SECOND AMENDED AND RESTATED SECURITIES PLEDGE AGREEMENT
Exhibit 10.16
SECOND AMENDED AND RESTATED
SECURITIES PLEDGE AGREEMENT
SECURITIES PLEDGE AGREEMENT
THIS SECOND AMENDED AND RESTATED SECURITIES PLEDGE AGREEMENT (this “Pledge Agreement”)
is made and entered into as of July 8, 2011 is made by SONIC FINANCIAL CORPORATION, a North
Carolina corporation (the “Pledgor”) to BANK OF AMERICA, N.A., a national banking
association, as Administrative Agent (in such capacity, the “Administrative Agent”) for
each of the lenders (the “Lenders”) now or hereafter party to the Revolving Credit
Agreement defined below (collectively with the Administrative Agent, and certain other Persons
parties to Related Swap Contracts and Secured Cash Management Arrangements as more particularly
described in Section 17 hereof, the “Revolving Secured Parties”). All capitalized
terms used but not otherwise defined herein shall have the respective meanings assigned thereto in
the Revolving Credit Agreement.
W I T N E S S E T H:
WHEREAS, Sonic Automotive, Inc., a Delaware corporation (the “Company”), certain of
the Lenders (the “Existing Lenders”) and Bank of America as administrative agent (the
“Administrative Agent”) entered into that certain Amended and Restated Credit Agreement dated as of
January 15, 2010 (as amended prior to (but excluding) the date hereof, the “Existing Credit
Agreement”), pursuant to which certain of the Existing Lenders agreed to make available to the
Company a revolving credit facility, including a letter of credit subfacility and a swingline
subfacility; and
WHEREAS, the Pledgor entered into an Amended and Restated Securities Pledge Agreement dated as
of January 15, 2010 (as amended prior to (but excluding) the date hereof, the “Existing Pledge
Agreement”), pursuant to which the Pledgor has secured obligations arising under the Existing
Credit Agreement; and
WHEREAS, the Company has requested that the Existing Credit Agreement be amended and restated
in order to, among other things, (a) extend the maturity date of the revolving credit facility
provided therein, (b) increase the maximum aggregate amount of the revolving credit facility
provided therein to $175,000,000, and (c) make certain other amendments to the Existing Credit
Agreement on the terms and conditions set forth in that certain Second Amended and Restated Credit
Agreement dated as of the date hereof (as amended, restated, supplemented or otherwise modified
from time to time, the “Revolving Credit Agreement”) among the Company, the Administrative
Agent and the Lenders; and
WHEREAS, the Administrative Agent and the Lenders have agreed to enter into the Revolving
Credit Agreement, subject to, among other things, a condition that the parties amend and restate
the Existing Pledge Agreement as provided herein; and
WHEREAS, the Pledgor, as collateral security for the payment and performance of the
Obligations and the obligations and liabilities of any Loan Party now existing or hereafter arising
under Related Swap Contracts and Secured Cash Management Arrangements (such Obligations and other
obligations and liabilities being referred to as the “Secured Obligations”), is willing to
pledge and grant to the Administrative Agent for the benefit of the Revolving Secured Parties
a security interest in the Equity Interests of Speedway Motorsports, Inc. (the “Speedway”)
described on Schedule I attached hereto (collectively, the “Pledged Interests”);
and
WHEREAS, the Company is an Affiliate of the Pledgor, and the Pledgor will materially benefit
from the Loans and other credit facilities made or to be made available under the Revolving Credit
Agreement; and
WHEREAS, the Revolving Secured Parties are unwilling to make available or maintain the credit
facilities under the Revolving Credit Agreement unless the Pledgor enters into this Pledge
Agreement;
NOW, THEREFORE, in order to induce (i) the Lenders to amend and restate the Existing Credit
Agreement and (ii) the Revolving Secured Parties to enter into the Loan Documents and to make or
maintain the credit facilities provided for therein available to or for the account of the Company
and in consideration of the premises and mutual covenants contained herein, the parties hereto
agree that the Existing Pledge Agreement is hereby amended and restated as follows:
1. Pledge of Pledged Interests; Other Collateral.
(a) As collateral security for the payment and performance by the Pledgor of its now or
hereafter existing Secured Obligations, the Pledgor hereby grants, pledges and collaterally
assigns to the Administrative Agent for the benefit of the Revolving Secured Parties a first
priority security interest in all of the following items of property in which it now has or
may at any time hereafter acquire an interest or the power to transfer rights therein, and
wheresoever located:
(i) the Pledged Interests; and
(ii) all money, securities, security entitlements and other investment
property, dividends, rights, general intangibles and other property at any time and
from time to time (x) declared or distributed in respect of or in exchange for or on
conversion of any Pledged Interest, or (y) by its or their terms exchangeable or
exercisable for or convertible into any Pledged Interest; and
(iii) all other property of whatever character or description, including money,
securities, security entitlements and other investment property, and general
intangibles hereafter delivered by or on behalf of the Pledgor to the Administrative
Agent in substitution for any of the foregoing or as additional collateral; and
(iv) all securities accounts to which may at any time be credited any or all of
the foregoing or any proceeds thereof and all certificates and instruments
representing or evidencing any of the foregoing or any proceeds thereof; and
(v) all proceeds of any of the foregoing.
