Exhibit 4.12
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SONIC AUTOMOTIVE, INC. (a Delaware corporation)
The Guarantors Listed on Schedule A
$75,000,000
11% Senior Subordinated Notes due 2008
PURCHASE AGREEMENT
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Dated: November 8, 2001
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PURCHASE AGREEMENT ......................................................... 2
SECTION 1. Representations and Warranties................................ 3
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(a) Representations and Warranties by the Company and the Guarantors .... 3
(i) Similar Offerings............................................. 4
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(ii) Offering Memorandum .......................................... 4
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(iii) Independent Accountants....................................... 4
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(iv) Financial Statements.......................................... 4
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(v) No Material Adverse Change in Business ....................... 4
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(vi) Good Standing of the Company ................................. 5
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(vii) Subsidiaries ................................................. 5
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(viii) Capitalization ............................................... 6
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(ix) Authorization of Agreements .................................. 6
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(x) Authorization of the Indenture ............................... 6
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(xi) Authorization of the Securities, the Guarantees and
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the Exchange Securities ...................................... 6
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(xii) Description of the Securities, the Guarantees, the
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Indenture, the Registration Rights Agreement and the
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Exchange Securities .......................................... 7
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(xiii) Absence of Defaults and Conflicts ............................ 7
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(xiv) Absence of Labor Disputes .................................... 8
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(xv) Absence of Proceedings ....................................... 8
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(xvi) Possession of Intellectual Property .......................... 9
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(xvii) Absence of Further Requirements .............................. 9
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(xviii) Possession of Licenses and Permits ........................... 9
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(xix) Title to Property ............................................ 10
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(xx) Tax Returns .................................................. 10
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(xxi) Insurance .................................................... 11
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(xxii) Solvency ..................................................... 11
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(xxiii) Stabilization or Manipulation ................................ 11
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(xxiv) Related Party Transactions .................................. 11
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(xxv) Suppliers.................................................... 11
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(xxvi) Environmental Laws .......................................... 12
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(xxvii) Registration Rights ......................................... 12
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(xxviii) Accounting Controls ......................................... 12
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(xxix) Investment Company Act ...................................... 13
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(xxx) Rule 144A Eligibility ....................................... 13
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(xxxi) No General Solicitation ..................................... 13
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(xxxii) No Registration Required .................................... 13
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(xxxiii) PORTAL ...................................................... 13
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(xxxiv) Franchise Agreements ........................................ 13
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(xxxv) ▇▇▇▇▇ Subordination Agreement ............................... 14
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(b) Officer's Certificates ............................................... 14
SECTION 2. Sale and Delivery to Initial Purchasers; Closing ............ 14
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(a) Securities and Guarantees ............................................ 14
(b) Payment .............................................................. 14
(c) Qualified Institutional Buyer ........................................ 15
(d) Denominations; Registration .......................................... 15
SECTION 3. Covenants of the Company and the Guarantors ................. 15
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(a) Offering Memorandum .................................................. 15
(b) Notice and Effect of Material Events ................................. 15
(c) Amendment to Offering Memorandum and Supplements ..................... 16
(d) Qualification of Securities and Guarantees for Offer and Sale ........ 16
(e) Exchange Offer ....................................................... 16
(f) Integration .......................................................... 17
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(g) Rating of Securities ............................................... 17
(h) Rule 144A Information .............................................. 17
(i) Restriction on Resales ............................................. 17
(j) Use of Proceeds .................................................... 17
(k) Restriction on Sale of Securities .................................. 18
(l) DTC Clearance ...................................................... 18
(m) Legends. ........................................................... 18
(n) Interim Financial Statements ....................................... 18
(o) Periodic Reports ................................................... 18
SECTION 4. Payment of Expenses ............................................ 19
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(a) Expenses ........................................................... 19
(b) Termination of Agreement ........................................... 19
SECTION 5. Conditions of Initial Purchasers' Obligations ................. 19
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(a) Opinion of Counsel for the Company and the Guarantors .............. 20
(b) Opinion of Counsel for the Initial Purchasers ...................... 20
(c) Officers' Certificate .............................................. 20
(d) Accountants' Letters and Consents .................................. 21
(e) Maintenance of Rating .............................................. 21
(f) PORTAL ............................................................. 21
(g) Chief Financial Officer's Certificate .............................. 21
(h) Registration Rights Agreement and Indenture ........................ 21
(i) Manufacturers' Consents ............................................ 22
(j) Lenders' Consents .................................................. 22
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(k) Additional Documents ........................................... 22
(l) Termination of Agreement ....................................... 22
SECTION 6. Indemnification ............................................. 22
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(a) Indemnification of Initial Purchasers .......................... 22
(b) Indemnification of Company, Guarantors, and Directors .......... 23
(c) Actions against Parties; Notification ......................... 24
(d) Settlement without Consent if Failure to Reimburse ............. 24
SECTION 7. Contribution ................................................ 24
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SECTION 8. Representations, Warranties and Agreements to Survive
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Delivery .................................................... 26
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SECTION 9. Termination of Agreement .................................... 26
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(a) Termination; General ............................................ 26
(b) Liabilities ..................................................... 27
SECTION 10. Default by One or More of the Initial Purchasers .............. 27
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SECTION 11. Notices ....................................................... 28
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SECTION 12. Parties ....................................................... 28
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SECTION 13. Governing Law and Time ........................................ 28
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SECTION 14. General Provisions ............................................ 29
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SECTION 15. Partial Unenforceability ...................................... 29
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SECTION 16. Effect of Headings ............................................ 29
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Schedule A--Subsidiaries which are Guarantors
Schedule B--Initial Purchaser Amounts
Schedule C--2% Subsidiaries
Schedule D--Securities
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$75,000,000
11% Senior Subordinated Notes due 2008
SONIC AUTOMOTIVE, INC. (a Delaware corporation)
The Guarantors Listed on Schedule A
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PURCHASE AGREEMENT
November 8, 2001
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
Banc of America Securities LLC
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Sonic Automotive, Inc., a Delaware corporation (the "Company"), and
each of the Guarantors listed on Schedule A hereto (the "Guarantors") confirm
their respective agreements with ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and Banc of America Securities LLC (the "Initial
Purchasers"), (which term shall also include any initial purchaser substituted
as hereinafter provided in Section 10 hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ is acting
as representative (in such capacity, the "Representative"), with respect to (i)
the issue and sale by the Company and the purchase by the Initial Purchasers,
acting severally and not jointly, of the respective principal amounts set forth
in Schedule B of $75,000,000 aggregate principal amount of the Company's 11%
Senior Subordinated Notes due 2008 (the "Securities") and (ii) the issue and
sale by the Guarantors and the purchase by the Initial Purchasers, acting
severally and not jointly of the guarantees (the "Guarantees") of the Company's
obligations under the Securities. The Securities and the Guarantees are to be
issued pursuant to an indenture dated as of November 19, 2001 (the "Indenture")
among the Company, the Guarantors and U.S. Bank Trust National Association, as
trustee (the "Trustee"). Securities issued in book-entry form will be issued to
Cede & Co. as nominee of The Depository Trust Company ("DTC") pursuant to a
letter agreement, to be dated as of the Closing Time (as defined in Section
2(b)) (the "DTC Agreement"), among the Company, the Trustee and DTC.
The Company and the Guarantors understand that the Initial Purchasers
propose to make an offering of the Securities (together with the related
Guarantees) on the terms and in the manner set forth herein and agree that the
Initial Purchasers may resell, subject to the conditions set forth herein, all
or a portion of the Securities and the Guarantees to purchasers ("Subsequent
Purchasers") at any time after the date of this Agreement. The Securities and
the Guarantees are to be offered and sold through the Initial Purchasers without
being registered under the Securities Act of 1933, as amended (the "1933 Act"),
in reliance upon exemptions therefrom. Pursuant to the terms of the Securities,
the Guarantees and the Indenture, investors that acquire Securities
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and Guarantees may only resell or otherwise transfer such Securities and
Guarantees if such Securities and Guarantees are hereafter registered under the
1933 Act or if an exemption from the registration requirements of the 1933 Act
is available (including the exemption afforded by Rule 144A ("Rule 144A")
pursuant to the rules and regulations promulgated under the 1933 Act by the
Securities and Exchange Commission (the "Commission")).
The Company and the Guarantors have prepared and will deliver to each
Initial Purchaser by November 16, 2001 (by overnight courier), copies of a final
offering memorandum dated November 8, 2001 (the "Final Offering Memorandum"), to
be used by such Initial Purchaser in connection with its solicitation of,
purchases of, or offering of the Securities and the Guarantees. "Offering
Memorandum" means, with respect to any date or time referred to in this
Agreement, all offering memoranda (whether the Final Offering Memorandum, or any
amendment or supplement to such document), including exhibits thereto and any
documents incorporated therein by reference, which has been prepared and
delivered by the Company and the Guarantors to the Initial Purchasers in
connection with their solicitation of, purchases of, or offering of the
Securities and the Guarantees.
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Offering Memorandum (or other references of like import) shall be deemed to mean
and include all such financial statements and schedules and other information
which are incorporated by reference in the Offering Memorandum; and all
references in this Agreement to amendments or supplements to the Offering
Memorandum shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), which is
incorporated by reference in the Offering Memorandum.
The holders of the Securities and the Guarantees will be entitled to
the benefits of the registration rights agreement to be dated as of the Closing
Time (the "Registration Rights Agreement"), among the Company, the Guarantors
and the Initial Purchasers, pursuant to which the Company and the Guarantors
will agree among other things, to file, as soon as practicable after the Closing
Time but in any event within 60 days of the Closing Time, a registration
statement with the Commission registering the Exchange Securities (as defined in
the Registration Rights Agreement and including the securities exchanged for the
Original Securities (as defined below)) under the 1933 Act and to offer to
exchange the Company's existing $125,000,000 11% Senior Subordinated Notes due
2008 (the "Original Securities") for an equal principal amount of Exchange
Securities.
SECTION 1. Representations and Warranties.
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(a) Representations and Warranties by the Company and the Guarantors.
The Company and each of the Guarantors, jointly and severally, represent and
warrant to the Initial Purchasers as of the date hereof and as of the Closing
Time referred to in Section 2(b) hereof, and agrees with each Initial Purchaser
as follows:
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(i) Similar Offerings. The Company and the Guarantors have
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not, directly or indirectly, solicited any offer to buy or offered to
sell, and will not, directly or indirectly, solicit any offer to buy or
offer to sell, in the United States or to any United States citizen or
resident, any security which is or would be integrated with the sale of
the Securities and the Guarantees in a manner that would require the
Securities or the Guarantees to be registered under the 1933 Act.
