Exhibit 10.6

THIRD AMENDED AND RESTATED

ESCROW AND SECURITY AGREEMENT

THIS THIRD AMENDED AND RESTATED ESCROW AND SECURITY AGREEMENT (this “Agreement”)
is made and entered into as of July 23, 2014 among SONIC AUTOMOTIVE, INC., a
Delaware corporation (the “Company” and a “Grantor”), EACH OF THE UNDERSIGNED
SUBSIDIARIES OF THE COMPANY AND EACH OTHER PERSON WHO SHALL BECOME A PARTY
HERETO BY EXECUTION OF A JOINDER AGREEMENT (each a “Grantor”, and collectively
with the Company, the “Grantors”), and BANK OF AMERICA, N.A., a national banking
association, as Administrative Agent (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 4.17 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, the Company, certain of the Lenders (the “Existing Lenders”) and the
Administrative Agent entered into that certain Second Amended and Restated
Credit Agreement dated July 8, 2011 (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 Company and certain Subsidiaries of the Company (the “Existing
Grantors”) entered into a Second Amended and Restated Escrow and Security
Agreement dated as of July 8, 2011 (as amended prior to (but excluding) the date
hereof, the “Existing Escrow and Security Agreement”), pursuant to which the
Existing Grantors have secured their 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, and (c) make
certain other amendments to the Existing Credit Agreement on the terms and
conditions set forth in that certain Third 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;

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 Escrow and Security Agreement as provided
herein; and

WHEREAS, each Grantor will materially benefit from the Loans to be made, and the
Letters of Credit to be issued, under the Revolving Credit Agreement, and each
Grantor (other

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than the Company) is a party (as signatory or by joinder) to the Subsidiary
Guaranty pursuant to which such Grantor guarantees the Obligations of the
Company and the other Subsidiaries;

 

WHEREAS, in order to induce the Revolving Secured Parties to enter into the Loan
Documents and to make Loans and issue Letters of Credit, each Grantor has agreed
to make all shares of capital stock or Equity Interests of the Subsidiaries
described on Schedule I (as such schedule may be supplemented from time to time)
(collectively, the “Escrow Subsidiaries”) of the respective Grantor subject to
the terms and provisions of this Agreement;

WHEREAS, the Equity Interests in the Escrow Subsidiaries are not permitted to be
pledged under the terms of the applicable Franchise Agreements, Framework
Agreements, similar manufacturer agreements or indebtedness agreements of such
Escrow Subsidiaries (the “Restricted Equity Interests”);  

WHEREAS, in lieu of a pledge by the Grantors to the Administrative Agent of the
Restricted Equity Interests, the Grantors shall grant a security interest in
certain Disposition Proceeds (as defined below) of such Restricted Equity
Interests;

WHEREAS, to further protect the Revolving Secured Parties, the Grantors will
continue to deliver the Escrowed Shares (as defined below) into escrow to be
held in accordance with this Agreement;

WHEREAS, as collateral security for 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,
each Grantor is willing to grant to the Administrative Agent for the benefit of
the Revolving Secured Parties a security interest in certain of its personal
property and assets pursuant to the terms of this Agreement;

 

WHEREAS, the Revolving Secured Parties are unwilling to make available or
maintain the credit facilities under the Revolving Credit Agreement unless the
Company and each other Grantor enter into this 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 promises and the mutual covenants contained herein, the parties hereto agree
that the Existing Escrow and Security Agreement is hereby amended and restated
as follows:  

 

ARTICLE I
ESCROW

1.1Escrow.  Upon the terms hereof, each Grantor hereby delivers to the
Administrative Agent, in escrow (the “Escrow”) all of the issued and outstanding
certificated shares of capital stock or other Equity Interests now or hereafter
owned by such Grantor described on Schedule I attached hereto and incorporated
herein, as Schedule I may be amended or supplemented from time to time
(collectively, the “Escrowed Shares”).  In addition, each

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Grantor hereby agrees to deliver to the Administrative Agent, in escrow, any
Restricted Disposition Proceeds (as defined below) as and when received by the
Grantor in respect of such Escrowed Shares.

1.2Terms of Escrow.  (a)  The parties hereby appoint the Administrative Agent as
escrow agent in accordance with the terms and conditions set forth herein, and
the Escrow Agent hereby accepts such appointment as escrow agent.

(b)The Administrative Agent shall disburse all or any part of the Escrowed
Shares as follows: any time the Administrative Agent receives (i) a written
notification executed by a Grantor (or such Grantor’s successor interest to the
Escrowed Shares), advising the Administrative Agent of a proposed Disposition
(as defined below) of Escrowed Shares or other Restricted Disposition Proceeds,
(ii) (subject to Section 4.5(a)(iii)) all Disposition Proceeds (as herein
defined) paid or payable to Grantors in respect of such Escrowed Shares and,
(iii) if other than cash, duly executed instruments of assignment and delivery,
the Administrative Agent shall immediately release such portion of the Escrowed
Shares, subject as herein provided, as is specified in such written notice to
the Persons specified in such written notice.

(c)The Administrative Agent shall not be responsible for the sufficiency or
accuracy of the form of, or the execution, validity, value or genuineness of,
any document or property received, held or delivered by it hereunder, or of any
signature or endorsement thereon, or for any lack of endorsement thereon, or for
any description therein, nor shall the Administrative Agent be responsible or
liable to the other parties hereto or to anyone else in any respect on account
of the identity, authority, or rights of the Persons executing or delivering or
purporting to execute or deliver any document or property or this Agreement.

(d)(i)  In its capacity as escrow agent, the Administrative Agent shall have no
duties or responsibilities other than those expressly set forth herein and
except as expressly set forth herein, shall have no duty to enforce any
obligation of any Person, to make any payment or delivery of Disposition
Proceeds, or to direct or cause any payment or delivery thereof, or to direct or
cause any payment or delivery thereof to be made, or to enforce any obligation
of any Person to perform any other act.  The Administrative Agent shall be under
no liability to any Person by reason of any failure on the part of any other
Person to perform such Person’s obligations under any agreement involving or
relating in any way to the Escrowed Shares or the disposition thereof by the
Grantors.  Except as provided in Section 1.2(b), the Administrative Agent shall
not be obligated to recognize any agreement between any or all of the Grantors
and any other Persons.

(ii)The Administrative Agent shall not be liable to the Grantors or to any other
Person for any action taken or omitted by it in good faith and in the exercise
of its own best judgment.  The Administrative Agent may rely conclusively and
shall be protected in acting upon any order, notice, demand, certificate,
opinion or advice of counsel (including counsel chosen by the Administrative
Agent), statement, instrument, report or other paper or document (not only as to
its due execution and the validity and effectiveness of its provisions, but as
to the acceptability and reliability of any information therein contained) which
is believed by the Administrative Agent to be genuine and to be signed or
presented by the proper Person or Persons.

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(e)The Grantors shall pay all income, withholding and any other taxes imposed on
or measured by income which are attributable to income from the Escrowed Shares
and the Disposition Proceeds for the time all or any part thereof are held in
escrow hereunder, and shall file all tax and information returns applicable
thereto.  To the extent that the Administrative Agent becomes liable for the
payment of taxes, including withholding taxes, in respect of income derived from
the Escrowed Shares and Disposition Proceeds, the Administrative Agent may but
shall not be obligated to pay such taxes.  The Administrative Agent may withhold
or offset from any amount payable by the Administrative Agent to the Grantors
such amount as the Administrative Agent determines in its sole discretion to be
sufficient to provide for the payment of such taxes; alternately any such amount
paid by the Administrative Agent shall become a part of the Obligations.  In
addition, the Administrative Agent shall be indemnified and held harmless by the
Grantors from and against any liability for such taxes and for any penalties or
interest in respect of taxes on such investment income or payments in the manner
provided in subparagraph (k) below.

