Exhibit 10.7

CREDIT AGREEMENT
Dated as of June 23, 2020
between
SONIC AUTOMOTIVE, INC.,
and
ALLY BANK (Ally Capital in Hawaii, Mississippi, Montana and New Jersey)

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TABLE OF CONTENTS

Page

ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
1
1.01 Defined Terms
1
1.02 Other Interpretive Provisions
28
1.03 Accounting Terms
29
1.04 Rounding
30
1.05 Times of Day
31
1.06 [Reserved]
31
1.07 [Reserved]
31
ARTICLE II THE COMMITMENT AND CREDIT EXTENSION
31
2.01 Revolving Loan
31
2.02 [Reserved]
31
2.03 [Reserved]
31
2.04 [Reserved]
31
2.05 Prepayments
31
2.06 [Reserved]
32
2.07 Repayment of Loan
32
2.08 Interest
32
2.09 Fees
34
2.10 [Reserved]
34
2.11 Evidence of Debt
34
2.12 Payments Generally
34
2.13 [Reserved]
35
2.14 [Reserved]
35
2.15 [Reserved]
35
2.16 [Reserved]
35
2.17 Security
35
2.18 Additional Mortgaged Properties
35
2.19 Substitution and Release of Mortgaged Property
37
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY
39
3.01 Taxes
39
3.02 [Reserved]
41
3.03 [Reserved]
41
3.04 Increased Costs
41
3.05 [Reserved]
42
3.06 [Reserved]
42
3.07 Survival
42
ARTICLE IV CONDITIONS PRECEDENT TO EFFECTIVENESS
42
4.01 Conditions Precedent to Effectiveness
42
4.02 Conditions to all Advances
45
ARTICLE V REPRESENTATIONS AND WARRANTIES
45
5.01 Existence, Qualification and Power; Compliance with Laws
45

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Page

5.02 Authorization; No Contravention
45
5.03 Governmental Authorization; Other Consents
46
5.04 Binding Effect
46
5.05 Financial Statements; No Material Adverse Effect; No Internal Control Event
46
5.06 Litigation
47
5.07 No Default
47
5.08 Ownership of Property
47
5.09 Environmental Compliance
47
5.10 Insurance
48
5.11 Taxes
48
5.12 ERISA Compliance
48
5.13 Subsidiaries; Equity Interests
49
5.14 Margin Regulations; Investment Company Act
49
5.15 Disclosure
50
5.16 Compliance with Laws
50
5.17 Intellectual Property; Licenses, Etc
50
5.18 Books and Records
50
5.19 [Reserved]
50
5.20 Collateral; Mortgaged Properties; Leases
50
5.21 Solvency
52
5.22 Labor Matters
52
5.23 Acquisitions
52
5.24 Real Estate Indebtedness
52
5.25 [Reserved]
52
5.26 [Reserved]
52
5.27 OFAC
52
5.28 Anti-Corruption Laws
52
5.29 [Reserved]
53
5.30 Taxpayer Identification Number
53
5.31 Beneficial Ownership Certificate
53
ARTICLE VI AFFIRMATIVE COVENANTS
53
6.01 Financial Statements
53
6.02 Certificates; Other Information
55
6.03 Notices
57
6.04 Payment of Obligations
59
6.05 Preservation of Existence, Etc.
59
6.06 Maintenance of Properties; Repairs
59
6.07 Maintenance of Insurance
59
6.08 Compliance with Laws and Contractual Obligations
60
6.09 Books and Records
61
6.10 Inspection Rights; Environmental Reports
61

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TABLE OF CONTENTS
(continued)
Page

6.11 [Reserved
62
6.12 [Reserved]
63
6.13 [Reserved]
63
6.14 Additional Subsidiaries
63
6.15 Further Assurances
63
6.16 [Reserved]
64
6.17 Notices regarding Indebtedness
64
6.18 [Reserved]
64
6.19 [Reserved]
64
6.20 Anti-Corruption Laws
64
6.21 Leases
64
ARTICLE VII NEGATIVE COVENANTS
64
7.01 Liens
64
7.02 Investments
65
7.03 Indebtedness
66
7.04 Fundamental Changes
66
7.05 Dispositions
66
7.06 Restricted Payments
67
7.07 Change in Nature of Business
68
7.08 Transactions with Affiliates
68
7.09 Burdensome Agreements
68
7.10 Use of Proceeds
69
7.11 Financial Covenants
69
7.12 Acquisitions
69
7.13 [Reserved]
70
7.14 Amendments of Certain Indebtedness
70
7.15 Prepayments, etc, of Certain Indebtedness
70
7.16 [Reserved]
70
7.17 [Reserved]
70
7.18 [Reserved]
70
7.19 [Reserved]
70
7.20 [Reserved]
70
7.21 [Reserved]
71
7.22 Sanctions
71
7.23 [Reserved]
71
7.24 Anti-Corruption Laws
71
7.25 Post-Closing Deliveries
71
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES
71
8.01 Events of Default
71
8.02 Remedies Upon an Event of Default
74
8.03 Application of Funds
74

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TABLE OF CONTENTS
(continued)
Page

ARTICLE IX [reserved]
75
ARTICLE X MISCELLANEOUS
77
10.01 Amendments, Etc.
77
10.02 Notices; Effectiveness; Electronic Communication
77
10.03 No Waiver; Cumulative Remedies; Enforcement
78
10.04 Expenses; Indemnity; Damage Waiver
79
10.05 Payments Set Aside
80
10.06 Successors and Assigns
80
10.07 Treatment of Certain Information; Confidentiality
82
10.08 [Reserved]
83
10.09 Interest Rate Limitation
83
10.10 Counterparts; Integration; Effectiveness
84
10.11 Survival of Representations and Warranties
84
10.12 Severability
84
10.13 [Reserved]
84
10.14 Governing Law; Jurisdiction; Etc
84
10.15 Waiver of Jury Trial; Binding Arbitration
86
10.16 USA PATRIOT Act Notice
88
10.17 MIRE Events
88
10.18 No Advisory or Fiduciary Responsibility
88
10.19 [Reserved]
88
10.20 Electronic Execution of Assignments and Certain Other Documents
88
10.21 [Reserved]
89
10.22 Acknowledgement Regarding Any Supported QFCs
89

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SCHEDULES

Schedule 1.01CCertain ERISA InformationSchedule 4.01Good Standing Jurisdictions
and Foreign QualificationsSchedule 5.05Material Indebtedness and Other
LiabilitiesSchedule 5.06LitigationSchedule 5.13Subsidiaries; Equity
InterestsSchedule 5.20(c)Mortgaged PropertiesSchedule 6.07Casualty Insurance
RequirementsSchedule 7.03Existing IndebtednessSchedule 7.25Post-Closing
DeliveriesSchedule 10.02Lender’s Office; Certain Addresses for Notices; Tax
Identification NumberEXHIBITSForm of:Exhibit AAdvance RequestExhibit
B[Reserved]Exhibit C[Reserved]Exhibit DAssignment and AssumptionExhibit
ESubsidiary GuarantyExhibit FCompliance CertificateExhibit GJoinder
AgreementExhibit H-1[Reserved]Exhibit H-2[Reserved]Exhibit I[Reserved]Exhibit
J[Reserved]Exhibit K[Reserved]Exhibit L[Reserved]Exhibit M[Reserved]Exhibit NTax
Compliance CertificatesExhibit OForm of Notice of Loan Prepaymen3t

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CREDIT AGREEMENT
This CREDIT AGREEMENT (“Agreement”) is entered into as of June 23, 2020, between
SONIC AUTOMOTIVE, INC., a Delaware corporation (the “Company”) and ALLY BANK
(Ally Capital in Hawaii, Mississippi, Montana and New Jersey), a Utah
state-chartered bank (the “Lender”).
The Company has requested that the Lender provide a $69,000,000.00 revolving
line of credit facility. In consideration of the mutual covenants and agreements
herein contained, the parties hereto covenant and agree as follows:
ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

1.01  Defined Terms. As used in this Agreement, the following terms shall have
the meanings set forth below:
“AAA” has the meaning specified in Section 10.15(b)(ii).
“Acquisition” means the acquisition of (i) a controlling equity interest or
other controlling ownership interest in another Person (including the purchase
of an option, warrant or convertible or similar type security to acquire such a
controlling interest at the time it becomes exercisable by the holder thereof),
whether by purchase of such equity or other ownership interest or upon the
exercise of an option or warrant for, or conversion of securities into, such
equity or other ownership interest, (ii) assets of another Person which
constitute all or substantially all of the assets of such Person or of a line or
lines of business conducted by or a vehicle franchise or vehicle brand licensed
or owned by such Person, or (iii) assets constituting a vehicle dealership.
“Acquisition Arrangement” has the meaning specified in Section 7.12.
“Additional Mortgaged Property” has the meaning specified in Section 2.18(a).
“Additional Mortgaged Property Requirements” has the meaning specified in
Section 2.18(b).
“Additional Unsecured Indebtedness” means Indebtedness of the Company (which may
be guaranteed by the Subsidiaries of the Company on an unsecured basis);
provided that, (i) such Indebtedness is (A) not secured by any property of the
Company or any Subsidiary, (B) does not have a maturity, and does not require
any principal payments (whether by scheduled installment, mandatory prepayment
or redemption, or the exercise of any put right), earlier than six (6) months
following the Maturity Date, and (C) has terms (including terms of maturity and
amortization) that are typical for indebtedness of such type issued at such time
and such terms (other than applicable rates of interest) are otherwise no more
restrictive, or less advantageous to the Lender, than the Loan Documents or are
otherwise on terms satisfactory to the Lender, and (ii) after giving effect to
the issuance of such Indebtedness, (A) no Event of Default shall have occurred
and be continuing or would occur as a result therefrom and (B) such Indebtedness
is otherwise permitted under the Revolving Credit Agreement and the Floorplan
Credit Agreement.