(ii) Offering Memorandum. The Offering Memorandum does not,
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and at the Closing Time will not, include an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, that this
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representation, warranty and agreement shall not apply to statements in
or omissions from the Offering Memorandum made in reliance upon and in
conformity with information furnished to the Company and the Guarantors
in writing by any Initial Purchaser through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for
use in the Offering Memorandum.
(iii) Independent Accountants. The accountants who certified
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the financial statements (which term as used in this Agreement includes
the notes related thereto) and supporting schedules (of (i) the Company
and (ii) its Subsidiaries (as defined below in Section (a)(vii))
included in the Offering Memorandum are independent certified public
accountants within the meaning of Regulation S-X under the 1933 Act
with respect to the Company, the Guarantors and their respective
Subsidiaries.
(iv) Financial Statements. The financial statements of the
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Company, together with the related schedules and notes, included in the
Offering Memorandum present fairly the financial position of the
Company and its consolidated Subsidiaries at the dates indicated and
the combined balance sheets, statements of income, statements of
stockholders' equity and statements of cash flows of the Company and
its consolidated Subsidiaries for the periods specified; said financial
statements have been prepared in conformity with United States
generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The summary financial
information included in the Offering Memorandum presents fairly the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in the Offering
Memorandum. There are no pro forma financial statements and other pro
forma financial information (including the summary pro forma financial
information) of the Company, its Subsidiaries and entities acquired or
to be acquired by the Company or its Subsidiaries and the related notes
thereto which would be required to be included in the Offering
Memorandum if the Offering Memorandum were required to comply with the
requirements of the 1933 Act for a Form S-3 registration statement and
securities sold pursuant thereto.
(v) No Material Adverse Change in Business. Since the
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respective dates as of which information is given in the Offering Memorandum,
except as otherwise stated therein, (A) there has been no material adverse
change in the condition (financial or otherwise), earnings, business affairs or
business prospects of the Company and its Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business (a
"Material Adverse Effect"), (B) there have been no transactions entered into,
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or liabilities or obligations incurred, by the Company or any of its
Subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and its Subsidiaries
considered as one enterprise, and (C) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock.
(vi) Good Standing of the Company. The Company has been duly
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organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Offering Memorandum and to enter into and
perform its obligations under this Agreement, the Registration Rights
Agreement, the Indenture, the Securities, the Exchange Securities, and
the DTC Agreement and to enter into and consummate all the transactions
in connection therewith as contemplated in the Offering Memorandum; and
the Company is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect.
(vii) Subsidiaries. Each subsidiary of the Company that is a
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Guarantor (each a "Subsidiary" and collectively the "Subsidiaries") is
listed on Schedule A attached hereto. Each Subsidiary is a corporation,
limited liability company or limited partnership duly organized, as the
case may be, validly existing and in good standing under the laws of
the jurisdiction of its organization, has corporate, limited liability
company or limited partnership, as the case may be, power and authority
to own, lease and operate its properties and to conduct its business as
described in the Offering Memorandum and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would
not result in a Material Adverse Effect; except as otherwise disclosed
in the Offering Memorandum, all of the issued and outstanding capital
stock, membership interests or partnership interests, as the case may
be, of each such Subsidiary have been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company,
directly or through the Subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; none of
the outstanding shares of capital stock of the Subsidiaries was issued
in violation of any preemptive or similar rights arising by operation
of law, or under the charter or by-laws of any Subsidiary or under any
agreement to which the Company or any Subsidiary is a party. Except as
set forth on Schedule C, none of the Guarantors or any other Subsidiary
of the Company produced or accounted for more than 2% of the Company's
total revenues for the six months ended June 30, 2001 (the "Significant
Subsidiaries").
(viii) Capitalization. The authorized, issued and outstanding
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capital stock of the Company is as set forth in the Offering Memorandum
in the column entitled "Actual" under the caption "Capitalization"
(except for subsequent issuances, if any, pursuant to employee benefit
plans referred to in the Offering Memorandum or pursuant to the
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exercise of convertible securities or options referred to in the
Offering Memorandum and subsequent purchases of the Company's Class A
Common Stock, par value $0.01 per share). The shares of issued and
outstanding capital stock of the Company have been duly authorized and
validly issued and are fully paid and non-assessable; and except as
disclosed in the Offering Memorandum, none of the outstanding shares of
capital stock of the Company was issued in violation of the preemptive
or other similar rights of any securityholder of the Company arising by
operation of law, under the charter or by-laws of the Company, under
any agreement to which the Company or any of the Subsidiaries is a
party or otherwise.
(ix) Authorization of Agreements. This Agreement and the
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Registration Rights Agreement have each been duly authorized by the
Company and each of the Guarantors. This Agreement has been, and as of
the Closing Time the Registration Rights Agreement will have been, duly
executed and delivered by the Company and each of the Guarantors. Upon
the execution and delivery thereof by the Company and each of the
Guarantors, the Registration Rights Agreement will constitute a valid
and binding obligation of the Company and each of the Guarantors,
enforceable against the Company and each of the Guarantors in
accordance with its terms. The DTC Agreement has been duly authorized
by the Company; as of the Closing Time, the DTC Agreement will have
been duly executed and delivered by the Company; and, upon the
execution and delivery thereof by the Company, the DTC Agreement will
constitute a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.
(x) Authorization of the Indenture. The Indenture has been
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duly authorized by the Company and each of the Guarantors and, at the
Closing Time, will have been duly executed and delivered by the Company
and each of the Guarantors and will constitute a valid and binding
agreement of the Company and each of the Guarantors, enforceable
against the Company and each of the Guarantors in accordance with its
terms.
(xi) Authorization of the Securities, the Guarantees and the
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Exchange Securities. The Securities have been duly authorized
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by the Company and, at the Closing Time, will have been duly executed
by the Company and, when authenticated in the manner provided for in
the Indenture and delivered against payment of the purchase price
therefor, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their
terms and will be in the form contemplated by, and entitled to the
benefits of, the Indenture. The Guarantees have been duly authorized
by each of the Guarantors and, at the Closing Time, will have been
duly executed by each of the Guarantors and, when authenticated in the
manner provided for in the Indenture and delivered against payment of
the purchase price therefor, will constitute valid and binding
obligations of each of the Guarantors, enforceable against each of the
Guarantors in accordance with their terms, and will be in the form
contemplated by, and entitled to the benefits of, the Indenture. The
Exchange Securities, which shall include any securities which may be
issued in exchange for the Original Securities (as defined in the
Registration Rights Agreement) have been duly authorized by the
Company and each
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of the Guarantors and, when executed and authenticated and issued and
delivered by the Company and each of the Guarantors in exchange for
the Securities and the Original Securities and, in each case, the
related Guarantees pursuant to the Exchange Offer (as defined in the
Registration Rights Agreement), will constitute valid and binding
obligations of the Company and each of the Guarantors.
(xii) Description of the Securities, the Guarantees, the
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Indenture, the Registration Rights Agreement and the Exchange
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Securities. The Securities, the Guarantees, the Indenture, the
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Registration Rights Agreement, the Company's floor plan facilities,
credit facilities and mortgage facilities conform and will conform in
all material respects to the respective statements relating thereto
contained in the Offering Memorandum and will be in substantially the
respective forms previously delivered to the Initial Purchasers. The
Exchange Securities will conform in all material respects to the
statements relating thereto contained in the Offering Memorandum and
the Registration Statement (as defined in the Registration Rights
Agreement) at the time it becomes effective. There are no contracts or
documents which are required to be described or referred to in a
registration statement on Form S-1 under the 1933 Act which have not
been described or referred to in the Offering Memorandum. The terms of
the Notes and the Original Securities are identical.
(xiii) Absence of Defaults and Conflicts. (1) Except as disclosed
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in the Offering Memorandum, neither the Company nor any of the
Subsidiaries is in violation of its charter or by-laws or in default
in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or other
agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which any of them may be bound, or to
which any of the property or assets of the Company or any of the
Subsidiaries is subject (collectively, "Agreements and Instruments")
or has violated or is in violation of any applicable law, statute,
rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of the Subsidiaries or any of
their assets, properties or operations, except in each case for such
defaults or violations that would not result in a Material Adverse
Effect. (2) Except as disclosed in the Offering Memorandum, the
execution, delivery and performance of this Agreement, the
Registration Rights Agreement, the Indenture, the DTC Agreement, the
Securities, the Guarantees, the Exchange Securities and any other
agreement or instrument entered into or issued or to be entered into
or issued by the Company or any of the Guarantors in connection with
the transactions contemplated hereby or thereby or in the Offering
Memorandum or in connection with the consummation of the transactions
contemplated herein and in the Offering Memorandum (including the
issuance and sale of the Securities and the Guarantees and the use of
the proceeds from the sale of the Securities (together with the
related Guarantees as described in the Offering Memorandum under the
caption "Use of Proceeds"), the exchange of the Securities and the
Original Securities for Exchange Securities and compliance by the
Company and the Guarantors with their respective obligations
hereunder) have been duly authorized by all necessary corporate,
limited
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liability company or partnership action and do not and will not,
whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or a
Repayment Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of the Subsidiaries (other than existing
liens on properties being acquired in the pending acquisitions)
pursuant to, the Agreements and Instruments, nor will such action
result in any violation of the provisions of the charter or by-laws of
the Company or any of the Subsidiaries or any applicable law, statute,
rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of the Subsidiaries or any of
their assets, properties or operations. As used herein, a "Repayment
Event" means any event or condition which gives the holder of any
note, debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by
the Company or any of the Subsidiaries.
(xiv) Absence of Labor Disputes. No material labor dispute with
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the employees of the Company or any of the Subsidiaries exists or, to
the knowledge of the Company and the Guarantors, is imminent, and
except as disclosed in the Offering Memorandum, the Company and the
Guarantors are not aware of any existing or imminent labor disturbance
by the employees of any of their or any of the Subsidiaries' principal
suppliers, manufacturers, customers or contractors, which, in either
case, may reasonably be expected to result in a Material Adverse
Effect.
(xv) Absence of Proceedings. Except as disclosed in the Offering
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Memorandum, there is no action, suit, proceeding, inquiry or
investigation, in each case before or by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge
of the Company or any Guarantor, threatened, against or affecting (i)
the Company or any Subsidiary thereof or (ii) or property owned or
leased by, the Company or any of the Subsidiaries which, singly or in
the aggregate, might reasonably be expected to result in a Material
Adverse Effect, or which, singly or in the aggregate, might reasonably
be expected to materially and adversely affect the properties or
assets of the Company or any of the Significant Subsidiaries or the
consummation of this Agreement or the performance by the Company and
the Guarantors of their respective obligations hereunder or under the
Securities, the Guarantees or the Exchange Securities. The aggregate
of all pending legal or governmental proceedings to which the Company
or any Subsidiary thereof is a party or of which any of their
respective property or assets is the subject which are not described
in the Offering Memorandum, including ordinary routine litigation
incidental to the business, could not reasonably be expected to result
in a Material Adverse Effect.