(f)The Administrative Agent is acting as an escrow agent only with respect to
the Escrowed Shares and related Restricted Disposition Proceeds (as defined
below).  If any dispute arises as to whether the Administrative Agent is
obligated to deliver the Escrowed Shares or as to whom the Escrowed Shares are
to be delivered, the Administrative Agent shall not be required to make any
delivery, but in such event the Administrative Agent may hold the Escrowed
Shares until receipt by the Administrative Agent of the Disposition Proceeds and
(i) instructions in writing, signed by all parties which have, or claim to have,
an interest in the Escrowed Shares, directing the disposition of the Escrowed
Shares, or (ii) in the absence of such writing, a final judgment from a court of
competent jurisdiction or final binding arbitration award providing for the
disposition of the Escrowed Shares.

(g)The Administrative Agent shall be entitled to reimbursement from the Grantors
for all expenses paid or incurred by the Administrative Agent in the
administration of its duties hereunder, including, but not limited to, all
attorneys’ fees, advisors’ and consultants’ fees and disbursements and all taxes
or other governmental charges.

(h)The Administrative Agent may resign as escrow agent at any time and be
discharged from its duties as escrow agent hereunder by giving the Grantors at
least 30 days’ notice thereof.  As soon as practicable after its resignation,
the Administrative Agent shall turn over to a successor escrow agent appointed
by it and the Grantors all Escrowed Shares held hereunder upon presentation of a
document appointing the new escrow agent and its acceptance thereof.  If no new
escrow agent is so appointed within the 60-day period following such notice of
resignation, the Administrative Agent may deposit the Escrowed Shares with any
court it deems appropriate.

(i)From time to time on and after the date hereof, including without limitation
concurrently with the delivery of a written notice as provided in Section
1.02(b), the Grantors shall deliver or cause to be delivered to the
Administrative Agent such further documents and instruments and shall do and
cause to be done such further acts as the Administrative Agent shall reasonably
request to carry out more effectively the provisions and purposes of this
Agreement, to evidence compliance herewith or to assure itself that it is
protected in acting hereunder.

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(j)It is agreed that the Grantor shall retain all rights to dividends, all
rights to vote and all other rights in respect of ownership of the Escrowed
Shares, subject only to the Security Interest in the Disposition Proceeds
Collateral (each as defined below); provided, that any certificated Restricted
Equity Interests received as a dividend or other distribution in respect of
Escrowed Shares shall be delivered to the Administrative Agent in escrow to be
held pursuant to the terms of this Agreement.  

(k)EACH GRANTOR SHALL AND DOES HEREBY JOINTLY AND SEVERALLY INDEMNIFY AND HOLD
THE ADMINISTRATIVE AGENT AND EACH OF THE LENDERS AND OTHER REVOLVING SECURED
PARTIES AND THEIR RESPECTIVE SHAREHOLDERS, OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS, ATTORNEYS-IN-FACT AND AFFILIATES (EACH AN “INDEMNITEE” AND COLLECTIVELY,
THE “INDEMN1TEES”) HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, COSTS,
DAMAGES, JUDGMENTS, ATTORNEYS FEES, EXPENSES, OBLIGATIONS AND LIABILITIES OF ANY
KIND OR NATURE INCLUDING REASONABLE ATTORNEYS FEES AND EXPENSES INCURRED IN
CONNECTION THEREWITH (“LIABILITIES”) WHICH ANY INDEMNITEE INCURS OR SUSTAINS,
DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE SERVICES OF THE ADMINISTRATIVE AGENT HEREUNDER, THE ACTIONS OR
OMISSIONS OF ANY INDEMNITEE IN CONNECTION WITH THIS AGREEMENT, THE ESCROWED
SHARES AND/OR THE DISPOSITION PROCEEDS HELD BY THE ADMINISTRATIVE AGENT
HEREUNDER OR ANY INCOME EARNED THEREFROM INCLUDING, WITHOUT LIMITATION,
LIABILITIES WHICH ARISE IN WHOLE OR IN PART FROM THE NEGLIGENCE, WHETHER SOLE OR
CONCURRENT ON THE PART OF ANY INDEMNITEE BUT EXPRESSLY EXCLUDING THEREFROM THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY SUCH INDEMNITEE.  THE FOREGOING
INDEMNITY SHALL SURVIVE SATISFACTION OF THE OBLIGATIONS AND TERMINATION OF THIS
AGREEMENT.

ARTICLE II
GRANT OF SECURITY iNTEREST

2.1Assignment and Grant of Security.  Each Grantor hereby grants as collateral
security for the payment, performance and satisfaction of all of its Obligations
and the obligations and liabilities of any Loan Party now existing or hereafter
arising under Related Swap Contracts and Secured Cash Management Arrangements
other than Excluded Swap Obligations (such Obligations, obligations and
liabilities referred to collectively as the “Secured Obligations”), to the
Administrative Agent for the benefit of the Revolving Secured Parties a
continuing first priority security interest in and to, and collaterally assigns
to the Administrative Agent for the benefit of the Revolving Secured Parties
(collectively, the “Security Interest”) all rights, titles and interests which
such Grantor now has or at any time in the future may acquire in the following
(collectively, the “Disposition Proceeds”): (i) all purchase and sale agreements
relating to any of the Restricted Equity Interests and all rights to secure
payment thereunder; (ii) the net cash proceeds and all securities, general
intangibles, contract rights, or any other proceeds whatsoever (other than
shares of a Subsidiary which the Grantor is not obligated to pledge)

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which are received or from time to time receivable or otherwise distributed in
respect of the transfer, sale, assignment, conveyance or other disposition of
any kind (each, a “Disposition”) of the Escrowed Shares or other Restricted
Equity Interests and any other property substituted or exchanged therefor (other
than Restricted Disposition Proceeds (as hereinafter defined) and other shares
of a Subsidiary which the Grantor is not obligated to pledge) including without
limitation proceeds from any foreclosure sale or any other forced sale or
liquidation or any sale or disposition arising or occurring pursuant to a plan
in bankruptcy; and (iii) any and all proceeds or other sums payable and/or
distributable with respect to, all or any of the Escrowed Shares or other
Restricted Equity Interests and the other interests described in the preceding
clauses (i), (ii) and (iii) hereof.  Disposition Proceeds which constitute
Restricted Equity Interests shall be referred to herein as “Restricted
Disposition Proceeds” and shall not be included within the property subject to
the Security Interest.  The Disposition Proceeds subject to the Security
Interest are referred to herein as the “Disposition Proceeds Collateral”.

2.2Delivery of Disposition Proceeds.  Upon any Disposition of all or a part of
the Escrowed Shares or other Restricted Equity Interests (including without
limitation any foreclosure sale, any other forced sale or any sale or
disposition arising or occurring pursuant to a plan in bankruptcy), subject to
Section 4.5(a)(iii), the Grantors shall deliver to the Administrative Agent the
Disposition Proceeds, including (with respect to any certificated Disposition
Proceeds) duly executed instruments of transfer, all in form and substance
satisfactory to the Administrative Agent.  The term “certificated” when used
with the term “Disposition Proceeds” shall mean any such Disposition Proceeds
which are evidenced or represented by a note, certificate, instrument, chattel
paper or other written evidence of ownership or entitlement.  All Restricted
Disposition Proceeds shall be held by the Administrative Agent as part of the
Escrow. All Disposition Proceeds Collateral shall be held by the Administrative
Agent in its capacity as Administrative Agent under the Loan Documents and the
Administrative Agent shall be deemed to have possession thereof for purposes of
perfecting the Security Interest in any such property.