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“Additional Unsecured Indebtedness Prepayment” means any prepayment, redemption,
purchase, defeasance, settlement in cash or other satisfaction prior to the
scheduled maturity thereof of any Additional Unsecured Indebtedness, provided,
however, that “Additional Unsecured Indebtedness Prepayment” shall not include
any amount prepaid with the proceeds of the refinancing of such Additional
Unsecured Indebtedness with new or additional, Additional Unsecured
Indebtedness.
“Advance” means an advance of Loan funds made by the Lender to the Borrower
pursuant to the terms hereof.
“Advance Request” means a notice of a request for an Advance which shall be
substantially in the form of Exhibit A or such other form as maybe approved by
the Lender.
“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.
“Agreement” means this Credit Agreement.
“Alternate Source” means as is specified in the definition of Eurodollar Rate.
“Appraised Value” means, with respect to any Substitute Property (or proposed
Substitute Property), the appraised value of such Substitute Property (or
proposed Substitute Property) as set forth in the appraisal obtained by the
Lender with respect to such Substitute Property (or proposed Substitute
Property) in accordance with Section 2.19.
“Arbitration Rules” has the meaning specified in Section 10.15(b)(ii).
“Attributable Indebtedness” means, on any date, (a) in respect of any capital
lease of any Person, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.
“Audited Financial Statements” means the audited consolidated balance sheet of
the Company and its Subsidiaries for the fiscal year ended December 31, 2018,
and the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal year of the Company and its Subsidiaries,
including the notes thereto.
“Availability Period” means, the period from and including the Closing Date to
the earliest of (i) the Maturity Date, (ii) the date of termination of the
Commitment of the Lender to make Advances pursuant to Section 8.02.
“Beneficial Ownership Certification” means a certification regarding beneficial
ownership required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
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“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined
under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.
“Borrower Materials” has the meaning specified in Section 6.02.
“Builder Basket Amount” means, as of any date of determination, with respect to
any Restricted Payment or any Subordinated Indebtedness Prepayment, the sum of:
(A) $110,000,000; plus
(B) 50% of the aggregate Consolidated Net Income of the Company accrued on a
cumulative basis during the period beginning September 30, 2016 and ending on
the last day of the Company’s last fiscal quarter ending prior to the date of
such Restricted Payment or Subordinated Indebtedness Prepayment, or, if such
aggregate cumulative Consolidated Net Income shall be a loss, minus 100% of such
loss; plus
(C) 100% of the aggregate net cash proceeds and the fair market value of assets
other than cash received after September 30, 2016, and on or prior to such date
of determination, by the Company either (x) as capital contributions in the form
of common equity to the Company or (y) from the issuance or sale (other than to
any of its Subsidiaries) of Qualified Capital Stock of the Company or any
options, warrants or rights to purchase such Qualified Capital Stock of the
Company (except, in each case, to the extent such proceeds are used to purchase,
redeem or otherwise retire Capital Stock or Subordinated Indebtedness as set
forth below) (and excluding the net cash proceeds and the fair market value of
assets other than cash received from the issuance of Qualified Capital Stock
financed, directly or indirectly, using funds borrowed from the Company or any
Subsidiary until and to the extent such borrowing is repaid); plus
(D) 100% of the aggregate net cash proceeds and the fair market value of assets
other than cash received after September 30, 2016, and on or prior to such date
of determination, by the Company (other than from any of its Subsidiaries) upon
the exercise of any options, warrants or rights to purchase Qualified Capital
Stock of the Company (and excluding the net cash proceeds and the fair market
value of assets other than cash received from the exercise of any options,
warrants or rights to purchase Qualified Capital Stock financed, directly or
indirectly, using funds borrowed from the Company or any Subsidiary until and to
the extent such borrowing is repaid); plus
(E) 100% of the aggregate net cash proceeds and the fair market value of assets
other than cash received after September 30, 2016, and on or prior to such date
of determination, by the Company from the conversion or exchange, if any, of
debt securities or Redeemable Capital Stock of the Company or its Restricted
Subsidiaries into or for qualified Capital Stock of the Company plus, to the
extent such debt securities or
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Redeemable Capital Stock were issued after September 30, 2016, upon the
conversion or exchange of such debt securities or Redeemable Capital Stock, the
aggregate of net cash proceeds and the fair market value of assets other than
cash received from their original issuance (and excluding the net cash proceeds
and the fair market value of assets other than cash received from the conversion
or exchange of debt securities or Redeemable Capital Stock financed, directly or
indirectly, using funds borrowed from the Company or any Subsidiary until and to
the extent such borrowing is repaid); plus
(F) in the case of the disposition or repayment of any Specified Investment made
after September 30, 2016, and on or prior to such date of determination, an
amount (to the extent not included in Consolidated Net Income) equal to (a) the
lesser of (i) the return of capital with respect to such Investment and (ii) the
initial amount of such Investment, in either case, less the cost of the
disposition of such Investment and net of taxes.
“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Lender’s Office is located.
“Buyer Notes” means those promissory notes received by the Company or any
Subsidiary as partial or full payment consideration for Dispositions of vehicle
dealerships, associated dealership real estate or related businesses, or
Dispositions of Subsidiaries, by the Company or such Subsidiary to the obligors
of such promissory notes.
“Capital Stock” of any Person means any and all shares, interests,
participations, rights in or other equivalents (however designated) of such
Person’s capital stock or other equity interests whether now outstanding or
issued after the date of this Agreement, including limited liability company
interests, partnership interests (whether general or limited), any other
interest or participation that confers on a Person the right to receive a share
of the profits and losses of, or distributions of assets of (other than a
distribution in respect of Indebtedness), the issuing Person, including any
Preferred Stock and any rights (other than debt securities convertible into
Capital Stock), warrants or options exchangeable for or convertible into such
Capital Stock.
“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. §§9601 et seq.
“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided that notwithstanding anything herein to the
contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder or issued in connection
therewith and (y) all requests, rules, guidelines or directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
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Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted or issued.
“Change of Control” means an event or series of events by which:
(ii) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, but excluding any employee benefit plan
of such person or its subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such plan)
(other than (i) Sonic Financial, O. Bruton Smith or B. Scott Smith; (ii) any
spouse or immediate family member of O. Bruton Smith and B. Scott Smith
(collectively with O. Bruton Smith and B. Scott Smith, a “Smith Family Member”);
or (iii) any trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners and owners of which are Smith Family Members, (the
persons and entities in “i”, “ii”, and “iii” being referred to, collectively and
individually, as the “Smith Group”) so long as in the case of clauses (ii) and
(iii) O. Bruton Smith or B. Scott Smith retains a majority of the voting rights
associated with such ownership) becomes the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a
person or group shall be deemed to have “beneficial ownership” of all securities
that such person or group has the right to acquire (such right, an “option
right”), whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of 25% or more of the equity securities of the
Company entitled to vote for members of the board of directors or equivalent
governing body of the Company on a fully-diluted basis (and taking into account
all such securities that such person or group has the right to acquire pursuant
to any option right);
(b) during any period of 12 consecutive months, a majority of the members of the
board of directors or other equivalent governing body of the Company cease to be
composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and (ii)
above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body;
(c) any Person or two or more Persons (excluding members of the Smith Group so
long as O. Bruton Smith or B. Scott Smith retains a majority of the voting
rights associated with such equity securities) acting in concert shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation thereof, will result in its or their
acquisition of the power to exercise, directly or indirectly, a controlling
influence over the management or policies of the Company, or control over the
equity securities of the Company entitled to vote for members of the board of
directors or equivalent governing body of the Company on a fully-diluted basis
(and taking into account
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all such securities that such Person or group has the right to acquire pursuant
to any option right) representing 25% or more of the combined voting power of
such securities; or
(d) the Company fails to own, directly or indirectly, 100% of the Equity
Interests of any Subsidiary other than as a result of the sale of all Equity
Interests in a Subsidiary pursuant to a Permitted Disposition.
“Closing Date” means June 23, 2020.
“Code” means the Internal Revenue Code of 1986.
“Collateral” means the Mortgaged Properties.
“Commitment” means the Lender's obligation to make Advances to the Company
pursuant to Section 2.01, in an aggregate principal amount not to exceed the
amount of the Loan, as such amount may be adjusted from time to time in
accordance with this Agreement.
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.
“Company” has the meaning specified in the introductory paragraph hereto.
“Compliance Certificate” means a certificate substantially in the form of
Exhibit F.
“Condemnation Proceeding” has the meaning specified in Section 6.11 hereto.
“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.
“Consolidated Current Assets” means, as of any date of determination, the
current assets of the Company and its Subsidiaries on a consolidated basis as of
such date (but excluding in any event (i) any long-term assets of discontinued
operations held for sale, other than such assets which (x) are the subject of an
executed non-cancelable purchase and sale agreement between the applicable Loan
Party and a Person which is not an Affiliate of any Loan Party and (y) the
applicable Loan Party intends, in good faith, to Dispose of within 60 days of
such date of determination and (ii) any Investment described in Section
7.02(i)).
“Consolidated Current Liabilities” means, as of any date of determination, the
current liabilities of the Company and its Subsidiaries on a consolidated basis
as of such date.
“Consolidated EBITDAR” means for any period, on a consolidated basis for the
Company and its Subsidiaries, the sum of the amounts for such period, without
duplication, of (a) Consolidated Net Income, plus (b) to the extent deducted in
computing Consolidated Net Income for such period: (i) Consolidated Interest
Expense with respect to non-floorplan Indebtedness (including interest expense
not payable in cash), (ii) charges against income for foreign, Federal, state
and local income taxes, (iii) depreciation expense, (iv) amortization expense,
including, without limitation, amortization of other intangible assets and
transaction costs, (v) non-cash
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charges, (vi) all extraordinary losses, (vii) legal fees, broker fees and other
transaction expenses incurred in connection with any Permitted Acquisition (not
to exceed $1,000,000 in the aggregate for each such Acquisition), (viii)
Consolidated Rental Expense, and (ix) non-cash lease termination charges, net of
any amortization of such charges minus (c) to the extent included in computing
Consolidated Net Income for such period, (i) extraordinary gains and (ii) all
gains on repurchases of long-term Indebtedness.
“Consolidated Fixed Charge Coverage Ratio” means, as of any date of
determination, the ratio of (a) the difference of (i) Consolidated EBITDAR for
the four fiscal quarter period ending on such date minus (ii) an amount equal to
$100,000 (representing assumed maintenance capital expenditures) multiplied by
the average daily number of physical dealership locations at which the
Subsidiaries operated franchised vehicle dealerships during such period to (b)
Consolidated Fixed Charges for such period.
“Consolidated Fixed Charges” means, for any period, the sum of (a) Consolidated
Interest Expense with respect to non-floorplan Indebtedness for such period
(excluding any interest expense not payable in cash and not payable as a result
of any default), plus (b) Consolidated Principal Payments for such period, plus
(c) Consolidated Rental Expenses for such period, plus (d) Federal, state, local
and foreign income taxes paid in cash by the Company and its Subsidiaries on a
consolidated basis during such period, plus (e) dividends and distributions paid
in cash by the Company and its Subsidiaries on a consolidated basis during such
period, minus (f) cash refunds of Federal, state, local and foreign income taxes
received by the Company and its Subsidiaries on a consolidated basis during such
period. The calculation of “Consolidated Fixed Charges” is further described in
Section 1.03(d).
“Consolidated Funded Indebtedness” means, as of any date of determination, for
the Company and its Subsidiaries on a consolidated basis, the sum of (a) the
outstanding principal amount of all obligations, whether current or long-term,
for borrowed money (including Obligations hereunder) and all obligations
evidenced by bonds, debentures, notes, loan agreements or other similar
instruments, (b) all purchase money Indebtedness, (c) all direct obligations
arising under letters of credit (including standby and commercial), bankers’
acceptances, bank guaranties, surety bonds and similar instruments, (d) all
obligations in respect of the deferred purchase price of property or services
(other than trade accounts payable in the ordinary course of business), (e)
Attributable Indebtedness in respect of capital leases and Synthetic Lease
Obligations, (f) without duplication, all Guarantees with respect to outstanding
Indebtedness of the types specified in clauses (a) through (e) above of Persons
other than the Company or any Subsidiary, and (g) all Indebtedness of the types
referred to in clauses (a) through (f) above of any partnership or joint venture
(other than a joint venture that is itself a corporation or limited liability
company) in which the Company or a Subsidiary is a general partner or joint
venturer, unless such Indebtedness is expressly made non-recourse to the Company
or such Subsidiary.
“Consolidated Interest Expense” means, for any period, for the Company and its
Subsidiaries on a consolidated basis, the sum of (a) all interest (before
factory assistance or subsidy), premium payments, debt discount, fees, charges
and related expenses of the Company and its Subsidiaries in connection with
borrowed money (including capitalized interest) or in connection with the
deferred purchase price of assets, in each case to the extent treated as
interest in accordance
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with GAAP, and (b) the portion of rent expense of the Company and its
Subsidiaries with respect to such period under capital leases that is treated as
interest in accordance with GAAP.
“Consolidated Liquidity Ratio” means, as of any date of determination, the ratio
of (a) the sum of Consolidated Current Assets (excluding Temporary Excess Cash)
plus the Revolving Facility Liquidity Amount to (b) the sum of (i) Consolidated
Current Liabilities (but excluding, without duplication and only to the extent
such amounts would otherwise have been included in this clause (b)(i), (A) such
Consolidated Current Liabilities consisting of any holder put right, balloon,
bullet or similar final scheduled principal payment that would repay any
Indebtedness permitted by Section 7.03 in full, other than any such holder put
right, balloon, bullet or final payment which is due within ninety (90) days
following such date of determination, and (B) any Temporary Indebtedness) plus
(ii) without duplication, Indebtedness (whether or not reflected as a
Consolidated Current Liability) under all floorplan financing arrangements.
“Consolidated Net Income” means, for any period, for the Company and its
Subsidiaries on a consolidated basis, the net income of the Company and its
Subsidiaries for such period.
“Consolidated Principal Payments” means, for any period, for the Company and its
Subsidiaries on a consolidated basis, all scheduled payments of principal and
amortization of the Company and its Subsidiaries in connection with Indebtedness
for money borrowed (including Permitted Real Estate Indebtedness) or in
connection with the deferred purchase price of assets which payments are made or
are required to be made during such period, in each case to the extent treated
as principal in accordance with GAAP (other than any balloon, bullet or similar
final scheduled principal payment that repays such Indebtedness in full). It is
acknowledged that payments permitted under Section 7.15 shall not be deemed to
be scheduled payments of principal for purposes of determining “Consolidated
Principal Payments”.
“Consolidated Rental Expense” means, for any period, on a consolidated basis for
the Company and its Subsidiaries, the aggregate amount of fixed and contingent
rentals payable in cash by the Company and its Subsidiaries with respect to
leases of real and personal property (excluding capital lease obligations)
determined in accordance with GAAP for such period (subject to Section 1.03(b)).
“Consolidated Total Lease Adjusted Leverage Ratio” means, as of any date of
determination, the ratio of (a) (i) Consolidated Total Outstanding Indebtedness
(excluding (v) Indebtedness under the New Vehicle Floorplan Facility, (w)
Permitted Silo Indebtedness for New Vehicle or Used Vehicle inventory, (x)
Indebtedness under the Used Vehicle Floorplan Facility, (y) Temporary
Indebtedness and (z) Permitted Third Party Service Loaner Indebtedness) as of
such date minus (ii) the aggregate amount as of the date of determination of
unrestricted domestic cash held in (x) accounts on the consolidated balance
sheet of the applicable Person and its Restricted Subsidiaries as of such date
to the extent the use thereof for application to payment of Indebtedness is not
prohibited by law or any contract to which any such Person is a party and such
cash is not subject to any Lien and (y) accounts established with Silo Lenders,
if any, as an offset to floor plan notes payable that are reflected on the
consolidated balance sheet of the applicable Person and its Restricted
Subsidiaries as of such date to the extent the use thereof is not prohibited or
restricted by law or any contract to which any such Person is a party and is not
subject to any Lien; provided that the aggregate amount of cash under clauses
(x) and (y) for purposes of this calculation shall in no
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event exceed $50,000,000 at any time, plus (iii) eight (8) times Consolidated
Rental Expense for the period of four fiscal quarters most recently ended
(excluding Consolidated Rental Expense relating to any real property acquired
during the period of four fiscal quarters most recently ended but including as
Consolidated Rental Expense the “rental payments” for any real property Disposed
of and leased back to the Company or its Subsidiaries during the period of four
fiscal quarters most recently ended as if such sale-leaseback transaction had
occurred on and such “rental payments” began on the first day of such applicable
four fiscal quarter period) to (b) Consolidated EBITDAR for the period of four
fiscal quarters most recently ended.
“Consolidated Total Outstanding Indebtedness” means, for any period, for the
Company and its Subsidiaries on a consolidated basis, the aggregate outstanding
principal amount of Consolidated Funded Indebtedness of the Company and its
Subsidiaries for such period.
“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.
“Cost of Acquisition” means, with respect to any Acquisition, as at the date of
entering into any agreement therefor, the sum of the following (without
duplication): (i) the value of the Equity Interests of the Company or any
Subsidiary to be transferred in connection with such Acquisition, (ii) the
amount of any cash and fair market value of other property (excluding property
described in clause (i) and the unpaid principal amount of any debt instrument)
given as consideration in connection with such Acquisition, (iii) the amount
(determined by using the face amount or the amount payable at maturity,
whichever is greater) of any Indebtedness incurred, assumed or acquired by the
Company or any Subsidiary in connection with such Acquisition, (iv) all
additional purchase price amounts in the form of earnouts and other contingent
obligations that should be recorded on the financial statements of the Company
and its Subsidiaries in accordance with GAAP in connection with such
Acquisition, (v) all amounts paid in respect of covenants not to compete,
consulting agreements that should be recorded on the financial statements of the
Company and its Subsidiaries in accordance with GAAP, and other affiliated
contracts in connection with such Acquisition, and (vi) the aggregate fair
market value of all other consideration given by the Company or any Subsidiary
in connection with such Acquisition; provided that (x) the Cost of Acquisition
shall not include the purchase price of floored vehicles acquired in connection
with such Acquisition, (y) to the extent such Acquisition (or any other
Acquisition or proposed Acquisition included in the calculation of any threshold
set forth in Section 6.14 or 7.12) includes the purchase or leasing of any real
property, the consideration attributable to such real property shall be excluded
from the calculation of Cost of Acquisition, and (z) amounts under clause (iv)
above shall be excluded from the calculation of Cost of Acquisition to the
extent that such amounts as of the date of entering into any agreement with
respect to such Acquisition are not reasonably expected to exceed $5,000,000 in
the aggregate (each such determination for each applicable year of earnouts and
other contingent obligations with respect to the applicable Acquisition to be
based on the reasonably expected operations and financial condition of the
Company and its Subsidiaries during the first year after the date of the
applicable Acquisition). For purposes of determining the
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Cost of Acquisition for any transaction, the Equity Interests of the Company
shall be valued in accordance with GAAP.
“Covered Entity” means any of the following: (a) a “covered entity” as that term
is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (b) a
“covered bank” as that term is defined in, and interpreted in accordance with,
12 C.F.R. § 47.3(b); or (c) a “covered FSI” as that term is defined in, and
interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Covered Party” has the meaning specified in Section 10.22.
“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.
“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.
“Default Rate” means an interest rate equal to (i) the Interest Rate plus (ii)
2% per annum.
“Default Right” has the meaning assigned to that term in, and shall be
interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as
applicable.
“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any property by
any Person, including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.
“Disputes” has the meaning specified in Section 10.15(b)(i).
“Dollar” and “$” mean lawful money of the United States.
“Environmental Indemnity Agreement” has the meaning specified in Section
4.01(a)(xii).
“Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, licenses, agreements or governmental restrictions relating to pollution
and the protection of the environment or the release of any materials into the
environment, including those related to hazardous substances or wastes, air
emissions and discharges to waste or public systems.
“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Company, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials or (e) any
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contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.
“Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.
“ERISA” means the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Company within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).
“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b)
the withdrawal of the Company or any ERISA Affiliate from a Pension Plan subject
to Section 4063 of ERISA during a plan year in which such entity was a
“substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA that has resulted or could reasonably be expected to result in liability
of the Company under Title IV of ERISA in excess of $1,000,000; (c) a complete
or partial withdrawal by the Company or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization, in either
case that has resulted or could reasonably be expected to result in liability of
the Company under Title IV of ERISA in excess of (i) in the case of the
Automotive Industries Pension Trust Fund (EIN # 94-1133245), Plan No. 001,
$25,000,000 and (ii) in all other cases, $1,000,000; (d) the filing of a notice
of intent to terminate or the treatment of a Pension Plan amendment as a
termination under Section 4041 or 4041A of ERISA; (e) the institution by the
PBGC of proceedings to terminate a Pension Plan, Multiemployer Plan or Multiple
Employer Plan; (f) any event or condition which is reasonably likely to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan of the Company or any
ERISA Affiliate; (g) except as set forth on Schedule 1.01C, the determination
that any Pension Plan, Multiemployer Plan or Multiple Employer Plan is
considered an at-risk plan or a plan in endangered or critical status within the
meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of
ERISA; or (h) the imposition of any liability under Title IV of ERISA, other
than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon
the Company or any ERISA Affiliate in excess of (i) in the case of the
Automotive Industries Pension Trust Fund (EIN # 94-1133245), Plan No. 001,
$25,000,000 and (ii) in all other cases, $1,000,000.
“Event of Default” has the meaning specified in Section 8.01.
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“Excluded Investment” means (i) any Investment in the Company, any Restricted
Subsidiary or any Person which, as a result of such Investment, (a) becomes a
Restricted Subsidiary or (b) is merged or consolidated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated into,
the Company or any Restricted Subsidiary; (ii) Indebtedness of the Company owing
to a Restricted Subsidiary, Indebtedness of a Restricted Subsidiary owing to
another Restricted Subsidiary, or guarantees by a Restricted Subsidiary of the
Indenture Notes; (iii) Investments in any of the Indenture Notes; (iv) Temporary
Cash Investments; (v) Investments acquired by the Company or any Restricted
Subsidiary in connection with an asset sale permitted by any Indenture to the
extent such Investments are non-cash proceeds; (vi) any Investment to the extent
the consideration therefor consists of Qualified Capital Stock of the Company or
any Restricted Subsidiary; (vii) Investments representing Capital Stock or
obligations issued to the Company or any Restricted Subsidiary in the ordinary
course of the good faith settlement of claims against any other Person by reason
of a composition or readjustment of debt or a reorganization of any debtor or
any Restricted Subsidiary; (viii) prepaid expenses advanced to employees in the
ordinary course of business or other loans or advances to employees in the
ordinary course of business not to exceed $1.0 million in the aggregate at any
one time outstanding; (ix) Investments in existence on May 9, 2013; (x)
deposits, including interest-bearing deposits, maintained in the ordinary course
of business in banks or with floor plan lenders; endorsements for collection or
deposit in the ordinary course of business by such Person of bank drafts and
similar negotiable instruments of such other Person received as payment for
ordinary course of business trade receivables; (xi) Investments acquired in
exchange for the issuance of Capital Stock (other than Redeemable Capital Stock
or Preferred Stock) of the Company or acquired with the net cash proceeds
received by the Company after the date of this Agreement from the issuance and
sale of Capital Stock (other than Redeemable Capital Stock or Preferred Stock);
provided that such net cash proceeds are used to make such Investment within 10
days of the receipt thereof; (xii) Investments in prepaid expenses, negotiable
instruments held for collection and lease, utility and worker’s compensation,
performance and other similar deposits provided to third parties in the ordinary
course of business; (xiii) consumer loans and leases entered into, purchased or
otherwise acquired by the Company or its Subsidiaries, as lender, lessor or
assignee, as applicable, in the ordinary course of business consistent with past
practices; (xiv) items described in clause (c) of the definition of
“Investment”; and (xv) in addition to the Investments described in clauses (i)
through (xiv) above, Investments in an amount not to exceed the greater of (a)
$25.0 million and (b) 1% of the Company’s consolidated tangible assets in the
aggregate at any one time outstanding.
“Excluded Taxes” means any of the following Taxes imposed on or with respect to
Recipient or required to be withheld or deducted from payment to a Recipient,
(a) Taxes imposed on or measured by net income (however denominated), franchise
Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such
Recipient being organized under the laws of, or having its principal office or,
in the case of the Lender, its Lending Office located in, the jurisdiction
imposing such Tax (or any political subdivision thereof) or (ii) that are Other
Connection Taxes, (b) in the case of the Lender, U.S. federal withholding Taxes
imposed on amounts payable to or for the account of the Lender with respect to
an applicable interest in a Loan or Commitment pursuant to a law in effect on
the date on which (i) the Lender acquires such interest in the Loan or
Commitment (other than pursuant to an assignment request by the Company under
Section 10.13) or (ii) the Lender changes its Lending Office, except in each
such case to the extent that pursuant to Section 3.01(a)(ii), (a)(iii) or (c),
amounts with respect to such Taxes were payable either to the Lender’s
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assignor immediately before the Lender became a party hereto or to the Lender
immediately before it changed its Lending Office, (c) Taxes attributable to such
Recipient’s failure to comply with Section 3.01(e) and (d) any U.S. federal
withholding Taxes imposed pursuant to FATCA.
“FASB ASC” means the Accounting Standards Codification of the Financial
Accounting Standards Board.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantially comparable
and not materially more onerous to comply with) and any current or future
regulations or official interpretations thereof and any agreements entered into
pursuant to Section 1471(b)(1) of the Code.
“Flood Hazard Property” means any real property with respect to which the Lender
requests a flood hazard determination in its sole discretion and which is
determined to be in an area designated by the Federal Emergency Management
Agency as having special flood or mudslide hazards.
“Flood Requirements” means the following, with respect to any Flood Hazard
Property, in each case in form and substance satisfactory to the Lender: (a) the
applicable Loan Party’s written acknowledgment of receipt of written
notification from the Lender (i) as to the fact that such real property is a
Flood Hazard Property and (ii) as to whether the community in which each such
Flood Hazard Property is located is participating in the National Flood
Insurance Program and (b) such other flood hazard determination forms, notices
and confirmations thereof as requested by the Lender and naming the Lender as
loss payee; and (c) property level information sufficient for the Lender to
determine the adequacy of flood insurance.
“Floorplan Administrative Agent” means, as applicable, Bank of America (in its
capacity as the administrative agent under the Floorplan Credit Agreement or any
successor administrative agent under the Floorplan Credit Agreement).
“Floorplan Credit Agreement” means the Third Amended and Restated Syndicated New
and Used Floorplan Credit Agreement dated as of November 30, 2016 among the
Company, the Subsidiaries of the Company party thereto from time to time, the
Floorplan Administrative Agent and the Floorplan Lenders (as amended,
supplemented or otherwise modified from time to time).
“Floorplan Lenders” means the lenders party from time to time to the Floorplan
Credit Agreement.
“Framework Agreement” means a framework agreement, in each case between a Loan
Party and a manufacturer or distributor of New Vehicles.
The term “franchise” when used with respect to any vehicle manufacturer or
distributor shall be deemed to include each dealership that is authorized by a
Franchise Agreement to sell New Vehicles manufactured or distributed by such
manufacturer or distributor, whether or not such dealership is expressly
referred to as a franchise in the respective Franchise Agreement or Framework
Agreement.
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“Franchise Agreement” means a franchise agreement, in each case between a Loan
Party and a manufacturer or distributor of New Vehicles.
“FRB” means the Board of Governors of the Federal Reserve System of the United
States.
“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).
“Guarantee” means, as to any Person, any (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term “Guarantee” as a verb has a
corresponding meaning.
“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.
“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
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(a) all obligations of such Person for borrowed money and all obligations of
such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments;
(b) all direct or contingent obligations of such Person arising under letters of
credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments;
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business and, in each case, not past due for more than 60 days after the date
on which such trade account payable was created);
(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse;
(f) capital leases and Synthetic Lease Obligations;
(g) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Equity Interest in such Person or
any other Person, valued, in the case of a redeemable preferred interest, at the
greater of its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends; and
(h) all Guarantees of such Person in respect of any of the foregoing.
For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any capital lease or Synthetic Lease
Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date.
“Indemnified Taxes” means (a) Taxes other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of any Loan
Party under any Loan Document and (b) to the extent not otherwise described in
(a), Other Taxes.
“Indemnitees” has the meaning specified in Section 10.04(b).
“Indentures” means, individually or collectively as the context may require, the
2013-5.0% Indenture or the 2017-6.125% Indenture.
“Indenture Notes” means, individually or collectively as the context may
require, the 2013-5.0% Indenture Notes or the 2017-6.125% Indenture Notes.
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“Information” has the meaning specified in Section 10.07.
“Initial Appraised Value” means, with respect to any Mortgaged Property, the
appraised value of such Mortgaged Property as set forth in a FIRREA-conforming
appraisal obtained by the Lender with respect to such Mortgaged Property prior
to (and within 12 months of) the Closing Date, or if such Mortgaged Property is
an Additional Mortgaged Property or a Substitute Property, a FIRREA-conforming
appraisal obtained by the Lender with respect to such Additional Mortgaged
Property or Substitute Property immediately prior to (and within 12 months of)
such Additional Mortgaged Property or Substitute Property becoming a Mortgaged
Property.
“Interest Payment Date” means the first day of a calendar month, provided that
if such day is not a Business Day, the respective Interest Payment Date shall be
the next succeeding Business Day.
“Interest Period” means a period of approximately one month commencing on the
first Business Day of each month and ending on the first Business Day of the
following month.
“Internal Control Event” means a material weakness in, or fraud that involves
management or other employees who have a significant role in, the Company’s
internal controls over financial reporting, in each case as described in the
Securities Laws.
“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person and any arrangement pursuant to which the investor
Guarantees Indebtedness of such other Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit. For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.
“Involuntary Disposition” means, with respect to any Collateral, any of the
following: (a) any loss, destruction or damage of such Collateral or (b) any
condemnation, seizure, or taking, by exercise of the power of eminent domain or
otherwise, of such Collateral, or confiscation of such Collateral or the
requisition of the use of such Collateral.
“IP Rights” has the meaning specified in Section 5.17.
“IRS” means the United States Internal Revenue Service.
“Joinder Agreement” means each Joinder Agreement, substantially in the form of
Exhibit G, executed and delivered by a Subsidiary or any other Person to the
Lender pursuant to Section 6.14.
“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable
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administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case
whether or not having the force of law.
“Lease” means a lease or other agreement (whether written or oral) pursuant to
which any Person is granted a possessory interest in, or right to use or occupy,
all or any portion of one or more of the Mortgaged Properties, together with all
amendments thereto and all restatements, supplements, and other modifications
thereof.
“Lender” has the meaning specified in the introductory paragraph hereto.
“Lending Office” means, as to the Lender, the office or offices of the Lender
described as such in the Lender’s Administrative Questionnaire, or such other
office or offices as the Lender may from time to time notify the Company, which
office may include any Affiliate of the Lender or any domestic or foreign branch
of the Lender or such Affiliate. Unless the context otherwise requires each
reference to the Lender shall include its applicable Lending Office.
“LIBOR Reserve Percentage” means as of any day the maximum effective percentage
in effect on such day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the reserve requirements
(including supplemental, marginal and emergency reserve requirements) with
respect to eurocurrency funding or in respect of eurocurrency liabilities or any
similar category of liabilities for a member bank of the Federal Reserve System
in New York City.
“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).
“Loan” means an extension of credit by the Lender to the Company under Article
II in the form of an Advance.
“Loan Cap” means, at any time of determination, the lesser of (a) $69,000,000.00
and (b) the Margined Collateral Value at such time.
“Loan Documents” means, collectively, this Agreement, the Note, each Joinder
Agreement, each Security Instrument, the Subsidiary Guaranty, and each other
document and agreement executed in connection with the Loan.
“Loan Parties” means, collectively, the Company and each Subsidiary Guarantor.
“London Banking Day” means any day on which dealings in Dollar deposits are
conducted by and between banks in the London interbank eurodollar market.
“Margined Collateral Value” means, at any time, the sum of (a) for all Mortgaged
Properties on which material improvements have been constructed thereon, the
product of (i) 0.85 multiplied by (ii) the Initial Appraised Value of such
Mortgaged Properties, plus (b) for all other Mortgaged
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Properties, the product of (i) 0.75 multiplied by (ii) the Initial Appraised
Value of such Mortgaged Properties.
“Material Adverse Effect” means (a) a material adverse effect on (i) the
business, assets, properties, liabilities (actual or contingent), operations or
condition (financial or otherwise) of the Company and its Subsidiaries, taken as
a whole, (ii) the Mortgaged Properties, taken as a whole, or (iii) the ability
of the Company and the Subsidiary Guarantors, taken as a whole, to perform their
respective obligations under any Loan Document to which any of them is a party
or (b) an adverse effect on the rights and remedies of the Lender under the Loan
Documents.
“Maturity Date” means three hundred sixty-four (364) days after the date hereof;
provided that if any date determined to be a “Maturity Date” is not a Business
Day, such Maturity Date shall be the next preceding Business Day.
“Mortgage” or “Mortgages” means, individually and collectively, as the context
requires, each of the fee mortgages, deeds of trust, deeds and other similar
security documents executed by a Loan Party that purport to grant a Lien to the
Lender (or a trustee for the benefit of the Lender) for the benefit of the
Lender in any Mortgaged Properties, in form and substance satisfactory to the
Lender.
“Mortgaged Property” means the owned property of the Loan Parties listed on
Schedule 5.20(c), as supplemented from time to time in accordance with Section
2.18(b)(iii) and Section 2.19(b)(iii) following the addition of Additional
Mortgaged Property or a Substitute Property as a Mortgaged Property, including
all “Premises” referred to in the Security Instruments with respect to such
Mortgaged Property; provided that a Release Property shall no longer constitute
a Mortgaged Property after giving effect to the consummation of a Property
Substitution or Prepayment Release with respect to such Release Property in
accordance with Section 2.19.
“Mortgaged Property Support Documents” means with respect to the fee interest in
any Mortgaged Property:
(a) a fully executed and notarized Mortgage encumbering the fee interest of the
applicable Loan Party in such real property;
(b) if requested by the Lender in its sole discretion, maps or plats of an
as-built survey of the sites of such real property certified to the Lender and
the title insurance company issuing the policies referred to in clause (c) of
this definition in a manner satisfactory to each of the Lender and such title
insurance company, dated a date satisfactory to each of the Lender and such
title insurance company by an independent professional licensed land surveyor,
which maps or plats and the surveys on which they are based shall be sufficient
to delete any standard printed survey exception contained in the applicable
title policy and be made in accordance with the Minimum Standard Detail
Requirements for Land Title Surveys jointly established and adopted by the
American Land Title Association and the National Society of Professional
Surveyors, Inc. in 2016 with items 2, 3, 4, 6(b), 7(a), 7(b)(1), 7(c), 8, 9, 10,
11, 13, 14, 16,17, 18 and 19 on Table A thereof completed;
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(c) ALTA mortgagee title insurance policies issued by a title insurance company
acceptable to the Lender with respect to such real property, assuring the Lender
that the Mortgage covering such real property creates a valid and enforceable
first priority mortgage lien on such real property, free and clear of all
defects and encumbrances except Liens permitted under Section 7.01, which title
insurance policies shall otherwise be in form and substance satisfactory to the
Lender and shall include such endorsements as are requested by the Lender;
(d) (i) a completed “Life-of-Loan” Federal Emergency Management Agency Standard
Flood Hazard Determination with respect to such real property (together with a
notice about special flood hazard area status and flood disaster assistance duly
executed by each Loan Party relating thereto) and (ii) if such real property is
a Flood Hazard Property, Flood Requirements;
(e) if requested by the Lender, in such Person’s sole discretion, an
environmental assessment report, as to such real property, in form and substance
and from professional firms acceptable to the Lender;
(f) if requested by the Lender in its sole discretion, evidence reasonably
satisfactory to the Lender that such real property, and the uses of such real
property, are in compliance in all material respects with all applicable zoning
Laws (the evidence submitted as to which should include the zoning designation
made for such real property, the permitted uses of such real property under such
zoning designation and, if available, zoning requirements as to parking, lot
size, ingress, egress and building setbacks);
(g) copies of all Leases with respect to such real property and a fully executed
and notarized subordination, non-disturbance and attornment agreement with
respect to such real property and such Lease; and
(h) if requested by the Lender in its sole discretion, an opinion of legal
counsel to the applicable Loan Party granting the Mortgage on such real
property, addressed to the Lender, in form and substance reasonably acceptable
to the Lender.
“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate makes
or is obligated to make contributions, or during the preceding five plan years,
has made or been obligated to make contributions.
“Multiple Employer Plan” shall mean a Plan which has two or more contributing
sponsors (including the Company or any ERISA Affiliate) at least two of whom are
not under common control, as such a plan is described in Section 4064 of ERISA.
“Net Cash Proceeds” means the aggregate cash or cash equivalents proceeds
received by any Loan Party or any Subsidiary in respect of any Involuntary
Disposition, net of (a) direct costs incurred in connection therewith, and (b)
taxes paid or payable as a result thereof; it being understood that “Net Cash
Proceeds” shall include, without limitation, any cash or cash equivalents
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received upon the sale or other disposition of any non-cash consideration
received by any Loan Party or any Subsidiary in any Involuntary Disposition.
“New Vehicle” means a Vehicle which has never been owned except by a
manufacturer, distributor or dealer and (except in the case of Service Loaner
Vehicles) has never been registered, and (notwithstanding clause (b) of the
definition of “Vehicle”) includes Rental Vehicles and Demonstrators (each as
defined in the Floorplan Credit Agreement) and Service Loaner Vehicles, in each
case whether or not held for sale.
“New Vehicle Floorplan Facility” means the new vehicle floorplan facility
described in Section 2.01 through 2.05 of the Floorplan Credit Agreement
providing for revolving loans to certain Subsidiaries of the Company by the
lenders party thereto.
“New Vehicle Floorplan Loan” has the meaning specified for such term in the
Floorplan Credit Agreement.
“Note” means the promissory note made by the Company in favor of the Lender
evidencing the Loan made by the Lender to the Company.
“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to the Loan, whether direct or indirect (including those
acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising and including interest and fees that accrue after
the commencement by or against any Loan Party or any Affiliate thereof of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding.
“OFAC” means the Office of Foreign Assets Control of the United States
Department of the Treasury.
“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Documents).
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“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 3.05).
“Participant” has the meaning specified in Section 10.06(d).
“PBGC” means the Pension Benefit Guaranty Corporation.
“Pension Act” shall mean the Pension Protection Act of 2006.
“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum
required contributions (including any installment payment thereof) to Pension
Plans and set forth in, with respect to plan years ending prior to the effective
date of the Pension Act, Section 412 of the Code and Section 302 of ERISA, each
as in effect prior to the Pension Act and, thereafter, Section 412, 430, 431,
432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.
“Pension Plan” means any employee pension benefit plan (other than a Multiple
Employer Plan or a Multiemployer Plan) that is maintained or is contributed to
by the Company and any ERISA Affiliate and is either covered by Title IV of
ERISA or is subject to the minimum funding standards under Section 412 of the
Code.
“Permitted Acquisition” means any Acquisition permitted by Section 7.12.
“Permitted Disposition” means any Disposition permitted by Section 7.05.
“Permitted Real Estate Indebtedness” means Indebtedness of the Company or a
Subsidiary owing to non-Affiliated Persons secured solely by Liens on Permitted
Real Estate Indebtedness Collateral so long as the amount of such Indebtedness
(as measured for any specified real property parcel and improvements (if any)
financed thereby) is no greater than eighty-five percent (85%) of the value of
such parcel and improvements set forth in an appraisal thereof prepared by a
member of the Appraisal Institute and an independent appraisal firm satisfactory
to the Lender and commissioned in connection with such financing, a copy of
which such appraisal has been provided to the Lender upon its request.
“Permitted Real Estate Indebtedness Collateral” means, with respect to any
particular Permitted Real Estate Indebtedness, the applicable real property used
(at the time of the incurrence of such Permitted Real Estate Indebtedness) by a
Subsidiary of the Company for the operation of a vehicle dealership or a
business ancillary thereto, together with related real property rights,
improvements, fixtures (other than trade fixtures), insurance payments, leases
and rents related thereto and proceeds thereof.
“Permitted Silo Guaranty” means, with respect to any Permitted Silo Indebtedness
provided by any Silo Lender, the guaranty of such Indebtedness by (a) the
Company or (b) any Subsidiary that operates one or more dealerships at which New
Vehicle floorplan financing is provided by such Silo Lender.
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“Permitted Silo Indebtedness” means Indebtedness (including Permitted Silo
Guaranties) incurred from time to time by any of the Company’s current or future
Subsidiaries consisting of floorplan financing for New Vehicles or Used Vehicles
provided by financial institutions or manufacturer-affiliated finance companies
(“Silo Lenders”) to such Subsidiaries, provided that (i) with respect to
financing of Used Vehicles, the proceeds of such financing are used for
purchasing and carrying Used Vehicles, and (ii) such indebtedness is secured by,
in the case of Silo Lenders providing New Vehicle floorplan financing or New
Vehicle and Used Vehicle floorplan financing, a lien on certain assets of such
Subsidiaries (including New Vehicles and Used Vehicles financed (including
related contracts-in-transit) and the proceeds thereof and certain general
intangibles, but excluding real property and fixtures (other than trade
fixtures)); provided that, Permitted Silo Indebtedness provided by a Silo Lender
may be cross-collateralized with other Permitted Silo Indebtedness provided by
such Silo Lender.
“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
“Plan” shall mean any employee benefit plan within the meaning of Section 3(3)
of ERISA (generally including a Pension Plan, but excluding a Multiemployer Plan
and Multiple Employer Plan), maintained by the Company or, in the case of a
Pension Plan, by an ERISA Affiliate, for employees of the Company or any ERISA
Affiliate.
“Prepayment Release” has the meaning specified in Section 2.19(a).
“Principal Office” means the main banking office of the Lender in Detroit,
Michigan.
“Pro Forma Compliance” means that the Company and its Subsidiaries are in pro
forma compliance with the financial covenants set forth in Section 7.11
calculated as if the event with respect to which Pro Forma Compliance is being
tested had occurred on the first day of each relevant period with respect to
which current compliance with such financial covenant would be determined (for
example, in the case of a financial covenant based on Consolidated EBITDAR, as
if such event had occurred on the first day of the four fiscal quarter period
ending on the last day of the most recent fiscal quarter in respect of which
financial statements have been delivered pursuant to Section 6.01(a) or (b)).
Pro forma calculations made pursuant to this definition that require
calculations of Consolidated EBITDAR on a pro forma basis will be made in
accordance with Section 1.03(d).
“Pro Forma Compliance Certificate” means, with respect to any event, a duly
completed Compliance Certificate demonstrating Pro Forma Compliance for such
event.
“Property Substitution” has the meaning specified in Section 2.19(a).
“QFC” has the meaning assigned to the term “qualified financial contract” in,
and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).
“QFC Credit Support” has the meaning specified in Section 10.22.
“Qualified Capital Stock” of any Person means any and all Capital Stock of such
Person other than Redeemable Capital Stock.
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“RCRA” means the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976 and Hazardous and Solid Waste Amendments
of 1984, 42 U.S.C. §§6901 et seq.
“Recipient” means the Lender or any other recipient of any payment to be made by
or on account of any obligation of any Loan Party hereunder.
“Redeemable Capital Stock” means any Capital Stock that, either by its terms or
by the terms of any security into which it is convertible or exchangeable (at
the option of the holders thereof), is or upon the happening of an event or
passage of time would be, required to be redeemed prior to May 20, 2025 or is
redeemable at the option of the holder thereof at any time prior to May 20, 2025
(other than upon a change of control of or sale of assets by the Company in
circumstances where a holder of any 2013-5.0% Indenture Notes would have similar
rights), or is convertible into or exchangeable for debt securities at any time
prior to any such stated maturity at the option of the holder thereof.
“Register” has the meaning specified in Section 10.06(c).
“Registered Public Accounting Firm” has the meaning specified in the Securities
Laws and shall be independent of the Company as prescribed in the Securities
Laws.
“Related Acquisition or Related Proposed Acquisition” means, with respect to any
specified Acquisition (a “Specified Acquisition”), any other Acquisition, or any
proposed Acquisition subject to an Acquisition Arrangement, that in each case
(a) is part of a related series of Acquisitions or proposed Acquisitions that
includes the Specified Acquisition, (b) involves any seller or transferor that
is a seller or transferor (or an Affiliate of a seller or transferor) involved
in the Specified Acquisition and (c) occurs or is reasonably expected to occur
within six (6) months before or after the date of the Specified Acquisition.
“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents, trustees,
administrators, managers, advisors, and representatives of such Person and of
such Person’s Affiliates.
“Release Price” means, with respect to any Mortgaged Property, an amount equal
to 75% of the Initial Appraised Value of such Mortgaged Property.
“Release Property” has the meaning specified in Section 2.19(a).
“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.
“Required Financial Information” has the meaning specified in the definition of
“Restricted Subsidiary”.
“Responsible Officer” means the chief executive officer, president, chief
financial officer, chief accounting officer, treasurer, assistant treasurer or
controller of a Loan Party and solely for purposes of the delivery of incumbency
certificate pursuant to Section 4.01, the secretary or assistant secretary of a
Loan Party, and, solely for the purposes of notices given pursuant to Article
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II, any other officer of the applicable Loan Party so designated by any of the
foregoing officers in a notice to the Lender or any other officer of the
applicable Loan Party designated in or pursuant to an agreement between the
applicable Loan Party and the Lender. Any document delivered hereunder that is
signed by a Responsible Officer of a Loan Party shall be conclusively presumed
to have been authorized by all necessary corporate, partnership and/or other
action on the part of such Loan Party and such Responsible Officer shall be
conclusively presumed to have acted on behalf of such Loan Party. To the extent
requested by the Lender, each Responsible Officer will provide an incumbency
certificate and to the extent requested by the Lender, appropriate authorization
documentation, in form and substance satisfactory to the Lender.
“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other Equity
Interest of the Company or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such capital stock or other Equity Interest, or on account of
any return of capital to the stockholders, partners or members (or the
equivalent Person thereof) of the Company or any Subsidiary.
“Restricted Subsidiary” means each direct or indirect Subsidiary of the Company
that (i) has total assets (including Equity Interests in other Persons) of equal
to or greater than $10,000 (calculated as of the most recent fiscal period with
respect to which the Lender shall have received financial statements required to
be delivered pursuant to Sections 6.01(a) or (b) (or if prior to delivery of any
financial statements pursuant to such Sections, then calculated based on the
Audited Financial Statements) (the “Required Financial Information”)), or (ii)
has revenues (on a consolidated basis with its Subsidiaries) equal to or greater
than $10,000 for a period of four consecutive fiscal quarters (calculated for
the most recent four fiscal quarter period for which the Lender has received the
Required Financial Information); provided, however, that notwithstanding the
foregoing, the term “Restricted Subsidiaries” (i) shall also include any
Subsidiaries designated as “Restricted Subsidiaries” pursuant to the definition
of “Unrestricted Subsidiaries” and (ii) shall not include any Special Purpose
Insurance Captive.
“Revolving Administrative Agent” means, as applicable, Bank of America (in its
capacity as the administrative agent under the Revolving Credit Agreement or any
successor administrative agent under the Revolving Credit Agreement) serving as
the collateral agent on behalf of the Secured Parties thereunder.
“Revolving Credit Agreement” means that certain Fourth Amended and Restated
Credit Agreement dated as of November 30, 2016 among the Company, the Revolving
Administrative Agent and the Revolving Lenders, as amended, supplemented or
otherwise modified from time to time.
“Revolving Credit Facility” means the revolving credit facility described in the
Revolving Credit Agreement providing for revolving loans to the Company by the
Revolving Lenders.
“Revolving Lender” means each lender that has a commitment under the Revolving
Credit Facility or, following termination of such commitments, has Revolving
Facility Loans outstanding.
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“Sanction(s)” means any sanction administered or enforced by the United States
government (including without limitation, OFAC), the United Nations Security
Council, the European Union, Her Majesty’s Treasury or other relevant sanctions
authority.
“Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.
“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
“Securities Laws” means the Securities Act of 1933, the Securities Exchange Act
of 1934, Sarbanes-Oxley and the applicable accounting and auditing principles,
rules, standards and practices promulgated, approved or incorporated by the SEC
or the Public Company Accounting Oversight Board, as each of the foregoing may
be amended and in effect on any applicable date hereunder.
“Security Instruments” means, collectively or individually as the context may
indicate, the Mortgages and any related Mortgaged Property Support Documents and
all other agreements, instruments and other documents, whether now existing or
hereafter in effect, pursuant to which the Company, any other Loan Party, or any
other Person shall grant or convey to the Lender for the benefit of the Lender,
a Lien in, or any other Person shall acknowledge any such Lien in, property as
security for all or any portion of the Obligations.
“Solvent” means, when used with respect to any Person, that at the time of
determination:
(a) the fair value of its assets (both at fair valuation and at present fair
saleable value on an orderly basis) is in excess of the total amount of its
liabilities, including contingent obligations; and
(b) it is then able and expects to be able to pay its debts as they mature; and
(c) it has capital sufficient to carry on its business as conducted and as
proposed to be conducted.
“Sonic Financial” means Sonic Financial Corporation, a North Carolina
corporation.
“Special Purpose Insurance Captive” means a Person which (a) at all times shall
remain a wholly-owned Subsidiary of the Company or a Subsidiary Guarantor, (b)
shall not engage in any business other than the provision of dealer physical
damage insurance for new vehicle inventory, workers compensation insurance or
healthcare insurance to the Company and its Subsidiaries, (c) if organized in
North Carolina (or, in any other jurisdiction, to the extent otherwise permitted
by Law) has its Equity Interests pledged pursuant to the Pledge Agreement (as
defined in the Revolving Credit Agreement) and (d) has not and shall not (i)
transfer any funds to any Person other than (x) payment in the ordinary course
of business and on customary market terms of liability claims made by third
parties against the Company and its Subsidiaries, (y) payment of its own
business expenses in the ordinary course of business and on customary terms, and
(z) distributions to the Company or any Subsidiary Guarantor; (ii) make any
Investment (other than Investments permitted under applicable insurance
guidelines and made in the Company’s reasonable business judgment) in any
Person, (iii) incur any Indebtedness (other than Indebtedness from time to time
owed to the
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Company or any Subsidiary Guarantor) or grant a Lien on any of its assets (other
than to secure Indebtedness owed to the Company or any Subsidiary Guarantor),
(iv) provide any compensation to directors or employees other than on customary
market terms for captive insurance companies or (v) have its Equity Interests
pledged to any Person other than as described in clause (c) above. The parties
hereto acknowledge that as of the date hereof, SRM Assurance, Ltd. is a Special
Purpose Insurance Captive. A Special Purpose Insurance Captive shall not be
permitted to have, acquire or form any direct or indirect Subsidiary.
“Specified Investment” means any Investment in any Person other than an Excluded
Investment.
“Specified Loan Party” means any Loan Party that is not an “eligible contract
participant” under the Commodity Exchange Act (determined prior to giving effect
to Section 10.19).
“Subordinated Indebtedness” has the meaning given to such term in the Revolving
Credit Agreement and the Floorplan Credit Agreement.
“Subordinated Indebtedness Prepayment” means any prepayment, redemption,
purchase, defeasance, settlement in cash or other satisfaction prior to the
scheduled maturity thereof of any Subordinated Indebtedness, provided, however,
that “Subordinated Indebtedness Prepayment” shall not include any amount prepaid
with the proceeds of the refinancing of such Subordinated Indebtedness with new
or additional Subordinated Indebtedness.
“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of
the Company and shall include, without limitation, the Unrestricted
Subsidiaries.
“Subsidiary Guarantors” means, collectively, all Restricted Subsidiaries
executing a Subsidiary Guaranty on the Closing Date and all other Subsidiaries
that enter into a Joinder Agreement (other than any Subsidiary Guarantor that is
released in accordance with the terms hereof).
“Subsidiary Guaranty” means the Subsidiary Guaranty Agreement made by the
Subsidiary Guarantors in favor of the Lender substantially in the form of
Exhibit E as supplemented from time to time by execution and delivery of Joinder
Agreements pursuant to Section 6.14 and as otherwise supplemented, amended, or
modified from time to time.
“Substitution Requirements” has the meaning specified in Section 2.19(b).
“Substitute Property” has the meaning specified in Section 2.19(a).
“Supported QFC” has the meaning specified in Section 10.22.
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“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.
“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include the Lender or any Affiliate of
the Lender).
“Synthetic Lease Obligation” means the monetary obligation of a Person under (a)
a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.
“Temporary Cash Investments” means (a) cash or (b) Investments held in the form
of cash equivalents and short-term marketable securities.
“Temporary Excess Cash” means cash proceeds received by the Company from the
issuance of Subordinated Indebtedness permitted by Section 7.03(i), which cash
(as set forth in a notice delivered by the Company to the Lender within five (5)
Business Days of the Company’s receipt of such cash proceeds) is intended by the
Company to be applied to the prepayment or purchase (whether by open market
purchase or pursuant to a tender offer) of other Subordinated Indebtedness, but
has not yet been so applied solely because the Company has not completed such
prepayment, repurchase or refinancing, so long as such cash is so applied within
six (6) months of receipt thereof.
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“Temporary Indebtedness” means Subordinated Indebtedness the Company intends to
repay (whether by open market purchase or pursuant to a tender offer) using cash
proceeds received by the Company from the issuance of other Subordinated
Indebtedness permitted by Section 7.03(i); provided that, such applicable
Subordinated Indebtedness shall only qualify as “Temporary Indebtedness” for so
long as such cash proceeds qualify as “Temporary Excess Cash”.
“Threshold Amount” means $20,000,000.
“United States” and “U.S.” mean the United States of America.
“Unrestricted Subsidiaries” means all Subsidiaries of the Company other than the
Restricted Subsidiaries; provided that in no event shall the Unrestricted
Subsidiaries as a whole have more than $100,000 in total assets or more than
$100,000 in total revenues for a period of four consecutive fiscal quarters (in
each case) calculated as of the most recent four fiscal quarter period for which
the Lender has received the Required Financial Information; and if either such
threshold is exceeded, the Company shall immediately designate one or more such
Subsidiaries to be “Restricted Subsidiaries” and deliver to the Lender all
documents specified in Section 6.14 for such Subsidiaries, so that after giving
effect to such designation, the remaining Unrestricted Subsidiaries shall
satisfy such requirements; provided, however, that notwithstanding the
foregoing, the assets and revenues of Special Purpose Insurance Captives shall
not be taken into account for the purposes of determining the Company’s
compliance with, and its covenants relating to, the thresholds described in this
definition.
“U.S. Person” means any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.
“U.S. Special Resolution Regimes” has the meaning specified in Section 10.22.
“U.S. Tax Compliance Certificate” has the meaning specified in Section
3.01(e)(ii)(B)(III).
1.02 Other Interpretive Provisions. With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:
(a) The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
“include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.” The word “will” shall be construed to have the same
meaning and effect as the word “shall.” Unless the context requires otherwise,
(i) any definition of or reference to any agreement, instrument or other
document (including any Organization Document) shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), provided that, any reference to a defined term in any such agreement,
instrument or other document (including the Revolving Credit Agreement and the
Floorplan Credit Agreement) which has been terminated shall have the meaning set
forth in such document immediately prior to such termination, (ii) any reference
herein to any Person shall be construed to include such
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Person’s successors and assigns, (iii) the words “hereto,” “herein,” “hereof”
and “hereunder,” and words of similar import when used in any Loan Document,
shall be construed to refer to such Loan Document in its entirety and not to any
particular provision thereof, (iv) all references in a Loan Document to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, the Loan Document in
which such references appear, (v) any reference to any law shall include all
statutory and regulatory provisions consolidating, amending, replacing or
interpreting such law and any reference to any law or regulation shall, unless
otherwise specified, refer to such law or regulation as amended, modified or
supplemented from time to time, and (vi) the words “asset” and “property” shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
(b) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including;” the words “to” and
“until” each mean “to but excluding;” and the word “through” means “to and
including.”
(c) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.
1.03 Accounting Terms.
(a) Generally. All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP applied on
a consistent basis, as in effect from time to time, applied in a manner
consistent with that used in preparing the Audited Financial Statements, except
as otherwise specifically prescribed herein; provided that, all calculations of
financial covenants shall reflect the results of both continuing operations and
discontinued operations of the Company and its Subsidiaries, and in the event of
any such discontinued operations, the Company shall provide subtotals for each
of “continuing operations”, “discontinued operations” and “consolidated
operations”. Notwithstanding the foregoing, for purposes of determining
compliance with any covenant (including the computation of any financial
covenant) contained herein, Indebtedness of the Company and its Subsidiaries
shall be deemed to be carried at 100% of the outstanding principal amount
thereof and the effects of FASB ASC 825 on financial liabilities shall be
disregarded. In connection with the Company’s delivery of financial statements
hereunder, the Company shall deliver a reconciliation of the calculations of the
financial covenants before and after giving effect to the adjustments from FASB
ASC 825 described in this Agreement.
(b) Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either the Company or the Lender shall so request, the Lender and
the Company shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in GAAP; provided
that, until so amended, (i) such ratio or requirement shall continue to be
computed in accordance with GAAP prior to such change
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therein and (ii) the Company shall provide to the Lender financial statements
and other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP. Without
limiting the foregoing, for purposes of determining compliance with Section
7.11, leases shall continue to be classified and accounted for on a basis
consistent with that reflected in the Audited Financial Statements for all
purposes of this Agreement, notwithstanding any change in GAAP relating thereto,
unless the parties hereto shall enter into a mutually acceptable amendment
addressing such changes, as provided for above.
(c) Consolidation of Variable Interest Entities. All references herein to
consolidated financial statements of the Company and its Subsidiaries or to the
determination of any amount for the Company and its Subsidiaries on a
consolidated basis or any similar reference shall, in each case, be deemed to
include each variable interest entity that the Company is required to
consolidate pursuant to FASB ASC 810 as if such variable interest entity were a
Subsidiary as defined herein.
(d) Calculation of Consolidated EBITDAR, Consolidated Fixed Charges and
Consolidated Rental Expense. Consolidated EBITDAR shall be calculated for any
period by including the actual amount for such period, including the
Consolidated EBITDAR attributable to Acquisitions permitted hereunder and
occurring during such period and (to the extent otherwise included in
Consolidated Net Income) excluding the Consolidated EBITDAR attributable to
Permitted Dispositions of assets occurring during such period on a pro forma
basis for the period from the first day of the applicable period through the
date of the closing of each such permitted Acquisition or Permitted Disposition,
utilizing (i) where available or required pursuant to the terms of this
Agreement, historical audited and/or reviewed unaudited financial statements
obtained from the seller, broken down by fiscal quarter in the Company’s
reasonable judgment or (ii) unaudited financial statements (where no audited or
reviewed financial statements are required pursuant to the terms of this
Agreement) reviewed internally by the Company, broken down in the Company’s
reasonable judgment; provided, however, that (x) any such pro forma adjustment
of Consolidated EBITDAR shall reflect the Company’s and the Subsidiaries’ pro
forma rental payments related to the assets acquired in any applicable
Acquisition (and shall not reflect any rental expense payments of the applicable
seller), and (y) any such pro forma adjustment of Consolidated EBITDAR shall not
result in an increase of more than 10% of Consolidated EBITDAR prior to such
adjustment, unless the Company provides to the Lender (A) the supporting
calculations for such adjustment and (B) such other information as the Lender
may reasonably request to determine the accuracy of such calculations. For
purposes of determining “Consolidated Fixed Charges” for any period, the
Consolidated Interest Expense, Consolidated Principal Payments and Consolidated
Rental Expenses attributable to such Permitted Dispositions described above
during such period may, at the option of the Company and subject to the consent
of the Lender (which shall not be unreasonably withheld), be excluded therefrom.
1.04 Rounding. Any financial ratios required to be maintained by the Company
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other
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component, carrying the result to one place more than the number of places by
which such ratio is expressed herein and rounding the result up or down to the
nearest number (with a rounding-up if there is no nearest number).
1.05 Times of Day. Unless otherwise specified, all references herein to times of
day shall be references to Eastern time (daylight or standard, as applicable).
1.06 [Reserved].
1.07 [Reserved].
ARTICLE II
THE COMMITMENT AND CREDIT EXTENSION