(xvi) Possession of Intellectual Property. The Company and the
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Subsidiaries own, possess or license, or can acquire on reasonable
terms, adequate patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks, trade names or other
intellectual property
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(collectively, "Intellectual Property") presently employed by them in
connection with the business now operated by them, and neither the
Company nor any of the Subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any Intellectual Property (including
Intellectual Property which is licensed) or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of the
Subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect.
(xvii) Absence of Further Requirements. Except as may be
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required under state securities laws or to effect the Exchange Offer
contemplated by the Registration Rights Agreement, no filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company or
any of the Guarantors of their respective obligations hereunder, in
connection with the offering, issuance or sale of the Securities and
the Guarantees hereunder or the consummation of the transactions
contemplated by or for the due execution, delivery or performance of
this Agreement, the Registration Rights Agreement, the Indenture, the
DTC Agreement, the Securities, the Guarantees, the Exchange Securities
or any other agreement or instrument entered into or issued or to be
entered into or issued by the Company or any of the Subsidiaries in
connection with the consummation of the transactions contemplated
herein and in the Offering Memorandum (including the issuance and sale
of the Securities and the Guarantees and the use of the proceeds from
the sale of the Securities and the Guarantees as described in the
Offering Memorandum under the caption "Use of Proceeds").
(xviii) Possession of Licenses and Permits. The Company and the
----------------------------------
Subsidiaries possess such permits, licenses, approvals, consents,
certificates and other authorizations (collectively, "Governmental
Licenses") issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies necessary to conduct the business now
operated by them, except where the failure to possess such
Governmental Licenses would not, singly or in the aggregate, have a
Material Adverse Effect; the Company and the Subsidiaries are in
compliance with the terms and conditions of all such Governmental
Licenses and with the rules and regulations of the regulatory
authorities and governing bodies having jurisdiction with respect
thereto, except where the failure so to comply would not, singly or in
the aggregate, have a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except where the
invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of the
Subsidiaries has received any written notice of proceedings relating
to the revocation or modification of any such Governmental Licenses,
nor are there, to the knowledge of the Company or any Guarantor,
pending or threatened actions, suits, claims or proceedings against
the Company or any Subsidiary before any court, governmental agency or
body or otherwise that, if successful, would limit, revoke, cancel,
suspend or cause not to be renewed any Governmental License, in each
case, which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
-9-
(xix) Title to Property. The Company and the Subsidiaries have
-----------------
good and marketable title to all real property owned by the Company
and the Subsidiaries and good title to all other properties owned by
them, in each case, free and clear of all mortgages, pledges, liens,
security interests, claims, restrictions or encumbrances of any kind
except such as (a) are described in the Offering Memorandum or (b) do
not, singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be
made of such property by the Company or any of the Subsidiaries; and
all of the leases and subleases material to the business of the
Company and the Subsidiaries, considered as one enterprise, and under
which the Company or any of the Subsidiaries holds properties
described in the Offering Memorandum, are in full force and effect,
and neither the Company nor any of the Subsidiaries has any notice of
any material claim of any sort that has been asserted by anyone
adverse to the rights of the Company or any of the Subsidiaries under
any of the leases or subleases mentioned above, or affecting or
questioning the rights of the Company or any Subsidiary to the
continued possession of the leased or subleased premises under any
such lease or sublease.
(xx) Tax Returns. All United States federal income tax returns
-----------
of the Company and the Subsidiaries required by law to be filed have
been filed (taking into account extensions granted by the applicable
federal governmental agency) and all taxes shown by such returns or
pursuant to any assessment received by the Company or any Subsidiary,
which are due and payable, have been paid, except assessments against
which appeals have been or will be promptly taken in good faith and as
to which adequate reserves have been provided. The Company and the
Subsidiaries have filed all other tax returns that are required to
have been filed by them pursuant to applicable foreign, federal,
state, local or other law, and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Company and
the Subsidiaries, except for such taxes, if any, as are being
contested in good faith and by appropriate proceedings and as to which
adequate reserves have been provided. The charges, accruals and
reserves on the books of the Company in respect of all federal, state,
local and foreign tax liabilities of the Company and each Subsidiary
for any years not finally determined are adequate to meet any
assessments or re-assessments for additional income tax for any years
not finally determined, except to the extent of any inadequacy that
would not result in a Material Adverse Effect.
(xxi) Insurance. The Company and the Subsidiaries carry or are
---------
entitled to the benefits of insurance, with financially sound and
reputable insurers, in such amounts and covering such risks as is
generally maintained by companies of established repute engaged in the
same or similar business and all such insurance is in full force and
effect.
(xxii) Solvency. The Company and each of the Guarantors is, and
--------
immediately after the Closing will be, Solvent. As used herein, the
term "Solvent" means, with respect to the Company and each Guarantor,
as the case may be, on a particular date, that on such date (A) the
fair market value of the assets of the Company or such Guarantor is
greater than the total amount of liabilities (including contingent
liabilities) of the Company or such Guarantor, (B) the present fair
salable value of the
-10-
assets of the Company or such Guarantor is greater than the amount that
will be required to pay the probable liabilities of the Company or such
Guarantor on its debts as they become absolute and mature, (C) the Company
or such Guarantor is able to realize upon its assets and pay its debts and
other liabilities, including contingent obligations, as they mature, and
(D) the Company or such Guarantor does not have unreasonably small capital.
(xxiii) Stabilization or Manipulation. Neither the Company nor any
-----------------------------
Guarantor nor any of their respective officers, directors or controlling
persons has taken, or will take, directly or indirectly, any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company or any Guarantor in order to
facilitate the sale or resale of the Securities or the Guarantees. The
Company and the Guarantors have not distributed and, prior to the later to
occur of (i) the Closing Time and (ii) completion of the distribution of
the Securities and the Guarantees, will not distribute any offering
material in connection with the offering and sale of the Securities and the
Guarantees other than the Offering Memorandum or other materials, if any,
permitted by the 1933 Act and approved by the Representative.
(xxiv) Related Party Transactions. No relationship, direct or
--------------------------
indirect, exists between or among any of the Company, the Guarantors or any
affiliate of the Company or any Guarantor, on the one hand, and any
director, officer, stockholder, customer or supplier of any of them, on the
other hand, which is required by the 1933 Act or by the rules and
regulations enacted thereunder to be described in a registration statement
on Form S-3 which is not so described or is not described as required in
the Offering Memorandum.
(xxv) Suppliers. No supplier of merchandise to the Company or any of
---------
the Subsidiaries has ceased shipments of merchandise to the Company or any
of the Subsidiaries, other than in the normal and ordinary course of
business consistent with past practices, which cessation would not result
in a Material Adverse Effect.
(xxvi) Environmental Laws. Except as described in the Offering
------------------
Memorandum and except for such matters as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company nor
any of the Subsidiaries is in violation of any federal, state, local or
foreign statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products or
nuclear or radioactive material (collectively, "Hazardous Materials") or to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"); (B) the Company and the Subsidiaries have all
permits, licenses,
-11-
authorizations and approvals required for their respective businesses under
any applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of the
Subsidiaries and (D) there are no events, facts or circumstances that might
reasonably be expected to form the basis of any liability or obligation of
the Company or any of the Subsidiaries, including, without limitation, any
order, decree, plan or agreement requiring clean-up or remediation, or any
action, suit or proceeding by any private party or governmental body or
agency, against or affecting the Company or any of the Subsidiaries
relating to any Hazardous Materials or Environmental Laws.
(xxvii) Registration Rights. Except as described in the Offering
-------------------
Memorandum, there are no holders of securities (debt or equity) of the
Company or any Guarantor, or holders of rights (including, without
limitation, preemptive rights), warrants or options to obtain securities of
the Company or any Guarantor, who in connection with the issuance, sale and
delivery of the Securities, the Guarantees and the Exchange Securities, if
any, and the execution, delivery and performance of this Agreement and the
Registration Rights Agreement, have the right to request the Company or any
Guarantor to register securities held by them under the 1933 Act.
(xxviii) Accounting Controls. The Company and its consolidated
-------------------
Subsidiaries maintain a system of internal accounting controls sufficient
to provide reasonable assurances that (A) transactions are executed in
accordance with management's general or specific authorization; (B)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with United States GAAP and to maintain
accountability for assets; (C) access to assets is permitted only in
accordance with management's general or specific authorization; and (D) the
amounts recorded for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xxix) Investment Company Act. The Company and each of the
----------------------
Guarantors is not, and upon the issuance and sale of the Securities and the
Guarantees as herein contemplated and the application of the net proceeds
therefrom as described in the Offering Memorandum will not be, an
"investment company" or an entity "controlled" by an "investment company"
as such terms are defined in the Investment Company Act of 1940, as amended
(the "1940 Act").
(xxx) Rule 144A Eligibility. The Securities and the Guarantees are
---------------------
eligible for resale pursuant to Rule 144A and will not be, at the Closing
Time, of the same class as securities listed on a national securities
exchange registered under Section 6 of the 1934 Act, or quoted in a U.S.
automated interdealer quotation system.
(xxxi) No General Solicitation. None of the Company, the Guarantors,
-----------------------
any of their respective affiliates, as such term is defined in Rule 501(b)
under the 1933 Act ("Affiliates"), or any person acting on any of their
behalf (other than the Initial Purchasers, as to whom the Company and the
Guarantors make no representation) has
-12-
engaged or will engage, in connection with the offering of the Securities
and the Guarantees, in any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the 1933 Act.
(xxxii) No Registration Required. Subject to compliance by the
------------------------
Initial Purchasers with the representations and warranties set forth in
Section 2, it is not necessary in connection with the offer, sale and
delivery of the Securities and the Guarantees to the Initial Purchasers and
to each Subsequent Purchaser in the manner contemplated by this Agreement
and the Offering Memorandum to register the Securities and the Guarantees
under the 1933 Act or to qualify the Indenture under the Trust Indenture
Act of 1939, as amended.
(xxxiii) PORTAL. There are no securities of the Company or any of the
------
Guarantors which are of the same class as the Securities or the Guarantees
that are listed on a national securities exchange registered under Section
6 of the 1934 Act, or quoted in a United States automated inter dealer
quotation system. The Company and the Guarantors have been advised by the
National Association of Securities Dealers, Inc. PORTAL Market that the
Securities and the Guarantees will be designated Private Offerings, Resales
and Trading Through Automated Linkages ("PORTAL") eligible securities in
accordance with the rules and regulations of the National Association of
Securities Dealers, Inc.
