EXHIBIT 4.9
AMENDMENT NO. 1
AND
SUPPLEMENT
TO
AGREEMENT AND PLAN OF MERGER
THIS AMENDMENT NO. 1 AND SUPPLEMENT TO AGREEMENT AND PLAN OF
MERGER (this "AMENDMENT") is made and entered into as of this 17th day of May,
1999, by and among SONIC AUTOMOTIVE, INC., a Delaware corporation (the "BUYER"),
JN MANAGEMENT CO., a South Carolina corporation ("JN"), ▇▇▇▇▇▇▇ CHEVROLET WORLD,
INC., a South Carolina corporation ("CHEVROLET" and, together with JN,
collectively, the "COMPANIES"), and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. (the "SELLER").
W I T N E S S E T H:
WHEREAS, the parties hereto and ▇▇▇▇▇▇▇ Autoworld, Inc., a South
Carolina corporation ("AUTOWORLD"), have entered into that certain Agreement and
Plan of Merger dated as of December 15, 1998 (the "MERGER AGREEMENT")
(capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to them in the Merger Agreement); and
WHEREAS, Autoworld was merged into JN on February 19, 1999 (the
"AUTOWORLD MERGER");
WHEREAS, the parties hereto wish to amend and supplement the Merger
Agreement as hereinafter provided;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, including the cross-indemnification of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
III and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ set forth below, and intending to be legally bound,
the parties hereto hereby agree as follows:
1. SCHEDULES. The following Schedules to the Merger Agreement
have been agreed to by the parties and are attached to this Amendment:
Schedule Description
-------- -----------
Schedule 3.2(b) Consents and Approvals for the Seller
Schedule 3.5 Interest in other Entities
Schedule 3.7 Qualification
Schedule 3.8 Capitalization
Schedule 3.10 No Violation; Conflicts
Schedule 3.11 Encumbrances
Schedule 3.13 Financial Statements
Schedule 3.16(b) Leased Premises
Schedule 3.16(f) Zoning, Etc.
Schedule 3.16(g) Owned Equipment
Schedule 3.16(h) Leased Equipment
Schedule 3.17 Intellectual Property
Schedule 3.18 Certain Liabilities
Schedule 3.19 No Undisclosed Liabilities
Schedule 3.20 Absence of Changes
Schedule 3.21 Tax Matters
Schedule 3.22 Compliance with Laws
Schedule 3.23 Litigation Regarding the Companies
Schedule 3.24 Permits, Etc.
Schedule 3.25 Employees
Schedule 3.26 Compensation
Schedule 3.27 Employee Benefits
Schedule 3.29(a) Material Agreements
Schedule 3.29(b) Required Consents for Transfers of
Material Agreements
Schedule 3.31 Bank Accounts, Credit Cards and Safe
Deposit Boxes
Schedule 3.32(a) Insurance Policies
Schedule 3.32(b) Property Damage and Personal Injury
Claims
Schedule 3.33 Warranties
Schedule 3.34 Directors and Officers
Schedule 3.36 Environmental Matters
Schedule 3.37 Year 2000 Plan and Timetable
Schedule 3.38 Business Generally
Schedule 4.2(b) Consents and Approvals for the Buyer
Schedule 10.1(f) Due Diligence Materials
2. AMENDMENTS.
(a) Section 1.1 of the Merger Agreement is hereby amended
to read in its entirety as follows:
"1.1 THE MERGER
(a) Immediately prior to the Effective Time (as
defined in Section 1.1(b) below), the Seller will cause the following
transactions to occur:
(i) Chevrolet will be merged into JN
(the "CHEVROLET MERGER") in accordance with the Merger Law (as defined
below) and in a manner satisfactory to the Buyer in its sole
discretion;
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(ii) all of the issued and outstanding
stock or other securities held by JN in each of Isuzu of ▇▇▇▇▇▇▇▇,
Inc., Action Ford Mercury, Inc., and ▇▇▇▇ ▇▇▇▇▇▇▇ Buick Oldsmobile
Pontiac, Inc. will be distributed by JN to the Seller (such
distributions being hereinafter collectively called the "SPIN-OFFS";
the Spin-Offs and the Autoworld Merger and the Chevrolet Merger being
hereinafter collectively called the "REORGANIZATION").