2.01 Revolving Loan. Subject to the terms and conditions set forth herein, the
Lender agrees to make Advances to the Company from time to time in Dollars on
any Business Day during the Availability Period provided, that after giving
effect to any requested Advance, the aggregate initial principal amount of all
Advances made hereunder shall not exceed the Loan Cap in effect at the time of
the proposed Advance.
2.02 [Reserved]
2.03 [Reserved].
2.04 [Reserved].
2.05 Prepayments.
(a) Optional. The Company may, upon notice to the Lender pursuant to delivery to
the Lender of a Notice of Loan Prepayment, at any time or from time to time
voluntarily prepay the Loan in whole or in part without premium or penalty
subject to Section 3.06; provided that (i) such notice must be in a form
acceptable to the Lender and be received by the Lender not later than 11:00 a.m.
on the date of the prepayment; (ii) any prepayment of the Loan shall be in a
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof
or, in each case, if less, the entire principal amount thereof then outstanding.
Each such notice shall specify the date and amount of such prepayment. If such
notice is given by the Company, the Company shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein.
(b) Mandatory.
(i) The Company shall prepay the Loan as hereinafter provided in an aggregate
amount equal to 100% of the Net Cash Proceeds received by any Loan Party from
all Involuntary Dispositions with respect to Collateral within five (5) days of
the date of receipt of such Net Cash Proceeds with respect to such Involuntary
Disposition.
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(ii) The Company shall prepay the Loan in connection with a Property
Substitution or Prepayment Release in the amounts, and to the extent required,
pursuant to Section 2.19.
(iii) All prepayments under this Section 2.05(b) shall be without premium or
penalty, and shall be accompanied by interest on the principal amount prepaid
through the date of prepayment.
2.06 [Reserved].
2.07 Repayment of Loan. The Company shall pay to the Lender all principal and
interest not sooner paid on the Loan on the Maturity Date.
2.08 Interest.
(a) Interest Rate. The Loan and Advances hereunder shall bear interest at a rate
equal to 385 basis points (the “Increment”) above the 1-M LIBOR Index Rate*
(“1-M LIBOR Index Rate”).
(i) The interest rate will be increased or decreased by the same amounts as the
increase or decrease in the 1-M LIBOR Index Rate effective on the first day of
the next monthly billing period; and
(ii) Notwithstanding the foregoing, the 1-M LIBOR Index Rate is deemed to be .75
per annum if such rate was less than .75% per annum.
* The 1-M LIBOR Index Rate in effect for a monthly billing period will be the
arithmetic mean of the 1-Month LIBOR rate for the calendar days from and
including the 26th of the calendar month which is two months prior to the
applicable monthly billing period and ending with the 25th of the month
immediately preceding the applicable monthly billing period (the “Measurement
Period”). The 1-Month LIBOR rate applicable to any day on which no rate is
published will be the rate last quoted prior to such day.

