Exhibit 99.6
AMENDMENT NO. 1 AND SUPPLEMENT
TO
ASSET PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 AND SUPPLEMENT TO ASSET PURCHASE
AGREEMENT (this "AMENDMENT") is made and entered into as of this 28th day of
May, 1998, by and among: SONIC AUTOMOTIVE, INC., a Delaware corporation (the
"BUYER"), ▇▇▇▇▇▇▇▇ JEEP EAGLE, INC., an Ohio corporation d/b/a Volkswagen West,
Jeep Eagle West, ▇▇▇▇▇▇▇▇ KIA and Trader Bud's Westside Chrysler Plymouth,
▇▇▇▇▇▇▇▇ LINCOLN MERCURY, INC., an Ohio corporation d/b/a ▇▇▇▇▇▇▇▇ Lincoln
Mercury, WESTSIDE DODGE, INC., an Ohio corporation d/b/a Trader Bud's Westside
Dodge, TOYOTA WEST, INC., an Ohio corporation d/b/a Toyota West, and ▇▇▇▇▇▇▇▇
HYUNDAI, INC., an Ohio corporation d/b/a ▇▇▇▇▇▇▇▇ Hyundai, ▇▇▇▇▇▇▇▇ Isuzu and
▇▇▇▇▇▇▇▇ Subaru (collectively, the "SELLERS" and each, individually, a
"SELLER"); and ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, as Trustee
of the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. Special Irrevocable Trust (collectively, the
"SHAREHOLDERS").
WHEREAS, the Buyer, the Sellers and the Shareholders entered into an
Asset Purchase Agreement (the "PURCHASE AGREEMENT") dated as of February 4,
1998; and
WHEREAS, capitalized terms used herein and not otherwise defined herein
shall have the meanings given to them in the Purchase Agreement; and
WHEREAS, the Buyer and the Sellers desire to amend and supplement the
Purchase Agreement as hereinafter provided.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. AMENDMENTS TO PURCHASE AGREEMENT.
(a) Amendment of Purchase Price. Section 1.3(a) of the Purchase
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Agreement is hereby amended to read in its entirety as follows:
(a) PURCHASE PRICE. In addition to the assumption by
the Buyer of the Assumed Liabilities, as the full
consideration to be paid by the Buyer for the Purchased
Assets, the Buyer shall pay to the Sellers the aggregate a
purchase price of $48,550,000, subject to adjustment as
provided in Section 1.3(c) below (the "PURCHASE PRICE").
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(b) Amendment of Closing Payment. Section 1.3(b)(1) of the Purchase
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Agreement is hereby amended to read in its entirety as follows:
(1) $34,525,000 of the Purchase Price (the "CLOSING
PAYMENT") shall be payable to the Sellers at Closing by wire
transfer of immediately available funds to the account or
accounts of the Sellers, which shall be designated by ▇▇▇
▇▇▇▇▇▇▇▇, as agent for the Sellers (the "SELLERS' AGENT"), in
writing at least one full Business Day prior to the Closing
Date, in the respective amounts specified in Part I of
Schedule 1.3(d). For purposes of this Agreement, a "BUSINESS
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DAY" is a day other than a Saturday, a Sunday or a day on
which banks are required or authorized to be closed in the
State of North Carolina.
(c) Amendment of Adjustment Procedures.