ARTICLE III
REPRESENTATIONS AND WARRANTIES

3.1Representations and Warranties.  Each Grantor represents and warrants as
follows:

(a)This Agreement and the grant of the Security Interest pursuant hereto creates
a valid first priority security interest in the Disposition Proceeds securing
the payment of the Obligations, and upon taking possession thereof, the filing
of financing statements in accordance with the UCC, and/or any other necessary
actions to perfect such security interest, such first priority security interest
in such Disposition Proceeds will be duly perfected; and all filings and other
actions necessary or desirable to perfect and protect such security interest and
such priority have been duly taken (or will be taken).

(b)No consent of any other Person and no authorization, approval or other action
by, and no notice to or filing with, any Governmental Authority is required (i)
for the grant by Grantors of the Security Interest in the Disposition Proceeds
or for the execution, delivery, performance or enforceability of this Agreement
by the Grantors, (ii) for the perfection

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or maintenance of the Security Interest in the Disposition Proceeds created
hereby (including the first priority nature of such Security Interest) except
for the taking of possession thereof, the UCC filings or any other action
required by the UCC or other applicable perfection statutes, or (iii) for the
exercise by the Administrative Agent or any Revolving Secured Party of the
rights provided for in this Agreement or the remedies in respect of the
Disposition Proceeds pursuant to this Agreement.

(c)The Grantors are, individually or collectively, as applicable, the legal and
beneficial owners of the Escrowed Shares and other Restricted Equity Interests;
all of the Escrowed Shares and other Restricted Equity Interests currently
outstanding and described on Schedule I are duly authorized and issued, fully
paid and non-assessable, and all documentary, stamp or other taxes or fees owing
in connection with the issuance thereof have been paid; to the knowledge of the
Grantors, no dispute, right of setoff, counterclaim or defense exists with
respect to all or any part of the Escrowed Shares or other Restricted Equity
Interests; the Escrowed Shares and other Restricted Equity Interests are free
and clear of all Liens, mortgages, pledges, charges, security interests or other
encumbrances, options, warrants, puts, calls and other rights of third persons,
and restrictions, other than restrictions on transferability imposed by this
Agreement, the Revolving Credit Agreement, the other Loan Documents and the
applicable Franchise Agreement and applicable state and federal securities laws;
neither this Agreement, the Revolving Credit Agreement nor any of the other Loan
Documents creates or requires the creation or the granting by any Grantor of a
Security Interest in the Escrowed Shares and other Restricted Equity Interests.

(d)The original certificates representing all of the certificated Escrowed
Shares and other certificated Restricted Equity Interests have been delivered to
the Administrative Agent, in escrow; the Restricted Equity Interests described
on Schedule I constitute (i) all of the issued and outstanding capital stock of
each of the Escrow Subsidiaries as of the date hereof and (ii) the indicated
number of shares and/or ownership interest percentages of the entities as shown
on Schedule I; none of the Escrow Subsidiaries have issued, nor are there
outstanding, any options, warrants or other rights in favor of any Grantor or
any other Person to acquire the Escrowed Shares or other Restricted Equity
Interests or any capital stock of any of the Escrow Subsidiaries.

(e)This Agreement constitutes a legal, valid and binding obligation of each
Grantor enforceable in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency or similar laws affecting the enforcement
of creditors’ rights generally and general principals of equity; each Grantor
has the corporate or partnership, as the case may be, power and authority and
the legal right to execute and deliver, to perform its obligations under, and to
(i) deliver the Escrowed Shares into the Escrow, and (ii) to grant the Security
Interest in the Disposition Proceeds Collateral pursuant to this Agreement; and
each Grantor has taken all necessary, corporate, limited liability company or
partnership, as the case may be, action to authorize its execution, delivery and
performance of, the delivery of the Escrowed Shares into the Escrow, and the
grant of the security interest in the Disposition Proceeds Collateral pursuant
to this Agreement.

(f)The execution, delivery and performance of this Agreement will not (i)
conflict with or result in any breach or contravention of any Contractual
Obligation of any

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Grantor, including any agreement between a Grantor and any manufacturer or
distributor, (ii) violate any Law, or (iii) result in the creation or imposition
of any Lien on any of the properties or revenues of any Grantor pursuant to any
applicable Law or Contractual Obligation of any Grantor, except as contemplated
hereby.

(g)No action, suit or proceeding of or before any Governmental Authority is
pending or, to the knowledge of Grantors, threatened by or against any Grantor
or against any of its properties or revenues with respect to this Agreement or
any of the transactions contemplated hereby.

(h)There are no conditions precedent to the effectiveness of this Agreement that
have not been satisfied or waived.

ARTICLE IV
COVENANTS

Grantors covenant and agree as follows:

4.1Further Assurances.  (a)  Each Grantor agrees that, where any agreement
existing as of the date hereof or hereafter to which such Grantor is a party
contains any restriction prohibiting such Grantor from (i) transferring the
Escrowed Shares into the Escrow, or (ii) granting the Security Interest in the
Disposition Proceeds Collateral, such Grantor will obtain or use its best
efforts to obtain the necessary consent to or waiver of such restriction from
any Person so as to enable such Grantor to effectively transfer the Escrowed
Shares into the Escrow and grant to Administrative Agent such Security Interest
in the Disposition Proceeds Collateral.

(b)Each Grantor will from time to time at its expense promptly execute and
deliver all further instruments and documents, and take all further action, that
may be reasonably necessary or desirable, or that Administrative Agent may
reasonably request, in order to perfect and protect the Security Interest
granted or purported to be granted hereby or in any Joinder Agreement, in the
Disposition Proceeds Collateral, in the priority thereof, or to create or
preserve the full benefits of this Agreement and the rights and powers of
Administrative Agent herein or in any Joinder Agreement, or to enable
Administrative Agent to exercise and enforce its rights and remedies hereunder
or thereunder with respect to any of the Disposition Proceeds
Collateral.  Without limiting the generality of the foregoing, upon written
request by Administrative Agent, each Grantor will: (i) if the Disposition
Proceeds Collateral are certificated, deliver to Administrative Agent such
certificated Disposition Proceeds Collateral duly endorsed and accompanied by
duly executed instruments of transfer or assignment, all in form and substance
satisfactory to the Administrative Agent; and (ii) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary, or as Administrative Agent may
request, in order to perfect and preserve the Security Interest granted or
purported to be granted hereby with respect to any and all such Disposition
Proceeds Collateral.

(c)Each Grantor hereby authorizes Administrative Agent to file one or more
financing or continuation statements, and amendments thereto, relating to all or
any part of the Disposition Proceeds Collateral without the signature of such
Grantor where and to the extent

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permitted by applicable law.  A photocopy or other reproduction of this
Agreement or any financing statement covering the Disposition Proceeds
Collateral or any part thereof shall be sufficient as a financing statement
where and to the extent permitted by applicable law.

(d)Each Grantor will furnish to Administrative Agent from time to time, upon the
written request of Administrative Agent, statements and schedules further
identifying and describing the Disposition Proceeds Collateral, and such other
reports in connection with the Disposition Proceeds Collateral, as
Administrative Agent may reasonably request.

(e)In addition to such other information as shall be specifically provided for
herein, Grantors shall furnish to Administrative Agent such other information
with respect to the Disposition Proceeds Collateral as Administrative Agent may
reasonably request from time to time in connection with the Disposition Proceeds
Collateral, or the protection, preservation, maintenance or enforcement of the
Security Interest or the Disposition Proceeds Collateral, including, without
limitation, all documents and things in Grantors’ possession, or subject to its
demand for possession, related to the Disposition Proceeds Collateral.