(b) Subject to the provisions of this Agreement and
the Articles of Merger substantially in the form of Exhibit A attached
hereto (the "ARTICLES OF MERGER") and immediately subsequent to the
Chevrolet Merger and the Spin-Offs, JN shall be merged, in a
transaction intended by the parties to be a tax free reorganization
under Section 368(A) of the Internal Revenue Code of 1986, as amended,
with and into Sonic-▇▇▇▇▇▇▇ Chevrolet World, Inc., a wholly-owned South
Carolina subsidiary of the Buyer (the "SUB"), in accordance with the
provisions of the South Carolina Business Corporation Act (the "MERGER
LAW"), whereupon the existence of JN shall cease and the Sub shall be
the surviving corporation (the Sub and JN are sometimes herein referred
to as the "MERGING COMPANIES" and the Sub after the Merger is sometimes
herein referred to as the "SURVIVING COMPANY"). As soon as practicable
after satisfaction of or, to the extent permitted hereunder, waiver of
all conditions to the Merger, the Merging Companies shall execute and
file the Articles of Merger with the Secretary of State of the State of
South Carolina in accordance with the Merger Law, and shall otherwise
make all other filings or recordings required by the Merger Law in
connection with the Merger. The Merger shall become effective at such
date and time as the Articles of Merger are duly filed with, and
accepted by, the Secretary of State of the State of South Carolina (the
"EFFECTIVE TIME").
(c) At the Effective Time, the separate existence of
JN shall cease and JN shall be merged with and into the Sub and the Sub
shall be the Surviving Company, whose name thereafter shall be as
specified in the Articles of Merger.
(d) From and after the Effective Time: (i) the
Articles of Incorporation and the Bylaws of the Sub, both as in effect
immediately prior to the Effective Time, shall be the Articles of
Incorporation and the Bylaws of the Surviving Company, until thereafter
amended in accordance with the applicable law; (ii) the directors of
the Sub at the Effective Time shall become the directors of the
Surviving Company, until their respective successors are duly elected
or appointed and qualified in accordance with applicable law; and (iii)
the officers of the Sub at the Effective Time shall become the initial
officers of the Surviving Company, to serve at the pleasure of the
board of directors of the Surviving Company.
(e) At the Effective Time, by virtue of the Merger
and the applicable provisions of the Merger Law and without any further
action on the part of the Merging Companies or on the part of JN's
shareholders:
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(1) Each share of common stock of the
Sub outstanding immediately prior to the Effective Time shall,
automatically and without any action on the part of the holder thereof,
be converted into one share of common stock of the Surviving Company;
and
(2) all of the Shares shall,
automatically and without any action on the part of the Seller, cease
to be outstanding and shall be converted into the right to receive the
Merger Consideration (as defined in Section 1.2 below) in accordance
with the provisions of said Section 1.2. All Shares, when so converted,
shall no longer be outstanding and shall automatically be canceled and
retired and shall cease to exist, and the Seller shall cease to have
any rights with respect thereto, except the right to receive the Merger
Consideration in accordance with provisions of said Section 1.2."
(b) All references in the Merger Agreement to the "Subs" and
the "Surviving Companies" shall be deemed to be references to the "Sub" and the
"Surviving Company", as defined in amended Section 1.1 above, and all references
in the Merger Agreement to the "Shares" shall be deemed to be references to all
of the issued and outstanding shares of JN.
(c) Sections 1.2(a) and (b) of the Merger Agreement are hereby
amended to read in their entirety as follows:
"1.2 THE MERGER CONSIDERATION.
(a) THE MERGER CONSIDERATION. The consideration to be
paid by the Buyer for the Shares pursuant to the Merger (the "MERGER
CONSIDERATION") shall consist of the sum of (i) $4,000,000, plus (ii)
the Net Book Value (as defined in Section 1.2(c)(1) below).