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All such Pledged Interests, certificates, instruments, cash, securities, interests,
dividends, rights and other property referred to in clauses (i) through (v) of this
Section 1 are herein collectively referred to as the “Collateral.”
(c) Subject to Section 10(a), the Pledgor agrees to deliver all certificates,
instruments or other documents representing any Collateral to the Administrative Agent at
such location as the Administrative Agent shall from time to time designate by written
notice pursuant to Section 21 for its custody at all times until termination of this
Pledge Agreement, together with such instruments of assignment and transfer as requested by
the Administrative Agent.
(d) The Pledgor agrees to execute and deliver, or cause to be executed and delivered by
other Persons, at Pledgor’s expense, all share certificates, documents, instruments,
agreements, financing statements (and amendments thereto and continuations thereof),
assignments, control agreements, or other writings as the Administrative Agent may request
from time to time to carry out the terms of this Pledge Agreement or to protect or enforce
the Administrative Agent’s Lien and security interest in the Collateral hereunder granted to
the Administrative Agent for the benefit of the Revolving Secured Parties and further agrees
to do and cause to be done upon the Administrative Agent’s request, at Pledgor’s expense,
all things determined by the Administrative Agent to be necessary or advisable to perfect
and keep in full force and effect the Lien in the Collateral hereunder granted to the
Administrative Agent for the benefit of the Revolving Secured Parties, including the prompt
payment of all out-of-pocket fees and expenses incurred in connection with any filings made
to perfect or continue the Lien and security interest in the Collateral hereunder granted in
favor of the Administrative Agent for the benefit of the Revolving Secured Parties.
(e) All filing fees, advances, charges, costs and expenses, including reasonable fees,
charges and disbursements of counsel (“Attorney Costs”), incurred or paid by the
Administrative Agent or any Lender in exercising any right, power or remedy conferred by
this Pledge Agreement, or in the enforcement thereof, shall become a part of the Secured
Obligations secured hereunder.
2. Status of Pledged Interests. The Pledgor hereby represents, warrants and covenants
to the Administrative Agent for the benefit of the Revolving Secured Parties, with respect to
itself and the Collateral as to which it has or acquires any interest, that:
(a) All of the Pledged Interests are, as of the Closing Date, and shall at all times
thereafter be validly issued and outstanding, fully paid and non-assessable and are
accurately described on Schedule I.
(b) The Pledgor is, as of the Closing Date, and shall at all times thereafter be the
sole registered and record and beneficial owner of the Pledged Interests, free and clear of
all Liens, charges, equities, options, hypothecations, encumbrances and restrictions on
pledge or transfer, including transfer of voting rights (other than the pledge hereunder and
applicable restrictions pursuant to federal and state and applicable foreign securities
laws). Without limiting the foregoing, the Pledged Interests are not and will
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not be subject to any voting trust, shareholders agreement, right of first refusal,
voting proxy, power of attorney or other similar arrangement (other than the rights
hereunder in favor of the Administrative Agent).
(c) At no time shall any Pledged Interests (i) be held or maintained in the form of a
security entitlement or credited to any securities account and (ii) which constitute a
“security” (or as to which the Company has elected to have treated as a “security”) under
Article 8 of the Uniform Commercial Code of the State of North Carolina or of any other
jurisdiction whose laws may govern (the “UCC”) be maintained in the form of
uncertificated securities. With respect to Pledged Interests that are “securities” under
the UCC, or as to which the issuer has elected at any time to have such interests treated as
“securities” under the UCC, such Pledged Interests are, and shall at all times be,
represented by the share certificates listed on Schedule I hereto, which share
certificates, with stock powers duly executed in blank by the Pledgor, have been delivered
to the Administrative Agent or are being delivered to the Administrative Agent
simultaneously herewith. In addition, with respect to all Pledged Interests, including
Pledged Interests that are not “securities” under the UCC and as to which the Company has
not elected to have such interests treated as “securities” under the UCC, the Pledgor has
delivered to the Administrative Agent (or has previously delivered to the Administrative
Agent Uniform Commercial Code financing statements duly authorized by the Pledgor and naming
the Administrative Agent for the benefit of the Revolving Secured Parties as “secured
party,” in form, substance and number sufficient in the reasonable opinion of the
Administrative Agent to be filed in all UCC filing offices and in all jurisdictions in which
filing is necessary or advisable to perfect in favor of the Administrative Agent for the
benefit of the Revolving Secured Parties the Lien on such Pledged Interests, together with
all required filing fees.
(d) It has full corporate power, legal right and lawful authority to execute this
Pledge Agreement and to pledge, assign and transfer the Pledged Interests in the manner and
form hereof.