The “1-Month LIBOR rate” means the per annum rate of interest for one month
deposits in U.S. Dollars for each day of the Measurement Period that appears on
the Bloomberg Screen US0001M Index (London Interbank Offered Rate administered
by the British Bankers’ Association, New York Stock Exchange Euronext or other
successor administrator for LIBOR) at approximately 11:00 a.m. London time, or
if such source becomes unavailable or there is no such successor, the per annum
rate of interest for one month deposits in U.S. Dollars for each day of the
Measurement Period obtained from such other commercially available source
providing quotations of LIBOR as Lender may designate.

The parties acknowledge that London Interbank Offered Rate (“LIBOR”) may be
phased out in the future.  In the event that Lender will no longer utilize a
LIBOR-based rate for this Loan, the “1-M LIBOR Index Rate” will be re-defined as
the successor base or reference rate applicable to this
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Loan designated by Lender in its reasonable discretion. In such event, the
Increment may also be adjusted by Lender so that the total interest rate paid by
Borrower immediately after the conversion from the LIBOR-based rate will
approximate the total interest rate paid by Borrower immediately prior to the
conversion. Borrower will be notified of these changes, which will be made
without requiring the necessity of an amendment to this Agreement.

(b) Accrual and Computation of Interest. Interest due and payable on the Loan:
(i) Accrues from the date of each Advance up to, but excluding, the date of
repayment of all Loan amounts;

(ii) Will be computed as follows:
(A) 360/360 method for each monthly payment where the interest period runs from
the first day of the month through the last day of the month, specifically:
[interest rate /12] x unpaid Principal balance
(B) 365/365 method for each monthly payment where the interest period runs from
a day other than the first day of the month through the last day of that month,
or from any day of the month through any day of that month that is not the last
day of that month ("Irregular Interest Period"), specifically:
[number of days in Irregular Interest Period / number of days in that month] x
[interest rate /12] x unpaid principal balance

(C) Interest due for any Irregular Interest Period that results from prepayment
will be calculated in the manner described in Paragraph III.C.2.b.ii above; and
(c) (i) If any amount of principal of the Loan or any portion thereof is not
paid when due (without regard to any applicable grace periods), whether at
stated maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws.
(ii) If any amount (other than principal of the Loan) payable by the Company
under any Loan Document is not paid when due (without regard to any applicable
grace periods), whether at stated maturity, by acceleration or otherwise, then
upon the request of the Lender, such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.
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(iii) Upon the request of the Lender, while any Event of Default exists (other
than as set forth in clauses (b)(i) and (b)(ii) above), the Company shall pay
interest on the principal amount of all outstanding Obligations hereunder at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.
(iv) Accrued and unpaid interest on past due amounts (including interest on past
due interest) shall be due and payable upon demand.
(d) Interest on the Loan shall be due and payable in arrears on each Interest
Payment Date applicable thereto and at such other times as may be specified
herein. Interest hereunder shall be due and payable in accordance with the terms
hereof before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law.
(e) Interest as shown on the billing statement prepared by the Lender will be
withdrawn by the Lender from the Company’s pre-designated account on the due
date designated in the billing statement or within five (5) calendar days after
the due date (at the Lender’s discretion) via ACH transaction or other
electronic means. The Company will maintain sufficient funds in the account to
cover the withdrawals for interest.
2.09 Fees.
(a) Loan Fees. The Company shall pay to the Lender a loan fees in the amounts of
(i) the product of one quarter of one percent (0.25%) multiplied by the Loan Cap
in effect on the date hereof, and (ii) upon increase in the Loan Cap as a result
of subsequent increases in Margined Collateral Value, the product of one quarter
of one percent (0.25%) multiplied by the amount of such increase in the Loan
Cap.
(b) Usage Fee. The Company shall pay to the Lender a fee, payable quarterly, in
arrears, on a calendar year basis, in an amount equal to one quarter of one
percent (0.25%) per annum of the average unused portion of the Loan, as
determined by the Lender.
2.10 [Reserved].
2.11 Evidence of Debt. The Advance made by the Lender shall be evidenced by one
or more accounts or records maintained by the Lender in the ordinary course of
business. The accounts or records maintained by the Lender shall be conclusive
absent manifest error of the amount of the Advances made by the Lender to the
Company and the interest and payments thereon. Any failure to so record or any
error in doing so shall not, however, limit or otherwise affect the obligation
of the Company hereunder to pay any amount owing with respect to the Obligations
of the Lender.
2.12 Payments Generally. All payments to be made by the Company shall be made
free and clear of and without condition or deduction for any counterclaim,
defense, recoupment or setoff. Except as otherwise expressly provided herein,
all payments by the Company hereunder shall be made to Lender at the Lender’s
Office in Dollars and in immediately available funds not later than 2:00 p.m. on
the date specified herein. All payments received by the Lender after 2:00
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p.m. shall be deemed received on the next succeeding Business Day and any
applicable interest or fee shall continue to accrue. If any payment to be made
by the Company shall come due on a day other than a Business Day, payment shall
be made on the next following Business Day, and such extension of time shall be
reflected in computing interest or fees, as the case may be.
2.13 [Reserved].
2.14 [Reserved].
2.15 [Reserved].
2.16 [Reserved].
2.17 Security.
(a) Security. As security for the full and timely payment and performance of all
Obligations, the Company shall, and shall cause all other Loan Parties to, on or
before the Closing Date, do or cause to be done all things reasonably necessary
in the opinion of the Lender and its counsel to grant to the Lender a duly
perfected security interest in all Collateral subject to no prior Lien or other
encumbrance except as expressly permitted hereunder or under the other Loan
Documents and with the priority identified in the Security Instruments. In
addition, and without limiting the foregoing, the Company shall take and cause
each other Loan Party to take such further action, and deliver or cause to be
delivered such further documents and instruments, as required by the Security
Instruments or otherwise as the Lender may reasonably request to create, perfect
and maintain the effectiveness and priority of the Liens contemplated by this
Section 2.17 and each of the Security Instruments.
(b) Further Assurances. At the request of the Lender from time to time, the
Company will or will cause all other Loan Parties, as the case may be, to
execute, by their respective Responsible Officers, alone or with the Lender, any
certificate, instrument, financing statement, control agreement, statement or
document, or to procure any certificate, instrument, statement or document or to
take such other action (and pay all related costs) which the Lender reasonably
deems necessary from time to time to create, continue or preserve the Liens in
Collateral (and the perfection and priority thereof) of the Lender contemplated
hereby and by the other Loan Documents.
2.18 Additional Mortgaged Properties.
(a) Additional Mortgaged Properties. Following the Closing Date, addition of
tracts of real property owned by the Company or any of its Subsidiaries as
Mortgaged Properties (each an “Additional Mortgaged Property”) shall be subject
to the satisfaction of the Additional Mortgaged Property Requirements.
(b) Additional Mortgaged Property Requirements. The addition of any Additional
Mortgaged Property shall be subject to the following conditions precedent
(collectively, the “Additional Mortgaged Property Requirements”):
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(i) the Lender shall have received at least sixty (60) days prior written notice
requesting the real property be added as an Additional Mortgaged Property;
(ii) the Lender shall have received a FIRREA-conforming appraisal for such
property of the current value of such property as of a date that is within 12
months before the date of the addition of such real property as an Additional
Mortgaged Property, which appraisal shall be in form and substance reasonably
acceptable to the Lender;
(iii) the Lender shall have received (y) the Mortgaged Property Support
Documents with respect to such proposed Additional Mortgaged Property and (z) an
updated Schedule 5.20(c) that is true, correct and complete after giving effect
to the addition of such Additional Mortgaged Property;
(iv) the Lender shall have received evidence that all insurance required to be
maintained pursuant to the Loan Documents has been obtained and is in effect,
including endorsements naming the Lender as an additional insured and mortgagee,
as the case may be, on all such insurance policies maintained with respect to
such proposed Additional Mortgaged Property and the new Loan Parties following
the completion of the addition of such Additional Mortgaged Property as a
Mortgaged Property;
(v) unless waived by the Lender, the Company shall have paid all expenses of the
Lender in connection with the addition of such Additional Mortgaged Property,
including (i) real property diligence related expenses, including appraisal and
environmental assessment fees, and (ii) fees, charges and disbursements of
counsel to the Lender to the extent invoiced prior to or on the date of the
addition of such Additional Mortgaged Property, plus such additional amounts of
such fees, charges and disbursements as shall constitute its reasonable estimate
of such fees, charges and disbursements incurred or to be incurred by it through
the closing proceedings with respect to the addition of such Additional
Mortgaged Property (provided that such estimate shall not thereafter preclude a
final settling of accounts between the Company and the Lender);
(vi) any Subsidiary of the Company that owns such Additional Mortgaged Property
or leases or operates a vehicle dealership at such Additional Mortgaged Property
shall have complied with the requirements of Section 6.14; and
(vii) the Additional Mortgaged Property shall otherwise be reasonably acceptable
to the Lender.
(c) Flood Requirements. Notwithstanding anything to the contrary contained
herein, if at any time Additional Mortgaged Property is to be pledged as a
Mortgaged Property hereunder, the Lender shall not enter into, accept or record
any Mortgage in respect of such Additional Mortgaged Property until the Lender
shall have received written confirmation from the Lender (which may be delivered
via electronic mail) that flood
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insurance compliance has been completed by the Lender with respect to such
Additional Mortgaged Property.
2.19 Substitution and Release of Mortgaged Property.
(a) Release. The Company may obtain the release of one or more Mortgaged
Properties during the term of this Agreement (each herein called a “Release
Property”) by (i) substituting such Release Property with a tract of owner
occupied real property owned by the Company or one of its Subsidiaries (a
“Substitute Property”) with respect to such Release Property (each such release
and substitution herein called, a “Property Substitution.”), subject to the
satisfaction of the Substitution Requirements, or (ii) making a prepayment of
the Loan in the amount of the Release Price applicable to such Mortgaged
Property, which prepayment shall be applied to the remaining principal balance
of the Loan (including any payment due on the Maturity Date) (each such release,
a “Prepayment Release”).
(b) Substitute Property. Each Property Substitution shall be subject to the
satisfaction of the following conditions precedent (collectively, the
“Substitution Requirements”):
(i) The Lender shall have received at least sixty (60) days prior written notice
requesting the Property Substitution;
(ii) The Substitute Property shall (A) have an Appraised Value no less than the
Initial Appraised Value of the applicable Release Property (or, if the
Substitute Property has an Appraised Value of less than the Initial Appraised
Value of the applicable Release Property, a prepayment of the Loan in an amount
equal to 85% of the amount by which the Initial Appraised Value of the
applicable Release Property exceeds the Appraised Value of the Substitute
Property (the “Partial Release Price”), which Partial Release Price shall be due
and payable at the time of Property Substitution, and shall have been received
by the Lender, in immediately available funds, as a condition to such Property
Substitution); provided that if such Substitute Property does not have material
improvements constructed thereon, such Substitute Property shall have an
Appraised Value of an amount such that 75% of Appraised Value of such Substitute
Property equals 85% of the Initial Appraised Value of the applicable Release
Property (or, if less, a prepayment of the Loan in an amount equal to 85% of
such difference shall be due and payable at the time of Property Substitution,
and shall have been received by the Lender, in immediately available funds, as a
condition to such Property Substitution), and (B) be otherwise acceptable to the
Lender.
(iii) The Lender shall have received (y) the Mortgaged Property Support
Documents with respect to such Substitute Property and (z) an updated Schedule
5.20(c) that is true, correct and complete after giving effect to such Property
Substitution;
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(iv) The representations and warranties of the Company and each other Loan Party
contained in Article V or any other Loan Document, or which are contained in any
document furnished at any time under or in connection herewith or therewith,
shall be true and correct on and as of the date of such Property Substitution,
except to the extent that such representations and warranties specifically refer
to an earlier date, in which case they shall be true and correct as of such
earlier date, and except that for purposes of this Section 4.02, the
representations and warranties contained in subsections (a) and (b) of Section
5.05 shall be deemed to refer to the most recent statements furnished pursuant
to clauses (a) and (b), respectively, of Section 6.01;
(v) No Default or Event of Default shall exist, or would result from such
Property Substitution;
(vi) The Lender shall have received evidence that all insurance required to be
maintained pursuant to the Loan Documents has been obtained and is in effect,
including endorsements naming the Lender as an additional insured and mortgagee,
as the case may be, on all such insurance policies maintained with respect to
the Substitute Property and the new Loan Parties following the completion of the
Property Substitution;
(vii) unless waived by the Lender, the Company shall have paid all expenses of
the Lender in connection with such Property Substitution, including (i) real
property diligence related expenses, including appraisal and environmental
assessment fees, and (ii) fees, charges and disbursements of counsel to the
Lender to the extent invoiced prior to or on the date of such Property
Substitution, plus such additional amounts of such fees, charges and
disbursements as shall constitute its reasonable estimate of such fees, charges
and disbursements incurred or to be incurred by it through the closing
proceedings with respect to such Property Substitution (provided that such
estimate shall not thereafter preclude a final settling of accounts between the
Company and the Lender);
(viii) any Subsidiary of the Company that owns such Substitute Property or
leases or operates a vehicle dealership at such Substitute Property shall have
complied with the requirements of Section 6.14; and
(ix) the Property Substitution and the Substitute Property shall otherwise be
reasonably acceptable to the Lender.
(c) Prepayment Release. Any Prepayment Release shall be subject to (i) receipt
by the Lender of the Release Price, in immediately available funds, (ii) no
Default or Event of Default shall exist, or would result from such Prepayment
Release, and (iii) receipt of an updated Schedule 5.20(c) that is true, correct
and complete after giving effect to the release of such Release Property.
(d) Further Assurances. After giving effect to any Property Substitution or
Prepayment Release, the Lender agrees (at the expense of the Company) to
execute, as
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applicable, and deliver to the Company any such mortgage releases and other
similar discharge or release documents, as are reasonably requested and
necessary to release, as of record, the security interests in favor of the
Lender under the Loan Documents in the applicable Release Property and each
Subsidiary Guarantor that, after giving effect to such Property Substitution or
Prepayment Release, is no longer required to be a Subsidiary Guarantor pursuant
to Section 6.14.
(e) Flood Requirements. Notwithstanding anything to the contrary contained
herein, if at any time Substitute Property is to be pledged as a Mortgaged
Property hereunder, the Lender shall not enter into, accept or record any
Mortgage in respect of such Substitute Property until the Lender shall have
received written confirmation that flood insurance compliance has been completed
by the Lender with respect to such Substitute Property.
(f) Pre-Approved Releases. Notwithstanding the foregoing provisions of this
Section 2.19, the Lender shall release the following properties from the lien of
its Mortgage upon request of the Company without the requirement that the
Company provide Substitue Property or that the release or the Substitute
Property be approved by the Lender as set forth above: (i) former EchoPark
Dealership located at 9575 E. 40th Avenue, Stapleton, Colorado; (ii) former
EchoPark Dealership located at 9525 E. 40th Avenue, Stapleton, Colorado; and
(iii) former EchoPark Dealership located at 13412 Coal Mine Avenue, Littleton,
Colorado.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY

3.01 Taxes.
(a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of
Taxes.
(i) Any and all payments by or on account of any obligation of any Loan Party
hereunder or under any Loan Document shall be made without deduction or
withholding for any Taxes, except as required by applicable Laws. If any
applicable Laws (as determined in the good faith discretion of the Lender)
require the deduction or withholding of any Tax from any such payment by the
Lender or a Loan Party, then the Lender or such Loan Party shall be entitled to
make such deduction or withholding, upon the basis of the information and
documentation to be delivered pursuant to subsection (e) below.
(ii) If any Loan Party or the Lender shall be required by the Code to withhold
or deduct any Taxes, including both United States Federal backup withholding and
withholding taxes, from any payment, then (A) the Lender shall withhold or make
such deductions as are determined by the Lender to be required based upon the
information and documentation it has received pursuant to subsection (e) below,
(B) the Lender shall timely pay the full amount withheld or deducted to
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the relevant Governmental Authority in accordance with the Code, and (C) to the
extent that the withholding or deduction is made on account of Indemnified
Taxes, the sum payable by the applicable Loan Party shall be increased as
necessary so that after any required withholding or the making of all required
deductions (including deductions applicable to additional sums payable under
this Section 3.01) the applicable Recipient receives an amount equal to the sum
it would have received had no such withholding or deduction been made.
(iii) If any Loan Party or the Lender shall be required by any applicable Laws
other than the Code to withhold or deduct any Taxes from any payment, then (A)
such Loan Party or the Lender, as required by such Laws, shall withhold or make
such deductions as are determined by it to be required based upon the
information and documentation it has received pursuant to subsection (e) below,
(B) such Loan Party or the Lender, to the extent required by such Laws, shall
timely pay the full amount withheld or deducted to the relevant Governmental
Authority in accordance with such Laws, and (C) to the extent that the
withholding or deduction is made on account of Indemnified Taxes, the sum
payable by the applicable Loan Party shall be increased as necessary so that
after any required withholding or the making of all required deductions
(including deductions applicable to additional sums payable under this Section
3.01) the applicable Recipient receives an amount equal to the sum it would have
received had no such withholding or deduction been made.
(b) Payment of Other Taxes by the Company. Without limiting the provisions of
subsection (a) above, the Company shall timely pay to the relevant Governmental
Authority in accordance with applicable law, or at the option of the Lender
timely reimburse it for the payment of, any Other Taxes.
(c) Tax Indemnifications. (i) The Company shall, and does hereby, indemnify each
Recipient, and shall make payment in respect thereof within 10 days after demand
therefor, for the full amount of any Indemnified Taxes (including Indemnified
Taxes imposed or asserted on or attributable to amounts payable under this
Section 3.01) payable or paid by such Recipient or required to be withheld or
deducted from a payment to such Recipient, and any penalties, interest and
reasonable expenses arising therefrom or with respect thereto, whether or not
such Indemnified Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to the Company by the Lender shall be conclusive absent
manifest error. The Company shall, and does hereby, indemnify the Lender and
shall make payment in respect thereof within 10 days after demand therefor, for
any amount which Lender for any reason fails to pay indefeasibly to the Lender
as required pursuant to Section 3.01(c)(ii) below.
(d) Evidence of Payments. Upon request by the Company or the Lender, as the case
may be, after any payment of Taxes by the Company or by the Lender to a
Governmental Authority as provided in this Section 3.01, the Company shall
deliver to the Lender or the Lender shall deliver to the Company, as the case
may be, the original or a certified copy of a receipt issued by such
Governmental Authority evidencing such payment,
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a copy of any return required by Laws to report such payment or other evidence
of such payment reasonably satisfactory to the Company or the Lender, as the
case may be.
(e) [Reserved].
(f) [Reserved]
(g) Survival. Each party’s obligations under this Section 3.01 shall survive any
assignment of rights by, or the replacement of the Lender, the termination of
the Commitment and the repayment, satisfaction or discharge of all other
Obligations.
3.02 [Reserved].
3.03 [Reserved].
3.04 Increased Costs .
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, the Lender
(except for any reserve requirement reflected in the LIBOR Reserve Percentage);
or
(ii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B)
Taxes described in clauses (b) through (d) of the definition of Excluded Taxes
and (C) Connection Income Taxes) on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto.
(b) Capital Requirements. If the Lender determines that any Change in Law
affecting the Lender or any Lending Office of the Lender or the Lender’s holding
company, if any, regarding capital or liquidity requirements has or would have
the effect of reducing the rate of return on the Lender’s capital or on the
capital of the Lender’s holding company, if any, as a consequence of this
Agreement, the Commitment of the Lender or the Loan, to a level below that which
the Lender or the Lender’s holding company could have achieved but for such
Change in Law (taking into consideration the Lender’s policies and the policies
of the Lender’s holding company with respect to capital adequacy), then from
time to time the Company will pay to the Lender, such additional amount or
amounts as will compensate the Lender or the Lender’s holding company for any
such reduction suffered.
(c) Certificates for Reimbursement. A certificate of the Lender setting forth
the amount or amounts necessary to compensate the Lender or its holding company,
as the case may be, as specified in subsection (a) or (b) of this Section and
delivered to the Company shall be conclusive absent manifest error. The Company
shall pay the Lender the amount shown as due on any such certificate within 10
days after receipt thereof.
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(d) Delay in Requests. Failure or delay on the part of the Lender to demand
compensation pursuant to the foregoing provisions of this Section shall not
constitute a waiver of the Lender’s right to demand such compensation, provided
that the Company shall not be required to compensate the Lender pursuant to the
foregoing provisions of this Section for any increased costs incurred or
reductions suffered more than nine months prior to the date that the Lender,
notifies the Company of the Change in Law giving rise to such increased costs or
reductions and of the Lender’s intention to claim compensation therefor (except
that, if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the nine-month period referred to above shall be extended to
include the period of retroactive effect thereof).
3.05 [Reserved].
3.06 [Reserved].
3.07 Survival. All of the Company’s obligations under this Article III shall
survive termination of the Aggregate Commitments, repayment of all other
Obligations hereunder, and resignation of the Lender.
ARTICLE IV
CONDITIONS PRECEDENT TO EFFECTIVENESS

