Exhibit 10.5

 

REAFFIRMATION OF GUARANTIES

AND COLLATERAL DOCUMENTS

 

THIS REAFFIRMATION OF GUARANTIES AND COLLATERAL DOCUMENTS, dated March 26, 2004
(this “Reaffirmation”) is by the undersigned guarantors (individually, a
“Guarantor”, and collectively, the “Guarantors”). Each Guarantor has guaranteed
the Indebtedness and Obligations of Sonic Automotive, Inc., a Delaware
corporation (“Borrower”), under the Second Amended and Restated Credit
Agreement, dated February 5, 2003, among Borrower, Ford Motor Credit Company, as
agent (the “Agent”) and the Lenders, as such agreement may be amended and/or
restated from time to time (the “Credit Agreement”), and each Guarantor has
provided a security interest in its assets and/or pledges of other collateral to
secure its Guaranty.

 

The Credit Agreement provides for the Loan to Borrower in the aggregate
principal amount of $500,000,000.00 to be made severally by Ford Credit,
Chrysler Financial, Toyota Credit and Bank of America in accordance with the
terms thereof. In accordance with the First Amendment to Credit Agreement dated
as of even date herewith (the “Amendment”), the Credit Agreement will be amended
to add Merrill Lynch Capital Corporation, a Delaware corporation, and JPMorgan
Chase Bank, a New York state chartered bank, as Lenders and to increase the
principal amount of the Loan to $550,000,000.00.

 

NOW, THEREFORE, in consideration of the promises and other valuable
consideration, receipt of which is hereby acknowledged, and to induce each of
the Lenders to amend the Credit Agreement in accordance with the Amendment, the
Guarantors, and each of them, agree as follows:

 

1. Definitions. Capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to such terms in the Credit Agreement. As used
herein, the following terms shall have the following meanings:

 

2. Reaffirmation. Each Guarantor reaffirms its liabilities, obligations and
agreements under the Guaranties and the Collateral Documents with respect to the
Credit Agreement, including the increase in the principal amount of the Loan,
the addition of additional Lenders and any other changes to the other terms and
conditions as set forth in the Amendment. Guarantor acknowledges and agrees that
every right, power and remedy of Agent and Lenders under the Guaranties and
Collateral Documents are in full force and effect, including without limitation,
such right, powers and remedies relating to the Credit Agreement, as amended,
and the payment of the Indebtedness and the performance of the Obligations.

 

3. No Defense or Set-Off. Each Guarantor acknowledges and declares that it has
no defense, claim, charge, plea or set-off whatsoever in law or equity against
the Lenders, the Agent, the Guaranties, the Collateral Documents, the Credit
Agreement, the Amendment, or any other instrument or document executed by
Guarantor or Borrower in connection with the Credit Agreement or the Amendment.
Guarantor waives and releases any and all defenses that might accrue to
Guarantor by the execution of the Amendment.

 

[REMAINER OF PAGE INTENTIONALLY LEFT BLANK]

 

[SIGNATURE PAGE TO FOLLOW]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have executed this Reaffirmation under
seal as of the date set forth above intending to be legally bound hereby.

 

SONIC - MONTGOMERY FLM, INC., COBB PONTIAC-CADILLAC, INC., ROYAL MOTOR COMPANY,
INC., CAPITAL CHEVROLET AND IMPORTS, INC., SONIC AUTOMOTIVE - 21699 U.S. HWY 19
N., INC., HMC FINANCE ALABAMA, INC. SONIC AUTOMOTIVE OF GEORGIA, INC., SONIC
AUTOMOTIVE 5260 PEACHTREE INDUSTRIAL BLVD., LLC, FRONTIER OLDSMOBILE-CADILLAC,
INC., MARCUS DAVID CORPORATION, SONIC AUTOMOTIVE - 9103 E. INDEPENDENCE, NC,
LLC, SONIC LAKE NORMAN CHRYSLER JEEP, LLC, TOWN AND COUNTRY FORD, INCORPORATED,
SONIC AUTOMOTIVE-3700 WEST BROAD STREET, COLUMBUS, INC., SONIC AUTOMOTIVE-1455
AUTOMALL DRIVE, COLUMBUS, INC., SONIC AUTOMOTIVE-1495 AUTOMALL DRIVE, COLUMBUS,
INC., SONIC AUTOMOTIVE-4000 WEST BROAD STREET, COLUMBUS, INC., SONIC
AUTOMOTIVE-1500 AUTOMALL DRIVE, COLUMBUS, INC., SONIC AUTOMOTIVE-1400 AUTOMALL
DRIVE, COLUMBUS, INC., SONIC-FORT MILL DODGE, INC., SONIC AUTOMOTIVE 2752
LAURENS RD., GREENVILLE, INC., SONIC AUTOMOTIVE 2424 LAURENS RD., GREENVILLE,
INC., SONIC-FORT MILL CHRYSLER JEEP, INC., SONIC AUTOMOTIVE OF CHATTANOOGA, LLC,
SONIC AUTOMOTIVE OF NASHVILLE, LLC, SONIC AUTOMOTIVE - 6025 INTERNATIONAL DRIVE,
LLC, SONIC-CREST CADILLAC, LLC, TOWN AND COUNTRY JAGUAR, LLC, TOWN AND COUNTRY
FORD OF CLEVELAND, LLC, SONIC — 2185 CHAPMAN RD., CHATTANOOGA, LLC, SONIC OF
TEXAS, INC.,