(xxxiv) Franchise Agreements. Each franchise agreement, in each case
--------------------
between a Subsidiary and the applicable manufacturer has been duly
authorized by the Company and such Subsidiaries, and, as of the Closing
Time, the Company shall have obtained all consents, authorizations and
approvals from the Manufacturers required to consummate the Offering.
(xxxv) ▇▇▇▇▇ Subordination Agreement. The Subordinated ▇▇▇▇▇ Loan
-----------------------------
(as defined in the Offering Memorandum) will be governed by a Subordination
Agreement to be dated November 19, 2001, which will be in a form agreed to
by the Representative and shall be binding and enforceable against O.
▇▇▇▇▇▇ ▇▇▇▇▇, and under which the debt owed to ▇▇. ▇▇▇▇▇ is subordinated to
the Securities and the Exchange Securities.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any of the Subsidiaries delivered to the Initial Purchasers or to
counsel for the Initial Purchasers shall be deemed a representation and warranty
by the Company or any of the Subsidiaries to the Initial Purchasers as to the
matters covered thereby.
SECTION 2. Sale and Delivery to Initial Purchasers; Closing.
------------------------------------------------
(a) Securities and Guarantees. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company and the Guarantors agree to sell to each Initial Purchaser,
severally and not jointly, and each Initial Purchaser, severally and not
jointly, agrees to purchase from the Company and the Guarantors, at the price
set forth in Schedule D, the aggregate principal amount of Securities (including
the Guarantees) set forth in Schedule B opposite the name of such Initial
Purchaser, plus any
-13-
additional principal amount of Securities (including the Guarantees) which such
Initial Purchaser may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) Payment. Payment of the purchase price for, and delivery of
certificates for, the Securities and the Guarantees shall be made at the office
of Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, or at such other place as shall be
agreed upon by the Representative and the Company and the Guarantors at 9:00
A.M. (New York Time) on November 19, 2001 (unless postponed in accordance with
the provisions of Section 10), or such other time not later than ten business
days after such date as shall be agreed upon by the Representative and the
Company and the Guarantors (such time and date of payment and delivery being
herein called the "Closing Time").
Payment shall be made to the Company and the Guarantors by wire transfer of
immediately available funds to a bank account designated by the Company and the
Guarantors, against delivery to the respective accounts of the Initial
Purchasers of certificates for the Securities and the Guarantees to be purchased
by them. It is understood that each Initial Purchaser has authorized the
Representative, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Securities and the Guarantees which it
has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as representative of
the Initial Purchasers, may (but shall not be obligated to) make payment of the
purchase price for the Securities and the Guarantees to be purchased by any
Initial Purchaser whose funds have not been received by the Closing Time, but
such payment shall not relieve such Initial Purchaser from its obligations
hereunder. The certificates representing the Securities and the Guarantees shall
be registered in the name of Cede & Co. pursuant to the DTC Agreement, or
physical certificates representing the Securities and the Guarantees shall be
registered in the names and denominations requested by each Initial Purchaser,
and in either case shall be made available for examination and packaging by the
Initial Purchasers in The City of New York not later than 9:00 A.M. on the last
business day prior to the Closing Time.
(c) Qualified Institutional Buyer. Each Initial Purchaser severally and not
jointly represents and warrants to, and agrees with, the Company and each of the
Guarantors that it is a "qualified institutional buyer" within the meaning of
Rule 144A under the 1933 Act (a "Qualified Institutional Buyer").
(d) Denominations; Registration. Certificates representing the Securities
(including the Guarantees) shall be in such denominations ($1,000 or integral
multiples thereof) and registered in such names as the Representative may
request in writing at least one full business day before the Closing Time.
SECTION 3. Covenants of the Company and the Guarantors. The Company and the
-------------------------------------------
Guarantors, jointly and severally, covenant with each Initial Purchaser as
follows:
(a) Offering Memorandum. The Company and the Guarantors, as promptly as
possible, will furnish to each Initial Purchaser, without charge, such number of
copies of the Offering Memorandum thereto such Initial Purchaser may reasonably
request.
-14-
(b) Notice and Effect of Material Events. The Company and the Guarantors
will immediately notify each Initial Purchaser, and confirm such notice in
writing, of (x) any filing made by the Company or any Guarantor of information
relating to the offering of the Securities and the Guarantees with any
securities exchange or any other regulatory body in the United States or any
other jurisdiction, and (y) prior to the completion of the placement of the
Securities and the Guarantees by the Initial Purchasers, any material changes in
or affecting the earnings, business affairs or business prospects of the Company
and the Subsidiaries which (i) make any statement in the Offering Memorandum
false or misleading or (ii) are not disclosed in the Offering Memorandum. In
such event or if during such time any event shall occur or condition shall exist
as a result of which it is necessary, in the opinion of the Company and the
Guarantors, their counsel, the Initial Purchasers or counsel for the Initial
Purchasers, to amend or supplement the Offering Memorandum in order that the
Offering Memorandum not include any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances then existing, the Company will
forthwith amend or supplement the Offering Memorandum by preparing and
furnishing to each Initial Purchaser an amendment or amendments of, or a
supplement or supplements to, the Offering Memorandum (in form and substance
satisfactory in the opinion of counsel for the Initial Purchasers) so that, as
so amended or supplemented, the Offering Memorandum will not include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances existing at
the time it is delivered to a Subsequent Purchaser, not misleading.
(c) Amendment to Offering Memorandum and Supplements. The Company and the
Guarantors will advise each Initial Purchaser promptly of any proposal to amend
or supplement the Offering Memorandum and will not effect such amendment or
supplement without the consent of the Initial Purchasers. Neither the consent of
the Initial Purchasers to, nor the Initial Purchasers' delivery of, any such
amendment or supplement, shall constitute a waiver of any of the conditions set
forth in Section 5 hereof.
(d) Qualification of Securities and Guarantees for Offer and Sale. The
Company and the Guarantors will endeavor, in cooperation with the Initial
Purchasers, to register or qualify the Securities and the Guarantees for
offering and sale under the applicable securities laws of such jurisdictions as
the Representative may designate and will maintain such qualifications in effect
as long as required for the sale of the Securities and the Guarantees; provided,
however, that the Company and the Guarantors shall not be obligated to file any
general consent to service of process or to qualify as a foreign corporation or
as a dealer in securities in any jurisdiction in which it is not so qualified or
to subject itself to taxation in respect of doing business in any jurisdiction
in which it is not otherwise so subject.
(e) Exchange Offer. The Company and the Guarantors will offer the holders
of the Company's 11% Senior Subordinated Notes due 2008 the opportunity to
exchange such notes for the Exchange Securities. Such offer will be on terms
acceptable to ▇▇▇▇▇▇▇ ▇▇▇▇▇ and shall be made as soon after the date hereof as
is practicable in accordance with the Registration Rights Agreement.
-15-
(f) Integration. The Company and the Guarantors agree that they will not
and will cause their affiliates not to make any offer or sale of securities of
the Company or any Guarantor of any class if, as a result of the doctrine of
"integration" referred to in Rule 502 promulgated under the 1933 Act, such offer
or sale could be deemed to render invalid (for the purpose of (i) the sale of
the Securities and the Guarantees by the Company and the Guarantors to the
Initial Purchasers, (ii) the resale of the Securities and the Guarantees by the
Initial Purchasers to Subsequent Purchasers or (iii) the resale of the
Securities and the Guarantees by such Subsequent Purchasers to others) the
exemption from the registration requirements of the 1933 Act provided by Section
4(2) thereof or by Rule 144A or by Regulation S thereunder or otherwise.
(g) Rating of Securities. The Company and the Guarantors shall take all
reasonable action necessary to enable Standard & Poor's Ratings Group, a
division of McGraw Hill, Inc. ("S&P"), and ▇▇▇▇▇'▇ Investors Service, Inc.
("Moody's"), to provide their respective credit ratings of the Securities and
the Guarantees.
(h) Rule 144A Information. The Company and the Guarantors agree that, in
order to render the Securities and the Guarantees eligible for resale pursuant
to Rule 144A under the 1933 Act, while any of the Securities and the Guarantees
remain outstanding, it will make available, upon request, to any holder of
Securities and Guarantees or prospective purchasers of Securities and Guarantees
the information specified in Rule 144A(d)(4), unless the Company and the
Guarantors furnish information to the Commission pursuant to Section 13 or 15(d)
of the 1934 Act (such information, whether made available to holders or
prospective purchasers or furnished to the Commission, is hereinafter referred
to as "Additional Information").
(i) Restriction on Resales. Until the expiration of two years after the
original issuance of the Securities and the Guarantees, the Company and the
Guarantors will not, and will cause their "affiliates" (as such term is defined
in Rule 144(a)(1) under the ▇▇▇▇ ▇▇▇) not to, resell any Securities and
Guarantees which are "restricted securities" (as such term is defined under Rule
144(a)(3) under the ▇▇▇▇ ▇▇▇) that have been reacquired by any of them and shall
immediately upon any purchase of any such Securities and Guarantees submit such
Securities and Guarantees to the Trustee for cancellation.
(j) Use of Proceeds. The Company and the Guarantors will use the net
proceeds received by them from the sale of the Securities and the Guarantees in
the manner specified in the Offering Memorandum under "Use of Proceeds."
(k) Restriction on Sale of Securities. During a period of 180 days from the
date of the Final Offering Memorandum, the Company and the Guarantors will not,
without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly,
issue, sell, offer to sell, grant any option for the sale of, or otherwise
dispose of, any debt securities or guarantees of debt securities of the Company
or any of the Guarantors, or any securities convertible or exchangeable into or
exercisable for any debt securities or guarantees of debt securities of the
Company or any of the Guarantors, and will not file a registration statement in
connection therewith (other than a registration statement registering solely the
Securities, the Guarantees and/or the Exchange
-16-
Securities); provided, however, the Company may incur indebtedness under its
existing revolving credit, floor plan and construction/mortgage facilities.
(l) DTC Clearance. The Company and the Guarantors will use all reasonable
efforts in cooperation with the Initial Purchasers to permit the Securities and
the Guarantees to be eligible for clearance and settlement through DTC.
(m) Legends. Each certificate representing a Security (including a
Guarantee) will bear the legend contained in "Notices to Investors" in the
Offering Memorandum for the time period and upon the other terms stated in the
Offering Memorandum.
(n) Interim Financial Statements. Prior to the Closing Time, the Company
shall furnish to the Initial Purchasers any unaudited interim financial
statements of the Company, promptly after they have been completed, for any
periods subsequent to the periods covered by the financial statements appearing
in the Offering Memorandum.