(e) The pledge, assignment and delivery of its Pledged Interests (along with undated
stock powers executed in blank, financing statements and other agreements referred to in
Section 2(c) hereof) to the Administrative Agent for the benefit of the Revolving
Secured Parties pursuant to this Pledge Agreement creates or continues, as applicable, a
valid and perfected first priority security interest in such Pledged Interests in favor of
the Administrative Agent for the benefit of the Revolving Secured Parties, securing the
payment of the Secured Obligations, assuming, in the case of the Pledged Interests which
constitute certificated “securities” under the UCC, continuous and uninterrupted possession
by or on behalf of the Administrative Agent. The Pledgor will at its own cost and expense
defend the Revolving Secured Parties’ right, title and security interest in and to the
Collateral against the claims and demands of all persons whomsoever.
(f) None of the Pledged Interests (nor any interest therein or thereto) shall be sold,
transferred or assigned without the Administrative Agent’s prior written consent, which may
be withheld for any reason.
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(g) It shall at all times cause the Pledged Interests of the Pledgor that constitute
“securities” (or as to which the issuer elects to have treated as “securities”) under the
UCC to be represented by the certificates now and hereafter delivered to the Administrative
Agent in accordance with Sections 1 and 2.
(h) The exact legal name and address, and the type of entity, jurisdiction of
formation, jurisdiction of formation identification number (if any), and location of the
chief executive office, of the Pledgor are as specified on Schedule II attached
hereto. The Pledgor shall not change its name, or its jurisdiction of formation (whether by
reincorporation, merger or otherwise) or the location of its chief executive office, except
upon giving not less than thirty (30) days’ prior written notice to the Administrative Agent
and taking or causing to be taken all such action at the Pledgor’s expense as may be
reasonably requested by the Administrative Agent to perfect or maintain the perfection of
the Lien of the Administrative Agent in Collateral.
3. Preservation and Protection of Collateral.
(a) The Administrative Agent shall be under no duty or liability with respect to the
collection, protection or preservation of the Collateral, or otherwise, beyond the use of
reasonable care in the custody and preservation thereof while in its possession.
(b) The Pledgor agrees to pay when due all taxes, charges, Liens and assessments
against the Collateral in which it has an interest, unless being contested in good faith by
appropriate proceedings diligently conducted and against which adequate reserves have been
established in accordance with Section 6.04 of the Revolving Credit Agreement and
evidenced to the satisfaction of the Administrative Agent and provided that all enforcement
proceedings in the nature of levy or foreclosure are effectively stayed. Upon the failure
of the Pledgor to so pay or contest such taxes, charges, Liens or assessments, or upon the
failure of the Pledgor to pay any amount pursuant to Section 1(c), the
Administrative Agent at its option may pay or contest any of them (the Administrative Agent
having the sole right to determine the legality or validity and the amount necessary to
discharge such taxes, charges, Liens or assessments) but shall not have any obligation to
make any such payment or contest. All sums so disbursed by the Administrative Agent,
including reasonable Attorney Costs, court costs, expenses and other charges related
thereto, shall be payable on demand by the applicable Pledgor to the Administrative Agent
and shall be additional Secured Obligations secured by the Collateral, and any amounts not
so paid on demand (in addition to other rights and remedies resulting from such nonpayment)
shall bear interest from the date of demand until paid in full at the applicable Default
Rate.
(c) The Pledgor hereby (i) irrevocably authorizes the Administrative Agent to file
(with, or to the extent permitted by applicable law, without the signature of the Pledgor
appearing thereon) financing statements (including amendments thereto and continuations and
copies thereof) showing the Pledgor as “debtor” at such time or times and in all filing
offices as the Administrative Agent may from time to time determine to be necessary or
advisable to perfect or protect the rights of the Administrative Agent and the Revolving
Secured Parties hereunder, or otherwise to give effect to the transactions
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herein contemplated, and (ii) irrevocably ratifies and acknowledges all such actions
taken by or on behalf of the Administrative Agent prior to the Applicable Date.