(b) PAYMENT OF THE MERGER CONSIDERATION. The Merger
Consideration shall be paid as follows:
(1) (A) At the Closing, the sum of
$5,081,000 shall be payable by the Buyer to the Seller by wire transfer
of immediately available funds to the account of the Seller, which
shall be designated by the Seller in writing at least one full Business
Day prior to the Closing Date (as defined in Article 2 hereof). The sum
of $500,000 (the "ESCROW AMOUNT") shall be placed in escrow with First
Union National Bank or another escrow agent mutually acceptable to the
parties hereto (the "ESCROW AGENT") by the Buyer in accordance with the
escrow agreement in the form of Exhibit B hereto, with such other
changes thereto as the Escrow Agent shall reasonably request (the
"ESCROW AGREEMENT"). For purposes of this Agreement, a "BUSINESS DAY"
is a day other than a Saturday, a Sunday or a day on which banks are
required to be closed in the State of North Carolina.
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(B) The term of the Escrow
Agreement shall be for a period of ninety (90) days from the Closing
Date (or such longer period of time as shall be necessary to complete
the determination of Net Book Value pursuant to Section 1.2(c) below).
If, as of the date which is ninety (90) days from the Closing Date (or
such later date as shall be necessary to complete the determination of
the Net Book Value pursuant to Section 1.2(c) below), the Buyer shall
have made no claims in respect of any Net Book Value Shortfall (as
defined in Section 1.2(c) below), the Buyer will execute a joint
instruction with the Seller pursuant to the Escrow Agreement to
instruct the Escrow Agent to pay all of the Escrow Amount to the Seller
pursuant to the terms of the Escrow Agreement.
(2) (A) At the Closing, the Buyer
shall issue to the Seller 3,750 shares of the Buyer's Class A
Convertible Preferred Stock, Series II (the "PREFERRED STOCK"). The
Preferred Stock will be convertible into shares of the Buyer's Class A
Common Stock, par value $.01 per share (the "COMMON STOCK"), as
provided in the Certificate of Designation, Preferences and Rights with
respect to the Preferred Stock, a copy of which is attached as Exhibit
C-1 hereto. At the Closing, the Seller will execute and deliver to the
Buyer a Certificate Regarding Restricted Securities in substantially
the form of Exhibit C-2 hereto.
(B) At the Closing, the Buyer
shall also issue to the Seller that number of unregistered shares of
Common Stock obtained by dividing $2,250,000 by an amount equal to
eighty-five percent (85%) of the Market Price (as defined in the
Certificate of Designation, Preferences and Rights with respect to the
Preferred Stock) determined as of the Closing Date (such unregistered
shares of Common Stock being hereinafter called the "LOCK-UP COMMON
SHARES"). The Seller hereby agrees that, notwithstanding the
effectiveness of the Shelf Registration Statement (as defined in
Subsection 1.2(b)(3) below), he will not offer, sell, contract to sell,
pledge, or otherwise dispose of in any way, directly or indirectly, any
of the Lock-up Common Shares for a period of one hundred eighty (180)
days from the Closing Date. The Lock-up Common Shares will be
registered by the Buyer in the Shelf Registration Statement referred to
and defined in Subsection 1.2(b)(3) below.
(3) As promptly as possible after the
Closing, but in no event later than July 31, 1999, the Buyer shall
cause all of the Lock-up Common Shares and all of shares of Common
Stock issuable upon conversion of the Preferred Stock (the "CONVERSION
COMMON SHARES") to be registered for resale by the Seller under a
"shelf" registration statement (the "SHELF REGISTRATION STATEMENT")
filed with the Securities and Exchange Commission (the "SEC")under the
Securities Act of 1933, as amended (the "SECURITIES ACT"). Upon the
effectiveness of the Shelf Registration Statement, the Seller will
convert all shares of the Preferred Stock then held by it into the
Conversion Common Shares not later than September 1, 1999.
Notwithstanding the effectiveness of the Shelf Registration Statement,
the Seller hereby agrees that he will not offer, sell, contract to
sell, pledge or otherwise dispose
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of in any way, directly or indirectly, any of the Conversion Common
Shares until August 1, 1999. All Lock-up Common Shares and Conversion
Common Shares registered pursuant to this Subsection (3) are
hereinafter called the "REGISTERED COMMON SHARES."