(o) Periodic Reports. For a period of three years after the Closing Time,
the Company and the Guarantors will furnish to the Initial Purchasers copies of
all annual reports, quarterly reports and current reports (excluding exhibits)
filed with the Commission on Forms 10-K, 10-Q and 8-K, or such other similar
forms as may be designated by the Commission, and such other documents, reports
and information as shall be furnished by the Company and the Guarantors
generally to the holders of the Securities and the Guarantees or to security
holders of its publicly issued securities generally.
SECTION 4. Payment of Expenses.
-------------------
(a) Expenses. The Company and the Guarantors, jointly and severally, will
pay (or cause to be paid) all expenses incident to the performance of their
respective obligations under this Agreement, including (i) the preparation,
printing and any filing of the Offering Memorandum and the Registration
Statement (including financial statements and any schedules or exhibits) and of
each amendment or supplement thereto, including the Offering Memorandum and the
Exchange Offer prospectus to be contained in the Registration Statement, (ii)
the preparation, printing and delivery to the Initial Purchasers of this
Agreement, the Registration Rights Agreement, the Indenture and such other
documents as may be required in connection with the offering, purchase, sale and
delivery of the Securities and the Guarantees, (iii) the preparation, issuance
and delivery of the certificates for the Securities and the Guarantees to the
Initial Purchasers, including any charges of DTC in connection therewith, (iv)
the fees and disbursements of the Company's and the Guarantors' counsel,
accountants and other advisors, (v) the qualification of the Securities and the
Guarantees under securities laws in accordance with the provisions of Section
3(d) hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Initial Purchasers in connection therewith and in connection
with the preparation, printing and delivery to the Initial Purchasers of copies
of any memorandum related to blue sky matters, any supplement thereto or any
survey of investment qualifications, (vi) the fees and expenses of the Trustee,
including the fees and disbursements of
-17-
counsel for the Trustee in connection with the Indenture and the Securities and
the Guarantees, (vii) any fees payable in connection with the rating of the
Securities and the Guarantees and the listing of the Securities and the
Guarantees with the PORTAL market, and (viii) any filing fees incident to, and
any reasonable fees and disbursements of counsel to the Initial Purchasers in
connection with, the review by the National Association of Securities Dealers,
Inc. of the terms of the sale of the Securities and the Guarantees.
(b) Termination of Agreement. If this Agreement is terminated by the
Representative in accordance with the provisions of Section 5 or Section 9(a)(i)
or 9(a)(ii) hereof, the Company and the Guarantors, jointly and severally, shall
reimburse the Initial Purchasers for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Initial
Purchasers.
SECTION 5. Conditions of Initial Purchasers' Obligations. The obligations
---------------------------------------------
of the several Initial Purchasers hereunder are subject to the accuracy of the
representations and warranties of the Company and the Guarantors contained in
Section 1 hereof or in certificates of any officer of the Company or any of the
Subsidiaries delivered pursuant to the provisions hereof, to the performance by
the Company and the Guarantors of their covenants and other obligations
hereunder, and to the following further conditions:
(a) Opinion of Counsel for the Company and the Guarantors. At the Closing
Time, the Initial Purchasers shall have received the favorable opinion, dated as
of the Closing Time, of ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇ PLLC, counsel for the Company and the
Guarantors, in form and substance satisfactory to counsel for the Initial
Purchasers, together with signed or reproduced copies of such letters for each
of the other Initial Purchasers, to the effect previously agreed to by the
parties and to such further effect as counsel for the Initial Purchasers may
reasonably request.
(b) Opinion of Counsel for the Initial Purchasers. At the Closing Time, the
Initial Purchasers shall have received the favorable opinion, dated as of the
Closing Time, of Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the
Initial Purchasers, together with signed or reproduced copies of such letter for
each of the other Initial Purchasers, with respect to certain matters agreed
upon. In giving such opinion such counsel may rely, as to all matters governed
by the laws of jurisdictions other than the law of the State of New York and the
federal law of the United States and the General Corporation Law of the State of
Delaware, upon the opinions of counsel satisfactory to the Representative. Such
counsel may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of officers
of the Company, the Guarantors and the Subsidiaries and certificates of public
officials.
(c) Officers' Certificate. At the Closing Time, (i) the Offering
Memorandum, as it may then be amended or supplemented, including any documents
incorporated by reference therein, shall not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; (ii) there shall not
have been, since the date hereof or since the respective dates as of which
information is given in the Offering Memorandum, any material adverse change in
the condition
-18-
(financial or otherwise), earnings, business affairs or business prospects of
the Company and its Subsidiaries, considered as one enterprise, whether or not
arising in the ordinary course of business; (iii) the Company and the Guarantors
shall have complied with all agreements and satisfied all conditions on its part
to be performed or satisfied at or prior to the Closing Time; and (iv) the
representations and warranties of the Company and the Guarantors in Section 1
shall be accurate and true and correct as though expressly made at and as of the
Closing Time. At the Closing Time, the Initial Purchasers shall have received a
certificate of the Chief Executive Officer of the Company and the Chief
Financial Officer of the Company, and equivalent officials of each Guarantor,
dated as of the Closing Time, to such effect.
(d) Accountants' Letters and Consents. At the Closing Time, the Initial
Purchasers shall have received from Deloitte & Touche LLP a letter dated such
date, in form and substance satisfactory to the Representative and to counsel
for the Initial Purchasers, together with signed or reproduced copies of such
letters for each of the other Initial Purchasers, containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
the Initial Purchasers with respect to the financial statements and certain
financial information contained in the Offering Memorandum and in the form
previously agreed to. To the extent an audit report of Deloitte & Touche LLP is
included in the Offering Memorandum, such accounting firm shall include either
in such letter or in a separate writing a consent to the inclusion of its report
in the Offering Memorandum and to the reference to it under the caption
"Independent Auditors" in the Offering Memorandum.
(e) Maintenance of Rating. At the Closing Time, the Securities and the
Guarantees shall be rated at least B-2 by Moody's and B+ by S&P, and the Company
and the Guarantors shall have delivered to the Representative a letter dated the
Closing Time, from each such rating agency, or other evidence satisfactory to
the Representative, confirming that the Securities and the Guarantees have such
ratings; and since the date of this Agreement, there shall not have occurred a
downgrading in the rating assigned to the Securities and the Guarantees or any
of the Company's and the Guarantor's other debt securities by any nationally
recognized securities rating agency, and no such securities rating agency shall
have publicly announced that it has under surveillance or review, with possible
negative implications, its rating of the Securities and the Guarantees or any of
the Company's and the Guarantor's other debt securities.
(f) PORTAL. At the Closing Time, the Securities and the Guarantees shall
have been designated for trading on PORTAL.
(g) Chief Financial Officer's Certificate. At the Closing Time, the Initial
Purchasers shall have received a certificate of the principal financial officer
of the Company and the Guarantors as to certain agreed upon accounting matters.
(h) Registration Rights Agreement and Indenture. The Company and each of
the Guarantors shall have duly authorized, executed and delivered the
Registration Rights
-19-
Agreement and the Indenture to the Initial Purchasers in a form and substance
satisfactory to the Representative and counsel for the Initial Purchasers.
(i) Manufacturers' Consents. The Representative shall have received on or
as of the Closing Time, as the case may be, a certificate, in a form and
substance satisfactory to the Representative, of two executive officers of the
Company certifying that each of the Company and its subsidiaries owns, possesses
or has obtained any required consents and approvals from all Manufacturers with
respect to the Offering and such consents and approvals, if any, shall be in a
form satisfactory to the Representative other than those consents not received
as described in the Offering Memorandum.
(j) Lenders' Consents. Prior to or at the Closing Time, the Company shall
have received any required consents under their existing indebtedness for the
issuance and sale of the Securities pursuant to the terms of this Agreement and
the Indenture.
(k) Additional Documents. At the Closing Time, counsel for the Initial
Purchasers shall have been furnished with such documents and opinions as they
may require for the purpose of enabling them to pass upon the issuance and sale
of the Securities and the Guarantees as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company and the Guarantors in connection with the issuance and sale
of the Securities and the Guarantees as herein contemplated shall be
satisfactory in form and substance to the Initial Purchasers and counsel for the
Initial Purchasers.
(l) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Representative by notice to the Company at
any time at or prior to the Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 6, 7 and 8 shall survive any such termination and remain
in full force and effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification of Initial Purchasers. The Company and each of the
Guarantors, jointly and severally, agree to indemnify and hold harmless each
Initial Purchaser and each person, if any, who controls any Initial Purchaser
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Offering Memorandum,
or the omission or alleged omission therefrom of a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
-20-
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Representative), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any
such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
-------- -------
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company or the
Guarantors by any Initial Purchaser through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in
the Offering Memorandum.
(b) Indemnification of Company, Guarantors, and Directors. Each
Initial Purchaser severally agrees to indemnify and hold harmless the
Company, the Guarantors and their directors, and each person, if any, who
controls the Company or the Guarantors within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions,
made in the Offering Memorandum in reliance upon and in conformity with
written information furnished to the Company or the Guarantors by such
Initial Purchasers through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Offering
Memorandum. The Company hereby acknowledges that the only information that
the Initial Purchasers have furnished to the Company expressly for use in
the Offering Memorandum are the statements set forth in the third sentence
in the paragraph directly below the table and all sentences in the fourth
paragraph below the table under the caption "Plan of Distribution" in the
Offering Memorandum.
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof
and in any event shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 6(a) above, counsel to the
indemnified parties shall be selected by the Representative, and, in the
case of parties indemnified pursuant to
-21-
Section 6(b) above, counsel to the indemnified parties shall be selected by the
Company. An indemnifying party may participate at its own expense in the defense
of any such action; provided, however, that counsel to the indemnifying party
-------- -------
shall not (except with the consent of the indemnified party) also be counsel to
the indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6
------------
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Guarantors on the one hand and the Initial Purchasers on the other hand from the
offering of the Securities and the Guarantees pursuant to this Agreement or (ii)
if the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Guarantors on the one hand and of the Initial Purchasers on the other hand
in connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and the Guarantors on the one
hand and the Initial Purchasers on the other hand in connection with the
offering of the Securities and the Guarantees pursuant to this Agreement shall
be deemed to be in the same respective proportions
-22-
as the total net proceeds from the offering of the Securities and the Guarantees
pursuant to this Agreement (before deducting expenses) received by the Company
and the Guarantors and the total underwriting discount received by the Initial
Purchasers, bear to the aggregate initial offering price of the Securities and
the Guarantees.