 

[SIGNATURE PAGE TO REAFFIRMATION OF GUARANTIES]

 

-2-

--------------------------------------------------------------------------------

SONIC - WILLIAMS IMPORTS, INC., SONIC - WILLIAMS BUICK, INC., SONIC - WILLIAMS
CADILLAC, INC., SONIC - WILLIAMS MOTORS, LLC, SONIC - NEWSOME CHEVROLET WORLD,
INC., SONIC - NEWSOME OF FLORENCE, INC., SONIC - CLASSIC DODGE, INC. SONIC -
ROCKVILLE MOTORS, INC., SONIC - ROCKVILLE IMPORTS, INC., SONIC - MANHATTAN
WALDORF, INC., SONIC - MANHATTAN FAIRFAX, INC., SONIC - NORTH CHARLESTON, INC.,
SONIC AUTOMOTIVE - 5585 PEACHTREE INDUSTRIAL BLVD., LLC, SONIC - NORTH
CHARLESTON DODGE, INC., VILLAGE IMPORTED CARS, INC., FIRSTAMERICA AUTOMOTIVE,
INC., FA SERVICE CORPORATION, FAA AUTO FACTORY, INC., FAA BEVERLY HILLS, INC.,
FAA CAPITOL N, INC., FAA CONCORD H, INC., FAA CONCORD N, INC., FAA CONCORD T,
INC., FAA DUBLIN N, INC., FAA MARIN D, INC., FAA POWAY D, INC., FAA POWAY G,
INC., FAA SAN BRUNO, INC., FAA SERRAMONTE H, INC., FAA SERRAMONTE L, INC., FAA
SERRAMONTE, INC., FAA STEVENS CREEK, INC., SONIC – COAST CADILLAC, INC. FAA
TORRANCE CPJ, INC., FAA DUBLIN VWD, INC., KRAMER MOTORS INCORPORATED, FAA SANTA
MONICA V, INC., FAA LAS VEGAS H, INC., L DEALERSHIP GROUP, INC., WINDWARD, INC.,
AUTOBAHN, INC., SONIC – STEVENS CREEK B, INC., FAA HOLDING CORP., FRANCISCAN
MOTORS, INC.,

 

[SIGNATURE PAGE TO REAFFIRMATION OF GUARANTIES]

 

-3-

--------------------------------------------------------------------------------

SANTA CLARA IMPORTED CARS, INC., STEVENS CREEK CADILLAC, INC., FAA MARIN F,
INC., FAA POWAY H, INC., FAA POWAY T, INC., FAA MARIN LR, INC., SONIC-RIVERSIDE,
INC., SONIC-GLOVER, INC., RIVERSIDE NISSAN, INC., SPEEDWAY CHEVROLET, INC. FORT
MILL FORD, INC., FREEDOM FORD, INC., SONIC AUTOMOTIVE - CLEARWATER, INC., SONIC
AUTOMOTIVE COLLISION CENTER OF CLEARWATER, INC., SONIC AUTOMOTIVE - 1919 N.
DIXIE HWY., NSB, INC., SONIC AUTOMOTIVE - 1307 N. DIXIE HWY., NSB, INC., SONIC
AUTOMOTIVE- 1720 MASON AVE., DB, INC., SONIC AUTOMOTIVE - 241 RIDGEWOOD AVE.,
HH, INC., SONIC AUTOMOTIVE OF NEVADA, INC., SONIC AUTOMOTIVE OF TENNESSEE, INC.,
SONIC AUTOMOTIVE - BONDESEN, INC., SONIC - LLOYD PONTIAC - CADILLAC, INC., SONIC
- LLOYD NISSAN, INC., SONIC - SUPERIOR OLDSMOBILE, LLC, SONIC - SHOTTENKIRK,
INC., SONIC - INTEGRITY DODGE LV, LLC, SONIC - VOLVO LV, LLC, SONIC - FM
AUTOMOTIVE, LLC, SONIC - FM, INC., SONIC - FM VW, INC., SONIC - NORTH CADILLAC,
INC., SONIC - FREELAND, INC., SONIC AUTOMOTIVE - 1720 MASON AVE., DB, LLC SONIC
AUTOMOTIVE SERVICING COMPANY, LLC SONIC AUTOMOTIVE F & I, LLC SONIC – RIVERSIDE
AUTO FACTORY, INC. TRANSCAR LEASING, INC. SONIC AUTOMOTIVE – 2490 SOUTH LEE
HIGHWAY, L.L.C. FAA CAPITOL F, INC.,

 

[SIGNATURE PAGE TO REAFFIRMATION OF GUARANTIES]

 