(4) The Seller also agrees and acknowledges, with
regard to the offer or resale by him of any of the Registered Common
Shares, that:
(A) all resales by him of Registered
Common Shares shall be effected only pursuant to a current prospectus
or supplements thereto which are a part of the Shelf Registration
Statement (the "RESALE PROSPECTUS");
(B) any offering of any of the
Registered Common Shares under the Resale Prospectus by the Seller will
be effected in an orderly manner through a securities dealer, acting as
broker or dealer, selected by the Buyer in its sole discretion (the
"DESIGNATED BROKER");
(C) if requested by the Buyer, the
Seller will enter into one or more custody agreements with one or more
banks with respect to the Registered Common Shares so that all such
Shares are held in the custody of such bank or banks until offered
pursuant to clause (B) above;
(D) the Seller will make resales of
Registered Common Shares only by one or more methods described in the
Resale Prospectus, as appropriately supplemented or amended when
required;
(E) since the Registered Common Shares
are "restricted securities" within the meaning of Rule 145 promulgated
by the SEC under the Securities Act ("RULE 145"), the certificates
representing the Registered Common Shares will be issued by the Buyer
to the Seller with such legends as the Buyer may reasonably require
until such shares are offered pursuant to the foregoing terms under the
Resale Prospectus, at which time such certificates shall be tendered to
the Buyer by the Seller and a new certificate or certificates without
legends shall be issued by the Buyer to the Designated Broker in order
to settle any resales by the Seller;
(F) the Seller shall provide the Buyer
with all information concerning the Seller and his resale of the
Registered Common Shares as may then be required by the Securities Act
and shall indemnify the Buyer for any liabilities arising under the
Securities Act, the Securities Exchange Act of 1934 or any state
securities laws resulting from any material misstatements in, or
omissions of material information from, such information provided by
the Seller to the Buyer pursuant to this clause (F);
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(G) the Seller shall pay any and all
expenses directly related to the resale of the Registered Common
Shares, including, but not limited to, the commissions or fees of the
Designated Broker, but excluding the fees and expenses of the custodial
bank or banks holding the Registered Common Shares, if applicable,
which shall be borne by the Buyer;
(H) the Buyer shall have no obligation
to maintain the currency of any prospectus, permit the use of any
prospectus or maintain the effectiveness of the Shelf Registration
Statement for the resale of the Registered Common Shares once all of
the Registered Common Shares that remain unsold may be sold by the
Seller without restriction pursuant to Rule 145; and
(I) the Seller has received a copy of
the Buyer's most recent Annual Report on Form 10-K, Quarterly Report on
Form 10-Q and proxy statement as well as all its Current Reports on
Form 8-K since the end of the Buyer's last fiscal year.
(5) The Buyer also agrees that, in connection
with Subsection (3) above:
(A) the Buyer shall pay all expenses,
including legal and accounting fees, in connection with the
preparation, filing and maintenance of the Shelf Registration
Statement, including amendments thereto, the Resale Prospectus,
including supplements thereto, the issuance of certificates
representing the Registered Common Shares, and other expenses incurred
by the Buyer in meeting its obligations as set forth in Subsection (3)
above;
(B) the Buyer shall indemnify the Seller
for any liabilities arising under the Securities Act, the Securities
Exchange Act of 1934 or any state securities laws resulting from any
material misstatements in, or omissions of material information from,
the Resale Prospectus or the Shelf Registration Statement, including
the information incorporated by reference therein, except for
liabilities required to be indemnified by Seller under Subsection
(4)(F) above;
(C) The Buyer shall also list the
Registered Common Shares for trading on the New York Stock Exchange;
and
(D) Subject to the provisions of
Subsection (4) (H) above, the Buyer shall maintain the currency of the
Shelf Registration Statement and the prospectus related thereto.
(6) Notwithstanding any provision of this Agreement
to the contrary, the Seller shall not have any right to take any action
(and the Seller hereby agrees that he shall not take any action) to
restrain, enjoin or otherwise delay any
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registration as a result of any controversy that might arise with
respect to the interpretation or implementation of this Agreement.
Nothing contained in this subsection (6) shall prevent Seller from
making a claim for monetary relief.
(d) Section 3.20 of the Merger Agreement is hereby amended to
delete the date of "December 31, 1997" as it appears on the first line thereof
and to insert in its place the date of "December 31, 1998."
