forth in Section 9.1 of the Credit Agreement.
15. Successors in Interest; Release. This Pledge Agreement shall create a
continuing security interest in the Pledged Collateral and shall be binding upon
each Pledgor, its successors and assigns and shall inure, together with the
rights and remedies of the Administrative Agent hereunder, to the benefit of the
Administrative Agent and the Secured Parties and their successors and permitted
assigns; provided, however, that none of the Pledgors may assign its
16
rights or delegate its duties hereunder without the prior written consent of
each Secured Party or the Required Secured Parties, as required by the Credit
Agreement. To the fullest extent permitted by law, each Pledgor hereby releases
the Administrative Agent, and its successors and assigns, from any liability for
any act or omission relating to this Pledge Agreement or the Pledged Collateral,
except for any liability arising from the gross negligence or willful misconduct
of the Administrative Agent or its officers, employees or agents.
16. Notices. All notices required or permitted to be given under this
Pledge Agreement shall be in conformance with Section 9.2 of the Credit
Agreement.
17. Counterparts. This Pledge Agreement may be executed in any number of
counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Pledge Agreement to produce or
account for more than one such counterpart.
18. Headings. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning,
construction or interpretation of any provision of this Pledge Agreement.
19. Governing Law; Submission to Jurisdiction and Service of Process;
Waivers. THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. Each of the Pledgors agrees that Sections
5-1401 and 5-1402 of the General Obligations law of the State of New York shall
apply to this Pledge Agreement. Each Pledgor agrees not to assert any claim
against the Administrative Agent, any Secured Party (including the Issuing
Secured Party), any of their Affiliates, or any of their respective directors,
officers, employees, attorneys or agents, on any theory of liability, for
special, indirect, consequential or punitive damages arising out of or otherwise
relating to any of the transactions contemplated herein or in any other Credit
Document. The terms of Sections 9.14 and 9.17 of the Credit Agreement are
incorporated herein by reference, mutatis mutandis, and the parties hereto agree
to such terms.
20. Severability. If any provision of this Pledge Agreement is determined
to be illegal, invalid or unenforceable, such provision shall be fully severable
and the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
21. Entirety. This Pledge Agreement, the other Credit Documents and any
Hedging Agreement represent the entire agreement of the parties hereto and
thereto, and supersede all prior agreements and understandings, oral or written,
if any, including any commitment letters or correspondence relating to this
Pledge Agreement, the other Credit Documents, any such Hedging Agreement or the
transactions contemplated herein and therein.
22. Survival. All representations and warranties of the Pledgors hereunder
shall survive the execution and delivery of this Pledge Agreement, the other
Credit Documents and
17
any Hedging Agreement, the delivery of the Notes and the making of the Loans and
the issuance of the Letters of Credit under the Credit Agreement.
23. Obligations of Pledgors.
(a) Each of the Guarantors is entering into this Security Agreement in
consideration of the financial accommodation to be provided by the Secured
Parties under the Credit Agreement, for the mutual benefit, directly and
indirectly, of each of the Pledgors and in consideration of the joint and
several undertakings of each of the Guarantors under the Guaranty provided
pursuant to Article X of the Credit Agreement, and each Guarantor is
granting the security interests in the Pledged Collateral of such Guarantor
pursuant to this Security Agreement in support of its obligations under the
Guaranty.
(b) Notwithstanding any provision to the contrary contained herein or
in any other of the Credit Documents, to the extent the obligations of a
Pledgor shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal
law relating to fraudulent conveyances or transfers) then the obligations
of such Pledgor hereunder shall be limited to the maximum amount that is
permissible under applicable law (whether federal or state and including,
without limitation, the Bankruptcy Code).
18
Each of the parties hereto has caused a counterpart of this Pledge
Agreement to be duly executed and delivered as of the date first above written.
PLEDGORS: THE PANTRY, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Financial Officer, Vice President - Finance
and Secretary
R & H MAXXON, INC.,
a South Carolina corporation
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President and Assistant Secretary
KANGAROO, INC.,
a Georgia corporation
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President and Assistant Secretary
Accepted and agreed to as of the date first above written.
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Director
Schedule 2(a)
to
Amended and Restated
Pledge Agreement
dated as of April 14, 2003
in favor of Wachovia Bank, National Association,
as Administrative Agent
PLEDGED STOCK
Pledgor: The Pantry, Inc.
Name of Subsidiary Number of Shares Certificate Number Percentage Ownership
------------------ ---------------- ------------------ --------------------
Kangaroo, Inc. 8,000 100%
R. & H. Maxxon, Inc. 2,210 100%
Exhibit 4(a)
to
Amended and Restated
Pledge Agreement
dated as of April 14, 2003
in favor of Wachovia Bank, National Association,
as Administrative Agent
Irrevocable Stock Power
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to
the following shares of capital stock of , a
--------------------- ------------
corporation:
No. of Shares Certificate No.
------------- ---------------
and irrevocably appoints its Administrative
----------------------------------
Agent and attorney-in-fact to transfer all or any part of such capital stock and
to take all necessary and appropriate action to effect any such transfer. The
Administrative Agent and attorney-in-fact may substitute and appoint one or more
persons to act for him.
,
--------------
a [corporation]
--------------
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