4. Default. Upon the occurrence and during the continuance of any Event of Default,
the Administrative Agent is given full power and authority, then or at any time thereafter, to
sell, assign, deliver or collect the whole or any part of the Collateral, or any substitute
therefor or any addition thereto, in one or more sales, with or without any previous demands or
demand of performance or, to the extent permitted by law, notice or advertisement, in such order as
the Administrative Agent may elect; and any such sale may be made either at public or private sale
at the Administrative Agent’s place of business or elsewhere, either for cash or upon credit or for
future delivery, at such price or prices as the Administrative Agent may reasonably deem fair; and
the Administrative Agent or any other Revolving Secured Party may be the purchaser of any or all
Collateral so sold and hold the same thereafter in its own right free from any claim of the Pledgor
or right of redemption. The Administrative Agent shall use good faith efforts to promptly provide
notice to the Pledgor of all written notices of default by the Company delivered by the
Administrative Agent under the Revolving Credit Agreement, provided that the failure to
deliver such notice shall not impose any liability on the Administrative Agent nor impair any of
the Administrative Agent’s rights or remedies under this Agreement. If, after the occurrence and
during the continuance of an Event of Default by the Company, the Administrative Agent has given
written notice to the Pledgor of the Administrative Agent’s intent to exercise any remedies under
the Loan Documents, the Pledgor shall not, other than in connection with estate planning and
administration, sell, assign or otherwise transfer any other Equity Interests owned by Pledgor in
Speedway until the earlier of (i) the Facility Termination Date, (ii) the date the Administrative
Agent gives notice to the Pledgor that such restriction is no longer in place, and (iii) the date
the Event of Default shall cease to be continuing. Demands of performance, advertisements and
presence of property and sale and notice of sale are hereby waived to the extent permissible by
law. Any sale hereunder may be conducted by an auctioneer or any officer or agent of the
Administrative Agent. The Pledgor recognizes that the Administrative Agent may be unable to effect
a public sale of the Collateral by reason of certain prohibitions contained in the Securities Act
of 1933, as amended (the “Securities Act”), and applicable state law, and may be otherwise
delayed or adversely affected in effecting any sale by reason of present or future restrictions
thereon imposed by governmental authorities, and that as a consequence of such prohibitions and
restrictions the Administrative Agent may be compelled (i) to resort to one or more private sales
to a restricted group of purchasers who will be obliged to agree, among other things, to acquire
the Collateral for their own account, for investment and not with a view to the distribution or
resale thereof, or (ii) to seek regulatory approval of any proposed sale or sales, or (iii) to
limit the amount of Collateral sold to any Person or group. The Pledgor agrees and acknowledges
that private sales so made may be at prices and upon terms less favorable to the Pledgor than if
such Collateral was sold either at public sales or at private sales not subject to other regulatory
restrictions, and that the Administrative Agent has no obligation to delay the sale of any of the
Collateral for the period of time necessary to permit Speedway to register or otherwise qualify the
Collateral, even if Speedway would agree to register or otherwise qualify such Collateral for
public sale under the Securities Act or applicable state law. The Pledgor further agrees, to the
extent permitted by applicable law, that the use of private sales made under the foregoing
circumstances to dispose of the Collateral shall be deemed to be dispositions in a commercially
reasonable manner. The Pledgor hereby acknowledges that a ready market may not exist for the
Pledged Interests if they
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are not traded on a national securities exchange or quoted on an automated quotation system
and agrees and acknowledges that in such event the Pledged Interests may be sold for an amount less
than a pro rata share of the fair market value of Speedway’s assets minus its liabilities. In
addition to the foregoing, the Revolving Secured Parties may exercise such other rights and
remedies as may be available under the Loan Documents, at law (including without limitation the
UCC) or in equity.
5. Proceeds of Sale. The net cash proceeds resulting from the collection,
liquidation, sale, or other disposition of the Collateral shall be applied first to the expenses
(including all Attorney Costs) of retaking, holding, storing, processing and preparing for sale,
selling, collecting, liquidating and the like, and then to the satisfaction of all Secured
Obligations in accordance with the terms of Section 8.03 of the Revolving Credit Agreement.
6. Presentments, Demands and Notices. The Administrative Agent shall not be under any
duty or obligation whatsoever to make or give any presentments, demands for performances, notices
of nonperformance, protests, notice of protest or notice of dishonor in connection with any
obligations or evidences of indebtedness held thereby as collateral, or in connection with any
obligations or evidences of indebtedness which constitute in whole or in part the Secured
Obligations secured hereunder.
7. Attorney-in-Fact. The Pledgor hereby appoints the Administrative Agent as the
Pledgor’s attorney-in-fact for the purposes of carrying out the provisions of this Pledge Agreement
and taking any action and executing any instrument which the Administrative Agent may deem
necessary or advisable to accomplish the purposes hereof, which appointment is irrevocable and
coupled with an interest; provided, that the Administrative Agent shall have and may
exercise rights under this power of attorney only upon the occurrence and during the continuance of
an Event of Default. Without limiting the generality of the foregoing, upon the occurrence and
during the continuance of a Default or an Event of Default, the Administrative Agent shall have the
right and power to receive, endorse and collect all checks and other orders for the payment of
money made payable to the Pledgor representing any dividend, interest payment, principal payment or
other distribution payable or distributable in respect to the Collateral or any part thereof and to
give full discharge for the same.
8. Reinstatement. The granting of a security interest in the Collateral and the other
provisions hereof shall continue to be effective or be reinstated, as the case may be, if at any
time any payment of any of the Secured Obligations is rescinded or must otherwise be returned by
any Revolving Secured Party or is repaid by any Revolving Secured Party in whole or in part in good
faith settlement of a pending or threatened avoidance claim, whether upon the insolvency,
bankruptcy or reorganization of the Pledgor or any other Loan Party or otherwise, all as though
such payment had not been made. The provisions of this Section 8 shall survive repayment of
all of the Secured Obligations and the termination or expiration of this Pledge Agreement in any
manner, including but not limited to termination upon occurrence of the Facility Termination Date.