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(1) the portion of the first sentence of Section 1.3(c)(1) of
the Purchase Agreement which precedes the words "PROVIDED, HOWEVER" is hereby
deleted and the following is hereby inserted in its place:
(1) As used in this Agreement, the term "NET CURRENT
ASSETS" shall mean (i) all of the Purchased Assets as of the
Closing Date which would, in conformity with generally
accepted accounting principles applied in a manner consistent
with those used in the preparation of the Financial Statements
referred to in Section 3.4 below ("GAAP"), be included under
current assets on a balance sheet, MINUS (ii) all of the
Assumed Liabilities as of the Closing Date which would, in
conformity with GAAP, be included under current liabilities on
a balance sheet. Not later than 60 days after the Closing Date
(as defined in Article 2 hereof), the Buyer will prepare and
deliver to the Sellers' Agent an unaudited balance sheet (the
"CLOSING BALANCE SHEET") of the Sellers as of the Closing
Date, consisting of computations of (A) the Net Current
Assets, and (B) the tangible book value as of the Closing Date
of the Purchased Assets (excluding goodwill and other
intangible assets) less the book value as of the Closing Date
of the Assumed Liabilities, all as determined in accordance
with GAAP;
(2) Section 1.3(c)(2) of the Purchase Agreement is hereby
amended to read in its entirety as follows:
(2) To the extent that the Net Current Assets, as
deemed mutually agreed by the parties or as determined by the
Accountants, as aforesaid, is less than $9,800,000 (the "NET
CURRENT ASSETS SHORTFALL"), the Sellers shall be obligated,
jointly and severally, to
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pay the amount of the Net Current Assets Shortfall, together
with interest on such amount at a rate equal to the Buyer's
floor plan financing rate from time to time in effect (the
"INTEREST RATE") from and including the Closing Date through
the date of payment, promptly to the Buyer. In furtherance of
(but not by way of limitation of) the Sellers' obligation in
the immediately preceding sentence, the Sellers' Agent and the
Buyer shall execute and deliver to the Escrow Agent a joint
instruction to deliver up to 500 of the Escrow Shares to the
Buyer, with the balance of such 500 of the Escrow Shares to be
delivered to the Sellers so long as no claim by the Buyer for
indemnification shall then be pending pursuant to this
Agreement. To the extent that the Net Current Assets, as
deemed mutually agreed by the parties or as determined by the
Accountants, as aforesaid, is at least equal to $9,800,00, the
Buyer shall be obligated to execute and deliver to the Escrow
Agent a joint instruction to deliver 500 of the Escrow Shares
to the Sellers pursuant to the Escrow Agreement (except to the
extent of any pending claim by the Buyer for indemnification
pursuant to this Agreement). To the extent that the Net
Current Assets, as deemed mutually agreed by the parties or as
determined by the Accountants, as aforesaid, is greater than
$9,800,000 (the "NET CURRENT ASSETS EXCESS"), the Buyer shall
be obligated to pay the amount of the Net Current Assets
Excess in cash promptly to the Sellers, together with interest
thereon at the Interest Rate from and including the Closing
Date through the date of payment.
(d) Amendment of Closing. Article 2 of the Purchase Agreement is hereby
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amended to read in its entirety as follows:
ARTICLE 2
CLOSING
The sale and purchase of the Purchased Assets
contemplated hereby shall take place at a closing (the
"CLOSING") at the offices of Kemp, Schaeffer, ▇▇▇▇ & ▇▇▇▇▇▇▇▇
Co., L.P.A., ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, at
10:00 a.m. local time on the fifth (5th) Business Day, or such
shorter period as the Buyer may choose, following the date the
Buyer gives notice of the Closing to the Sellers, but in no
event later than June 30, 1998 (the "CLOSING DATE DEADLINE").
The date on which the Closing actually occurs is hereinafter
referred to as the "CLOSING DATE".
(e) Amendment Regarding Certain Prohibitions of Sellers. Section 5.3 of
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the Purchase Agreement is hereby amended to read in its entirety as follows:
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5.3 CERTAIN PROHIBITIONS. The Sellers hereby
acknowledge that, after March 31, 1998, they have been
operating their businesses for the economic benefit of the
Buyer. Accordingly, the Sellers warrant that they have not,
and the Sellers further agree that they shall not, without the
written consent of the Buyer, (a) engage or take part in, or
agree to engage or take part in, any reorganization or similar
transaction, (b) enter into any contract, agreement,
undertaking or commitment which would have been required to be
set forth in Schedule 3.6(a) if in effect on the date hereof
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or enter in to any contract, agreement, undertaking or
commitment which cannot be assigned to the Buyer or a
permitted assignee of the Buyer, (c) sell or otherwise dispose
of any of their respective assets, other than sales of
inventory in the ordinary course of business, (d) make any
capital appropriation or expenditure or commitment therefor on
behalf of the Sellers, (e) take, cause, agree to take or
cause, or permit to occur any of the actions or events set
forth in Section 3.5 of this Agreement, or (f) declare or make
payment of any dividend or other distribution of cash or other
property in respect of any of their capital stock, or redeem,
purchase or otherwise acquire any such capital stock;
PROVIDED, HOWEVER, the Buyer's consent to the payment of
dividends by the Sellers will not be withheld so long as the
Sellers shall have demonstrated, to the reasonable
satisfaction of the Buyer, that such dividends (A) are only
out of retained earnings for periods ending prior to April 1,
1998, and (B) will not result in the Net Current Assets
falling below $9,800,000.