(f)Subject to Section 4.5(a)(iii), each Grantor shall, if any of the Disposition
Proceeds Collateral are received by such Grantor, (i) in the case of Disposition
Proceeds Collateral, forthwith transfer and deliver to Administrative Agent all
such Disposition Proceeds Collateral either in cash or if certificated, duly
endorsed and accompanied by duly executed instruments of transfer, all in form
satisfactory to the Administrative Agent, all of which thereafter shall be held
by Administrative Agent as collateral security for payment and performance of
the Obligations, pursuant to the terms of this Agreement, and (ii) in the case
of Restricted Disposition Proceeds, forthwith deliver such Restricted
Disposition Proceeds in escrow to the Administrative Agent to be held as
Escrowed Shares.

(g)Each Grantor agrees that if such Grantor shall at any time acquire any
additional Restricted Equity Interests of any Escrow Subsidiary, such Grantor
shall, as soon as practically possible, (and without the necessity for any
request or demand by Administrative Agent) deliver the certificates representing
such shares or interests to Administrative Agent, in escrow in the same manner
and with the same effect as described in Article 1 hereof.  Upon delivery, such
shares or evidences of ownership shall thereupon constitute Escrowed Shares for
the purposes and upon the terms and conditions set forth in this Agreement.

(h)No Grantor will make any Disposition of the Escrowed Shares or other
Restricted Equity Interests (whether certificated or uncertificated) or any part
thereof, or create directly or indirectly any security interest or otherwise
encumber (other than any restriction imposed by any Franchise Agreement to which
the Grantor is a party)  any of the Escrowed Shares or other Restricted Equity
Interests, or permit any of the Escrowed Shares or other Restricted Equity
Interests to ever be or become subject to any warrant, put, option or other
rights of third Persons or any attachment, execution, sequestration or other
legal or equitable process, or any security interest or encumbrance of any kind,
in each case, unless and until any Disposition Proceeds Collateral are paid
and/or delivered to the Administrative Agent in accordance with the Agreement,
or are received and retained by the requisite Grantor in accordance with Section
4.5(a)(iii), and any Restricted Disposition Proceeds are delivered in escrow to
the Administrative Agent to be held as Escrowed Shares.

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(i)The Grantors shall enforce or secure in the name of Administrative Agent, for
the benefit of the Revolving Secured Parties, the performance of each and every
obligation, term, covenant, condition and agreement relating to any Disposition
Proceeds Collateral, and the Grantors shall appear in and defend any action or
proceeding arising under, occurring out of or in any manner connected therewith
and upon request by the Administrative Agent, the Grantors will do so in the
name of the Administrative Agent and on behalf of the Revolving Secured Parties,
but at the expense of the Grantors, and the Grantors shall pay all costs and
expenses of the Administrative Agent and the Revolving Secured Parties,
including, but not limited to, attorneys’ fees and disbursements, in any action
or proceeding in which the Revolving Secured Parties may appear.

(j)Each Grantor shall allow the Administrative Agent to inspect all records of
such Grantor relating to the Escrowed Shares and/or the Disposition Proceeds
Collateral, and to make and take away copies of such records.

(k)Each Grantor shall promptly notify the Administrative Agent of any material
change in any fact or circumstance warranted or represented by such Grantor in
this Agreement or in any other writing furnished by such Grantor to the
Administrative Agent in connection with the Escrowed Shares or this Agreement.

(l)Each Grantor shall promptly notify the Administrative Agent of any claim,
action or proceeding affecting title to the Escrowed Shares, or any part
thereof, the Disposition Proceeds Collateral, or the Security Interest, and at
the request of the Administrative Agent, appear in and defend, at the Grantors’
expense, any such action or proceeding.

(m)The Grantors (jointly and severally) shall promptly pay to the Administrative
Agent the amount of all reasonable costs and expenses of the Administrative
Agent and/or the Revolving Secured Parties, including, but not limited to,
reasonable attorneys’ fees, incurred by the Administrative Agent or the
Revolving Secured Parties in connection with this Agreement and the enforcement
of the rights of the Administrative Agent or the Revolving Secured Parties
hereunder, in accordance with Section 10.05 of the Revolving Credit Agreement.

(n)At no time shall any Escrowed Shares or other Restricted Equity 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
related Escrow Subsidiary 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.  

(o)Each Grantor and each issuer of any Escrowed Shares or other Restricted
Equity Interests shall mark each register or other ownership or transfer record
relating to any of the Escrowed Shares or other Restricted Equity Interests with
a notation indicating that (a) such securities, if Escrowed Shares, are subject
to this Agreement and the Escrow hereunder, (b) any Disposition of any Escrowed
Shares or other Restricted Equity Interests is subject to this Agreement, and
(c) any Disposition Proceeds Collateral are subject to the Security Interest and
Escrow hereunder.

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4.2Conversions; etc.  Should the Escrowed Shares, or any part thereof, ever be
in any manner converted by any of the Escrow Subsidiaries into another property
of the same or another type or any money or other proceeds ever be paid or
delivered to any Grantor as a result of such Grantor’s rights in the Escrowed
Shares, then in any such event (except as otherwise provided herein), (i) (in
the case of property other than Restricted Equity Interests) all such property,
money and other proceeds shall be and/or become part of the Disposition Proceeds
Collateral, and each Grantor covenants forthwith to pay or deliver to the
Administrative Agent all of the same which is susceptible of delivery; and at
the same time, if the Administrative Agent deems it necessary and so requests,
such Grantors will properly endorse or assign the same to the Administrative
Agent for the benefit of the Revolving Secured Parties, and (ii) (in the case of
Restricted Equity Interests) such property shall be delivered in escrow to the
Administrative Agent to be held as Escrowed Shares.  Without limiting the
generality of the foregoing, each Grantor hereby agrees that the shares of
capital stock of the surviving corporation in any merger or consolidation
involving any of the Escrow Subsidiaries or any of the Escrowed Shares shall be
deemed to constitute Disposition Proceeds Collateral (or, if applicable,
Restricted Disposition Proceeds) if the surviving Escrow Subsidiary ceases to be
either a direct or indirect wholly owned Subsidiary of the Company.

4.3Preservation of Escrowed Shares.  Neither the Administrative Agent nor the
Revolving Secured Parties shall have any responsibility for or obligation or
duty with respect to all or any part of the Escrowed Shares or other Restricted
Equity Interests or any Disposition Proceeds Collateral or any matter or
proceeding arising out of or relating thereto, including, without limitation,
beyond the use of reasonable care in the custody and preservation thereof while
in its possession, any obligation or duty to collect any sums due in respect
thereof or to protect or preserve any rights against prior parties or any other
rights pertaining thereto, it being understood and agreed that the Grantors
shall be responsible generally for the preservation of all rights in the
Escrowed Shares, the other Restricted Equity Interests and the Disposition
Proceeds Collateral.

4.4Collection of the Loan.  Neither the Administrative Agent nor any Revolving
Secured Party shall ever be liable for any failure to use due diligence in the
collection of any and all amounts due and owing under the Notes, the Revolving
Credit Agreement or any other Loan Documents, or any part thereof.

4.5Rights of Parties Before the Occurrence of an Event of Default.