9. Waiver by the Pledgor. The Pledgor waives to the extent permitted by applicable
law (a) any right to require any Revolving Secured Party or any other obligee of the Secured
Obligations to (i) proceed against any Person or entity, including without limitation any
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Loan Party, (ii) proceed against or exhaust any Collateral or other collateral for the Secured
Obligations, or (iii) pursue any other remedy in its power, (b) any defense arising by reason of
any disability or other defense of any other Person, or by reason of the cessation from any cause
whatsoever of the liability of any other Person or entity, (c) any right of subrogation, (d) any
right to enforce any remedy which any Revolving Secured Party or any other obligee of the Secured
Obligations now has or may hereafter have against any other Person and any benefit of and any right
to participate in any collateral or security whatsoever now or hereafter held by the Administrative
Agent for the benefit of the Revolving Secured Parties. The Pledgor authorizes each Revolving
Secured Party and each other obligee of the Secured Obligations without notice (except notice
required by applicable law) or demand and without affecting its liability hereunder or under the
Loan Documents from time to time to: (x) take and hold security, other than the Collateral herein
described, for the payment of such Secured Obligations or any part thereof, and exchange, enforce,
waive and release the Collateral herein described or any part thereof or any such other security;
and (y) apply such Collateral or other security and direct the order or manner of sale thereof as
such Revolving Secured Party or obligee in its discretion may determine.
The Administrative Agent may at any time deliver (without representation, recourse or
warranty) the Collateral or any part thereof to a Pledgor and the receipt thereof by the Pledgor
shall be a complete and full acquittance for the Collateral so delivered, and the Administrative
Agent shall thereafter be discharged from any liability or responsibility therefor.
10. Dividends and Voting Rights.
(a) All dividends and other distributions with respect to any of the Pledged Interests
shall be subject to the pledge hereunder, provided, however, that cash
dividends paid to the Pledgor as record owner of the Pledged Interests may be retained by
the Pledgor so long as no Default or Event of Default shall have occurred and be continuing
at the time of receipt by the Pledgor, free from any Liens hereunder.
(b) So long as no Default or Event of Default shall have occurred and be continuing,
the registration of the Collateral in the name of a Pledgor as record and beneficial owner
shall not be changed and the Pledgor shall be entitled to exercise all voting and other
rights and powers pertaining to the Collateral for all purposes not inconsistent with the
terms of the Loan Documents.
(c) Upon the occurrence and during the continuance of any Default or Event of Default,
all rights of the Pledgor to receive and retain cash dividends and other distributions upon
the Collateral pursuant to subsection (a) above shall cease and shall thereupon be vested in
the Administrative Agent for the benefit of the Revolving Secured Parties, and the Pledgor
shall promptly deliver, or shall cause to be promptly delivered, all such cash dividends and
other distributions with respect to the Pledged Interests to the Administrative Agent
(together, if the Administrative Agent shall request, with the documents described in
Sections 1(c) and 2(c) hereof or other negotiable documents or instruments
so distributed) to be held by it hereunder or, at the option of the Administrative Agent, to
be applied to the Secured Obligations. Pending delivery to the Administrative Agent of such
property, the Pledgor shall keep such property segregated
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from its other property and shall be deemed to hold the same in trust for the benefit
of the Revolving Secured Parties.
(d) Upon the occurrence and during the continuance of any Default or Event of Default,
at the option of the Administrative Agent, all rights of the Pledgor to exercise the voting
or consensual rights and powers which it is authorized to exercise pursuant to subsection
(b) above shall cease and the Administrative Agent may thereupon (but shall not be obligated
to), at its request, cause such Collateral to be registered in the name of the
Administrative Agent or its nominee or agent for the benefit of the Revolving Secured
Parties and/or exercise such voting or consensual rights and powers as appertain to
ownership of such Collateral, and to that end the Pledgor hereby appoints the Administrative
Agent as its proxy, with full power of substitution, to vote and exercise all other rights
as a shareholder with respect to such Pledged Interests hereunder upon the occurrence and
during the continuance of any Default or Event of Default, which proxy is coupled with an
interest and is irrevocable until the Facility Termination Date, and the Pledgor hereby
agrees to provide such further proxies as the Administrative Agent may request;
provided, however, that the Administrative Agent in its discretion may from
time to time refrain from exercising, and shall not be obligated to exercise, any such
voting or consensual rights or such proxy.
11. Continued Powers. Until the Facility Termination Date shall have occurred, the
power of sale and other rights, powers and remedies granted to the Administrative Agent for the
benefit of the Revolving Secured Parties hereunder shall continue to exist and may be exercised by
the Administrative Agent at any time after the occurrence and during the continuance of any Event
of Default and from time to time irrespective of the fact that any of the Secured Obligations or
any part thereof may have become barred by any statute of limitations or that any part of the
liability of the Pledgor may have ceased.