(g) Deletion of Section 11.1(f). Section 11.1(f) of the Purchase
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Agreement is hereby deleted in its entirety.
2. AGREEMENT ON EXHIBITS AND SCHEDULES.
(a) Agreement on Exhibits. The parties hereto hereby agree on the form
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and substance of Exhibits A (Preferred Stock Statement of Rights and
Preferences), B (Form of Escrow Agreement), C (Form of Bills of Sale and
Assignment), D (Form of Dealerships Leases), E (Form of Non-Competition
Agreement), F (Form of Legal Opinion of Counsel for the Sellers and the
Shareholders), and G (Form of Legal Opinion of Counsel for the Buyer), all as
attached hereto.
(b) Agreement on Schedules. The parties hereto hereby agree on the form
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of Schedules 1.3(d), 3.1, 3.2, 3.3, 3.4, 3.5, 3.6(a), 3.6(b), 3.7, 3.8(a), 3.9,
3.12, 3.13, 3.14(a), 3.14(b), 3.16, 3.17, 3.19, 3.20, 3.21, 3.22, 3.23, 3.24,
3.26, 3.29(j), 3.29(l), 3.30, 3.31, 3.32, and 4.2(a), all as attached hereto.
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3. EMPLOYMENT AGREEMENTS. At the Closing, the Buyer and Messrs., ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
and ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ will enter into separate employment agreements in
substantially the form of Exhibit H attached hereto.
4. DEALERSHIP LEASES. The monthly "Rent" under each of the Dealership Leases and
the "Purchase Price" for the Buyer's purchase option under each of the
Dealership Leases shall be as set forth on Exhibit I attached hereto.
5. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, and all such counterparts together shall constitute one instrument.
6. PURCHASE AGREEMENT CONFIRMED. Except as set forth in this Amendment, the
Purchase Agreement is hereby confirmed and shall remain in full force and
effect.
7. EFFECT ON LETTER AGREEMENT DATED FEBRUARY 4, 1998. The Letter Agreement among
the Sellers, the Shareholders and the Buyer, dated February 4, 1998, regarding
delivery of the Exhibits and Schedules, is superseded by this Agreement;
provided, however, paragraph 7 thereof (regarding indemnification by the Buyer
under certain circumstances) shall remain in full force and effect.
[Signatures begin on the following page]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed all as of the day, month and year first above written.
THE BUYER: SONIC AUTOMOTIVE, INC.
By: /s/
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Name:
Title:
THE SELLERS:
▇▇▇▇▇▇▇▇ JEEP EAGLE, INC.
By: /s/
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Name:
Title:
▇▇▇▇▇▇▇▇ LINCOLN MERCURY, INC.
By: /s/
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Name:
Title:
WESTSIDE DODGE, INC.
By: /s/
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Name:
Title:
TOYOTA WEST, INC.
By: /s/
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Name:
Title:
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▇▇▇▇▇▇▇▇ HYUNDAI, INC.
By: /s/
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Name:
Title:
THE SHAREHOLDERS: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (SEAL)
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▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (SEAL)
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▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (SEAL)
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▇▇▇ ▇. ▇▇▇▇▇▇▇▇, AS TRUSTEE OF
THE ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. SPECIAL
IRREVOCABLE TRUST
Attachments:
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Exhibits: A through G
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Exhibit H - Form of Employment Agreement
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Exhibit I - Rents under Dealership Leases
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Schedules: 1.3(d), 3.1, 3.2, 3.3, 3.4, 3.5, 3.6(a), 3.6(b), 3.7, 3.8(a),
3.9, 3.12, 3.13, 3.14(a), 3.14(b), 3.16, 3.17, 3.19, 3.20,
3.21, 3.22, 3.23, 3.24, 3.26, 3.29(j), 3.29 (l), 3.30, 3.31,
3.32, and 4.2(a)
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