3. CONCERNING THE CLOSING BALANCE SHEET ADJUSTMENT PROCEDURES.
(a) Notwithstanding the provisions of Section 1.2 (c)(1) of
the Merger Agreement, the Closing Balance Sheet shall give effect to the
Reorganization. Accordingly, (i) references to the "Companies" shall be deemed
references only to JN, after the Autoworld Merger, the Chevrolet Merger and the
Spin-Offs, and (ii) the tax liabilities of the Companies reflected in the
Closing Balance sheet shall include any and all tax liabilities associated with
the Spin-Offs as well as with the Autoworld Merger and the Chevrolet Merger.
Except as herein provided, the Closing Balance Sheet shall be determined as
provided in Section 1.2 (c)(1) of the Merger Agreement.
(b) The reserve in the Closing Balance Sheet for liabilities
in connection with the issuance of extended warranties, as referred to in clause
(F) of Section 1.2(c)(1) of the Merger Agreement, shall include reserves with
respect to the Hartsville operations and shall not exceed an aggregate total of
$540,000, and the reserve in the Closing Balance Sheet for finance and insurance
chargebacks shall not exceed $25,000. The parties also agree that the Closing
Balance Sheet shall reflect a used vehicle valuation of $1,654,903.
(c) Section 1.2 (c)(3) of the Merger Agreement is hereby
amended to read in its entirety as follows:
(3) (A) To the extent that the Net Book Value, as
deemed mutually agreed by the parties or as determined by the
Accountants, as aforesaid, is greater than $7,581,000 (the "NET BOOK
VALUE EXCESS"), the Buyer shall be obligated to pay the amount of the
Net Book Value Excess promptly to the Seller. Payment of fifty-one
percent (51%) of the Net Book Value Excess shall, subject to the
provisions of Subparagraphs (B), (C), and (D) below, be by the issuance
of additional shares of Preferred Stock at the rate of one whole share
of Preferred Stock for each $1,000 of such Net Book Value Excess (no
fractional shares of Preferred Stock are to be issued; any such
fractional shares are to be paid in cash). Such additional shares of
Preferred Stock are hereinafter called the "ADDITIONAL PREFERRED
SHARES." Payment of forty-nine percent (49%) of the Net Book Value
Excess shall be made in cash in the same manner as the payment of the
cash portion of the Merger Consideration at the Closing. Payment of the
Net Book Value Excess (whether the same be paid in shares of the
Buyer's stock or in cash) shall be made together with interest, payable
in cash, on the amount of the Net Book Value Excess at the Buyer's
floor plan financing rate from time to time in effect (the "INTEREST
RATE") from the
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Closing Date to the date of such payment. Notwithstanding the foregoing
agreement of the parties regarding the payment of the cash portion of
any Net Book Value Excess, the Seller may request a larger number of
Additional Preferred Shares (and/or Additional Common Shares or
Additional Lock-up Common Shares pursuant to Subparagraphs (B), (C) and
(D) below), and a corresponding smaller amount of cash, if the Seller
believes that the reimbursement by the Buyer of the Seller's capital
gains tax liability on such cash portion pursuant to Section 1.2(c)(4)
below will cause more than forty-nine percent (49%) of the Merger
Consideration to be paid in cash. Such request shall be made in writing
by the Seller to the Buyer prior to the payment of the Net Book Value
Excess and shall specify the larger number of Additional Preferred
Shares and/or Additional Common Shares or Additional Lock-up Common
Shares pursuant to Subparagraphs (B), (C) and (D) below) and the
corresponding reduction of such cash. In the event that such request
shall be made, the Buyer will pay the Net Book Value Excess in the
respective portions of Additional Preferred Shares (and/or Additional
Common Shares or Additional Lock-up Common Shares pursuant to
Subparagraphs (B), (C) and (D) below) and cash specified in such
request, and the Buyer's obligation to reimburse the Seller for capital
gains taxes pursuant to Section 1.2(c)(4) below will be calculated
based upon such reduced cash portion specified in such request by the
Seller. To the extent that the Net Book Value, as deemed mutually
agreed by the parties or as determined by the Accountants, as
aforesaid, is less than $7,581,000 (the "NET BOOK VALUE SHORTFALL"),
the Seller shall be obligated to pay the amount of the Net Book Value
Shortfall promptly to the Buyer. In furtherance of such obligation of
the Seller, the parties shall execute and deliver to the Escrow Agent a
joint instruction to deliver up to all of the Escrow Amount to the
Buyer. To the extent that the Net Book Value Shortfall exceeds the
Escrow Amount, the Seller shall be obligated to pay the amount of such
excess promptly to the Buyer, together with interest, payable in cash,
on the amount of such excess at the Interest Rate from the Closing Date
to the date of such payment. Any interest earned on the Escrow Amount
shall be paid to the Buyer and/or the Seller in proportion to their
respective shares of the Escrow Amount paid to them.