12. Other Rights. The rights, powers and remedies given to the Administrative Agent
for the benefit of the Revolving Secured Parties by this Pledge Agreement shall be in addition to
all rights, powers and remedies given to the Administrative Agent or any Revolving Secured Party
under any Loan Document or by virtue of any statute or rule of law. Any forbearance or failure or
delay by the Administrative Agent in exercising any right, power or remedy hereunder shall not be
deemed to be a waiver of such right, power or remedy, and any single or partial exercise of any
right, power or remedy hereunder shall not preclude the further exercise thereof; and every right,
power and remedy of the Revolving Secured Parties shall continue in full force and effect until
such right, power or remedy is specifically waived in accordance with the terms of the Revolving
Credit Agreement.
13. Anti-Marshaling Provisions. The right is hereby given by the Pledgor to the
Administrative Agent, for the benefit of the Revolving Secured Parties, to make releases (whether
in whole or in part) of all or any part of the Collateral agreeable to the Administrative Agent
without notice to, or the consent, approval or agreement of other parties and interests, including
junior lienors, which releases shall not impair in any manner the validity of or priority of the
Liens and security interests in the remaining Collateral conferred hereunder, nor release the
Pledgor from personal liability for the Secured Obligations. Notwithstanding the existence of any
other security interest in the Collateral held by the Administrative Agent, for the benefit of
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the Revolving Secured Parties, the Administrative Agent shall have the right to determine the
order in which any or all of the Collateral shall be subjected to the remedies provided in this
Pledge Agreement. The Pledgor hereby waives any and all right to require the marshaling of assets
in connection with the exercise of any of the remedies permitted by applicable law or provided
herein or in any Loan Document.
14. Entire Agreement. This Pledge Agreement constitutes and expresses the entire
understanding between the parties hereto with respect to the subject matter hereof, and supersedes
all prior negotiations, agreements and understandings, inducements, commitments or conditions,
express or implied, oral or written, except as herein contained. The express terms hereof control
and supersede any course of performance or usage of the trade inconsistent with any of the terms
hereof and thereof. Neither this Pledge Agreement nor any portion or provision hereof may be
changed, altered, modified, supplemented, discharged, canceled, terminated, or amended orally or in
any manner other than as provided in the Revolving Credit Agreement.
15. Further Assurances. The Pledgor agrees at its own expense to do such further acts
and things, and to execute and deliver, and cause to be executed and delivered as may be necessary
or advisable to give effect thereto, such additional conveyances, assignments, financing
statements, control agreements, documents, certificates, stock powers, agreements and instruments,
as the Administrative Agent may at any time reasonably request in connection with the
administration or enforcement of this Pledge Agreement or related to the Collateral or any part
thereof or in order better to assure and confirm unto the Administrative Agent its rights, powers
and remedies for the benefit of the Revolving Secured Parties hereunder or thereunder. The Pledgor
hereby consents and agrees that the Company and all other Persons, shall be entitled to accept the
provisions hereof as conclusive evidence of the right of the Administrative Agent, on behalf of the
Revolving Secured Parties, to exercise its rights, privileges, and remedies hereunder and
thereunder with respect to the Collateral, notwithstanding any other notice or direction to the
contrary heretofore or hereafter given by the Pledgor or any other Person to the Company or other
Persons.
16. Binding Agreement; Assignment. This Pledge Agreement and the terms, covenants and
conditions hereof, shall be binding upon and inure to the benefit of the parties hereto, and to
their respective successors and assigns, except that the Pledgor shall not be permitted to assign
this Pledge Agreement, or any interest herein or in the Collateral, or any part thereof or interest
therein, or otherwise pledge, encumber or grant any option with respect to the Collateral, or any
part thereof, or any cash or property held by the Administrative Agent as Collateral under this
Pledge Agreement. Without limiting the generality of the foregoing sentence of this Section
16, any Lender may assign to one or more Persons, or grant to one or more Persons
participations in or to, all or any part of its rights and obligations under the Revolving Credit
Agreement (to the extent permitted by the Revolving Credit Agreement); and to the extent of any
such permitted assignment or participation such other Person shall, to the fullest extent permitted
by law, thereupon become vested with all the benefits in respect thereof granted to such Lender
herein or otherwise, subject however, to the provisions of the Revolving Credit Agreement,
including Article IX thereof (concerning the Administrative Agent) and Section
10.06 thereof (concerning assignments and participations). All references herein to the
Administrative Agent and to the Revolving Secured Parties shall include any successor thereof or
permitted assignee, and any other obligees from time to time of the Secured Obligations.
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17. Related Swap Contracts and Secured Cash Management Arrangements. All obligations
of the Pledgor under or in respect of Related Swap Contracts and Secured Cash Management
Arrangements (which are not prohibited under the terms of the Revolving Credit Agreement) to which
any Lender or any Affiliate of any Lender is a party, shall be deemed to be Secured Obligations
secured hereby, and each Lender or Affiliate of a Lender party to any such Related Swap Contract or
Secured Cash Management Arrangement shall be deemed to be a Revolving Secured Party hereunder with
respect to such Secured Obligations; provided, however, that such obligations shall
cease to be Secured Obligations at such time, prior to the Facility Termination Date, as such
Person (or Affiliate of such Person) shall cease to be a “Lender” under the Revolving
Credit Agreement.