4.01 Conditions Precedent to Effectiveness. The effectiveness of this Agreement
is subject to satisfaction or waiver of the following conditions precedent:
(a) The Lender’s receipt of the following, each of which shall be originals or
telecopies (followed promptly by originals) unless otherwise specified, each
properly executed by a Responsible Officer of the signing Loan Party, each dated
the Closing Date (or, in the case of certificates of governmental officials, a
recent date before the Closing Date) and each in form and substance satisfactory
to the Lender:
(i) executed counterparts of (A) this Agreement, and (B) the Subsidiary
Guaranty;
(ii) the Note executed by the Company in favor of the Lender;
(iii) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Loan Party as the
Lender may require evidencing the identity, authority and capacity of each
Responsible Officer thereof authorized to act as a Responsible Officer in
connection with this Agreement and the other Loan Documents to which such Loan
Party is a party;
(iv) such documents and certifications as the Lender may reasonably require to
evidence that each Loan Party is duly organized or formed, and that each Loan
Party is validly existing, in good standing and qualified to engage in business
in the respective jurisdictions specified in Schedule 4.01, which includes each
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jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification, except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect;
(v) a favorable opinion of Parker Poe Adams & Bernstein LLP, counsel to the Loan
Parties, addressed to the Lender in form and substance acceptable to the Lender
(which shall include matters of Delaware, Tennessee, Texas, Georgia, California,
Colorado, South Carolina, Florida and Federal Law) and such other matters
concerning the Loan Parties and the Loan Documents as the Lender may reasonably
request;
(vi) a favorable opinion of local counsel to the Loan Parties in Delaware,
Tennessee, Texas, Georgia, California, Colorado, South Carolina and Florida,
addressed to the Lender in form and substance satisfactory to the Lender;
(vii) a certificate of a Responsible Officer of the Company either (A) attaching
copies of all consents, licenses and approvals required in connection with the
execution, delivery and performance by such Loan Party and the validity against
such Loan Party of the Loan Documents to which it is a party, and such consents,
licenses and approvals shall be in full force and effect, or (B) stating that no
such consents, licenses or approvals are so required;
(viii) a certificate signed by a Responsible Officer of the Company certifying
that (A) the representations and warranties of the Company and each other Loan
Party contained in Article V or any other Loan Document, or which are contained
in any document furnished at any time under or in connection herewith or
therewith, shall be true and correct on and as of the Closing Date, except to
the extent that such representations and warranties specifically refer to an
earlier date, in which case they shall be true and correct as of such earlier
date, (B) no Default or Event of Default shall exist, and (C) that there has
been no event or circumstance since the date of the Audited Financial Statements
that has had or could be reasonably expected to have, either individually or in
the aggregate, a Material Adverse Effect;
(ix) a certificate signed by the chief executive officer, chief financial
officer, treasurer, chief accounting officer or other Responsible Officer of the
Company certifying that each Loan Party is Solvent, after giving effect to this
Agreement and the other Loan Documents and the Indebtedness pursuant hereto and
thereto;
(x) (A) a duly completed preliminary Compliance Certificate as of the last day
of the fiscal quarter of the Company ended on March 31, 2020, signed by a
Responsible Officer of the Company and (B) a calculation of the Loan Cap as of
the Closing Date;
(xi) evidence that all insurance required to be maintained pursuant to the Loan
Documents has been obtained and is in effect, including endorsements naming
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the Lender as an additional insured and loss payee, as the case may be, on all
such insurance policies maintained with respect to properties of the Company or
any Loan Party constituting part of the Collateral;
(xii) Mortgaged Property Support Documents with respect to the Mortgaged
Properties;
(xiii) executed counterparts of an environmental indemnity agreement in form and
substance reasonably acceptable to the Lender, with respect to the Mortgaged
Properties;
(xiv) forecasts (including assumptions) prepared by the management of the
Company of consolidated balance sheets, income statements and cash flow
statements of the Company and its Subsidiaries in form and substance reasonably
satisfactory to the Lender through fiscal year end 2023;
(xv) upon the reasonable request of the Lender, the Company shall have provided
to the Lender, and the Lender shall be reasonably satisfied with, the
documentation and other information so requested in connection with applicable
“know your customer” and anti-money-laundering rules and regulations, including,
without limitation, the Patriot Act, and any Loan Party that qualifies as a
“legal entity customer” under the Beneficial Ownership Regulation shall have
delivered to the Lender that so requests, a Beneficial Ownership Certification
in relation to such Loan Party;
(xvi)  (A) the audited consolidated financial statements of the Company and its
subsidiaries for the fiscal year ended December 31, _____, and (B) the
internally-prepared quarterly financial statements of the Company and its
subsidiaries on a consolidated basis for each fiscal quarter ending at least 45
days prior to the Closing Date and (C) such other financial information as the
Lender may reasonably request; and
(xvii) such other assurances, certificates, documents, consents or opinions as
the Lender reasonably may require.
(b) Any upfront fees or other fees required to be paid to the Lender on or
before the Closing Date pursuant to any Loan Document or the Existing Credit
Agreement shall have been paid.
(c) Unless waived by the Lender, the Company shall have paid all expenses of the
Lender owed pursuant to the Fee Letter, including (i) real property diligence
related expenses, including appraisal fees, and (ii) the fees, charges and
disbursements of counsel to the Lender to the extent invoiced prior to or on the
Closing Date, plus such additional amounts of such fees, charges and
disbursements as shall constitute its reasonable estimate of such fees, charges
and disbursements incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter preclude a final
settling of accounts between the Company and the Lender).
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Without limiting the generality of the provisions of Section 9.03, for purposes
of determining compliance with the conditions specified in this Section 4.01,
the Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with, each document or other matter required hereunder to be consented
to or approved by or acceptable or satisfactory to the Lender.
4.02 Conditions to all Advances. The obligation of the Lender to honor any
request for an Advance is subject to the following conditions precedent:
(a) The representations and warranties of the Company and each other Loan Party
contained in Article V or any other Loan Document, or which are contained in any
document furnished at any time under or in connection herewith or therewith,
shall be true and correct on and as of the date of such Advance, except to the
extent that such representations and warranties specifically refer to an earlier
date, in which case they shall be true and correct as of such earlier date, and
except that for purposes of this Section 4.02, the representations and
warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed
to refer to the most recent statements furnished pursuant to clauses (a) and
(b), respectively, of Section 6.01.
(b) No Default or Event of Default shall exist, or would result from such
proposed Advance or from the application of the proceeds thereof.
(c) The Lender shall have received a request for an Advance in accordance with
the requirements hereof.
Each request for an Advance submitted by the Company shall be deemed to be a
representation and warranty that the conditions specified in Sections 4.02(a)
and (b) have been satisfied on and as of the date of the applicable Advance.
ARTICLE V
REPRESENTATIONS AND WARRANTIES

The Company represents and warrants to the Lender that:
5.01 Existence, Qualification and Power; Compliance with Laws. Each Loan Party
and each Subsidiary thereof (a) is duly organized or formed, validly existing
and, as applicable, in good standing under the Laws of the jurisdiction of its
incorporation or organization, (b) has all requisite power and authority and all
franchises and all requisite governmental licenses, authorizations, consents and
approvals to (i) own or lease its assets and carry on its business and (ii)
execute, deliver and perform its obligations under the Loan Documents to which
it is a party, (c) is duly qualified and is licensed and, as applicable, in good
standing under the Laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification or license, and (d) is in compliance with all Laws; except in each
case referred to in clause (b)(i), (c) or (d), to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect.
5.02 Authorization; No Contravention. The execution, delivery and performance by
each Loan Party of each Loan Document to which such Person is party, have been
duly authorized
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by all necessary corporate or other organizational action, and do not and will
not (a) contravene the terms of any of such Person’s Organization Documents; (b)
conflict with or result in any breach or contravention of, or the creation of
any Lien under, or require any payment to be made under (i) any Contractual
Obligation to which such Person is a party or affecting such Person or the
properties of such Person or any of its Subsidiaries or (ii) any order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which such Person or its property is subject; or (c) violate any Law. Each
Loan Party and each Subsidiary thereof is in compliance with all Contractual
Obligations referred to in clauses (b) and (c), except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect.
5.03 Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document (other than
(i) any such filing necessary or advisable to perfect in favor of the Lender,
the Liens on the Collateral and (ii) any such approval, consent, exemption,
authorization, other action, notice or filing that has been obtained, taken,
given or made and is in full force and effect), except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect.
5.04 Binding Effect. This Agreement has been, and each other Loan Document, when
delivered hereunder, will have been, duly executed and delivered by each Loan
Party that is party thereto. This Agreement constitutes, and each other Loan
Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms.
5.05 Financial Statements; No Material Adverse Effect; No Internal Control
Event.
(a) The Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present the financial condition of the
Company and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other liabilities,
direct or contingent, of the Company and its Subsidiaries as of the date
thereof, including liabilities for taxes, material commitments and Indebtedness.
(b) Intentionally Omitted.
(c) Since the date of the Audited Financial Statements, there has been no event
or circumstance, either individually or in the aggregate, that has had or could
reasonably be expected to have a Material Adverse Effect.
(d) To the Company’s best knowledge, no Internal Control Event, exists or has
occurred since the date of the Audited Financial Statements that has resulted in
or could reasonably be expected to result in a misstatement in any material
respect, in any financial information delivered or to be delivered to the
Lender, of (x) covenant compliance
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calculations provided hereunder or (y) the assets, liabilities, financial
condition or results of operations of the Company and its Subsidiaries on a
consolidated basis.
5.06 Litigation. There are no actions, suits, proceedings, claims or disputes
pending or, to the knowledge of the Company after due and diligent
investigation, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, by or against the Company or any of its
Subsidiaries or against any of their properties (including any Mortgaged
Property) or revenues that (a) purport to affect or pertain to this Agreement or
any other Loan Document, or any of the transactions contemplated hereby, or (b)
if determined adversely, could reasonably be expected to have a Material Adverse
Effect. Schedule 5.06 (as supplemented by any written notices provided by the
Company after the Closing Date pursuant to Section 6.02(a)) sets forth all
actions, suits, proceedings, claims or disputes pending, or to the knowledge of
the Company after due and diligent investigation, threatened or contemplated, at
law, in equity, in arbitration or before any Governmental Authority seeking
damages or other remedies in excess of the Threshold Amount or which if
determined adversely, could reasonably be expected to have a Material Adverse
Effect.
5.07 No Default. Neither the Company nor any Subsidiary is in default under or
with respect to any Contractual Obligation that could, either individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. No
Default has occurred and is continuing or would result from the consummation of
the transactions contemplated by this Agreement or any other Loan Document.
5.08 Ownership of Property. Each of the Company and each Subsidiary has good
record and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary or used in the ordinary conduct of its business
(including, good record and marketable title in fee simple to the Mortgaged
Properties), except for such defects in title as could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. The
Collateral is subject to no Liens, other than Liens permitted by Section 7.01.
5.09 Environmental Compliance.
(a) The Company and its Subsidiaries conduct in the ordinary course of business
a review of the effect of existing Environmental Laws and any material claims
alleging potential liability or responsibility for violation of any
Environmental Law on their respective businesses, operations and properties, and
as a result thereof the Company has reasonably concluded that such Environmental
Laws and claims could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(b) Each of the Mortgaged Properties and all operations at the Mortgaged
Properties are in compliance with all applicable Environmental Laws, and there
is no violation of any Environmental Law with respect to the Mortgaged
Properties, and there are no conditions relating to the Mortgaged Properties
that could give rise to any Environmental Liability, except, in each case, as
could not reasonably be expected to have a Material Adverse Effect. There are no
pending or, to the best knowledge of the Company, threatened claims or
proceedings under Environmental Laws, including any such claims for liabilities
under CERCLA relating to the disposal of Hazardous Materials, against any
Mortgaged Property, or against any Loan Party with respect to any Mortgaged
Property, except to the
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extent that the aggregate effect of all such claims and proceedings could not
reasonably be expected to have a Material Adverse Effect. There are no facts,
circumstances, conditions or occurrences on any Mortgaged Property that, to the
best knowledge of the Company, could reasonably be expected (i) to form the
basis of any Environmental Liability against any Loan Party or any Mortgaged
Property, or (ii) to cause any Mortgaged Property to be subject to any
restrictions on the ownership, occupancy, use or transferability of such
Mortgaged Property by the Loan Parties under any applicable Environmental Law,
except to the extent that the aggregate effect of such facts, circumstances,
conditions or occurrences could not reasonably be expected to have a Material
Adverse Effect. Hazardous Materials have not been transported or disposed of
from the Mortgaged Properties, or generated, treated, stored or disposed of at,
on or under any of the Mortgaged Properties or any other location, in each case
by or on behalf the Loan Parties in violation of, or in a manner that would be
reasonably likely to give rise to liability under, any applicable Environmental
Law, except as could not reasonably be expected to have a Material Adverse
Effect. Hazardous Materials have not been released on or from any Mortgaged
Property where such release, individually or in the aggregate, may reasonably be
expected to have a Material Adverse Effect.
5.10 Insurance. The properties of the Company and its Subsidiaries are insured
with financially sound and reputable insurance companies not Affiliates of the
Company, in such amounts, with such deductibles and covering such risks as (i)
are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Company or the applicable Subsidiary
operates and (ii) satisfy the requirements of Section 6.07 and the Security
Instruments.
5.11 Taxes. The Company and its Subsidiaries have filed all Federal, state and
other material tax returns and reports required to be filed, and have paid all
Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings diligently conducted and for which adequate
reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against the Company or any Subsidiary that would, if made, have a
Material Adverse Effect. Neither any Loan Party nor any Subsidiary thereof is
party to any tax sharing agreement.
5.12 ERISA Compliance.
(a) Each Plan, and to the knowledge of the Company, each Multiemployer Plan and
Multiple Employer Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Federal or state Laws. Each
Pension Plan which is intended to be a qualified plan under Section 401(a) of
the Code has received a favorable determination letter from the Internal Revenue
Service to the effect that the form of such Pension Plan is qualified under
Section 401(a) of the Code with respect to all plan document qualification
requirements for which the applicable remedial amendment period has closed and
that the trust related thereto has been determined to be exempt from federal
income tax under Section 501(a) of the Code or an application for such a letter
is currently being processed by the Internal Revenue Service. To the best
knowledge of the Company, nothing has occurred that would prevent or cause the
loss of such tax-qualified status.
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(b) There are no pending or, to the best knowledge of the Company, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan or to the knowledge of the Company, any Multiemployer Plan
or Multiple Employer Plan that could reasonably be expected to have a Material
Adverse Effect. Neither the Company nor any ERISA Affiliate has engaged in any
prohibited transaction or violation of the fiduciary responsibility rules with
respect to any Plan, Multiemployer Plan or Multiple Employer Plan that has
resulted or could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred with respect to any Pension Plan, or to the
knowledge of the Company, any Multiemployer Plan or Multiple Employer Plan, and
neither the Company nor any ERISA Affiliate is aware of any fact, event or
circumstance that could reasonably be expected to constitute or result in an
ERISA Event; (ii) the Company and each ERISA Affiliate has met all applicable
requirements under the Pension Funding Rules in respect of each Pension Plan,
and no waiver of the minimum funding standards under the Pension Funding Rules
has been applied for or obtained; (iii) as of the most recent valuation date for
any Pension Plan, the funding target attainment percentage (as defined in
Section 430(d)(2) of the Code) is 60% or higher and neither the Company nor any
ERISA Affiliate knows of any facts or circumstances which would cause the
funding target attainment percentage for any such plan to drop below 60% as of
the most recent valuation date; (iv) neither the Company nor any ERISA Affiliate
has incurred any liability to the PBGC other than for the payment of premiums,
and there are no premium payments which have become due which are unpaid; and
(v) neither the Company nor any ERISA Affiliate has engaged in a transaction
that could be subject to Section 4069 or Section 4212(c) of ERISA.
5.13 Subsidiaries; Equity Interests. As of the Closing Date, the Company has no
Subsidiaries other than those specifically disclosed in Part (a) of Schedule
5.13, and all of the outstanding Equity Interests in such Subsidiaries have been
validly issued, are fully paid and nonassessable and are owned by the Company or
its Subsidiaries in the amounts specified on Part (a) of Schedule 5.13 free and
clear of all Liens. The Company has no equity investments in any other
corporation or entity other than those specifically disclosed in Part(b) of
Schedule 5.13. All of the outstanding Equity Interests in the Company have been
validly issued and are fully paid and nonassessable.
5.14 Margin Regulations; Investment Company Act.
(a) The Company is not engaged and will not engage, principally or as one of its
important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the FRB), or extending credit for
the purpose of purchasing or carrying margin stock.
(b) None of the Company, any Person Controlling the Company, or any Subsidiary
is or is required to be registered as an “investment company” under the
Investment Company Act of 1940.
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5.15 Disclosure. The Company has disclosed to the Lender all agreements,
instruments and corporate or other restrictions to which it or any of its
Subsidiaries is subject, and all other matters known to it, that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect. No report, financial statement, certificate or other information
furnished (whether in writing or orally) by or on behalf of any Loan Party to
the Lender in connection with the transactions contemplated hereby and the
negotiation of this Agreement or delivered hereunder or under any other Loan
Document (in each case, as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Company represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.
5.16 Compliance with Laws. Each of the Company and each Subsidiary is in
compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
5.17 Intellectual Property; Licenses, Etc. The Company and its Subsidiaries own,
or possess the right to use, all of the trademarks, service marks, trade names,
copyrights, patents, patent rights, franchises, licenses and other intellectual
property rights (collectively, “IP Rights”) that are reasonably necessary for
the operation of their respective businesses, without conflict with the rights
of any other Person, except where the failure to do so, either individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect. To the best knowledge of the Company, no slogan or other advertising
device, product, process, method, substance, part or other material now
employed, or now contemplated to be employed, by the Company or any Subsidiary
infringes upon any rights held by any other Person. No claim or litigation
regarding any of the foregoing is pending or, to the best knowledge of the
Company, threatened, which, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
5.18 Books and Records. Each of the Company and each Subsidiary maintains proper
books of record and account, in which full, true and correct entries in
conformity with GAAP consistently applied have been made of all financial
transactions and matters involving the assets and business of the Company or
such Subsidiary, as the case may be.
5.19 [Reserved].
5.20 Collateral; Mortgaged Properties; Leases.
(a) The provisions of each of the Security Instruments are effective to create
in favor of the Lender, a legal, valid and enforceable, perfected security
interest (with the priority described therein) in all right, title and interest
of each applicable Loan Party in the Collateral described therein, except as
otherwise permitted hereunder.
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(b) No Contractual Obligation to which any Loan Party is a party or by which the
property of any Loan Party is bound prohibits the filing or recordation of any
of the Loan Documents or any other action which is necessary or appropriate in
connection with the perfection of the Liens on Collateral evidenced and created
by any of the Loan Documents.
(c) As of the Closing Date, Schedule 5.20(c) lists all of the Mortgaged
Properties and all Leases with respect to the Mortgaged Properties, and
identifies the applicable Loan Party that owns the fee interest in such
Mortgaged Property and the Loan Party that is the tenant under the Lease with
respect to such Mortgaged Property.
(d) Each Mortgaged Property is assessed for real estate tax purposes as one or
more wholly independent tax parcels, separate from any other real property, and
no other real property is assessed and taxed together with any Mortgaged
Property or any portion thereof.
(e) Each Mortgaged Property is served by public or private utilities (including
water and sewer systems) required and adequate for the current or contemplated
use thereof.
(f) Each Mortgaged Property complies in all material respects with the
requirements and regulations of the ADA. At the Lender’s written request from
time to time, the Company shall provide the Lender with written evidence of such
compliance satisfactory to the Lender. Subject to the terms of the applicable
Lease and any obligations of the applicable tenant thereunder, the Company shall
be solely responsible for all such ADA costs of compliance and reporting.
(g) (i) All existing Leases are in full force and effect and are enforceable in
accordance with their respective terms, (ii) no material breach or default by
any party, or event which would constitute a material breach or default by any
party after notice or the passage of time, or both, is continuing under any
existing Lease (iii) none of the landlord’s interests under any of the Leases,
including, but not limited to, rents, additional rents, charges, issues or
profits, has been transferred or assigned, except pursuant to the Loan
Documents, and (iv) no rent or other payment under any existing Lease has been
paid by any tenant for more than one (1) month in advance (except a security
deposit shall not be deemed rent collected in advance). True, correct and
complete copies of all existing Leases (to the extent written, or a written
summary of the material terms thereof, to the extent oral) have been delivered
to the Lender (which delivery may be made by posting such Leases on the
Platform).
(h) No Mortgaged Property is a Flood Hazard Property unless the Lender shall
have received the following: (a) the applicable Loan Party’s written
acknowledgment of receipt of written notification from the Lender (i) as to the
fact that such Mortgaged Property is a Flood Hazard Property, (ii) as to whether
the community in which each such Flood Hazard Property is located is
participating in the National Flood Insurance Program and (iii) such other flood
hazard determination forms, notices and confirmations thereof as requested by
the Lender and (b) copies of insurance policies or certificates of insurance of
the applicable Loan Party evidencing flood insurance reasonably satisfactory to
the Lender
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and naming the Lender as loss payee. All flood hazard insurance policies
required hereunder have been obtained and remain in full force and effect, and
the premiums thereon have been paid in full.
5.21 Solvency. Both before and after giving effect to the Loan and advances
under the Loan, each Loan Party is Solvent. On the Closing Date, both before and
after giving effect to the Loan hereunder, each Loan Party is Solvent.
5.22 Labor Matters. As of the date hereof, to the Company’s and its
Subsidiaries’ knowledge, there are no material labor disputes to which the
Company or any of its Subsidiaries may become a party, including, without
limitation, any strikes, lockouts or other disputes relating to such Persons’
plants and other facilities.
5.23 Acquisitions. As of the Closing Date and as of the date of each Permitted
Acquisition, all material conditions precedent to, all consents from applicable
Governmental Authorities, and all other material consents necessary to permit,
such Permitted Acquisition will have been obtained, satisfied, or waived (except
that (i) no conditions imposed by the Loan Documents are so waivable other than
with the consent of the Lender and (ii) no other conditions shall be waived if
such waiver would materially adversely affect the benefits to be obtained by the
Company or the Lender from such Acquisition), as the case may be.
5.24 Real Estate Indebtedness. The amount of any Indebtedness of the Company and
its Subsidiaries secured by Liens on the real property and improvements financed
thereby is no greater than eighty-five percent (85%) of the value of such real
property and improvements as set forth in an appraisal of such real property and
improvements prepared by an independent member of the Appraisal Institute
certified appraiser in connection with such Indebtedness (which appraisal shall
be delivered to Lender upon its request).
5.25 [Reserved].
5.26 [Reserved].
5.27 OFAC. Neither the Company, nor any of its Subsidiaries, nor any director or
officer thereof, nor, to the knowledge of the Company and its Subsidiaries, any
employee, agent, affiliate or representative of the Company or any of its
Subsidiaries, is an individual or entity that is, or is owned or controlled by
any individual or entity that is (i) currently the subject or target of any
Sanctions, (ii) located, organized or resident in a Designated Jurisdiction, or
(iii) included on OFAC’s List of Specially Designated Nationals, HMT’s
Consolidated List of Financial Sanctions Targets and the Investment Ban List, or
any similar list enforced by any other relevant sanctions authority.
5.28 Anti-Corruption Laws. The Company and its Subsidiaries have conducted their
businesses in compliance with the United States Foreign Corrupt Practices Act of
1977, the UK Bribery Act of 2010, and in all material respects with applicable
anti-corruption laws and have instituted and maintained policies and procedures
designed to promote and achieve compliance with such laws.
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5.29 [Reserved].
5.30 Taxpayer Identification Number. The Company’s true and correct U.S.
taxpayer identification number is set forth on Schedule 10.02.
5.31 Beneficial Ownership Certificate. The information included in the
Beneficial Ownership Certification, if applicable, is true and correct in all
respects.
ARTICLE VI
AFFIRMATIVE COVENANTS