(a)Exercising Rights and Receipt of Cash Proceeds Prior to an Event of
Default.  Unless and until an Event of Default shall occur and be continuing:

(i)With respect to all Disposition Proceeds Collateral, subject to the other
provisions of this Agreement, the Grantors shall be entitled to receive all cash
dividends or interest paid in respect of or attributable to such Disposition
Proceeds Collateral and any and all other Distributions.  As used herein
“Distributions” shall mean the declaration or payment of any dividend or other
distribution on or with respect to such Disposition Proceeds Collateral, and any
other payment made with respect to such Disposition Proceeds Collateral other
than in respect of a Disposition thereof.  All such Distributions shall if
received by any Person other than the Administrative Agent, be held

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in trust for the benefit of the Administrative Agent and the Revolving Secured
Parties and shall forthwith be delivered to the Administrative Agent duly
endorsed and accompanied by duly executed instruments of transfer, all in form
and substance satisfactory to the Administrative Agent to be held subject to the
Security Interest and the other provisions of this Agreement.

(ii)With respect to all Disposition Proceeds Collateral, each Grantor shall have
the right to vote and give consents with respect to all such Disposition
Proceeds Collateral owned by it and to consent to, ratify, or waive notice of
any and all meetings and take such other action as it deems appropriate to
protect or further its interests in respect thereof; provided that such right
shall in no case be exercised for any purpose contrary to, or in violation of,
any of the terms or provisions of this Agreement, the Notes, the Revolving
Credit Agreement, or any other Loan Document.

(iii)The requisite Grantor shall be entitled to receive and retain the cash
purchase price for any sale of Restricted Equity Interests that is a Permitted
Disposition (the “Retained Cash”) and shall not be required to deliver the
Retained Cash to the Administrative Agent pursuant to Section 4.1(f) or any
other provision hereof.

(b)Exercising Rights in Disposition Proceeds Collateral After the  Occurrence of
an Event of Default.  Upon the occurrence and during the continuance of an Event
of Default, the Administrative Agent, without the consent of any Grantor, may:

(i)At any time vote or consent in respect of any Disposition Proceeds Collateral
and authorize any such Disposition Proceeds Collateral to be voted and such
consents to be given, ratify and waive notice of any and all meetings, and take
such other action as shall seem desirable to the Administrative Agent, in its
sole discretion, to protect or further the interests of the Administrative Agent
and the Revolving Secured Parties in respect of any such Disposition Proceeds
Collateral as though it were the outright owner thereof, and, each Grantor
hereby irrevocably constitutes and appoints the Administrative Agent, after the
occurrence and during the continuance of an Event of Default, its sole proxy and
attorney-in-fact, with full power of substitution to vote and act with respect
to any and all such Disposition Proceeds Collateral standing in the name of such
Grantor or with respect to which such Grantor is entitled to vote and act.  The
proxy and power of attorney herein granted are coupled with interests, are
irrevocable, and shall continue throughout the term of this Agreement;

(ii)In respect of any Disposition Proceeds Collateral, join in and become a
party to any plan of recapitalization, reorganization or readjustment (whether
voluntary or involuntary) as shall seem desirable to the Administrative Agent in
respect of any such Disposition Proceeds Collateral, and deposit any such
Disposition Proceeds Collateral under any such plan; make any exchange,
substitution, cancellation or surrender of such Disposition Proceeds Collateral
required by any such plan and take such action with respect to any such
Disposition Proceeds Collateral as may be required by any such plan or for the
accomplishment thereof; and no such disposition, exchange, substitution,
cancellation or surrender shall be deemed to constitute a release of such
Disposition Proceeds Collateral from the Security Interest of this Agreement;

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(iii)Receive for application as provided in Section 8.03 of the Revolving Credit
Agreement all payments of whatever kind made upon or with respect to any
Disposition Proceeds Collateral; and

(iv)Subject to the provisions of Section 4.5(c) hereof, transfer or endorse into
its name, or into the name or names of its nominee or nominees, all or any of
the Disposition Proceeds Collateral.

(c)Right of Sale of Disposition Proceeds Collateral After the Occurrence of an
Event of Default.  Upon the occurrence and during the continuance of an Event of
Default, the Administrative Agent may sell, without recourse to judicial
proceedings, by way of one or more contracts, with the right (except at private
sale) to bid for and buy, free from any right of redemption, any Disposition
Proceeds Collateral upon five (5) days’ notice (which notice is agreed to be
reasonable notice for the purposes hereof) to the Grantors of the time and place
of sale, for cash, upon credit or for future delivery, at the Administrative
Agent’s option and in the Administrative Agent’s complete discretion:

(i)At public sale, including a sale at any broker’s board or exchange; or

(ii)At private sale in any manner which will not require the Disposition
Proceeds Collateral, or any part thereof, to be registered in accordance with
the Securities Act of 1933, as amended, or the rules and regulations promulgated
thereunder, or any other law or regulation, at the best price reasonably
obtainable by the Administrative Agent at any such private sale or other
disposition in the manner mentioned above.

The Administrative Agent is also hereby authorized, but not obligated, to take
such actions, give such notices, obtain such consents, and do such other things
as the Administrative Agent may deem required or appropriate in the event of
sale or disposition of such Disposition Proceeds Collateral.  Each Grantor
understands that the Administrative Agent may in its sole discretion approach a
restricted number of potential purchasers and that a sale under such
circumstances may yield a lower price for such Disposition Proceeds Collateral,
or any portion thereof, than would otherwise be obtainable if the same were
registered and sold in the open market.  Each Grantor agrees (A) that in the
event the Administrative Agent shall so sell such Disposition Proceeds
Collateral, or any portion thereof, at such private sale or sales, the
Administrative Agent shall have the right to rely upon the advice and opinion of
any member firm of a national securities exchange as to the best price
reasonably obtainable upon such a private sale thereof (any expense borne by the
Administrative Agent in obtaining such advice to be paid by the Grantors as an
expense related to the exercise by the Administrative Agent of its rights
hereunder), and (B) that such reliance shall be conclusive evidence that the
Administrative Agent handled such matter in a commercially reasonable
manner.  No Revolving Secured Party shall be under any obligation to take any
steps to permit such Disposition Proceeds Collateral to be sold at a public sale
or to delay a sale to permit the Escrow Subsidiaries to register such
Disposition Proceeds Collateral for public sale under the Securities Act of 1933
or applicable state securities law.  In ease of any sale by the Administrative
Agent of the Disposition Proceeds Collateral on credit or for future delivery,
the Disposition Proceeds Collateral sold may be retained by the

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Administrative Agent until the selling price is paid by the purchaser, but the
Administrative Agent shall incur no liability in case of failure of the
purchaser to take up and pay for the Disposition Proceeds Collateral so
sold.  In case of any such failure, such Disposition Proceeds Collateral so sold
may be again similarly sold.  In connection with the sale of the Disposition
Proceeds Collateral, the Administrative Agent is authorized, but not obligated,
to limit prospective purchasers to the extent deemed necessary or desirable by
the Administrative Agent to render such sale exempt from the registration
requirements of the Securities Act of 1933, as amended, and any applicable state
securities laws, and no sale so made in good faith by the Administrative Agent
shall be deemed not to be “commercially reasonable” because so made.  In no
event, however, shall the Administrative Agent or any Revolving Secured Party
have any right to sell, foreclose upon, or compel the sale of, any Escrowed
Shares.

(d)Other Rights After an Event of Default.  Upon the occurrence and during the
continuance of an Event of Default, the Administrative Agent, at its election,
may with respect to all Disposition Proceeds Collateral exercise any and all
rights available to a secured party under the Uniform Commercial Code as enacted
in the State of North Carolina or other applicable jurisdiction, as amended, in
addition to any and all other rights afforded hereunder, under the Revolving
Credit Agreement, the Notes, under the other Loan Documents, at law, in equity
or otherwise.