The relative fault of the Company and the Guarantors on the one hand and
the Initial Purchasers on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Guarantors, or by the Initial
Purchasers, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, the Guarantors and the Initial Purchasers agree that it would
not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Initial Purchasers were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in this
Section 7. The aggregate amount of the losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
7 shall be deemed to include any legal or other fees reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon such untrue or
alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities (including the Guarantees) purchased by it
and distributed to the public were offered to the public exceeds the amount of
any damages which such Initial Purchaser has otherwise been required to pay by
reason of any such untrue or alleged untrue statement or omission or alleged
omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Initial Purchaser within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as such Initial
Purchaser, and each director of the Company and each Guarantor, and each person,
if any, who controls the Company and each Guarantor within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company and each Guarantor. The Initial
Purchasers' respective obligations to contribute pursuant to this Section 7 are
several in proportion to the principal amount of Securities (including the
Guarantees) set forth opposite their respective names in Schedule B hereto and
not joint.
-23-
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of the Subsidiaries submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Initial Purchaser or
controlling person, or by or on behalf of the Company or any Guarantor, and
shall survive (i) delivery of the Securities (including the Guarantees) to the
Initial Purchasers and (ii) any termination of this Agreement.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The Representative may terminate this Agreement,
by notice to the Company and the Guarantors, at any time at or prior to the
Closing Time (i) if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
Final Offering Memorandum (exclusive of any amendment or supplement thereto),
any material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and the
Subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there shall have occurred a downgrading
in the rating assigned to the Securities or Guarantees or any of the Company's
or any Guarantor's other debt securities by any nationally recognized securities
rating agency, or if such securities rating agency shall have publicly announced
that it has under surveillance or review, with possible negative implications,
its rating of the Securities, the Guarantees or any of the Company's or
Guarantors' other debt securities or guarantees of debt securities, or (iii) if
there has occurred any material adverse change in the financial markets in the
United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Representative, impracticable or
inadvisable to market the Securities or the Guarantees or to enforce contracts
for the sale of the Securities or the Guarantees, or (iv) if trading in any
securities of the Company or any Guarantor has been suspended or materially
limited by the Commission or the NASDAQ National Market System, or if trading
generally on the American Stock Exchange or the New York Stock Exchange or in
the Nasdaq National Market has been suspended or materially limited, or minimum
or maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or (v) the Company shall have sustained a loss by
strike, fire, flood, earthquake, accident or other calamity of such character as
in the judgment of the Representative may interfere materially with the conduct
of the business and operations of the Company regardless of whether or not such
loss shall have been insured, or (vi) a material disruption has occurred in
commercial banking or securities settlement or clearance services in the United
States, or (vii) if a banking moratorium has been declared by either Federal,
Delaware or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in
-24-
Section 4 hereof, and provided further that Sections 1, 6, 7 and 8 shall survive
suchnation and remain in full force and effect.
SECTION 10. Default by One or More of the Initial Purchasers. If one or
------------------------------------------------
more of the Initial Purchasers shall fail at Closing Time to purchase the
Securities which it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), the Representative shall have the right, but not the
obligation, within 24 hours thereafter, to make arrangements for one or more of
the non-defaulting Initial Purchasers, or any other initial purchasers, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, the
Representative shall not have completed such arrangements within such 24-hour
period, then
(a) if the number of Defaulted Securities does not exceed 10% of the
aggregate principal amount of the Securities to be purchased hereunder,
each of the non-defaulting Initial Purchasers shall be obligated, severally
and not jointly, to purchase the full amount thereof in the proportions
that their respective obligations hereunder bear to the obligations of all
non-defaulting Initial Purchasers, or
(b) if the number of Defaulted Securities exceeds 10% of the aggregate
principal amount of the Securities to be purchased hereunder, this
Agreement shall terminate without liability on the part of any
non-defaulting Initial Purchaser.
No action taken pursuant to this Section shall relieve any defaulting
Initial Purchaser from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Representative, the Company or the Guarantors shall
have the right to postpone the Closing Time for a period not exceeding seven
days in order to effect any required changes in the Offering Memorandum or in
any other documents or arrangements. As used herein, the term "Initial
Purchaser" includes any person substituted for an Initial Purchaser under this
Section 10.
SECTION 11. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Initial
Purchasers shall be directed to (i) the Representative at ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, attention of ▇▇▇▇▇ ▇▇▇▇▇ and
(ii) Banc of America Securities LLC at ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, attention of ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, with a copy to Fried, Frank, Harris, ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇, ▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Esq.; notices to the Company or the Guarantors shall be directed to
them at Sonic Automotive, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇; with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
III, Esq., ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇, PLLC, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
SECTION 12. Parties. This Agreement shall inure to the benefit of and be
-------
binding upon the Initial Purchasers, the Company and the Guarantors and their
respective successors. Nothing
-25-
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Initial Purchasers, the
Company and the Guarantors and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Initial Purchasers, the Company and the
Guarantors and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities and
Guarantees from any Initial Purchaser shall be deemed to be a successor by
reason merely of such purchase.
SECTION 13. Governing Law and Time. THIS AGREEMENT SHALL BE GOVERNED
----------------------
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY HEREIN REFER TO NEW YORK CITY TIME.
SECTION 14. General Provisions. This Agreement constitutes the entire
------------------
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
SECTION 15. Partial Unenforceability. The invalidity or
------------------------
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
SECTION 16. Effect of Headings. The Article and Section headings
------------------
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
Each of the parties hereto acknowledges that it is a sophisticated
business person who was adequately represented by counsel during negotiations
regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 6 and the contribution provisions of
Section 7, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 6 and 7 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company, its affairs and its business in order to assure that adequate
disclosure has been made in Offering Memorandum.
-26-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Guarantors a
counterpart hereof, whereupon this instrument, along with all counterparts, will
become a binding agreement among the Initial Purchasers, the Company and the
Guarantors in accordance with its terms.
Very truly yours,
SONIC AUTOMOTIVE, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President, Treasurer and Chief
Financial Officer
AUTOBAHN, INC.
CAPITOL CHEVROLET AND IMPORTS, INC.
▇▇▇▇ PONTIAC CADILLAC, INC.
FA SERVICE CORPORATION
FAA AUTO FACTORY, INC.
FAA ▇▇▇▇▇▇▇ HILLS, INC.
FAA CAPITOL F, INC.
FAA CAPITOL N, INC.
FAA CONCORD H, INC.
FAA CONCORD N, INC.
FAA CONCORD T, INC.
FA DEALER SERVICES, INC.
FAA DUBLIN N, INC.
FAA DUBLIN VWD, INC.
FAA HOLDING CORP.
FAA LAS VEGAS H, INC.
FAA MARIN D, INC.
FAA MARIN F, INC.
FAA ▇▇▇▇▇ ▇▇, INC.
FA POWAY D, INC.
FAA POWAY G, INC.
FAA POWAY H, INC.
FAA POWAY T, INC.
FAA SAN BRUNO, INC.
FAA SANTA ▇▇▇▇▇▇ V, INC.
FAA SERRAMONTE H, INC.
FAA SERRAMONTE L, INC.
FAA SERRAMONTE, INC.
FAA STEVENS CREEK, INC.
FAA TORRANCE CPJ, INC.
FIRSTAMERICA AUTOMOTIVE, INC.
FORT MILL CHRYSLER-PLYMOUTH-DODGE INC.
FORT MILL FORD, INC.
FRANCISCAN MOTORS, INC.
FREEDOM FORD, INC.
FRONTIER OLDSMOBILE-CADILLAC, INC.
HMC FINANCE ALABAMA, INC.
▇▇▇▇▇▇ MOTORS INCORPORATED
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ CHEVROLET, LLC
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ CHEVROLET, L.P.
L DEALERSHIP GROUP, INC. (formerly ▇▇▇▇▇ DEALERSHIP
GROUP, INC.)
▇▇▇▇▇▇ ▇▇▇▇▇ CORPORATION
▇▇▇▇▇▇▇▇ MOTORS, LTD.
RIVERSIDE NISSAN, INC.
ROYAL MOTOR COMPANY, INC.
SANTA ▇▇▇▇▇ IMPORTED CARS, INC.
SMART NISSAN, INC.
SONIC AUTOMOTIVE - ▇▇▇▇▇▇▇▇, INC.
SONIC AUTOMOTIVE OF CHATTANOOGA, LLC
SONIC AUTOMOTIVE-CLEARWATER, INC.
SONIC AUTOMOTIVE COLLISION CENTER OF CLEARWATER,
INC,
SONIC AUTOMOTIVE F&I, LLC
SONIC AUTOMOTIVE OF GEORGIA, INC.
SONIC AUTOMOTIVE OF NASHVILLE, LLC
SONIC AUTOMOTIVE OF NEVADA, INC.
SONIC AUTOMOTIVE SERVICING COMPANY, LLC
SONIC AUTOMOTIVE OF TENNESSEE, INC.
SONIC AUTOMOTIVE OF TEXAS, L.P.
SONIC AUTOMOTIVE WEST, LLC
SONIC AUTOMOTIVE - ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇.,
▇▇▇, INC.
SONIC AUTOMOTIVE-1400 AUTOMALL DRIVE,
COLUMBUS, INC.
SONIC AUTOMOTIVE-1455 AUTOMALL DRIVE,
COLUMBUS, INC.
SONIC AUTOMOTIVE-1495 AUTOMALL DRIVE,
COLUMBUS, INC.
SONIC AUTOMOTIVE-1500 AUTOMALL DRIVE,
COLUMBUS, INC.
SONIC AUTOMOTIVE - ▇▇▇▇ ▇▇▇▇▇ ▇▇▇., DB,
INC.
SONIC AUTOMOTIVE - ▇▇▇▇ ▇▇▇▇▇ ▇▇▇., DB,
LLC
SONIC AUTOMOTIVE - ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇.,
▇▇▇, INC.
SONIC AUTOMOTIVE - ▇▇▇▇▇ ▇.▇. ▇▇▇ ▇▇ N.,
INC.
SONIC AUTOMOTIVE - ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇.,
▇▇, ▇▇▇.
SONIC AUTOMOTIVE ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇▇▇, INC.
SONIC AUTOMOTIVE ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇▇▇, INC.
SONIC AUTOMOTIVE ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, LLC
SONIC AUTOMOTIVE - ▇▇▇▇ ▇. ▇▇▇▇, ▇▇, L.P.
SONIC AUTOMOTIVE-3700 WEST BROAD STREET, COLUMBUS, INC.
SONIC AUTOMOTIVE - ▇▇▇▇ ▇. ▇▇▇▇ ▇▇., PO,
INC.
SONIC AUTOMOTIVE-4000 WEST BROAD STREET, COLUMBUS, INC.
SONIC AUTOMOTIVE - ▇▇▇▇ ▇-▇▇ ▇▇▇▇, ▇▇, L.P.
SONIC AUTOMOTIVE - ▇▇▇▇ ▇-▇▇ ▇▇▇▇, ▇▇, L.P.