So long as the Lender shall have the Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, the Company shall, and
shall (except in the case of the covenants set forth in Sections 6.01, 6.02, and
6.03) cause each Subsidiary to:
6.01 Financial Statements. Deliver to the Lender, in form and detail
satisfactory to the Lender:
(a) as soon as available, but in any event within ninety (90) days after the end
of each fiscal year of the Company (or if earlier, fifteen (15) days after the
date required to be filed with the SEC (without giving effect to any extension
permitted by the SEC)):
(i) an audited consolidated balance sheet of the Company and its Subsidiaries as
at the end of such fiscal year, setting forth in comparative form the figures
for the previous fiscal year, in reasonable detail and prepared in accordance
with GAAP;
(ii) [Reserved];
(iii) the related audited consolidated statement of income or operations for
such fiscal year setting forth in each case in comparative form the figures for
the previous fiscal year, all in reasonable detail and prepared in accordance
with GAAP;
(iv) [Reserved];
(v) the related audited consolidated statements of stockholders’ equity and cash
flows for such fiscal year setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail and prepared in
accordance with GAAP; such consolidated financial statements to be audited and
accompanied by (x) a report and opinion of a Registered Public Accounting Firm
of nationally recognized standing reasonably acceptable to the Lender as to
whether such financial statements are free of material misstatement, which
report and opinion shall be prepared in accordance with audit standards of the
Public Company Accounting Oversight Board and applicable Securities Laws and
shall not be subject to any “going concern” or like qualification or exception
or any qualification or exception as to the scope of such audit or with respect
to the absence of material misstatement; and (y) (A) management’s assessment of
the effectiveness of the
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Company’s internal controls over financial reporting as of the end of such
fiscal year of the Company as required in accordance with Item 308 of SEC
Regulation S-K expressing a conclusion which contains no statement that there is
a material weakness in such internal controls, except for such material
weaknesses as to which the Lender does not object, and (B) an attestation report
of such Registered Public Accounting Firm on management’s assessment of, and the
opinion of the Registered Public Accounting Firm independently assessing the
effectiveness of, the Company’s internal controls over financial reporting in
accordance with Item 308 of SEC Regulation S-K, PCAOB Auditing Standard No. 2
and Section 404 of Sarbanes-Oxley and expressing a conclusion which contains no
statement that there is a material weakness in such internal controls, except
for such material weakness as to which the Lender does not object, and such
consolidating statements to be certified by a Responsible Officer of the Company
to the effect that such statements are fairly stated in all material respects
when considered in relation to the consolidated financial statements of the
Company and its Subsidiaries;
(b) as soon as available, but in any event within forty-five (45) days after the
end of each of the first three fiscal quarters of each fiscal year of the
Company (or if earlier, five days after the date required to be filed with the
SEC (without giving effect to any extension permitted by the SEC)):
(i) an unaudited consolidated balance sheet of the Company and its Subsidiaries
as at the end of such fiscal quarter, setting forth in comparative form the
figures for the corresponding fiscal quarter of the previous fiscal year, in
reasonable detail and prepared in accordance with GAAP;
(ii) [Reserved];
(iii) the related unaudited consolidated statement of income or operations for
such fiscal quarter (and the portion of the Company’s fiscal year then ended)
setting forth in each case in comparative form the figures for the corresponding
fiscal quarter (and portion) of the previous fiscal year, all in reasonable
detail and prepared in accordance with GAAP;
(iv) Reserved];
(v) the related unaudited consolidated statements of stockholders’ equity and
cash flows for such fiscal quarter (and the portion of the Company’s fiscal year
then ended) setting forth in comparative form the figures for the corresponding
fiscal quarter (and portion) of the previous fiscal year, all in reasonable
detail and prepared in accordance with GAAP;
such consolidated and consolidating financial statements described in this
Section 6.01(b) to be unaudited and certified by a Responsible Officer of the
Company as fairly presenting the financial condition, results of operations,
shareholders’ equity and cash flows of the Company and its Subsidiaries in
accordance with GAAP, subject only to normal year-end audit adjustments and the
absence of footnotes;
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(c) if requested by the Lender, as soon as available, but in any event within
thirty (30) days after the end of each calendar month (including December, but
excluding the last month of the fiscal quarter periods described in Section
6.01(b)) of each fiscal year of the Company (or if earlier than such 30th day,
five days after the date required to be filed with the SEC (without giving
effect to any extension permitted by the SEC)):
(i) an unaudited consolidated balance sheet of the Company and its Subsidiaries
as at the end of such calendar month, setting forth in comparative form the
figures for the corresponding calendar month of the previous fiscal year, in
reasonable detail and prepared in accordance with GAAP;
(ii) [Reserved];
(iii) the related unaudited consolidated statement of income or operations for
such calendar month (and the portion of the Company’s fiscal year then ended)
setting forth in each case in comparative form the figures for the corresponding
calendar month (and portion) of the previous fiscal year, all in reasonable
detail and prepared in accordance with GAAP;
(iv) [Reserved];
(v) the related unaudited consolidated statements of stockholders’ equity and
cash flows for such calendar month (and the portion of the Company’s fiscal year
then ended) setting forth in comparative form the figures for the corresponding
calendar month (and portion) of the previous fiscal year, all in reasonable
detail and prepared in accordance with GAAP;
such consolidated and consolidating financial statements described in this
Section 6.01(c) to be unaudited and certified by a Responsible Officer of the
Company as fairly presenting the financial condition, results of operations,
shareholders’ equity and cash flows of the Company and its Subsidiaries in
accordance with GAAP, subject only to normal year-end audit adjustments and the
absence of footnotes.
(d) as requested by the Lender, financial statements for any Special Purpose
Insurance Captives.
As to any information contained in materials furnished pursuant to Section
6.02(g), the Company shall not be separately required to furnish such
information under clause (a), (b), (c) or (d) above, but the foregoing shall not
be in derogation of the obligation of the Company to furnish the information and
materials described in clauses (a), (b), (c) and (d) above at the times
specified therein.
6.02 Certificates; Other Information. Deliver to the Lender, in form and detail
satisfactory to the Lender:
(a) Concurrently with:
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(i) the delivery of the financial statements referred to in Section 6.01(a) and
(b) and (if such monthly financial statements are requested by the Lender)
Section 6.01(c), (A) a duly completed Compliance Certificate signed by a
Responsible Officer of the Company, including the calculation of the financial
covenants set forth in Section 7.11(a), (b) and (c) and (B) a schedule (which
such schedule may be included in the Compliance Certificate delivered with
respect to such period) describing all actions, suits, proceedings, claims or
disputes pending, or to the knowledge of the Company after due and diligent
investigation, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority seeking damages or other remedies in excess of
the Threshold Amount;
(ii) the delivery of the financial statements referred to in Section 6.01(c)
(with respect to each January, February, April, May, July, August, October and
November), if requested by the Lender, a duly completed Compliance Certificate
signed by a Responsible Officer of the Company, but only including the
calculation of the financial covenant set forth in Section 7.11(a);
(iii) the delivery of the financial statements referred to in Section 6.01(a),
financial projections for the 12 months succeeding the date of such financial
statements, such projections to be prepared by management of the Company, in
form satisfactory to the Lender; and
(iv) any event described herein requiring Pro Forma Compliance, a duly completed
Pro Forma Compliance Certificate (including the calculation of the financial
covenants set forth in Section 7.11(a), (b) and (c)) signed by a Responsible
Officer of the Company;
(b) to the extent any Loan Party qualifies as a “legal entity customer” under
the Beneficial Ownership Regulation, an updated Beneficial Ownership
Certification promptly following any change in the information provided in the
Beneficial Ownership Certification delivered to the Lender in relation to such
Loan Party that would result in a change to the list of beneficial owners
identified in such certification;
(c) [Reserved]
(d) in the event of any Acquisition, the certificates and information required
by Section 7.12;
(e) [Reserved]
(f) [Reserved]
(g) promptly after any request by the Lender, copies of any detailed audit
reports, management letters or recommendations submitted to the board of
directors (or the audit committee of the board of directors) of the Company by
independent accountants in connection with the accounts or books of the Company
or any Subsidiary, or any audit of any of them;
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(h) promptly after the same are available, copies of each annual report, proxy
or financial statement or other report or communication sent to the stockholders
of the Company, and copies of all annual, regular, periodic and special reports
and registration statements which the Company may file or be required to file
with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934,
and not otherwise required to be delivered to the Lender pursuant hereto;
(i) promptly, and in any event within five Business Days after receipt thereof
by any Loan Party or any Subsidiary thereof, copies of each notice or other
correspondence received from the SEC (or comparable agency in any applicable
non-U.S. jurisdiction) concerning any investigation or possible investigation by
such agency regarding financial or other operational results of any Loan Party
or any Subsidiary thereof;
(j) promptly after any request by the Lender, copies of any non-cancelable
purchase and sale agreement referenced in the definition of “Consolidated
Current Assets”;
(k) concurrently with the delivery to other lenders, copies of all
certifications of compliance with financial covenants as required by such other
lenders; and
(l) promptly, such additional information regarding the business, financial or
corporate affairs of the Company or any Subsidiary, or compliance with the terms
of the Loan Documents, as the Lender may from time to time reasonably request.
Documents required to be delivered pursuant to Section 6.01(a), (b) or (c) or
Section 6.02(g) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Company posts such documents, or provides a link thereto on the Company’s
website on the Internet at the website address listed on Schedule 10.02; or (ii)
on which such documents are posted on the Company’s behalf on an Internet or
intranet website, if any, to which the Lender and the Lender have access
(whether a commercial, third-party website or whether sponsored by the Lender);
provided that: (i) the Company shall deliver paper copies of such documents to
the Lender that requests the Company to deliver such paper copies until a
written request to cease delivering paper copies is given by the Lender and (ii)
the Company shall notify the Lender and (by telecopier or electronic mail) of
the posting of any such documents and provide to the Lender by electronic mail
electronic versions (i.e., soft copies) of such documents. The Lender shall have
no obligation to request the delivery or to maintain copies of the documents
referred to above, and in any event shall have no responsibility to monitor
compliance by the Company with any such request for delivery, and the Lender
shall be solely responsible for requesting delivery to it or maintaining its
copies of such documents.
6.03 Notices. Promptly notify the Lender:
(a) of the occurrence of any Default;
(b) of any matter that has resulted or could reasonably be expected to result in
a Material Adverse Effect, including (i) breach or non-performance of, or any
default under, a Contractual Obligation of the Company or any Subsidiary; (ii)
any notice or correspondence
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from or on behalf of the applicable franchisor, distributor or manufacturer, the
Company or any Subsidiary alleging that any such event has occurred with respect
to any Franchise Agreement or Framework Agreement, (iii) any dispute,
litigation, investigation, proceeding or suspension between the Company or any
Subsidiary and any Governmental Authority which such dispute, litigation,
investigation, proceeding or suspension arising under this clause (iii) has
resulted or could reasonably be expected to result in a Material Adverse Effect;
or (iv) the commencement of, or any material development in, any litigation or
proceeding affecting the Company or any Subsidiary, including pursuant to any
applicable Environmental Laws, where the result of such event arising under this
clause (iv) has resulted or could reasonably be expected to result in a Material
Adverse Effect;
(c) of the occurrence of any ERISA Event with respect to a Pension Plan, and
subject to notification to the Company, with respect to a Multiemployer Plan or
Multiple Employer Plan;
(d) of any material change in accounting policies or financial reporting
practices by the Company or any Subsidiary;
(e) the Registered Public Accounting Firm’s determination or the Company’s
determination at any time of the occurrence or existence of any Internal Control
Event;
(f) [Reserved];
(g) [Reserved];
(h) [Reserved]; and
(i) of one or more of the following environmental matters: (i) any notice of any
material claim under Environmental Laws relating to any Mortgaged Property; (ii)
any condition or occurrence on or arising from any Mortgaged Property that (x)
results in noncompliance in any material respect by the Company with any
applicable Environmental Law or (y) could reasonably be expected to form the
basis of a material claim under Environmental Laws against a Loan Party or any
such Mortgaged Property; (iii) any condition or occurrence on any Mortgaged
Property that could reasonably be expected to cause such Mortgaged Property to
be subject to any material restrictions on the ownership, occupancy, use or
transferability by the Loan Parties under any Environmental Law; and (iv) any
material removal or remedial actions to be taken in response to the actual or
alleged presence or release of any Hazardous Material on any Mortgaged Property
as required by any Environmental Law or any Governmental Authority.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Company setting forth details of the occurrence
referred to therein and stating what action the Company has taken and proposes
to take with respect thereto. Each notice pursuant to Section 6.03(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.
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6.04 Payment of Obligations. Pay and discharge as the same shall become due and
payable (a) all tax liabilities, assessments and governmental charges or levies
upon it or its properties or assets, unless the same are being contested in good
faith by appropriate proceedings diligently conducted and adequate reserves in
accordance with GAAP are being maintained by the Company or such Subsidiary; (b)
all lawful claims which, if unpaid, would by law become a Lien upon its
property; and (c) all Indebtedness, as and when due and payable, but subject to
any subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.
6.05 Preservation of Existence, Etc.. (a) Preserve, renew and maintain in full
force and effect its legal existence and good standing under the Laws of the
jurisdiction of its organization except in a transaction permitted by Section
7.04 or 7.05; (b) take all reasonable action to maintain all rights, privileges,
permits, licenses and franchises necessary or desirable in the normal conduct of
its business, except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (c) preserve or renew all of its
registered patents, trademarks, trade names and service marks, the
non-preservation of which could reasonably be expected to have a Material
Adverse Effect.
6.06 Maintenance of Properties; Repairs. (a) Maintain, preserve and protect the
Mortgaged Properties and all of its other material properties and equipment
necessary in the operation of its business in good working order and condition,
ordinary wear and tear excepted; (b) make all necessary repairs thereto and
renewals and replacements thereof except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect; and (c) use the
standard of care typical in the industry in the operation and maintenance of its
facilities.
6.07 Maintenance of Insurance.
(a) (i) Maintain with financially sound and reputable insurance companies not
Affiliates of the Company or any Subsidiary, insurance with respect to its
properties and business against loss or damage of the kinds customarily insured
against by Persons engaged in the same or similar business and otherwise as
required by the Security Instruments; (ii) maintain general public liability
insurance at all times with financially sound and reputable insurance companies
not Affiliates of the Company or any Subsidiary, against liability on account of
damage to persons and property; and (iii) maintain insurance to the extent
required under all applicable workers’ compensation laws and against loss by
reason of business interruption with such insurance policies to be in form
reasonably satisfactory to the Lender. Each of the policies described in this
Section 6.07 shall provide that the insurer shall give the Lender not less than
thirty (30) days’ (or ten (10) days’ in the case of termination for non-payment)
prior written notice before any material amendment to any such policy by
endorsement or any lapse, termination or cancellation thereof, each such policy
of liability insurance shall list the Lender as an additional insured, and each
such policy of casualty insurance with respect to the Mortgaged Properties shall
list the Lender as lenders loss payable and mortgagee in accordance with
Schedule 6.07 and, in each case, in form and substance satisfactory to the
Lender.
(b) Without limitation of the foregoing, the Loan Parties shall keep each of the
Mortgaged Properties insured during the term of this Agreement, for the mutual
benefit of the Loan Parties and the Lender, against fire and such other hazards
that would be covered
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by an insurance policy issued on a Special Form Cause of Loss (“All Risk”) basis
(“Casualty Policy”), in accordance with the insurance requirements set forth on
Schedule 6.07.
(c) Any insurance proceeds paid in connection with damage to any Mortgaged
Property will be paid to the Lender and applied in the following manner:
(i) first, to the costs and expenses, including attorney’s fees related to the
insured loss; and
(ii) then, at the Lender’s sole, absolute discretion, to one ore more of the
following:
A.  To restore or repair the Mortgaged Property adversely impacted by the
insured loss;
B. To reduce the outstanding balance of the Loan or any Obligation;
C. If no Default has occurred or is imminent and the damage to the Mortgaged
Property is not deemed a total loss by the Borrower’s insurance carrier, the
Lender may provide the insurance proceeds to Borrower for restoration or repair
of the Mortgaged Property adversely impacted by the insured loss.
(d) With respect to any check or instrument representing the insurance proceeds:
(i) If made payable jointly to Borrower and the Lender, then Borrower
immediately will endorse it to the Lender and provide it to the Lender for
handling in accordance with subparagraph 6.07(c); and
(ii) If made payable to Borrower only, Borrower immediately will endorse it to
the Lender for handling in accordance with subparagraph 6.07(c) above.
(e) The Loan Parties shall (i) maintain fully paid flood hazard insurance on all
Flood Hazard Properties constituting Collateral, on such terms and in such
amounts as required by The National Flood Insurance Reform Act of 1994 or as
otherwise required by the Lender, (ii) furnish to the Lender evidence of the
renewal (and payment of renewal premiums therefor) of all such policies prior to
the expiration or lapse thereof, and (iii) furnish to the Lender prompt written
notice of any redesignation of any Mortgaged Property into or out of a special
flood hazard area.
6.08 Compliance with Laws and Contractual Obligations.
(a) Comply in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees and all Contractual Obligations
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings
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diligently conducted; or (b) the failure to comply therewith could not
reasonably be expected to have a Material Adverse Effect.
(b) Without limitation the generality of the foregoing, of any of the provisions
hereof, the Loan Parties: (i) shall comply with, and maintain all Mortgaged
Properties in compliance in all material respects with, any applicable
Environmental Laws; (ii) shall obtain and maintain in full force and effect all
material governmental approvals required for its operations at or on the
Mortgaged Properties by any applicable Environmental Laws; (iii) shall cure as
soon as reasonably practicable any material violation of applicable
Environmental Laws with respect to the Mortgaged Properties; (iv) shall not, and
shall not permit any other Person to, own or operate on any of the Mortgaged
Properties, any landfill or dump or hazardous waste treatment, storage or
disposal facility as defined pursuant to the RCRA, or any comparable state law;
and (v) shall not use, generate, treat, store, release or dispose of Hazardous
Materials at or on any Mortgaged Property except in the ordinary course of its
business and in compliance in all material respects with all Environmental Laws.
6.09 Books and Records. Maintain proper books of record and account, in which
full, true and correct entries in conformity with GAAP consistently applied
shall be made of all financial transactions and matters involving the assets and
business of the Company or such Subsidiary, as the case may be.
6.10 Inspection Rights; Environmental Reports.
(a) Permit representatives and independent contractors of the Lender to visit
and inspect any of its properties, to examine its corporate, financial and
operating records, and make copies thereof or abstracts therefrom, and to
discuss its affairs, finances and accounts with its directors, officers, and
independent public accountants, all at such reasonable times during normal
business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Company; provided, however, that when an Event of Default
exists the Lender (or any of their respective representatives or independent
contractors) may do any of the foregoing at the expense of the Company at any
time during normal business hours and without advance notice. After the
occurrence and during the continuation of an Event of Default, the Lender may
obtain, at the cost of the Company, a re-appraisal of any Mortgaged Property and
the Loan Parties shall fully cooperate with the Lender and the appraiser in
obtaining the necessary information to prepare such re-appraisal.
(b) At the written request of the Lender from time to time, provide to the
Lender within seventy-five (75) days (or such longer period as the Lender
permits in its sole discretion) after such request, at the expense of the
Company, an environmental site assessment report for any Mortgaged Property at
which the Lender reasonably believes that a material violation of Environmental
Laws has occurred, prepared by an environmental consulting firm acceptable to
the Lender, indicating the presence or absence of Hazardous Materials and the
estimated cost of any compliance, removal or remedial action in connection with
any Hazardous Materials on such Mortgaged Property. Without limiting the
generality of the foregoing, if the Lender determines at any time that a
material risk exists that any such report will not be provided within the time
referred to above, the Lender may
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retain an environmental consulting firm to prepare such report at the expense of
the Company, and the Company hereby grants at the time of such request to the
Lender, such firm and any agents or representatives thereof an irrevocable
non-exclusive license, subject to the rights of tenant, to enter onto their
respective Mortgaged Properties to undertake such an assessment.
6.11 Condemnation. Borrower will give the Lender written notice of any
proceeding regarding any temporary or permanent taking of any or all of the
Mortgaged Property by exercise of the right of eminent domain, inverse
condemnation, or similar injury or damage to, or decrease in value of, the
Mortgaged Property, including severance and change in the grade of any streets
(“Condemnation Proceeding”), and:

a. Borrower will promptly deliver to the Lender copies of all documents Borrower
delivers or receives relating to the Condemnation Proceeding;

b. Borrower will file, defend, and/or prosecute its claim in the Condemnation
Proceeding, including the interest of Trustee of any Security Instrument or the
Lender, as applicable, with due diligence to final conclusion;

c. In its sole, absolute discretion, the Lender may participate in the
Condemnation Proceeding and be represented by counsel of its choice, and
Borrower will provide such documents and information to the Lender to permit
full participation in the Condemnation Proceeding;

d. Any condemnation award or other proceeds from the Condemnation Proceeding
("Condemnation Award") will be paid to the Lender and applied in the following
order:

i. First to the Lender’s costs and expenses incurred in connection with the
Condemnation Proceeding, including without limitation, attorney fees; and

ii. Then at the Lender’s sole, absolute discretion:

A. To reduce the outstanding balance of the Loan or any other Obligation;

B. To restore or repair the Mortgaged Property and/or Collateral adversely
impacted by the Condemnation Proceeding; or

C. If no Default has occurred or is imminent, the Lender will deliver the
Condemnation Award to Borrower for restoration or repair of the Mortgaged
Property or improvements adversely impacted by the Condemnation Proceeding; and