(e)Application of Proceeds.  Any and all Disposition Proceeds Collateral
including cash proceeds and the proceeds from the disposition as hereinabove
provided of Disposition Proceeds Collateral received by Lenders or any part
thereof shall be applied as provided in Section 8.03 of the Revolving Credit
Agreement.

4.6Right to File as Financing Statement.  The Administrative Agent shall have
the right at any time to execute and file this Agreement as a financing
statement, but the failure of the Administrative Agent to do so shall not impair
the validity or enforceability of this Agreement or the Security Interest.

4.7Restricted Disposition Shares; No Control by Administrative Agent or Lenders.

(a)Notwithstanding anything herein or in any other Loan Document to the
contrary, the Administrative Agent shall not have, or be deemed to have, a
security interest in any Restricted Disposition Proceeds or the Escrowed Shares,
but the Administrative Agent shall have, and is hereby granted, a security
interest in Disposition Proceeds Collateral (the “Subsequent Proceeds”) of
Restricted Disposition Proceeds so long as such Subsequent Proceeds are not
themselves Restricted Disposition Proceeds.  Any Restricted Disposition Proceeds
delivered to the Administrative Agent to be held in escrow by the Administrative
Agent and will be deemed to be Escrowed Shares for purposes of this Agreement.  

(b)Notwithstanding anything herein or in any other Loan Document to the
contrary, this Agreement, the Revolving Credit Agreement and the other Loan
Documents, and the transactions contemplated hereby and thereby, do not and will
not, constitute, create or have the effect of constituting or creating, directly
or indirectly, the actual or practical ownership of any of the Escrow
Subsidiaries by the Administrative Agent or any Revolving Secured Party, or

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control, affirmative or negative, direct or indirect, by the Administrative
Agent or any Revolving Secured Party over the management or any other aspect of
the day-to-day operation of the Escrow Subsidiaries, which ownership and control
remains exclusively and at all times in each of the Escrow Subsidiaries.

4.8Agreement to Supplement.  Each Grantor acknowledges and agrees that this
Agreement shall be amended and supplemented from time to time to specifically
include a description of all Escrowed Shares subject hereto subsequent to the
date hereof, and the Administrative Agent shall be entitled to supplement
Schedule I from time to time, without any action or joinder of the Grantors to
reflect the addition of all such additional Escrowed Shares.  The Administrative
Agent shall have a valid first priority security interest in all additional
Disposition Proceeds which come into existence after the date hereof, whether or
not reflected on a supplement to Schedule I.  The Grantor hereby agrees to
execute, deliver and cause the filing of all stock powers, financing statements
and other documents and to take such further action as deemed necessary in the
Administrative Agent’s reasonable discretion with respect to each such
additional Escrowed Shares and Disposition Proceeds to ensure each Grantor’s
compliance hereunder with respect thereto.

4.9Reinstatement.  The granting of a security interest in the Disposition
Proceeds 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 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 any Grantor or any
other Loan Party or otherwise, all as though such payment  had not been
made.  The provisions of this Section 4.9 shall survive repayment of all of the
Secured Obligations and the termination or expiration of this Agreement in any
manner, including but not limited to termination upon occurrence of the Facility
Termination Date.

4.10Certain Waivers by the Grantors.  Each Grantor 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 (x) proceed against any
Person or entity, including without limitation any Loan Party, (y) proceed
against or exhaust the Disposition Proceeds Collateral or other collateral for
the Secured Obligations, or (z) 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, and (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.  Each Grantor 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: (i) take and hold
security, other than the Disposition Proceeds Collateral herein described, for
the payment of such Secured Obligations or any part thereof, and exchange,
enforce, waive and release the Disposition Proceeds Collateral herein described
or any part thereof or any such other security; and (ii) apply such Disposition
Proceeds Collateral or other security and direct the order

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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 Disposition Proceeds Collateral or any part thereof to
a Grantor and the receipt thereof by such Grantor shall be a complete and full
acquittance for the Disposition Proceeds Collateral so delivered, and the
Administrative Agent shall thereafter be discharged from any liability or
responsibility therefor.

4.11Continued 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 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 any Grantor may have ceased.

4.12Other Rights.  The rights, powers and remedies given to the Administrative
Agent for the benefit of the Revolving Secured Parties by this Agreement shall
be in addition to all rights, powers and remedies given to the Administrative
Agent or any Revolving Secured Party under any other 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.

4.13Anti-Marshaling Provisions.  The right is hereby given by each Grantor 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
Disposition Proceeds 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
Disposition Proceeds conferred hereunder, nor release any Grantor from personal
liability for the Secured Obligations.  Notwithstanding the existence of any
other security interest in the Disposition Proceeds held by the Administrative
Agent, for the benefit of the Revolving Secured Parties, the Administrative
Agent shall have the right to determine the order in which any or all of the
Disposition Proceeds shall be subjected to the remedies provided in this
Agreement.  Each Grantor 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.

4.14Entire Agreement.  This Agreement and each Joinder Agreement, together with
the Revolving Credit Agreement and other Loan Documents, 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 and of the
Joinder Agreements control and supersede any course of performance or usage

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of the trade inconsistent with any of the terms hereof and thereof.  Neither
this Agreement nor any Joinder Agreement nor any portion or provision hereof or
thereof 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.

4.15Reliance.  Each Grantor hereby consents and agrees that all Persons shall be
entitled to accept the provisions hereof and of the Joinder Agreements 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 Disposition Proceeds,
notwithstanding any other notice or direction to the contrary heretofore or
hereafter given by any Grantor or any other Person to any Persons.

4.16Binding Agreement; Assignment.  This Agreement and each Joinder Agreement,
and the terms, covenants and conditions hereof and thereof, shall be binding
upon and inure to the benefit of the parties hereto, and to their respective
successors and assigns, except that no Grantor shall be permitted to assign this
Agreement, any Joinder Agreement or any interest herein or therein or in the
Disposition Proceeds, or any part thereof or interest therein, or otherwise
pledge, encumber or grant any option with respect to the Disposition Proceeds,
or any part thereof, or any cash or property held by the Administrative Agent as
the Disposition Proceeds under this Agreement.  Without limiting the generality
of the foregoing sentence of this Section 4.16, 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 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.

4.17Related Swap Contracts.  All obligations of any Grantor under or in respect
of Related Swap Contracts and Secured Cash Management Arrangements other than
Excluded Swap Obligations shall be deemed to be Secured Obligations secured
hereby, and each Hedge Bank or Cash Management Bank 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 under or in respect of any Related Swap
Contract shall cease to be Secured Obligations at such time, prior to the
Facility Termination Date, as the applicable Hedge Bank (or Affiliate of such
Person) shall cease to be a “Hedge Bank” 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 Disposition Proceeds (including the release or
impairment of any Disposition Proceeds) 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 Agreement to the
contrary, the Administrative Agent shall only be

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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.  The Administrative Agent shall not be required to
verify the payment of, or that any other satisfactory arrangements have been
made with respect to, obligations arising under Secured Cash Management
Agreements and Related Swap Contracts in the case of a Facility Termination
Date.  Each Revolving Secured Party not a party to the Revolving Credit
Agreement who obtains the benefit of this 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.

4.18Severability.  The provisions of this 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 Agreement
shall be construed as if such invalid or unenforceable provision had never been
contained herein.

4.19Counterparts.  This 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 Agreement to produce or account
for more than one such counterpart executed by the Grantor against whom
enforcement is sought.  Without limiting the foregoing provisions of this
Section 4.19, the provisions of Section 10.10 of the Revolving Credit Agreement
shall be applicable to this Agreement.