SONIC AUTOMOTIVE ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., LLC
SONIC AUTOMOTIVE - 5585 PEACHTREE INDUSTRIAL BLVD., LLC
SONIC AUTOMOTIVE - ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇,
▇▇, INC.
SONIC AUTOMOTIVE - 6025 INTERNATIONAL
DRIVE, LLC
SONIC AUTOMOTIVE - ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇, LLC
SONIC - ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇▇▇▇,
LLC
SONIC - ▇▇▇▇▇▇▇ H, INC.
SONIC - BUENA PARK H, INC.
SONIC - CAMP FORD, L.P.
SONIC - CAPITAL CHEVROLET, INC.
SONIC - CARROLLTON V, L.P.
SONIC CHRYSLER-PLYMOUTH-JEEP, LLC
SONIC-CLASSIC DODGE, INC.
SONIC - COAST CADILLAC, INC. (formerly FAA WOODLAND
HILLS VW, INC.)
SONIC DODGE, LLC
SONIC DEVELOPMENT, LLC
SONIC - FM AUTOMOTIVE, LLC
SONIC - FM, INC.
SONIC - FM NISSAN, INC.
SONIC - FM VW, INC.
SONIC - FORT WORTH T, L.P.
SONIC - ▇▇▇▇▇▇▇▇, INC.
SONIC - GLOBAL IMPORTS, L.P.
SONIC-▇▇▇▇▇▇, INC.
SONIC - HARBOR CITY H, INC.
SONIC - HOUSTON V, L.P.
SONIC - INTEGRITY DODGE LV, LLC
SONIC - LAS VEGAS C EAST, LLC
SONIC - LAS VEGAS C WEST, LLC
SONIC - ▇▇▇▇▇ NISSAN, INC.
SONIC - ▇▇▇▇▇ PONTIAC - CADILLAC, INC.
SONIC - ▇▇▇▇ ▇▇▇▇▇, L. P.
SONIC - MANHATTAN FAIRFAX, INC.
SONIC - MANHATTAN WALDORF, INC.
SONIC-▇▇▇▇▇▇▇▇▇▇ FLM, INC.
SONIC - ▇▇▇▇▇▇▇ CHEVROLET WORLD, INC.
SONIC - ▇▇▇▇▇▇▇ OF ▇▇▇▇▇▇▇▇, INC.
SONIC - NORTH CHARLESTON, INC.
SONIC - NORTH CHARLESTON DODGE, INC.
SONIC - PARK PLACE A, L.P. (formerly SONIC - DALLAS
AUTO FACTORY, L.P.)
SONIC PEACHTREE INDUSTRIAL BLVD., L.P.
SONIC - READING, L.P.
SONIC RESOURCES, INC.
SONIC - ▇▇▇▇▇▇▇▇▇▇ F, L.P.
SONIC-RIVERSIDE, INC.
SONIC - RIVERSIDE AUTO FACTORY, INC.
SONIC - ROCKVILLE IMPORTS, INC.
SONIC - ROCKVILLE MOTORS, INC.
SONIC - ▇▇▇ ▇▇▇▇▇ NISSAN, L.P.
SONIC - ▇▇▇▇▇▇▇▇▇▇▇, INC.
SONIC -SUPERIOR OLDSMOBILE, LLC
SONIC - STEVENS CREEK B, INC.
SONIC OF TEXAS, INC.
SONIC-VOLVO LV, LLC
SONIC - WEST COVINA T, INC.
SONIC - WEST RENO CHEVROLET, INC.
SONIC-▇▇▇▇▇▇▇▇ BUICK, INC.
SONIC - ▇▇▇▇▇▇▇▇ CADILLAC, INC.
SONIC - ▇▇▇▇▇▇▇▇ IMPORTS, INC.
SONIC - ▇▇▇▇▇▇▇▇ MOTORS, LLC
SPEEDWAY CHEVROLET, INC.
SRE ALABAMA - 2, LLC
SRE ALABAMA - 3, LLC
SREALESTATE ARIZONA - 1, LLC
SREALESTATE ARIZONA - 2, LLC
SREALESTATE ARIZONA - 3, LLC
SREALESTATE ARIZONA - 4, LLC
SRE FLORIDA - 1, LLC
SRE FLORIDA - 2, LLC
SRE FLORIDA - 3, LLC
SRE GEORGIA - 1, L.P.
SRE GEORGIA - 2, L.P.
SRE GEORGIA - 3, L.P.
SRE HOLDING, LLC
SRE NEVADA - 1, LLC
SRE NEVADA - 2, LLC
SRE NEVADA - 3, LLC
SRE SOUTH CAROLINA - 2, LLC
SRE TENNESSEE - 1, LLC
SRE TENNESSEE - 2, LLC
SRE TENNESSEE - 3, LLC
SRE TEXAS - 1, L.P.
SRE TEXAS - 2, L.P.
SRE TEXAS - 3, L.P.
SRE VIRGINIA - 1, LLC
STEVENS CREEK CADILLAC, INC.
TOWN AND COUNTRY CHRYSLER-PLYMOUTH-JEEP, LLC
TOWN AND COUNTRY CHRYSLER-PLYMOUTH-JEEP OF
ROCK HILL, INC.
TOWN AND COUNTRY FORD, INCORPORATED
TOWN AND COUNTRY FORD OF CLEVELAND, LLC
TOWN AND COUNTRY JAGUAR, LLC
TRANSCAR LEASING, INC.
VILLAGE IMPORTED CARS, INC.
WINDWARD, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President, Treasurer and Chief
Financial Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: /s/ signature illegible
-------------------------------------
Authorized Signatory
SCHEDULE A
Subsidiaries which are Guarantors
---------------------------------
AUTOBAHN, INC. (a California corporation)
CAPITOL CHEVROLET AND IMPORTS, INC. (an Alabama corporation)
▇▇▇▇ PONTIAC CADILLAC, INC. (an Alabama corporation)
FA SERVICE CORPORATION (a California corporation)
FAA AUTO FACTORY, INC. (a California corporation)
FAA ▇▇▇▇▇▇▇ HILLS, INC. (a California corporation)
FAA CAPITOL F, INC. (a California corporation)
FAA CAPITOL N, INC. (a California corporation)
FAA CONCORD H, INC. (a California corporation)
FAA CONCORD N, INC. (a California corporation)
FAA CONCORD T, INC. (a California corporation)
FAA DUBLIN N, INC. (a California corporation)
FAA DUBLIN VWD, INC. (a California corporation)
FAA HOLDING CORP. (a California corporation)
FAA LAS VEGAS H, INC. (a Nevada corporation)
FAA MARIN D, INC. (a California corporation)
FAA MARIN F, INC. (a California corporation)
FAA ▇▇▇▇▇ ▇▇, INC. (a California corporation)
FAA POWAY D, INC. (a California corporation)
FAA POWAY G, INC. (a California corporation)
FAA POWAY H, INC. (a California corporation)
FAA POWAY T, INC. (a California corporation)
FAA SAN BRUNO, INC. (a California corporation)
FAA SANTA ▇▇▇▇▇▇ V, INC. (a California corporation)
FAA SERRAMONTE H, INC. (a California corporation)
FAA SERRAMONTE L, INC. (a California corporation)
FAA SERRAMONTE, INC. (a California corporation)
FAA STEVENS CREEK, INC. (a California corporation)
FAA TORRANCE CPJ, INC. (a California corporation)
FIRSTAMERICA AUTOMOTIVE, INC. (a Delaware corporation)
FORT MILL CHRYSLER-PLYMOUTH-DODGE INC. (a South Carolina corporation)
FORT MILL FORD, INC. (a South Carolina corporation)
FRANCISCAN MOTORS, INC. (a California corporation)
FREEDOM FORD, INC. (a Florida corporation)
FRONTIER OLDSMOBILE-CADILLAC, INC. (a North Carolina corporation)
HMC FINANCE ALABAMA, INC. (an Alabama corporation)
▇▇▇▇▇▇ MOTORS INCORPORATED (a California corporation)
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ CHEVROLET, LLC (a Delaware limited liability company)
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ CHEVROLET, L.P. (a Texas limited partnership)
L DEALERSHIP GROUP, INC. (a Texas corporation)
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▇▇▇▇▇▇ ▇▇▇▇▇ CORPORATION (a North Carolina corporation)
▇▇▇▇▇▇▇▇ MOTORS, LTD. (a Texas limited partnership)
RIVERSIDE NISSAN, INC. (an Oklahoma corporation)
ROYAL MOTOR COMPANY, INC. (an Alabama corporation)
SANTA ▇▇▇▇▇ IMPORTED CARS, INC. (a California corporation)
SMART NISSAN, INC. (a California corporation)
SONIC AUTOMOTIVE - ▇▇▇▇▇▇▇▇, INC. (a Florida corporation)
SONIC AUTOMOTIVE OF CHATTANOOGA, LLC (a Tennessee limited liability company)
SONIC AUTOMOTIVE-CLEARWATER, INC. (a Florida corporation)
SONIC AUTOMOTIVE COLLISION CENTER OF CLEARWATER, INC. (a Florida corporation)
SONIC AUTOMOTIVE F&I, LLC (a Nevada limited liability company)
SONIC AUTOMOTIVE OF GEORGIA, INC. (a Georgia corporation)
SONIC AUTOMOTIVE OF NASHVILLE, LLC (a Tennessee limited liability company)
SONIC AUTOMOTIVE OF NEVADA, INC. (a Nevada corporation)
SONIC AUTOMOTIVE SERVICING COMPANY, LLC (a Nevada limited liability company)
SONIC AUTOMOTIVE OF TENNESSEE, INC. (a Tennessee corporation)
SONIC AUTOMOTIVE OF TEXAS, L.P. (a Texas limited partnership)
SONIC AUTOMOTIVE WEST, LLC (a Nevada limited liability company)
SONIC AUTOMOTIVE - ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇., ▇▇▇, INC. (a Florida corporation)
SONIC AUTOMOTIVE-1400 AUTOMALL DRIVE, COLUMBUS, INC. (an Ohio corporation)
SONIC AUTOMOTIVE-1455 AUTOMALL DRIVE, COLUMBUS, INC. (an Ohio corporation)
SONIC AUTOMOTIVE-1495 AUTOMALL DRIVE, COLUMBUS, INC. (an Ohio corporation)
SONIC AUTOMOTIVE-1500 AUTOMALL DRIVE, COLUMBUS, INC. (an Ohio corporation)
SONIC AUTOMOTIVE - ▇▇▇▇ ▇▇▇▇▇ ▇▇▇., DB, INC. (a Florida corporation)
SONIC AUTOMOTIVE - ▇▇▇▇ ▇▇▇▇▇ ▇▇▇., DB, LLC (a Florida limited liability
company)
SONIC AUTOMOTIVE - ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇., ▇▇▇, INC. (a Florida corporation)
SONIC AUTOMOTIVE - ▇▇▇▇▇ ▇.▇. ▇▇▇ ▇▇ N., INC. (a Florida corporation)
SONIC AUTOMOTIVE - 241 RIDGEWOOD AVE., HH, INC. (a Florida corporation)
SONIC AUTOMOTIVE 2424 LAURENS RD., GREENVILLE, INC. (a South Carolina
corporation)
SONIC AUTOMOTIVE - 2490 SOUTH ▇▇▇ HIGHWAY, LLC (a Tennessee limited liability
company)