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e. With respect to any check or instrument representing the condemnation
proceeds:

i. If made payable jointly to Borrower and the Lender, then Borrower immediately
will endorse it to the Lender and provide it to the Lender for handling in
accordance with subparagraph 6.11(d) above; and

ii. If made payable to Borrower only, the Borrower immediately will endorse it
to the Lender and provide to the Lender for handling in accordance with
subparagraph 6.11(d).
6.12 [Reserved].
6.13 [Reserved].
6.14 Additional Subsidiaries. Cause each Subsidiary of the Company that owns any
fee interest in a Mortgaged Property, or leases or operates a vehicle dealership
at any Mortgaged Property, to be a Subsidiary Guarantor, and cause any such
Subsidiary that is not a Subsidiary Guarantor, to promptly deliver to the
Lender:
(i) a Joinder Agreement duly executed by such Subsidiary with all schedules and
information thereto appropriately completed;
(ii) unless the Lender expressly waives such requirement in accordance with
Section 10.01, an opinion or opinions of counsel to such Subsidiary dated as of
the date of delivery of such Joinder Agreements (and other Loan Documents)
provided for in this Section 6.14 and addressed to the Lender, in form and
substance acceptable to the Lender;
(iii) the documents described in Sections 4.01(a)(iii), (iv), (vii), (xi) and
(xiii) with respect to such Subsidiary; and
(iv) evidence satisfactory to the Lender that all taxes, filing fees, recording
fees and other related transaction costs have been paid; provided that the
Lender shall not enter into or accept any joinder of a Subsidiary pursuant to
this Section 6.14 until the Lender shall have completed its applicable diligence
under “know your customer” and anti-money-laundering rules and regulations,
including, without limitation, the Patriot Act, and the Beneficial Ownership
Regulation.
6.15 Further Assurances. Execute, acknowledge, deliver, and record or file such
further instruments, including, without limitation, further security agreements,
financing statements, and continuation statements, and do such further acts as
may be reasonably necessary, desirable, or proper to carry out more effectively
the purposes of this Agreement, to protect the Liens granted in this Agreement
or the Loan Documents to which any Loan Party is a party and against the rights
or interests of third Persons, including without limitation, if requested by the
Lender in its reasonable judgment or pursuant to its regulatory practice, flood
hazard certifications and, if any applicable real
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property or contents are in a Flood Hazard Property, Flood Requirements, and the
Company will pay all reasonable costs connected with any of the foregoing.
6.16 [Reserved].
6.17 Notices regarding Indebtedness. At the time the Company or any Loan Party
enters into any Subordinated Indebtedness or Additional Unsecured Indebtedness,
the Company shall deliver to the Lender a certificate, in form and substance
acceptable to the Lender, attaching copies of all material documentation
relating to such Subordinated Indebtedness or Additional Unsecured Indebtedness,
stating the amount of such Indebtedness and certifying that (i) such
Indebtedness complies with the requirements of Sections 7.15 and 7.09 and the
definition of “Subordinated Indebtedness” or “Additional Unsecured
Indebtedness”, as applicable, and (ii) no Event of Default shall have occurred
and be continuing or would occur as a result thereof.
6.18 [Reserved].
6.19 [Reserved].
6.20 Anti-Corruption Laws. Conduct its businesses in compliance with the United
States Foreign Corrupt Practices Act of 1977, the UK Bribery Act of 2010, and
other similar corruption legislation in other jurisdictions, and maintain
policies and procedures designed to promote and achieve compliance with such
laws.
6.21 Leases. The Loan Parties shall comply in all material respects with each
Lease. The Loan Parties shall not amend or change, or allow to be amended or
changed any Lease to reduce rent thereunder or in any other manner materially
adverse to the rights of the Lender without the written consent of the Lender;
provided that, at all times, each tenant under each Lease shall be a Loan Party.
No Loan Party shall enter into any new Lease, or terminate or accept the
termination of any Lease, without in each case obtaining the prior written
consent of the Lender.
ARTICLE VII
NEGATIVE COVENANTS

So long as the Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, the Company shall not,
nor shall it permit any Subsidiary to, directly or indirectly:
7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of the
Collateral, other than the following:
(a) Liens pursuant to any Loan Document;
(b) Liens for taxes not yet due or which are being contested in good faith and
by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;
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(c) easements, rights-of-way, restrictions and other similar encumbrances
affecting real property which, in the aggregate, are not substantial in amount,
and which do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of the applicable Person; and
(d) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business which are not overdue for
a period of more than thirty (30) days or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person.
7.02 Investments. Make any Investments, except:
(a) Investments held by the Company or such Subsidiary in the form of cash
equivalents or short-term marketable securities;
(b) advances to officers, directors and employees of the Company and
Subsidiaries in an aggregate amount not to exceed $5,000,000 at any time
outstanding, for travel, entertainment, relocation and analogous ordinary
business purposes;
(c) Investments of the Company in any Subsidiary Guarantor and Investments of
any Subsidiary Guarantor in the Company or in another Subsidiary Guarantor;
(d) Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, and Investments received in satisfaction or partial
satisfaction thereof from financially troubled account debtors to the extent
reasonably necessary in order to prevent or limit loss;
(e) Guarantees permitted by Section 7.03;
(f) Acquisitions permitted by Section 7.12;
(g) [Reserved];
(h) Buyer Notes obtained by the Company or a Subsidiary in connection with a
Disposition permitted by Section 7.05(h), provided, however, that the aggregate
amount of all such Investments at any one time shall not exceed $10,000,000;
(i) Investments made in connection with the Company’s supplemental executive
retirement plan, as the same may be amended, so long as such Investments do not
exceed $5,000,000 in any given calendar year;
(j) Investments in Special Purpose Insurance Captives, such Investments not to
exceed $25,000,000 in the aggregate over the term of the Obligations hereunder;
and
(k) other Investments not exceeding $10,000,000 in the aggregate in any fiscal
year of the Company.
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7.03 Intentionally Omitted.
7.04 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into
another Person, or Dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except that, so long as no
Default exists or would result therefrom:
(a) any Subsidiary may merge with (i) the Company, provided that the Company
shall be the continuing or surviving Person, or (ii) any one or more other
Subsidiaries, provided that when any Subsidiary Guarantor is merging with
another Subsidiary, the Subsidiary Guarantor shall be the continuing or
surviving Person;
(b) subject to Section 6.14, any Subsidiary may merge into or consolidate with
another Person in order to consummate an Acquisition permitted by Section 7.12;
provided that (i) if the Company is a party to any such merger or consolidation,
the Company is the survivor thereof, and (ii) except as described in clause (i)
above, if a Subsidiary Guarantor is a party to any such merger or consolidation,
a Subsidiary Guarantor is the survivor thereof;
(c) any Subsidiary may Dispose of all or substantially all of its assets (upon
voluntary liquidation or otherwise) to the Company or to another Subsidiary;
(d) any Subsidiary may Dispose of all or substantially all of its assets to or
in favor of any Person in one transaction or in a series of transactions,
provided that such Disposition or Dispositions satisfy the requirements of
Section 7.05(h); and
(e) any Subsidiary which has Disposed of all or substantially all of its assets
in accordance with the terms of this Agreement may be dissolved or have its
entity status terminated; provided, however, that the Loan Parties shall not
make any Disposition in respect of any Collateral.
7.05 Dispositions. Make any Disposition or enter into any agreement to make any
Disposition, except:
(a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;
(b) Dispositions of inventory in the ordinary course of business;
(c) Dispositions of equipment or real property to the extent that (i) such
property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;
(d) Dispositions of property by any Subsidiary to the Company or to a Subsidiary
of the Company that is a “Subsidiary Guarantor” under (and as defined in) the
Revolving Credit Agreement and the Floorplan Credit Agreement;
(e) Dispositions permitted by Section 7.04;
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(f) Dispositions by the Company and its Subsidiaries of property pursuant to
sale-leaseback transactions, provided that the book value of all property so
Disposed of shall not exceed $50,000,000 in any fiscal year;
(g) Dispositions of retail installment sales contracts and related intangible
property arising from the sale or lease of vehicles, assets, or services in the
ordinary course of business;
(h) Dispositions by the Company and its Subsidiaries not otherwise permitted
under this Section 7.05; provided that at the time of such Disposition, no
Default shall exist or would result from such Disposition; provided, however,
that, other than Dispositions of obsolete or worn out fixtures (which may be
considered to be part of a Mortgaged Property) in the ordinary course of
business, the Loan Parties shall not make any Disposition in respect of any
Collateral except for any Disposition permitted above with respect to a Release
Property, subject to the satisfaction of the conditions applicable to the
Property Substitution or Prepayment Release with respect to such Release
Property in accordance with Section 2.19; and
(i) Dispositions of Mortgaged Properties by the Company and its Subsidiaries
which satisfy the conditions of Section 2.19 herein with respect to a Property
Substitution or a Prepayment Release, as applicable.
7.06 Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that, so long as no Default shall have occurred and be continuing at the
time of any action described below or would result therefrom:
(a) each Subsidiary may make Restricted Payments to the Company and any
Subsidiaries of the Company that are “Subsidiary Guarantors” under (and as
defined in) the Revolving Credit Agreement and the Floorplan Credit Agreement;
(b) the Company may declare and make dividend payments or other distributions
payable solely in the common stock or other common Equity Interests of such
Person;
(c) any Loan Party may make “net share settlements” of vested restricted stock
for tax withholding;
(d) [Reserved];
(e) [Reserved];
(f) the Company may declare and make cash dividends in an aggregate amount per
fiscal quarter of up to $0.10 per share for each share of the Company’s
Qualified Capital Stock outstanding as of the quarterly record date for
dividends payable in respect of such fiscal quarter (as such amount shall be
adjusted for changes in the capitalization of the Company upon
recapitalizations, reclassifications, stock splits, stock dividends, reverse
stock splits, stock consolidations and similar transactions), provided, however,
in the event a Change of Control occurs (and without waiving any Default arising
from such Change of
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Control, or any condition to the payment of cash dividends relating to such
Default), the aggregate amounts (if any) permitted to be paid in cash dividends
per fiscal quarter shall not exceed the aggregate amounts of such cash dividends
paid in the same fiscal quarter most recently occurring prior to such Change of
Control; provided further that for the purposes of this exception, shares of
Qualified Capital Stock issued for less than fair market value (other than
shares issued pursuant to options or otherwise in accordance with the Company’s
stock option, employee stock purchase or other equity compensation plans) shall
not be deemed outstanding; and
(g) the Company may make additional Restricted Payments (including cash
dividends not otherwise permitted by clause (f)), provided that the sum of (i)
aggregate amount of such Restricted Payments which are permitted solely by
virtue of this Section 7.06(g) and which are declared or made on or after the
date of this Agreement plus (ii) the aggregate amount of Subordinated
Indebtedness Prepayments and Additional Unsecured Indebtedness Prepayments that
are made on or after the date of this Agreement, plus (iii) the aggregate amount
of Investments (excluding (A) the Loan and advances to the extent these have
been repaid and (B) items described in clause (c) of the definition of
“Investment”, provided that such items are related to the sale, service, or
storage of vehicles or other related services and products) that are made on or
after the date of this Agreement, does not exceed the Builder Basket Amount.
7.07 Change in Nature of Business. Engage in any material line of business
substantially different from those lines of business conducted by the Company
and its Subsidiaries on the date hereof or any business substantially related or
incidental thereto. In addition, each Special Purpose Insurance Captive is
prohibited from engaging in any business other than the provision of business
insurance to the Company and its Subsidiaries.
7.08 Transactions with Affiliates. Enter into any transaction of any kind with
any Affiliate of the Company, whether or not in the ordinary course of business,
other than on fair and reasonable terms substantially as favorable to the
Company or such Subsidiary as would be obtainable by the Company or such
Subsidiary at the time in a comparable arm’s length transaction with a Person
other than an Affiliate (including with respect to any Special Purpose Insurance
Captive and any premiums paid thereto); provided that the foregoing restriction
shall not apply to transactions between or among the Company and any Subsidiary
Guarantor or between and among any Subsidiary Guarantors.
7.09 Burdensome Agreements. Enter into any Contractual Obligation (other than
this Agreement or any other Loan Document) that (a) limits the ability (i) of
any Subsidiary to make Restricted Payments to the Company or any Loan Party or
to otherwise transfer property to the Company or any Loan Party, (ii) of any
Subsidiary to Guarantee the Indebtedness of the Company, or (iii) of the Company
or any Subsidiary to create, incur, assume or suffer to exist Liens on property
of such Person; provided, however, that (x) clauses (i), (ii) and (iii) above
shall not prohibit any such restriction on Restricted Payments, Guarantees or
liens incurred or provided in favor of any Floorplan Secured Party under the
Floorplan Loan Documents or any Revolving Secured Party under the Revolving Loan
Documents, and (y) clause (iii) above shall not prohibit any negative pledge
incurred or provided in favor of any holder of Indebtedness permitted under
Section 7.03(e), (g) or (n) solely to the extent any such negative pledge
relates to the property
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financed by or securing such Indebtedness, or (z) manufacturer limitations on
dividends set forth in Franchise Agreements or Framework Agreements which
limitations relate to minimum capitalization requirements for dealerships; or
(b) requires the grant of a Lien to secure an obligation of such Person if a
Lien is granted to secure another obligation of such Person.
7.10 Use of Proceeds. Use the proceeds of any Advance, whether directly or
indirectly, and whether immediately, incidentally or ultimately, to purchase or
carry margin stock (within the meaning of Regulation U of the FRB) or to extend
credit to others for the purpose of purchasing or carrying margin stock or to
refund indebtedness originally incurred for such purpose.
7.11 Financial Covenants.
(a) Consolidated Liquidity Ratio. Permit the Consolidated Liquidity Ratio as of
the end of any fiscal quarter (or at the request of the Lender, as of the end of
any calendar month) to be less than 1.05 to 1.00.
(b) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated Fixed
Charge Coverage Ratio at any time to be less than 1.20 to 1.00.
(c) Consolidated Total Lease Adjusted Leverage Ratio. Permit the Consolidated
Total Lease Adjusted Leverage Ratio at any time to be greater than 5.75 to 1.00.
7.12 Acquisitions. Enter into any agreement, contract, binding commitment or
other arrangement providing for a transaction which would, if consummated,
constitute an Acquisition, or take any action to solicit the tender of
securities or proxies in respect thereof in order to effect any Acquisition,
(each, an “Acquisition Arrangement”) unless (i) the Person to be (or whose
assets are to be) acquired does not oppose such Acquisition and the material
line or lines of business of the Person to be acquired are substantially the
same as one or more line or lines of business conducted by the Company and its
Subsidiaries, or substantially related or incidental thereto, (ii) no Default or
Revolving Credit Facility Default or Floorplan Default shall have occurred and
be continuing either immediately prior to or immediately after giving effect to
such Acquisition and, (iii) if the aggregate Cost of Acquisition of all
Acquisitions (including such Acquisition) occurring in any fiscal year (together
with any other Related Acquisition or Related Proposed Acquisition with respect
to such Acquisition, whether or not occurring or expected to occur in the same
fiscal year) is in excess of $65,000,000, (x) no Default would exist immediately
after giving effect to such Acquisitions, (y) the Company shall have furnished
to the Lender pro forma historical financial statements as of the end of the
most recently completed fiscal year of the Company and most recent interim
fiscal quarter, if applicable, giving effect to such Acquisition and all other
Acquisitions consummated since such fiscal year end, and (z) the Company and its
Subsidiaries shall be in Pro Forma Compliance after giving effect to such
Acquisition, as evidenced by a Pro Forma Compliance Certificate delivered
simultaneously with such pro forma historical financial statements, (iv) the
Person acquired shall be a wholly-owned Subsidiary, or be merged into the
Company or a wholly-
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owned Subsidiary, immediately upon consummation of the Acquisition (or if assets
are being acquired, the acquiror shall be the Company or a wholly-owned
Subsidiary), and (v) after the consummation of such Acquisition, the Company or
any applicable Subsidiary shall have complied with the provisions of Section
6.14; provided that, clause (iii) of this Section 7.12 shall not apply to any
agreement, contract, binding commitment or other arrangement providing for a
transaction which would, if consummated, constitute an Acquisition of a Person
with respect to which real property constitutes all or substantially all of the
such Person’s assets.
7.13 Sale or Encumbrance of Mortgaged Property. Direct or indirect sale,
mortgage, pledge, assignment, transfer, license, lease or other disposition
(including any sale and leaseback transaction) of any Mortgaged Property or any
interest therein which such property remains a Mortgaged Property.
7.14 Amendments of Certain Indebtedness. Amend, modify or change in any manner
any term or condition of any of the Subordinated Indebtedness or any Additional
Unsecured Indebtedness permitted by Section 7.03(i) or (l) or refinance or
replace any such Indebtedness so that the terms and conditions thereof are less
favorable to the Lender than the terms and conditions of the relevant
Indebtedness as of the later of the Closing Date or the date of incurrence
thereof.
7.15 Prepayments, etc, of Certain Indebtedness. Make any Subordinated
Indebtedness Prepayment or Additional Unsecured Indebtedness Prepayment, except
that the Company may make such Subordinated Indebtedness Prepayment or
Additional Unsecured Indebtedness Prepayment, provided that (a) no Default shall
have occurred and be continuing at the time of any such Subordinated
Indebtedness Prepayment or Additional Unsecured Indebtedness Prepayment or would
result therefrom, and (b) the sum of (i) aggregate amount of such Subordinated
Indebtedness Prepayments and Additional Unsecured Indebtedness Prepayments made
on or after the date of this Agreement plus (ii) the aggregate amount of
Restricted Payments permitted by Section 7.06(g) that are declared or made on or
after the date of this Agreement, plus (iii) the aggregate amount of Investments
(excluding (A) the Loan and advances to the extent these have been repaid and
(B) items described in clause (c) of the definition of “Investment”, provided
that such items are related to the sale, service, or storage of vehicles or
other related services and products) that are made on or after the date hereof,
does not exceed the Builder Basket Amount.
7.16 [Reserved].
7.17 [Reserved].
7.18 [Reserved].
7.19 [Reserved].
7.20 [Reserved].

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7.21 [Reserved].
7.22 Sanctions. Directly or indirectly, use the proceeds of any Advance, or
lend, contribute or otherwise make available such proceeds to any Subsidiary,
joint venture partner or other individual or entity, to fund any activities of
or business with any individual or entity, or in any Designated Jurisdiction,
that, at the time of such funding, is the subject of Sanctions, or in any other
manner that will result in a violation by any individual or entity (including
any individual or entity participating in the transaction, whether as Lender or
otherwise) of Sanctions.
7.23 [Reserved].
7.24 Anti-Corruption Laws. Directly or indirectly use the proceeds of any
Advance for any purpose which would breach the United States Foreign Corrupt
Practices Act of 1977, the UK Bribery Act of 2010, and other similar
anti-corruption legislation in other jurisdictions.
7.25 Post-Closing Deliveries. Fail to satisfy any of the requirements set forth
on Schedule 7.25 within the time period specified therein.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES

8.01 Events of Default. Any of the following shall constitute an Event of
Default (each an “Event of Default”):
(a) Non-Payment. The Company or any other Loan Party fails to pay (i) when and
as required to be paid herein, any amount of principal of any Loan or (ii)
within five (5) days after the same becomes due, any interest on any Loan or any
fee due hereunder, or (iii) within five (5) days after the same becomes due, any
other amount payable hereunder or under any other Loan Document; or
(b) Specific Covenants. The Company fails to perform or observe any term,
covenant or agreement contained in any of Sections 6.01, 6.02(a), (b), (c) or
(d), 6.03, 6.05, 6.07 (with respect to the maintenance of casualty insurance
with respect to any Mortgaged Property); 6.10 or 6.11 or Article VII; or
(c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for thirty (30) days after the giving of written notice to such Loan
Party specifying the alleged default; or
(d) Representations and Warranties. Any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of the Company or any
other Loan Party herein, in any other Loan Document, or in any document
delivered in connection herewith or therewith shall be incorrect or misleading
in any material respect when made or deemed made; or
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(e) Cross-Default. (i) The Company or any Subsidiary (A) fails to make any
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder) having a principal amount (including undrawn
committed or available amounts and including amounts owing to all creditors
under any combined or syndicated credit arrangement), either individually or in
the aggregate for all Indebtedness for which a payment default then exists, of
more than the Threshold Amount, or (B) fails to observe or perform any other
agreement or condition relating to any such Indebtedness or Guarantee or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event occurs (each, an “Other Event”), the effect of which
default or Other Event is to cause, or to permit the holder or holders of such
Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee
or agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause, with the giving of notice if required, such Indebtedness in excess of the
Threshold Amount (either individually or in the aggregate for all Indebtedness
for which a covenant default then exists) to be demanded or to become due or to
be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or
an offer to repurchase, prepay, defease or redeem such Indebtedness to be made,
prior to its stated maturity, or such Guarantee to become payable or cash
collateral in respect thereof to be demanded; provided that, the mere fact that
any Indebtedness is a “demand obligation” and payment thereof may be demanded at
any time (whether or not any Person has defaulted thereunder) shall not, by
itself, constitute an “Other Event,” but the demand for payment thereof shall
constitute an “Other Event”; or (ii) there occurs under any Swap Contract an
Early Termination Date (as defined in such Swap Contract) resulting from (A) any
event of default under such Swap Contract as to which the Company or any
Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any
Termination Event (as so defined) under such Swap Contract as to which the
Company or any Subsidiary is an Affected Party (as so defined) and, in either
event, the Swap Termination Value owed by the Company or such Subsidiary as a
result thereof is greater than the Threshold Amount; or
(f) Insolvency Proceedings, Etc. The Company, any Loan Party or any of their
respective Subsidiaries institutes or consents to the institution of any
proceeding under any Debtor Relief Law, or makes an assignment for the benefit
of creditors; or applies for or consents to the appointment of any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer
for it or for all or any material part of its property; or any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer is
appointed without the application or consent of such Person and the appointment
continues undischarged or unstayed for sixty (60) calendar days; or any
proceeding under any Debtor Relief Law relating to any such Person or to all or
any material part of its property is instituted without the consent of such
Person and continues undismissed or unstayed for sixty (60) calendar days, or an
order for relief is entered in any such proceeding; or
(g) Inability to Pay Debts; Attachment. (i) The Company or any Subsidiary
becomes unable or admits in writing its inability or fails generally to pay its
debts as they become due, or (ii) any writ or warrant of attachment or execution
or similar process is issued or levied against all or any material part of the
property of any such Person and is not released, vacated or fully bonded within
thirty (30) days after its issue or levy; or
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(h) Judgments. There is entered against the Company or any Subsidiary (i) a
final judgment or order for the payment of money in an aggregate amount
exceeding the Threshold Amount (in each case, to the extent not covered by
independent third-party insurance as to which the insurer does not dispute
coverage), or (ii) any one or more non-monetary final judgments that have, or
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect and, in either case, (A) enforcement proceedings are
commenced by any creditor upon such judgment or order, or (B) there is a period
of ten (10) consecutive days during which a stay of enforcement of such
judgment, by reason of a pending appeal or otherwise, is not in effect; or
(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan,
Multiemployer Plan or Multiple Employer Plan which has resulted or could
reasonably be expected to result in liability of the Company under Title IV of
ERISA to the Pension Plan, Multiemployer Plan, Multiple Employer Plan or the
PBGC in an aggregate amount in excess of the Threshold Amount, or (ii) the
Company or any ERISA Affiliate fails to pay when due, after the expiration of
any applicable grace period, any installment payment with respect to its
withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in
an aggregate amount in excess of $25,000,000; or
(j) Invalidity of Loan Documents. (i) Any Loan Document, at any time after its
execution and delivery and for any reason other than as expressly permitted
hereunder or thereunder or satisfaction in full of all the Obligations, ceases
to be in full force and effect; (ii) any Security Instrument shall for any
reason (other than pursuant to the terms thereof) cease to create a valid
security interest in the Collateral purported to be covered thereby or such
security interest shall for any reason cease to be a perfected security interest
with the priority provided therefor in such Security Instrument subject only to
those Liens permitted by Section 7.01; or (iii) any Loan Party or any other
Person contests in any manner the validity or enforceability of any Loan
Document; or any Loan Party denies that it has any or further liability or
obligations under any Loan Document, or purports to revoke, terminate or rescind
any Loan Document; or
(k) Change of Control. There occurs any Change of Control; or
(l) Franchise Agreements. (i) Any Franchise Agreement to which a Subsidiary
Guarantor is a party is terminated or suspended or expires and a replacement for
such Franchise Agreement is not entered into within 30 days of such termination,
suspension or expiration, (ii) there occurs a default by any Person in the
performance or observance of any term of any Franchise Agreement to which a
Subsidiary Guarantor is a party which is not cured within any applicable cure
period therein, or (iii) there occurs any change in any Franchise Agreement to
which a Subsidiary Guarantor is a party, except in each case referred to in
clauses (i), (ii) and (iii) to the extent such termination, suspension,
expiration, default or change (either individually or in the aggregate) could
not reasonably be expected to have a Material Adverse Effect; provided that, in
the event a Franchise Agreement to which a Subsidiary Guarantor is a party
expires in accordance with its terms, if and for so long as the respective
Subsidiary Guarantor and manufacturer or distributor are negotiating in good
faith to renew such Franchise Agreement, and the respective manufacturer or
distributor has not taken (and is not reasonably expected to take) any action to
terminate
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such Franchise Agreement, such expiration shall not by itself be considered an
Event of Default under this Section 8.01(l); or
(m) [Reserved];
(n) [Reserved];
(o) Uninsured Casualty. An uninsured casualty with respect to the Mortgaged
Properties in excess of the Threshold Amount;
(p) Material Adverse Change. The occurrence of a material adverse change in the
business, condition (financial or otherwise), operations or properties of the
Company (on a consolidated basis), which is reasonably likely to impair the
ability of the Company to perform its obligations under this Agreement.
8.02 Remedies Upon an Event of Default. If any Event of Default occurs and is
continuing, the Lender may take any or all of the following actions:
(i) declare the commitment of the Lender to make Advances to be terminated,
whereupon such commitments and obligation shall be terminated;
(ii) declare the unpaid principal amount of the Loan, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or under any
other Loan Document to be immediately due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by the Company;
(iii) [Reserved]; and
(iv) exercise on behalf of itself all rights and remedies available to it under
the Loan Documents; provided, however, that upon the occurrence of an actual or
deemed entry of an order for relief with respect to the Company under the
Bankruptcy Code of the United States, the obligation of the Lender to make the
Advances shall automatically terminate, the unpaid principal amount of the Loan
and all interest and other amounts as aforesaid shall automatically become due
and payable, in each case without further act of the Lender.
8.03 Application of Funds. After the exercise of remedies provided for in this
Article VIII (or after the Loan has automatically become immediately due and
payable), any amounts received on account of the Obligations shall, subject to
the provisions of Section 2.16, be applied by the Lender in the following order:
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Lender and amounts payable under Article III)
payable to the Lender in its capacity as such;
Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lender (including fees, charges and
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disbursements of counsel to the Lender (including fees and time charges for
attorneys who may be employees of the Lender) and amounts payable under Article
III), ratably among them in proportion to the respective amounts described in
this clause Third payable to them;
Third, to payment of that portion of the Obligations constituting interest on
the Loan and other Obligations;
Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loan;
Fifth, to the payment of all other Obligations of the Loan Parties owing under
or in respect of the Loan Documents that are due and payable to the Lender on
such date, ratably based on the respective aggregate amounts of all such
Obligations owing to the Lender on such date; and
Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Company or as otherwise required by Law.
ARTICLE IX
ACKNOWLEDGEMENTS AND WAIVERS