-4-

--------------------------------------------------------------------------------

SONIC – LAS VEGAS C EAST, LLC, SONIC – LAS VEGAS C EAST, LLC SONIC – LAS VEGAS C
WEST, LLC, SONIC - CAPITOL CHEVROLET, INC. SONIC DEVELOPMENT, LLC SONIC – HARBOR
CITY H, INC. SONIC – BUENA PARK H, INC. SONIC – WEST COVINA T, INC. SONIC –
BETHANY H, INC. SONIC – WEST RENO CHEVROLET, INC. AVALON FORD, INC. SONIC-CARSON
F, INC. SONIC-CARSON LM, INC. SONIC-DOWNEY CADILLAC, INC. SONIC-MASSEY
CHEVROLET, INC. SONIC-LONE TREE CADILLAC, INC. SONIC-ENGLEWOOD M, INC.
SONIC-MASSEY PONTIAC BUICK GMC, INC. SONIC-SANFORD CADILLAC, INC. SONIC-PLYMOUTH
CADILLAC. INC. SONIC-CAPITOL CADILLAC, INC. ARNGAR, INC. MASSEY CADILLAC, INC.
(TX) MASSEY CADILLAC, INC. (TN) SMART NISSAN, INC. SONIC-LS, LLC
SONIC-AUTOMOTIVE WEST, LLC SONIC-RESOURCES, INC. SONIC-LAKE NORMAN DODGE, LLC
SONIC-CREST H, LLC SONIC – CALABASAS A, INC. SONIC – OKLAHOMA T, INC. SONIC –
CAPITOL IMPORTS, INC. FRANK PARRA AUTOPLEX, INC. MOUNTAIN STATES MOTORS CO.,
INC. Z MANAGEMENT, INC. SONIC-SERRAMONTE I, INC. SONIC CALABASAS V, INC. SONIC
DENVER T, INC. SONIC ANN ARBOR IMPORTS, INC. WRANGLER INVESTMENTS, INC. SONIC –
SATURN OF SILICON VALLEY, INC. ONTARIO L, LLC SONIC ONTARIO T, INC. FAA MONTEREY
F, INC. SONIC — DENVER VOLKSWAGEN, INC. FORT MYERS COLLISION CENTER, LLC SONIC –
SOUTH CADILLAC, INC. SONIC AGENCY, INC.

 

[SIGNATURE PAGE TO REAFFIRMATION OF GUARANTIES]

 

-5-

--------------------------------------------------------------------------------

SONIC AUTOMOTIVE SUPPORT, LLC SONIC ESTORE, INC. ADI OF THE SOUTHEAST, LLC SONIC
CHATTANOOGA D EAST, LLC CASA FORD OF HOUSTON, INC.

 

By:

 

/s/ E. Lee Wyatt             (Seal)

--------------------------------------------------------------------------------

Name:

  E. Lee Wyatt, Jr.

Title:

  Vice President of each of the above named entities

 

SONIC AUTOMOTIVE OF TEXAS, L.P., SONIC AUTOMOTIVE-4701 I-10 EAST, TX, L.P.,
SONIC AUTOMOTIVE - 3401 N. MAIN, TX, L.P., SONIC AUTOMOTIVE - 5221 I-10 EAST,
TX, L.P., SONIC - SAM WHITE NISSAN, L.P., SONIC - LUTE RILEY, L.P., SONIC -
READING, L.P., SONIC - CAMP FORD, L.P., SONIC-FORT WORTH T, L.P., PHILPOTT
MOTORS, LTD. SONIC – RICHARDSON F, L.P. SONIC – CARROLLTON V, L.P. SONIC –
HOUSTON V, L.P. SONIC – LS CHEVROLET, L.P., SONIC UNIVERSITY PARK A, L.P.
SONIC-MASSEY CADILLAC, L.P. SONIC – FRANK PARRA AUTOPLEX, L.P. SONIC – CADILLAC
D, L.P. SONIC SAM WHITE OLDSMOBILE, LP SONIC — CLEAR LAKE VOLKSWAGEN, L.P. SONIC
– JERSEY VILLAGE VOLKSWAGEN, L.P. SONIC – MESQUITE HYUNDAI, L.P.

 

By:

  Sonic of Texas, Inc.,     a Texas corporation, as General Partner of each of
the above entities    

By:

 

/s/ E. Lee Wyatt          (SEAL)

--------------------------------------------------------------------------------

    Name:   E. Lee Wyatt, Jr.     Title:   Vice President

 

[SIGNATURE PAGE TO REAFFIRMATION OF GUARANTIES]

 

-6-

--------------------------------------------------------------------------------

SONIC — GLOBAL IMPORTS, L.P.

SONIC – STONE MOUNTAIN CHEVROLET, L.P.

SONIC PEACHTREE INDUSTRIAL BLVD., L.P.

SONIC – STONE MOUNTAIN T, L.P.

By:

  Sonic Automotive of Georgia, Inc., a Georgia corporation, as General Partner
of each of the above entities     By:  

/s/ E. Lee Wyatt            (SEAL)

--------------------------------------------------------------------------------

    Name:   E. Lee Wyatt, Jr.     Title:   Vice President

 

[SIGNATURE PAGE TO REAFFIRMATION OF GUARANTIES]

 

-7-