(B) The Seller may, by written request
delivered to the Buyer at any time on or prior to the twentieth (20th)
day after the Closing, request the Buyer to provide the Seller with a
prospectus (the "PROSPECTUS") with respect to the Buyer's offer and
sale to the Seller of registered shares of Common Stock in lieu of up
to all of the Additional Preferred Shares. In the event that the Seller
shall deliver such request to the Buyer, the Buyer shall use its best
reasonable efforts to deliver the Prospectus to the Seller within fifty
(50) days after the Closing. At the option of the Seller, exercisable
by written notice to the Buyer (the "SELLER'S NOTICE") not sooner than
twenty (20) days after the receipt by the Seller from the Buyer of the
Prospectus, the Buyer shall be obligated to issue to the Seller, not
later than ten (10) days after receipt of the Seller's Notice, in lieu
of up to all of the Additional Preferred Shares, that number of
registered shares of Common Stock (the "ADDITIONAL COMMON SHARES")
which would be issued on conversion of the number
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of such Additional Preferred Shares specified in the Seller's Notice if
such number of Additional Preferred Shares specified in the Seller's
Notice were converted on the date of delivery to the Buyer of the
Seller's Notice; provided, however, as to any and all of the Additional
Preferred Shares, the Seller may, in the Seller's Notice, elect to take
the value of up to all of the Additional Preferred Shares (valued at
$1,000 per share) in that number of whole shares of registered Common
Stock (the "ADDITIONAL LOCK-UP COMMON SHARES") which would be issuable
upon conversion of the number of Additional Preferred Shares specified
in the Seller's Notice if such Additional Preferred Shares specified in
the Seller's Notice were converted on the date of delivery to the Buyer
of the Seller's Notice utilizing a Market Price equal to eighty-five
percent (85%) of the Market Price which would otherwise be applicable
to such conversion on such date.
(C) The offer and sale of the Additional
Conversion Common Shares and/or the Additional Lock-up Common Shares by
the Buyer shall be registered under an effective registration statement
filed by the Buyer with the SEC. Such Additional Common Shares and/or
Additional Lock-up Common Shares shall be deemed to be "Registered
Common Shares" and the provisions of Sections 1.2(b)(4) and (5) above
shall be applicable thereto. To the extent required by law, the Buyer
shall prepare as soon as reasonably practicable after the issuance of
the Additional Conversion Common Shares and/or the Additional Lock-up
Common Shares a prospectus supplement or post-effective amendment to
such registration statement that would permit the offer and resale of
such Registered Common Shares from time to time by the Seller. The
Buyer shall also use its best reasonable efforts to list such
Registered Common Shares for trading on the New York Stock Exchange.
(D) The Seller hereby agrees not to
offer, sell, contract to sell, pledge, or otherwise dispose of in any
way, directly or indirectly, any of the Additional Lock-up Common
Shares for a period of one hundred eighty (180) days from their date of
issuance. Provided that the Additional Conversion Common Shares are
issued prior to August 1, 1999, the Seller also agrees not to offer,
sell, contract to sell, pledge, or otherwise dispose of in any way,
directly or indirectly, any of the Additional Conversion Common Shares
until August 1, 1999.
(E) In the event that the Seller shall
fail to give the Seller's Notice, the Buyer's sole obligation with
respect to the Additional Preferred Shares shall be to make available
"current public information" within the meaning of subsection (c)(1) of
Rule 144 promulgated by the SEC under the Securities Act ("RULE 144"),
and to remove stock transfer instructions and restrictive legends from
certificates representing the shares of Common Stock issuable upon
conversion of the Additional Preferred Shares when such shares of
Common Stock issuable upon conversion of the Additional Preferred
Shares may be sold without restriction under Rule 144.