No Person who obtains the benefit of any Lien by virtue of the provisions of this Section
shall have any right to notice of any action or to consent to, direct or object to any action
hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the
release or impairment of any Collateral) other than in its capacity as a Lender and only to the
extent expressly provided in the Loan Documents. Notwithstanding any other provisions of this
Pledge Agreement to the contrary, the Administrative Agent shall only be required to verify the
payment of, or that other satisfactory arrangements have been made with respect to, the Secured
Obligations arising under Related Swap Contracts or Secured Cash Management Arrangements to the
extent the Administrative Agent has received written notice of such Obligations, together with
such supportive documentation as it may request from the applicable Lender or Affiliate of a
Lender. Each Revolving Secured Party not a party to the Revolving Credit Agreement who obtains the
benefit of this Pledge Agreement by virtue of the provisions of this Section shall be deemed to
have acknowledged and accepted the appointment of the Administrative Agent pursuant to the terms of
the Revolving Credit Agreement, and that with respect to the actions and omissions of the
Administrative Agent hereunder or otherwise relating hereto that do or may affect such Revolving
Secured Party, the Administrative Agent and each of its Related Parties shall be entitled to all
the rights, benefits and immunities conferred under Article IX of the Revolving Credit
Agreement.
18. Severability. The provisions of this Pledge Agreement are independent of and
separable from each other. If any provision hereof shall for any reason be held invalid or
unenforceable, such invalidity or unenforceability shall not affect the validity or enforceability
of any other provision hereof, but this Pledge Agreement shall be construed as if such invalid or
unenforceable provision had never been contained herein.
19. Counterparts. This Pledge Agreement may be executed in any number of counterparts
each of which when so executed and delivered shall be deemed an original, and it shall not be
necessary in making proof of this Pledge Agreement to produce or account for more than one such
counterpart executed by the Pledgor against whom enforcement is sought. Without limiting the
foregoing provisions of this Section 19, the provisions of Section 10.10 of the
Revolving Credit Agreement shall be applicable to this Pledge Agreement.
20. Termination. Subject to the provisions of Section 8, this Pledge
Agreement, and all obligations of the Pledgor hereunder (excluding those obligations and
liabilities that expressly survive such termination) shall terminate without delivery of any
instrument or performance of any act by any party on the Facility Termination Date. Upon such
termination of this Pledge
11
Agreement, the Administrative Agent shall, at the sole expense of the Pledgor, promptly
deliver to the Pledgor the certificates evidencing its shares of Pledged Interests (and any other
property received as a dividend or distribution or otherwise in respect of such Pledged Interests
to the extent then held by the Administrative Agent as additional Collateral hereunder), together
with any cash then constituting the Collateral not then sold or otherwise disposed of in accordance
with the provisions hereof, and take such further actions at the request of the Pledgor as may be
necessary to effect the same.
21. Notices. Any notice required or permitted hereunder shall be given (a) with
respect to the Pledgor, at the Company’s address indicated in Schedule 10.02 of the
Revolving Credit Agreement, (b) with respect to the Administrative Agent or any other Revolving
Secured Party, at the Administrative Agent’s address indicated in Schedule 10.02 of the
Revolving Credit Agreement. All such addresses may be modified, and all such notices shall be
given and shall be effective, as provided in Section 10.02 of the Revolving Credit
Agreement for the giving and effectiveness of notices and modifications of addresses thereunder.
22. Rules of Interpretation. The rules of interpretation contained in Sections
1.03 and 1.06 of the Revolving Credit Agreement shall be applicable to this Pledge
Agreement and are hereby incorporated by reference. All representations and warranties contained
herein shall survive the delivery of documents and any Credit Extensions referred to herein or
secured hereby.
23. Governing Law; Waivers.
(a) THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NORTH CAROLINA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.
(b) THE PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND CONSENTS THAT ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS PLEDGE AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREIN OR THEREIN MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN
MECKLENBURG COUNTY, STATE OF NORTH CAROLINA, UNITED STATES OF AMERICA AND, BY THE EXECUTION
AND DELIVERY OF THIS PLEDGE AGREEMENT, EXPRESSLY WAIVES ANY OBJECTION THAT IT MAY HAVE NOW
OR HEREAFTER TO THE LAYING OF THE VENUE OR TO THE JURISDICTION OF ANY SUCH SUIT, ACTION OR
PROCEEDING, AND IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION OF ANY
SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(c) THE PLEDGOR AGREES THAT SERVICE OF PROCESS MAY BE MADE BY PERSONAL SERVICE OF A
COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR
PROCEEDING, OR BY REGISTERED OR CERTIFIED MAIL (POSTAGE
12
PREPAID) TO THE ADDRESS OF THE PLEDGOR PROVIDED IN SECTION 21 OR BY ANY OTHER
METHOD OF SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE OF NORTH
CAROLINA.