4.20Termination.  Subject to the provisions of Section 4.9, this Agreement and
each Joinder Agreement, and all obligations of the Grantors 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
Agreement, the Administrative Agent shall, at the sole expense of the Grantors,
promptly deliver to the Grantors the Escrowed Shares, all other certificated
Restricted Equity Interests and the Disposition Proceeds Collateral and take
such actions at the request of the Grantors as may be necessary to effect the
same.

4.21Notices.  Any notice required or permitted hereunder shall be given (a) with
respect to any Grantor hereunder, at the address of the Company indicated in
Schedule 10.02 of the Revolving Credit Agreement, (b) with respect to the
Administrative Agent or a Lender, 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.

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4.22Joinder.  Each Person who shall at any time execute and deliver to the
Administrative Agent a Joinder Agreement who is identified therein as a
“Grantor” (as such term is defined in this Agreement) shall thereupon
irrevocably, absolutely and unconditionally become a party hereto and obligated
hereunder to the extent required pursuant to such Joinder Agreement as a Grantor
and shall have thereupon pursuant to Section 1 hereof granted a security
interest in and collaterally assigned and pledged to the Administrative Agent
for the benefit of the Revolving Secured Parties all Disposition Proceeds which
it has at its applicable date of execution of its respective Joinder Agreement
or thereafter acquires any interest or the power to transfer, and all references
herein and in the other Loan Documents to the Grantors or to the parties to this
Agreement shall be deemed to include such Person as a Grantor hereunder.  Each
such Joinder Agreement shall be accompanied by the Supplemental Schedules
referred to therein, appropriately completed with information relating to the
Grantor executing such Joinder Agreement and its property. Each of the
applicable Schedules attached hereto shall be deemed amended and supplemented
without further action by such information reflected on the Supplemental
Schedules to each such Joinder Agreement.

4.23Rules of Interpretation.  The rules of interpretation contained in Sections
1.03 and 1.06 of the Revolving Credit Agreement shall be applicable to this
Agreement and each Joinder 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.

4.24Governing Law; Waivers.

(a)THIS AGREEMENT AND EACH JOINDER 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)EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND CONSENTS THAT ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
JOINDER 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 AGREEMENT OR A JOINDER 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)EACH GRANTOR 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 PREPAID) TO
THE ADDRESS OF SUCH GRANTOR PROVIDED IN SECTION 4.21 OR BY ANY

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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 AGREEMENT OR ANY JOINDER AGREEMENT OR THE OTHER LOAN
DOCUMENTS IN THE COURTS OF ANY PLACE WHERE ANY GRANTOR OR ANY OF SUCH GRANTOR’S
PROPERTY OR ASSETS MAY BE FOUND OR LOCATED.  TO THE EXTENT PERMITTED BY THE
APPLICABLE LAWS OF ANY SUCH JURISDICTION, EACH GRANTOR 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 AGREEMENT OR ANY JOINDER 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)EACH GRANTOR 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.

4.25Amendment and Restatement.  The parties hereto agree that the Existing
Escrow and Security Agreement is hereby amended and restated in this Escrow and
Security Agreement, and this Escrow and Security Agreement shall constitute
neither a release nor novation of any lien or security interest arising under
the Existing Escrow and Security 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 Escrow and Security Agreement shall continue in effect on the terms
hereof.

 

[Signature page follows.]

 

20

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IN WITNESS WHEREOF, the parties have duly executed this Agreement on the day and
year first written above.

GRANTORS:

SONIC AUTOMOTIVE, INC.

By:

     /s/ Heath R. Byrd

Name:

Heath R. Byrd

Title:

Executive Vice President and Chief

Financial Officer

 

 

FAA HOLDING CORP.

FIRSTAMERICA AUTOMOTIVE, INC.

L DEALERSHIP GROUP, INC.

SAI AL HC1, INC.

SAI AL HC2, INC.

SAI FL HC2, INC.

SAI FL HC4, INC.

SAI MD HC1, INC.

SAI OK HC1, INC.

SAI TN HC3, LLC

SONIC AUTOMOTIVE OF NEVADA, INC.

SONIC OF TEXAS, INC.

By:

     /s/ Heath R. Byrd

Name:

Heath R. Byrd

Title:

Vice President and Treasurer

 

 

SAI GA HC1, LLC

By:

Sonic Automotive of Nevada, Inc., as

Sole Member

By:/s/ Heath R. Byrd

Name:Heath R. Byrd

Title:

Vice President and Treasurer

 

 

THIRD AMENDED AND RESTATED ESCROW AND SECURITY AGREEMENT

Signature Page

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ADMINISTRATIVE AGENT:

BANK OF AMERICA, N.A., as Administrative Agent

By:   /s/ Denise Jones

Name:Denise Jones

Title:Assistant Vice President

 

 

THIRD AMENDED AND RESTATED ESCROW AND SECURITY AGREEMENT

Signature Page

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SCHEDULE I

 

Escrowed Shares

 

grantor

escrow subsidiaries

type of shares

no. of shares

cert. no.(s)

FAA Holding Corp.

1.FAA Las Vegas H, Inc.

Nevada

Corporation

C13186-1999

Common Stock

10,000

2

FAA Holding Corp.

2.Kramer Motors Incorporated

California

Corporation

C0392185

Common Stock

250

10

FirstAmerica Automotive, Inc.

3.FAA Beverly Hills, Inc.

California

Corporation

C2069519

Common Stock

10,000

2

FirstAmerica Automotive, Inc.

4.FAA Concord H, Inc.

California

Corporation

C2004304

Common Stock

10,000

2

FirstAmerica Automotive, Inc.

5.FAA Concord T, Inc.

California

Corporation

C0613543

Common Stock

1,000

5

FirstAmerica Automotive, Inc.

6.FAA Poway H, Inc.

California

Corporation

C2006230

Common Stock

10,000

2

Schedule I – Page 1

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grantor

escrow subsidiaries

type of shares

no. of shares

cert. no.(s)

FirstAmerica Automotive, Inc.

7.FAA San Bruno, Inc.

California

Corporation

C2004303

Common Stock

10,000

2

FirstAmerica Automotive, Inc.

8.FAA Serramonte, Inc.

California

Corporation

C2004221

Common Stock

10,000

3

FirstAmerica Automotive, Inc.

9.FAA Serramonte H, Inc.

California

Corporation

C2069465

Common Stock

10,000

2

FirstAmerica Automotive, Inc.

10.FAA Serramonte L, Inc.

California

Corporation

C2004222

Common Stock

10,000

2

FirstAmerica Automotive, Inc.

11.FAA Stevens Creek, Inc.

California

Corporation

C2004216

Common Stock

10,000

2

L Dealership Group, Inc.

12.Franciscan Motors, Inc.

California

Corporation

C1532758

Common Stock

700,000

10

L Dealership Group, Inc.

13.Santa Clara Imported Cars, Inc.

California

Corporation

C0587296

Common Stock

1,082

10

Schedule I – Page 2

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grantor

escrow subsidiaries

type of shares

no. of shares

cert. no.(s)

L Dealership Group, Inc.

14.Sonic - Stevens Creek B, Inc.

California

Corporation

C0723787

Common Stock

300,000

10

L Dealership Group, Inc.

15.Windward, Inc.

Hawaii

Corporation

41788D1FPD

Common Stock

140,500

10

SAI AL HC1, Inc.

16.SAI Montgomery B, LLC

Alabama
Limited Liability Company
428-746

LLC Interest

100.00%

N/A

SAI AL HC2, Inc.