SONIC AUTOMOTIVE 2752 LAURENS RD., GREENVILLE, INC. (a South Carolina
corporation)
SONIC AUTOMOTIVE - ▇▇▇▇ ▇. ▇▇▇▇, ▇▇, L.P. (a Texas limited partnership)
SONIC AUTOMOTIVE-3700 WEST BROAD STREET, COLUMBUS, INC. (an Ohio corporation)
SONIC AUTOMOTIVE - ▇▇▇▇ ▇. ▇▇▇▇ ▇▇., PO, INC. (a Florida corporation)
SONIC AUTOMOTIVE-4000 WEST BROAD STREET, COLUMBUS, INC. (an Ohio corporation)
SONIC AUTOMOTIVE - ▇▇▇▇ ▇-▇▇ ▇▇▇▇, ▇▇, L.P. (a Texas limited partnership)
SONIC AUTOMOTIVE - ▇▇▇▇ ▇-▇▇ ▇▇▇▇, ▇▇, L.P. (a Texas limited partnership)
SONIC AUTOMOTIVE ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., LLC (a Georgia limited
liability company)
-2-
SONIC AUTOMOTIVE-5585 PEACHTREE INDUSTRIAL BLVD., LLC (a Georgia limited
liability company)
SONIC AUTOMOTIVE - ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇, ▇▇, INC. (a Florida corporation)
SONIC AUTOMOTIVE - 6025 INTERNATIONAL DRIVE, LLC (a Tennessee limited liability
company)
SONIC AUTOMOTIVE - ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇, LLC (a North Carolina limited
liability company)
SONIC - ▇▇▇▇▇▇▇ H, INC. (an Oklahoma corporation)
SONIC - ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇▇▇▇, LLC (a Tennessee limited liability
company)
SONIC - BUENA PARK H, INC. (a California corporation)
SONIC - CAMP FORD, L.P. (a Texas limited partnership)
SONIC - CAPITAL CHEVROLET, INC. (an Ohio corporation)
SONIC - CARROLLTON V, L.P. (a Texas limited partnership)
SONIC CHRYSLER-PLYMOUTH-JEEP, LLC (a North Carolina limited liability company)
SONIC - CLASSIC DODGE, INC. (an Alabama corporation)
SONIC - COAST CADILLAC, INC. (a California corporation)
SONIC DODGE, LLC (a North Carolina limited liability company)
SONIC DEVELOPMENT, LLC (a North Carolina limited liability company)
SONIC - FM AUTOMOTIVE, LLC (a Florida limited liability company)
SONIC - FM , INC. (a Florida corporation)
SONIC - FM NISSAN, INC. (a Florida corporation)
SONIC - FM VW, INC. (a Florida corporation)
SONIC - FORT WORTH T, L.P. (a Texas limited partnership)
SONIC - ▇▇▇▇▇▇▇▇, INC. (a Florida corporation)
SONIC - GLOBAL IMPORTS, L.P. (a Georgia limited partnership)
SONIC-▇▇▇▇▇▇, INC. (an Oklahoma corporation)
SONIC - HARBOR CITY H, INC. (a California corporation)
SONIC - HOUSTON V, L.P. (a Texas limited partnership)
SONIC - INTEGRITY DODGE LV, LLC (a Nevada limited liability company)
SONIC - LAS VEGAS C EAST, LLC (a Nevada limited liability company)
SONIC - LAS VEGAS C WEST, LLC (a Nevada limited liability company)
SONIC - ▇▇▇▇▇ NISSAN, INC. (a Florida corporation)
SONIC - ▇▇▇▇▇ PONTIAC - CADILLAC, INC. (a Florida corporation)
SONIC - ▇▇▇▇ ▇▇▇▇▇, L. P. (a Texas limited partnership)
SONIC - MANHATTAN FAIRFAX, INC. (a Virginia corporation)
SONIC - MANHATTAN WALDORF, INC. (a Maryland corporation)
SONIC - ▇▇▇▇▇▇▇▇▇▇ FLM, INC. (an Alabama corporation)
SONIC - ▇▇▇▇▇▇▇ CHEVROLET WORLD, INC. (a South Carolina corporation)
SONIC - ▇▇▇▇▇▇▇ OF ▇▇▇▇▇▇▇▇, INC. (a South Carolina corporation)
SONIC - NORTH CHARLESTON, INC. (a South Carolina corporation)
SONIC - NORTH CHARLESTON DODGE, INC. (a South Carolina corporation)
SONIC - PARK PLACE A, L.P. (a Texas limited partnership) (formerly Sonic -
Dallas Auto Factory, L.P.)
-3-
SONIC PEACHTREE INDUSTRIAL BLVD., L.P. (a Georgia limited partnership)
SONIC - READING, L.P. (a Texas limited partnership)
SONIC RESOURCES, INC. (a Nevada corporation)
SONIC - ▇▇▇▇▇▇▇▇▇▇ F, L.P. (a Texas limited partnership)
SONIC-RIVERSIDE, INC. (an Oklahoma corporation)
SONIC - RIVERSIDE AUTO FACTORY, INC. (an Oklahoma corporation)
SONIC - ROCKVILLE IMPORTS, INC. (a Maryland corporation)
SONIC - ROCKVILLE MOTORS, INC. (a Maryland corporation)
SONIC - ▇▇▇ ▇▇▇▇▇ NISSAN, L.P. (a Texas limited partnership)
SONIC - ▇▇▇▇▇▇▇▇▇▇▇, INC. (a Florida corporation)
SONIC - STEVENS CREEK B, INC. (a California corporation) (formerly known as ▇▇▇
▇▇▇▇▇ International, Inc.)
SONIC - SUPERIOR OLDSMOBILE, LLC (a Tennessee limited liability company)
SONIC OF TEXAS, INC. (a Texas corporation)
SONIC-VOLVO LV, LLC (a Nevada limited liability company)
SONIC - WEST COVINA T, INC. (a California corporation)
SONIC - WEST RENO CHEVROLET, INC. (an Oklahoma corporation)
SONIC - ▇▇▇▇▇▇▇▇ BUICK, INC. (an Alabama corporation)
SONIC - ▇▇▇▇▇▇▇▇ CADILLAC, INC. (an Alabama corporation)
SONIC - ▇▇▇▇▇▇▇▇ IMPORTS, INC. (an Alabama corporation)
SONIC - ▇▇▇▇▇▇▇▇ MOTORS, LLC (an Alabama limited liability company)
SPEEDWAY CHEVROLET, INC. (an Oklahoma corporation)
SRE ALABAMA - 2, LLC (an Alabama limited liability company)
SRE ALABAMA - 3, LLC (an Alabama limited liability company)
SREALESTATE ARIZONA - 1, LLC (an Arizona limited liability company)
SREALESTATE ARIZONA - 2, LLC (an Arizona limited liability company)
SREALESTATE ARIZONA - 3, LLC (an Arizona limited liability company)
SREALESTATE ARIZONA - 4, LLC (an Arizona limited liability company)
SRE FLORIDA - 1, LLC (a Florida limited liability company)
SRE FLORIDA - 2, LLC (a Florida limited liability company)
SRE FLORIDA - 3, LLC (a Florida limited liability company)
SRE GEORGIA - 1, L.P. (a Georgia limited liability partnership)
SRE GEORGIA - 2, L.P. (a Georgia limited liability partnership)
SRE GEORGIA - 3, L.P. (a Georgia limited liability partnership)
SRE HOLDING, LLC (a North Carolina limited liability company)
SRE NEVADA - 1, LLC (a Nevada limited liability company)
SRE NEVADA - 2, LLC (a Nevada limited liability company)
SRE NEVADA - 3, LLC (a Nevada limited liability company)
SRE SOUTH CAROLINA - 2, LLC (a South Carolina limited liability company)
SRE TENNESSEE - 1, LLC (a Tennessee limited liability company)
SRE TENNESSEE - 2, LLC (a Tennessee limited liability company)
SRE TENNESSEE - 3, LLC (a Tennessee limited liability company)
SRE TEXAS - 1, L.P. (a Texas limited partnership)
SRE TEXAS - 2, L.P. (a Texas limited partnership)
SRE TEXAS - 3, L.P. (a Texas limited partnership)
-4-
SRE VIRGINIA - 1, LLC (a Virginia limited liability company)
STEVENS CREEK CADILLAC, INC. (a California corporation)
TRANSCAR LEASING, INC. (a California corporation)
TOWN AND COUNTRY CHRYSLER-PLYMOUTH-JEEP, LLC (a Tennessee limited liability
company]
TOWN AND COUNTRY CHRYSLER-PLYMOUTH-JEEP OF ROCK HILL, INC. (a South Carolina
corporation)
TOWN AND COUNTRY DODGE OF CHATTANOOGA, LLC (a Tennessee limited liability
company)
TOWN AND COUNTRY FORD, INCORPORATED (a North Carolina corporation)
TOWN AND COUNTRY FORD OF CLEVELAND, LLC (a Tennessee limited liability
company)
TOWN AND COUNTRY JAGUAR, LLC (a Tennessee limited liability company)
VILLAGE IMPORTED CARS, INC. (a Maryland corporation), and
WINDWARD, INC. (a Hawaii corporation)
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SCHEDULE B
Aggregate Principal Amounts of Securities to be Purchased by each Initial
-------------------------------------------------------------------------
Purchaser
---------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated $45,000,000
Banc of America Securities LLC $30,000,000
SCHEDULE C
2% Subsidiaries
----------------
Autobahn, Inc.
Sonic Automotive of Texas, L.P.
Sonic - Global Imports, L.P.
Sonic - ▇▇▇▇ ▇▇▇▇▇, L.P.
Sonic - ▇▇▇▇▇▇▇▇▇▇ F, L.P.
SCHEDULE D
Securities
----------
1. The initial offering price of the Securities (including the Guarantees)
shall be 100.5% of the principal amount thereof, plus accrued interest, if any,
from the date of issuance.
2. The purchase price to be paid by the Initial Purchasers for the
Securities and the Guarantees shall be 98.8% of the principal amount thereof.
-1-