(d) NOTHING CONTAINED IN SUBSECTIONS (b) OR (c) HEREOF SHALL PRECLUDE THE
ADMINISTRATIVE AGENT FROM BRINGING ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS PLEDGE AGREEMENT OR THE OTHER LOAN DOCUMENTS IN THE COURTS OF ANY PLACE WHERE THE
PLEDGOR OR ANY OF SUCH PLEDGOR’S PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT
PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, THE PLEDGOR HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH
SUIT, ACTION OR PROCEEDING, OBJECTION TO THE EXERCISE OF JURISDICTION OVER IT AND ITS
PROPERTY BY ANY SUCH OTHER COURT OR COURTS WHICH NOW OR HEREAFTER, BY REASON OF ITS PRESENT
OR FUTURE DOMICILE, OR OTHERWISE, MAY BE AVAILABLE UNDER APPLICABLE LAW.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER OR
RELATED TO THIS PLEDGE AGREEMENT OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN CONNECTION WITH THE FOREGOING, EACH
PARTY HEREBY AGREES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY SUCH ACTION, SUIT
OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY AND HEREBY WAIVES, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PERSON MAY HAVE TO TRIAL BY JURY IN ANY
SUCH ACTION, SUIT OR PROCEEDING.
(f) THE PLEDGOR HEREBY EXPRESSLY WAIVES ANY OBJECTION IT MAY HAVE THAT ANY COURT TO
WHOSE JURISDICTION IT HAS SUBMITTED PURSUANT TO THE TERMS HEREOF IS AN INCONVENIENT FORUM.
24. Amendment and Restatement. The parties hereto agree that the Existing Pledge
Agreement is hereby amended and restated in this Pledge Agreement, and this Pledge Agreement shall
constitute neither a release nor novation of any lien or security interest arising under the
Existing Pledge Agreement nor a refinancing of any indebtedness or obligations arising thereunder
or under the Existing Credit Agreement or related documents, but rather the liens and security
interests in effect under the Existing Pledge Agreement shall continue in effect on the terms
hereof.
[Signature page follows.]
13
IN WITNESS WHEREOF, the parties have duly executed this Pledge Agreement on the day and year
first written above.
| PLEDGOR: | ||||||
| SONIC FINANCIAL CORPORATION | ||||||
| By: Name: |
\Xxxxxxx X. Xxxxxx\
|
|||||
| Title: | Vice President and Treasurer | |||||
SECOND AMENDED AND RESTATED SECURITIES PLEDGE AGREEMENT
(Sonic Financial Corporation)
Signature Page
(Sonic Financial Corporation)
Signature Page
| ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A., as Administrative Agent |
||||||
| By: Name: |
\Xxxx X. Xxxxxxx\
|
|||||
| Title: | Vice President | |||||
SECOND AMENDED AND RESTATED SECURITIES PLEDGE AGREEMENT
(Sonic Financial Corporation)
Signature Page
(Sonic Financial Corporation)
Signature Page
SCHEDULE I
| Name, | Total Amount | |||||||||||||||||
| Jurisdiction of | of Class or | |||||||||||||||||
| Formation | Type of | Total Amount | ||||||||||||||||
| and Type of | Class or Type | Pledged | of Class or | Certificate | Name of | |||||||||||||
| Name of | Entity of the | of Pledged | Interests | Type | Total Amount | Number | Par Value | Transfer Agent | ||||||||||
| Pledgor | Company | Interest | Authorized | Outstanding | Pledged | (if applicable) | (if applicable) | (if any) | ||||||||||
Sonic Financial Corporation |
Delaware Corporation | Common Stock | 200,000,000 | 41,574,384 1 | 2,500,000 | SM15587 | $.01 | American Stock Transfer Trust Company LLC | ||||||||||
Sonic Financial Corporation |
Delaware Corporation | Common Stock | 200,000,000 | 41,574,384 1 | 2,500,000 | SM15588 | $.01 | American Stock Transfer Trust Company LLC | ||||||||||
| 1 | This amount was the amount of common shares outstanding as of May 3, 2011 as identified on the Company’s Form 10-Q filed with the Securities and Exchange Commission on May 4, 2011. |
SCHEDULE II
| Jurisdiction of | Jurisdiction of | |||||||
| Name and | Type of Entity | Formation | Formation | Address of Chief | ||||
| Address of Pledgor | of Pledgor | of Pledgor | Identification Number | Executive Office | ||||
Sonic Financial Corporation |
Corporation | Xxxxx Xxxxxxxx | 0000000 | 0000 X. Xxxxxxxxxxxx Xxxx. Xxxxxxxxx, XX 00000 | ||||
Sonic Financial Corporation |
Corporation | Xxxxx Xxxxxxxx | 0000000 | 0000 X. Xxxxxxxxxxxx Xxxx. Xxxxxxxxx, XX 00000 |