17.SAI Irondale Imports, LLC

Alabama

Limited Liability Company

428-744

Common Stock

100.00%

N/A

SAI AL HC2, Inc.

18.SAI Irondale L, LLC

Alabama

Limited Liability Company

662-073

LLC Interest

100.00%

N/A

SAI GA HC1, Inc.

19.SAI Stone Mountain T, LLC

Georgia

Limited Liability Company

4746287

LLC Interest

100.00%

N/A

SAI FL HC2, Inc.

20.SAI Clearwater T, LLC

Florida

Limited Liability Company

L08000116713

LLC Interest

100.00%

N/A

Schedule I – Page 3

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grantor

escrow subsidiaries

type of shares

no. of shares

cert. no.(s)

SAI FL HC2, Inc.

21.SAI Fort Myers B, LLC

Florida

Limited Liability Company

L08000116712

LLC Interest

100.00%

N/A

SAI FL HC4, Inc.

22.SAI Fort Myers H, LLC

Florida

Limited Liability Company

L08000116710

LLC Interest

100.00%

N/A

SAI MD HC1, Inc.

23.SAI Rockville L, LLC

24.Maryland
Limited Liability Company
W12791083

LLC Interest

100.00%

N/A

SAI OK HC1, Inc.

25.SAI Atlanta B, LLC

26.Georgia
Limited Liability Company
08083814

LLC Interest

100.00%

N/A

SAI TN HC3, LLC

 

27.SAI Nashville H, LLC

Tennessee

Limited Liability Company

0336180

LLC Interest

100.00%

N/A

SAI HC VA1, Inc.

28.SAI Fairfax B, LLC

Virginia

Limited Liability Company

S4346344

LLC Interest

100.00%

N/A

SAI VA HC1, Inc.

29.SAI Tysons Corner H, LLC

Virginia

Limited Liability Company

S4346369

LLC Interest

100.00%

N/A

Schedule I – Page 4

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grantor

escrow subsidiaries

type of shares

no. of shares

cert. no.(s)

SAI VA HC1, Inc.

30.SAI Tysons Corner I, LLC

Virginia

Limited Liability Company

S4346377

LLC Interest

100.00%

N/A

Sonic Automotive, Inc.

31.FirstAmerica Automotive, Inc.

Delaware

Corporation

2761294

Common Stock

100

2

Sonic Automotive, Inc.

32.Marcus David Corporation

North Carolina

Corporation

0272880

Common Stock

579,000

8

Sonic Automotive, Inc.

33.Ontario L, LLC

California

Limited Liability Company

200330110050

LLC Interest

100.00%

N/A

Sonic Automotive, Inc.

34.SAI AL HC2, Inc.

Alabama

Corporation

D/C 199-217

Common Stock

100

1

Sonic Automotive, Inc.

35.SAI Ann Arbor Imports, LLC

36.Michigan
Limited Liability Company
E15303

LLC Interest

100.00%

N/A

Sonic Automotive, Inc.

37.SAI Columbus T, LLC

Ohio

Limited Liability Company

CP13128

LLC Interest

100.00%

N/A

Schedule I – Page 5

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grantor

escrow subsidiaries

type of shares

no. of shares

cert. no.(s)

Sonic Automotive, Inc.

38.SAI Denver B, Inc.

Colorado

Corporation

20131294528

Common Stock

100

1

Sonic Automotive, Inc.

39.SAI FL HC2, Inc.

Florida

Corporation

P98000016038

Common Stock

100

2

Sonic Automotive, Inc.

40.SAI Long Beach B, Inc.

41.California
Corporation
C2998588

Common Stock

100

1

Sonic Automotive, Inc.

42.SAI MD HC1, Inc.

43.Maryland
Corporation
D05310776

Common Stock

100

2

Sonic Automotive, Inc.

44.SAI Monrovia B, Inc.

45.California
Corporation
C2979304

Common Stock

100

1

Sonic Automotive, Inc.

46.SAI VA HC1, Inc.

47.Virginia
Corporation
07019870

Common Stock

100

1

Sonic Automotive, Inc.

48.Sonic Automotive of Nevada, Inc.

49.Nevada
Corporation
C18014-1997

Common Stock

1,000

1

Schedule I – Page 6

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grantor

escrow subsidiaries

type of shares

no. of shares

cert. no.(s)

Sonic Automotive, Inc.

50.Sonic Automotive 2752 Laurens Rd., Greenville, Inc.

South Carolina

Corporation

Common Stock

100

1

Sonic Automotive, Inc.

51.Sonic Automotive - 9103 E. Independence, NC, LLC

North Carolina

Limited Liability Company

0470751

LLC Interest

100.00%

N/A

Sonic Automotive, Inc.

52.Sonic–Buena Park H, Inc.

California

Corporation

C2356456

Common Stock

100

1

Sonic Automotive, Inc.

53.Sonic–Calabasas A, Inc.

California

Corporation

C2413759

Common Stock

100

1

Sonic Automotive, Inc.

54.Sonic – Denver T, Inc.

Colorado

Corporation

20021350687

Common Stock

100

1

Sonic Automotive, Inc.

55.Sonic – Harbor City H, Inc.

California

Corporation

C2356454

Common Stock

100

1

Sonic Automotive, Inc.

56.Sonic - Shottenkirk, Inc.

Florida

Corporation

P99000043291

Common Stock

100

1

Schedule I – Page 7

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grantor

escrow subsidiaries

type of shares

no. of shares

cert. no.(s)

Sonic Automotive of Nevada, Inc.

57.SAI GA HC1, LLC

Georgia

Limited Liability Company

4705444

LLC Interest

100.00%

N/A

Sonic Automotive of Nevada, Inc.

Sonic Automotive of Nevada, Inc.

58.Sonic Automotive of Chattanooga, LLC

Tennessee

Limited Liability Company

0336188

LLC Interest (Class A Units)

LLC Interest (Class B Units)

1

 

 

 

 

99

N/A

Sonic Automotive of Nevada, Inc.

59.Sonic Automotive of Nashville, LLC

Tennessee

Limited Liability Company

0336186

LLC Interest

100.00%

N/A

Sonic Automotive of Nevada, Inc.

Sonic Automotive of Nevada, Inc.

60.Sonic – 2185 Chapman Rd., Chattanooga, LLC

Tennessee

Limited Liability Company

0366281

LLC Interest (Class A Units)

LLC Interest (Class B Units)

1

 

99

N/A

Sonic of Texas, Inc.

Sonic Automotive of Nevada, Inc.

61.Philpott Motors, Ltd.

Texas

Limited Partnership

12223010

General Partner Interest

 

Limited Partner Interest

1.00%

 

 

 

99.00%

 

 

 

N/A

Schedule I – Page 8

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grantor

escrow subsidiaries

type of shares

no. of shares

cert. no.(s)

Sonic of Texas, Inc.

Sonic Automotive of Nevada, Inc.

62.Sonic – Fort Worth T, L.P.

Texas

Limited Partnership

13920710

General Partner Interest

Limited Partner Interest

1.00%

 

99.00%

N/A

Sonic of Texas, Inc.

 

Sonic Automotive of Nevada, Inc.

63.Sonic - Lute Riley, L.P.

Texas

Limited Partnership

11869810

General Partner Interest

Limited Partner Interest

1.00%

 

99.00%

N/A

Sonic of Texas, Inc.

Sonic Automotive of Nevada, Inc.

64.Sonic Momentum B, L.P.

Texas

Limited Partnership

800235477

General Partner Interest

Limited Partner Interest

1.00%

99.00%

N/A

 

 

Schedule I – Page 9

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