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4. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ASSIGNMENT AND AGREEMENT TO INDEMNIFY.
Immediately prior to the Chevrolet Merger, the Seller shall
cause Chevrolet to assign, sell and transfer unto the Seller, his heirs and
assigns, all rights, title and interest of Chevrolet in and to the following
(all of the following being the "▇▇▇▇▇▇ ASSETS"):
(a) All claims to the return of Chevrolet funds expended
at the premises located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇;
(b) All Personal property located (or previously located)
at, and the lease in connection with, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇;
(c) All claims for overpayment of compensation to ▇▇▇▇▇▇▇
▇▇▇▇▇▇;
(d) Equipment and personal property owned by Chevrolet
and in the possession of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇
▇▇▇▇▇▇;
(e) Ricon Lift franchise; and
(f) Any other restitution due to Chevrolet from ▇▇▇▇▇▇▇
▇▇▇▇▇▇.
The Seller does hereby agree to assume and become responsible for the payment or
performance of any and all liabilities and obligations, of any kind, character
and description, fixed or contingent, if any, of the Companies to ▇▇▇▇▇▇▇ and/or
▇▇▇ ▇▇▇▇▇▇ (the "▇▇▇▇▇▇ LIABILITIES").
5. INDEMNIFICATION BY THE SELLER. The Seller hereby agrees to indemnify
and hold all Buyer Indemnitees harmless, in accordance with he provisions of
Article 9 of the Merger Agreement, for any and all Buyer's Damages arising out
of, based upon, in connection with, or as a result of any and all of the
following:
(a) ▇▇▇▇▇ ▇. FORDAROY, ET. AL. ▇. ▇▇▇▇▇▇▇ AUTO WORLD AND
ALLSTATE INSURANCE COMPANY, Civil Action No.
97-CP-21-94, and all other claims, suits or causes of
action arising out of or based upon the occurrence
which gave rise to such litigation;
(b) all claims, suits or causes of action by Mt. Hope
Cemetery Association;
(c) the Reorganization; and
(d) the ▇▇▇▇▇▇ Liabilities and all claims, suits or
causes of action by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and/or ▇▇▇ ▇▇▇▇▇▇
arising out of or based upon the Lexington, South
Carolina operations between the Seller and/or more of
his Affiliates and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ including, without
limitation, the matters set forth in Section 4 above
and the transfer of the ▇▇▇▇▇▇ Assets.
11
6. MERGER AGREEMENT CONFIRMED. Except as provided in this Amendment,
the Merger Agreement is hereby confirmed, as amended hereby, and shall continue
in full force and effect.
7. CONCERNING WACHOVIA. The Buyer will cause the Seller to be released
from his personal guaranty to Wachovia Bank N.A., with respect to the floor plan
indebtedness of ▇▇▇▇▇▇▇ Automotive, LLC and Imports of ▇▇▇▇▇▇▇▇, LLC, within 30
days after the Closing. Pending such release, the Buyer will indemnify the
Seller to the fullest extent contemplated by Section 9.3 of the Merger
Agreement, for any amounts paid by him under such guaranty.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day, month and year first above written.
BUYER: SONIC AUTOMOTIVE, INC.
By: /s/ B. ▇▇▇▇▇ ▇▇▇▇▇
---------------------------
Name: B. ▇▇▇▇▇ ▇▇▇▇▇
Title: President
SELLER: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
----------------------------
THE COMPANIES: JN MANAGEMENT CO.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
---------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: President
▇▇▇▇▇▇▇ CHEVROLET WORLD, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
---------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: President
CROSS-INDEMNIFICATION BY MEMBERS. The undersigned, being the "Members"
under the Asset Purchase Agreement, as an inducement for the execution and
delivery by the Buyer of the foregoing Amendment No. 1 and Supplement to the
Merger Agreement, do hereby, jointly and severally among themselves and with the
Seller, agree to indemnify all Buyer Indemnitees for all Buyer's Damages for the
matters specified in Section 9.2 of the Merger Agreement, as well as for the
matters specified in Section 5 above, to the fullest extent provided in Article
9 of the Merger Agreement.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------- -----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