9.01. Acknowledgements and Waivers. Company hereby irrevocably and
unconditionally agrees that nothing contained herein, in the Subsidiary Guaranty
or in any document or agreement in which a Subsidiary Guarantor pledges
collateral to the Lender to secure the Subsidiary Guaranty or in any other Loan
Document shall prevent Lender from suing on the Note or from exercising any
rights available under any of the Loan Documents and that the exercise of any of
such rights against a Subsidiary Guarantor or collateral pledged thereby shall
not constitute a legal or equitable discharge of Borrower. Without limiting the
generality of the foregoing, Company hereby expressly waives any and all rights,
benefits and defenses that it may have under law or at equity, including those
referred to under California Civil Code (“CC”), Sections 2787-2855, inclusive,
2899, 2953 and 3433, including the right to require Lender to (a) proceed
against a Subsidiary Guarantor, (b) proceed against or exhaust any security or
collateral Lender may hold in connection with the Subsidiary Guaranty, or (c)
pursue any other right or remedy for the benefit of Company. Company further
expressly waives any and all benefits and defenses under (i) California Code of
Civil Procedure (“CCP”) Section 580a which would otherwise limit Company’s
liability after a non-judicial foreclosure sale of any of the Collateral to the
difference between the obligations guaranteed by the Subsidiary Guarantors and
the value of the property or interest sold at such non-judicial foreclosure sale
as determined by a fair value hearing or otherwise, (ii) CCP Sections 580b and
580d, which would otherwise limit Lender’s right to recover a deficiency
judgment with respect to purchase money obligations and after a non-judicial
foreclosure sale, respectively, and (iii) CCP Section 726 which, among other
things, would otherwise require Lender to exhaust all of its security before a
personal judgment may be obtained or a deficiency judgment may be pursued and
would limit Company’s liability after a judicial foreclosure sale to the
difference between the obligations guaranteed in the Subsidiary Guaranty and the
fair value of the property or interest sold at such judicial foreclosure sale.
Further, notwithstanding any foreclosure of the lien of any deed of trust or
security agreement with respect to any or all real or personal property secured
thereby, whether by the exercise of the power of sale contained therein, by an
action for judicial foreclosure,
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or by an acceptance of a deed in lieu of foreclosure, and notwithstanding
enforcement of the liability of any Subsidiary Guarantor or other action taken
by Lender in connection therewith, Company shall remain bound under this
Agreement and the Note and fully liable for the Loan and Company hereby
irrevocably and unconditionally waives any right to claim to the contrary.
Company acknowledges that it has been made aware of the provisions of CC Section
2856, has read and understands the provisions of that statute, has been advised
by its counsel as to the scope, purpose and effect of that statute, and based
thereon, without limiting any other waivers herein, Company hereby gives the
following waivers with respect to, and as described in, CC Sections 2856(c) and
(d) which provide as follows:
(c) . . . “Guarantor waives all rights and defenses that the guarantor may have
because the debtor’s debt is secured by real property. This means among other
things:
(1) The creditor may collect from the guarantor without first foreclosing on any
real or personal property pledged by the debtor;
(2) If the creditor forecloses on any real property collateral pledged by the
debtor:
(A) The amount of the debt may be reduced only by the price for which that
collateral is sold at the foreclosure sale, even if the collateral is worth more
than the sale price.
(B) The creditor may collect from the guarantor even if the creditor, by
foreclosing on the real property collateral, has destroyed any right the
guarantor may have to collect from the debtor.
This is an unconditional and irrevocable waiver of any rights and defenses the
guarantor may have because the debtor’s debt is secured by real property. These
rights and defenses include, but are not limited to, any rights or defenses
based on Sections 580a, 580b, 580d or 726 of the Code of Civil Procedure.”
(d) . . . “Guarantor waives all rights and defenses arising out of an election
of remedies by the creditor, even though that election of remedies, such as
non-judicial foreclosure with respect to security for a guaranteed obligation,
has destroyed the guarantor’s rights of subrogation and reimbursement against
the principal by operation of Section 580d of the Code of Civil Procedure or
otherwise.”
Company waives all rights to interpose any setoffs or counterclaims of any
nature in any action or proceeding instituted by Lender with respect to this
Agreement, the collateral therefor, or any matter arising therefrom or relating
thereto and the posting of any bond which may otherwise be required, and waives
any and all benefits of cross-demands pursuant to Section 431.70 of the
California Code of Civil Procedure.
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Company waives, to the fullest extent permitted by law, presentment, notice of
dishonor, protest, notice of protest, notice of intent to accelerate, notice of
acceleration, and all other notices or demands of any kind (including notice of
the acceptance by Lender of this Agreement, notice of the existence, creation,
non-payment, or non-performance of any or all Obligations), excepting only
notices specifically provided for in this Agreement.
Company waives any and all present and future rights (a) to participate in the
rights and remedies of Lender against Guarantor, the Collateral or any other
Person or any of their respective assets, (b) to require marshaling of assets or
to require realization on the Collateral or any portion thereof, or in any
particular order, priority or timing and (c) any right to designate the portion
of the Obligations that are to be satisfied as a result of a partial payment
thereof, whether by Company pursuant to this Agreement or otherwise by Guarantor
or any other party, including any right to do so under CC Section 2822.
ARTICLE X
MISCELLANEOUS
10.01 Amendments, Etc.. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the
Company or any other Loan Party therefrom, shall be effective unless in writing
signed by the Lender and the Company or the applicable Loan Party, as the case
may be, and acknowledged by the Lender (such acknowledgement not to be
unreasonably withheld or delayed), and each such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
10.02 Notices; Effectiveness; Electronic Communication.
(a) Notices; Effectiveness; Electronic Communications. Except in the case of
notices and other communications expressly permitted to be given by telephone
(and except as provided in subsection (b) below), all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by facsimile or electronic mail as follows, and all notices and other
communications expressly permitted hereunder to be given by telephone shall be
made to the applicable telephone number, as follows:
(i) if to the Company, any other Loan Party, the Lender, to the address,
facsimile number, electronic mail address or telephone number specified for such
Person on Schedule 10.02; and
(ii) if to Lender, to the address, facsimile number, electronic mail address or
telephone number specified herein (including, as appropriate, notices delivered
solely to the Person designated by the Lender then in effect for the delivery of
notices that may contain material non-public information relating to the
Company).
Notices and other communications sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices and other
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communications sent by facsimile shall be deemed to have been given when sent
(except that, if not given during normal business hours for the recipient, shall
be deemed to have been given at the opening of business on the next Business Day
for the recipient). Notices and other communications delivered through
electronic communications to the extent provided in subsection (b) below shall
be effective as provided in such subsection (b).
(b) Electronic Communications. Notices and other communications to the Lender
hereunder may be delivered or furnished by electronic communication (including
e-mail, FpML messaging, and Internet or intranet websites) pursuant to
procedures approved by the Lender.
Unless the Lender otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of
an acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), and (ii) notices or communications posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient at its e-mail address as described in the foregoing clause
(i) of notification that such notice or communication is available and
identifying the website address therefor; provided that, for both clauses (i)
and (ii), if such notice, email or other communication is not sent during the
normal business hours of the recipient, such notice, email or communication
shall be deemed to have been sent at the opening of business on the next
business day for the recipient.
(c) [Reserved];
(d) Change of Address, Etc. Each of the Company and the Lender may change its
address, facsimile or telephone number for notices and other communications
hereunder by notice to the other parties hereto.
(e) Reliance by Lender. The Lender shall be entitled to rely and act upon any
notices (including telephonic notices), purportedly given by or on behalf of the
Company even if (i) such notices were not made in a manner specified herein,
were incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof. The Company shall indemnify the Lender and
the Related Parties of each of them from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Company. All telephonic notices to and
other telephonic communications with the Lender may be recorded by the Lender,
and each of the parties hereto hereby consents to such recording.
10.03 No Waiver; Cumulative Remedies; Enforcement. No failure by the Lender to
exercise, and no delay by any such Person in exercising, any right, remedy,
power or privilege hereunder or under any Loan Document shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided, and provided under each other
Loan Document are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.
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10.04 Expenses; Indemnity; Damage Waiver.
(a) Costs and Expenses. The Company shall pay (i) all reasonable out-of-pocket
expenses incurred by the Lender and each of its Affiliates (including the
reasonable fees, charges and disbursements of counsel for the Lender), in
connection with the preparation, negotiation, execution, delivery and
administration of this Agreement and the other Loan Documents or any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), and shall pay
all fees and time charges for attorneys who may be employees of the Lender, in
connection with the enforcement or protection of its rights, including any audit
fees incurred when conducting any audit of any Loan Party or any Collateral
during the continuance of any Event of Default (A) in connection with this
Agreement and the other Loan Documents, including its rights under this Section,
or (B) in connection with the Loan made hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of the Loan. The Company shall also pay for (or
reimburse the Lender for any costs of) any real estate appraisals, limited
updated appraisals, and environmental reports, and any review of such
appraisals, limited updated appraisals, and environmental reports by the
Lender’s internal or external consultants relating to the Mortgaged Properties,
in each case to the extent any such appraisal, limited updated appraisal, or
environmental report is required to be delivered to (or received by) the Lender
pursuant to the terms of the Agreement, or is otherwise delivered or requested
by the Company or any Subsidiary.
(b) Indemnification by the Company. The Company shall indemnify the Lender, and
each Related Party of Lender (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses (including the fees, charges and
disbursements of any counsel for any Indemnitee), and shall indemnify and hold
harmless each Indemnitee from all fees and time charges and disbursements for
attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or
asserted against any Indemnitee by any Person (including the Company or any
other Loan Party) other than such Indemnitee and its Related Parties arising out
of, in connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder, or the consummation of the transactions
contemplated hereby or thereby, or, in the case of the Lender (and any sub-agent
thereof) and its Related Parties only, the administration of this Agreement and
the other Loan Documents, (ii) any Loan or the use or proposed use of the
proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials at, on, under or emanating from any property owned, leased or operated
by the Company or any of its Subsidiaries, or any Environmental Liability
related in any way to the Company or any of its Subsidiaries, or (iv) any actual
or prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party or by the Company or any other Loan Party, and
regardless of whether any Indemnitee is a party thereto, IN ALL CASES, WHETHER
OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE,
CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNITEE; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses (x) are
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determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or (y) result from a claim brought by the Company or any other
Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s
obligations hereunder or under any other Loan Document, if the Company or such
Loan Party has obtained a final and nonappealable judgment in its favor on such
claim as determined by a court of competent jurisdiction. Without limiting the
provisions of Section 3.01(c), this Section 10.04(b) shall not apply with
respect to Taxes other than any Taxes that represent losses, claims, damages,
etc. arising from any non-Tax claim.
(c) [Reserved]
(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, the Company shall not assert, and the Company hereby waives, and
acknowledges that no other Person shall have, any claim against any Indemnitee,
on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby, the transactions contemplated
hereby or thereby, any Loan or the use of the proceeds thereof. No Indemnitee
referred to in subsection (b) above shall be liable for any damages arising from
the use by unintended recipients of any information or other materials
distributed to such unintended recipients by such Indemnitee through
telecommunications, electronic or other information transmission systems in
connection with this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby, except to the extent such damages are found in a
final, nonappealable judgment by a court of competent jurisdiction to have
resulted from such Indemnitee’s gross negligence or willful misconduct.
(e) Payments. All amounts due under this Section shall be payable not later than
ten Business Days after demand therefor.
(f) Survival. The agreements in this Section and the indemnity provisions of
Section 10.02(e) shall survive the termination of the obligation of Lender to
make Advances and the repayment, satisfaction or discharge of all the other
Obligations.
10.05 Payments Set Aside. To the extent that any payment by or on behalf of the
Company is made to the Lender, or the Lender exercises its right of setoff, and
such payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such setoff had not occurred.
10.06 Successors and Assigns.
(a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors
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and assigns permitted hereby, except that neither the Company nor any other Loan
Party may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of the Lender and Lender may not
assign or otherwise transfer any of its rights or obligations hereunder except
by way of participation in accordance with the provisions of Section 10.06(d),
or (iii) by way of pledge or assignment of a security interest subject to the
restrictions of Section 10.06(f) (and any other attempted assignment or transfer
by any party hereto shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in subsection (d) of this Section and, to
the extent expressly contemplated hereby, the Related Parties of the Lender) any
legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) [Reserved].
(c) [Reserved].
(d) Participations. The Lender may at any time, without the consent of, or
notice to, the Company, sell participations to any Person (other than a natural
Person, or a holding company, investment vehicle or trust for, or owned and
operated for the primary benefit of a natural Person, or the Company or any of
the Company’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a
portion of the Lender’s rights and/or obligations under this Agreement
(including all or a portion of the Loan owing to it); provided that (i) the
Lender’s obligations under this Agreement shall remain unchanged, (ii) the
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Company, the Lender shall continue
to deal solely and directly with the Lender in connection with the Lender’s
rights and obligations under this Agreement. For the avoidance of doubt, the
Lender shall be responsible for the indemnity under Section 10.04(c) without
regard to the existence of any participation.
Any agreement or instrument pursuant to which the Lender sells such a
participation shall provide that the Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that the Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that affects such Participant. The Company agrees that each
Participant shall be entitled to the benefits of Sections 3.01 and 3.04 to the
same extent as if it were the Lender and had acquired its interest by assignment
pursuant to subsection (b) of this Section (it being understood that the
documentation required under Section 3.01(e) shall be delivered to the Lender to
the same extent as if it were the Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section; provided that such
Participant (A) agrees to be subject to the provisions of Sections 3.05 and
10.13 as if it were an assignee under paragraph (b) of this Section and (B)
shall not be entitled to receive any greater payment under Sections 3.01 or
3.04, with respect to any participation, than the Lender would have been
entitled to receive, except to the extent such entitlement to receive a greater
payment results from a Change in Law that occurs after the Participant acquired
the applicable participation. Lender agrees, at the Company’s request and
expense, to use reasonable efforts to cooperate with the Company to effectuate
the provisions of
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Section 3.05 with respect to any Participant. Each Participant agrees to be
subject to Section 2.13 as though it were the Lender. Lender shall, acting
solely for this purpose as non-fiduciary agent of the Company, maintain a
register on which it enters the name and address of each Participant and the
principal amounts (and .stated interest) of each Participant’s interest in the
Loan or other obligations under the Loan Documents (the “Participant Register”);
provided that the Lender shall have any obligation to disclose all or any
portion of the Participant Register (including the identity of any Participant
or any information relating to a Participant’s interest in any commitments,
loans, letters of credit or its other obligations under any Loan Document) to
any Person except to the extent that such disclosure is necessary to establish
that such commitment, loan, letter of credit or other obligation is in
registered form under Section 5f.103-1(c) of the United States Treasury
Regulations. The entries in the Participant Register shall be conclusive absent
manifest error, and the Lender shall treat each Person whose name is recorded in
the Participant Register as the owner of such participation for all purposes of
this Agreement notwithstanding any notice to the contrary.
(e) [Reserved].
(f) Certain Pledges. The Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under the Note) to secure obligations of the Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release the Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for Lender as a party
hereto.
(g) Electronic Execution of Assignments and Certain Other Documents. The words
“delivery,” “execute,” “execution,” “signed,” “signature,” and words of like
import in any Loan Document or any other document executed in connection
herewith shall be deemed to include electronic signatures, the electronic
matching of assignment terms and contract formations on electronic platforms
approved by the Lender, or the keeping of records in electronic form, each of
which shall be of the same legal effect, validity or enforceability as a
manually executed signature, physical delivery thereof or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable Law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform Electronic
Transactions Act; provided that notwithstanding anything contained herein to the
contrary, the Lender is under no obligation to agree to accept electronic
signatures in any form or in any format unless expressly agreed to by the Lender
pursuant to procedures approved by it and provided further without limiting the
foregoing, upon the request of any party, any electronic signature shall be
promptly followed by such manually executed counterpart.
(h) [Reserved].
10.07 Treatment of Certain Information; Confidentiality. The Lender agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its Affiliates and to its Related Parties
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent required or requested by any
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regulatory authority purporting to have jurisdiction over such Person or its
Related Parties (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating
to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights and obligations under this Agreement or (ii) any actual or prospective
party (or its Related Parties) to any swap, derivative or other transaction
under which payments are to be made by reference to the Company and its
obligations, this Agreement or payments hereunder, (g) on a confidential basis
to (i) any rating agency in connection with rating the Company or its
Subsidiaries or the credit facilities provided hereunder or (ii) the CUSIP
Service Bureau or any similar agency in connection with the issuance and
monitoring of CUSIP numbers of other market identifiers with respect to the
credit facilities provided hereunder, (h) with the consent of the Company or (i)
to the extent such Information (x) becomes publicly available other than as a
result of a breach of this Section or (y) becomes available to the Lender or its
Affiliates on a nonconfidential basis from a source other than the Company. In
addition, the Lender may disclose the existence of this Agreement and
information contained in this Agreement to market data collectors, similar
service providers to the lending industry and service providers to the Lender in
connection with the administration of this Agreement, the other Loan Documents
and the Commitment.
For purposes of this Section, “Information” means all information received from
the Company or any Subsidiary relating to the Company or any Subsidiary or any
of their respective businesses, other than any such information that is
available to the Lender on a nonconfidential basis prior to disclosure by the
Company or any Subsidiary, provided that, in the case of information received
from the Company or any Subsidiary after the date hereof, such information is
clearly identified at the time of delivery as confidential. Any Person required
to maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
The Lender acknowledges that (a) the Information may include material non-public
information concerning the Company or a Subsidiary, as the case may be, (b) it
has developed compliance procedures regarding the use of material non-public
information and (c) it will handle such material non-public information in
accordance with applicable Law, including United States Federal and state
securities Laws.
10.08 [Reserved].
10.09 Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If the Lender shall receive
interest in an amount that exceeds the Maximum Rate, the excess interest shall
be applied to the principal of the Loan or, if it exceeds such unpaid principal,
refunded to the Company. In determining whether the interest contracted for,
charged, or received by the
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Lender exceeds the Maximum Rate, the Lender may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.
10.10 Counterparts; Integration; Effectiveness. This Agreement and the other
Loan Documents may be executed in counterparts (and by different parties hereto
in different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract. This Agreement
and the other Loan Documents constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement and the other Loan
Documents shall become effective when they shall have been executed by the
Lender and when the Lender shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto.
Delivery of an executed counterpart of a signature page of this Agreement or any
other Loan Document by telecopy or other electronic imaging means shall be
effective as delivery of a manually executed counterpart of this Agreement or
such other Loan Document.
10.11 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the Lender,
regardless of any investigation made by the Lender or on its behalf and
notwithstanding that the Lender may have had notice or knowledge of any Default
at the time of any Advance, and shall continue in full force and effect as long
as the Loan or any other Obligation hereunder shall remain unpaid or
unsatisfied.
10.12 Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Without limiting the foregoing provisions of this Section
10.12, if and to the extent that the enforceability of any provisions in this
Agreement relating to the Lender shall be limited by Debtor Relief Laws, as
determined in good faith by the Lender, then such provisions shall be deemed to
be in effect only to the extent not so limited.
10.13 [Reserved].
10.14 Governing Law; Jurisdiction; Etc.
(a) GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND ANY CLAIMS,
CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR
OTHERWISE) BASED UPON,
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ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT (EXCEPT,
AS TO ANY OTHER LOAN DOCUMENT, AS EXPRESSLY SET FORTH THEREIN) AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b) SUBMISSION TO JURISDICTION. THE COMPANY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED
STATES FOR THE WESTERN DISTRICT, AND ANY APPELLATE COURT FROM ANY THEREOF, IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH
OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW
YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH
FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT
THAT THE LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE COMPANY OR ITS PROPERTIES
IN THE COURTS OF ANY JURISDICTION.
(c) WAIVER OF VENUE. THE COMPANY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED
TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT.
(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.

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10.15 Waiver of Jury Trial; Binding Arbitration.

(a) Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
(b) Binding Arbitration.
(i) Agreement to Arbitrate. Upon demand of any party, whether made before or
after institution of any judicial proceeding, any dispute, claim or controversy
arising out of, connected with or relating to this Agreement or any other Loan
Document (“Disputes”), between or among parties hereto and to the other Loan
Documents shall be resolved by binding arbitration as provided herein.
Institution of a judicial proceeding by a party does not waive the right of that
party to demand arbitration hereunder. Disputes may include tort claims,
counterclaims, claims brought as class actions, claims arising from Loan
Documents executed in the future, disputes as to whether a matter is subject to
arbitration, or claims concerning any aspect of the past, present or future
relationships arising out of or connected with the Loan Documents. The parties
hereto do not waive any applicable Federal or state substantive Law (including
the protections afforded to banks under 12 U.S.C. Section 91 or any similar
applicable state Law) except as provided herein. A judgment upon the award may
be entered in any court having jurisdiction.
(ii) General Rules of Arbitration. Any arbitration proceeding will (A) be
governed by the Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any of the Loan
Documents between the parties, (B) be conducted by the American Arbitration
Association (the “AAA”), or such other administrator as the parties shall
mutually agree upon, in accordance with the commercial dispute resolution
procedures of the AAA, unless the claim or counterclaim is at least $1,000,000
exclusive of claimed interest, arbitration fees and costs, in which case the
arbitration shall be conducted in accordance with the AAA’s optional procedures
for large, complex commercial disputes (the commercial dispute resolution
procedures or the optional procedures for large, complex commercial disputes to
be referred to, as applicable, as the “Arbitration Rules”) and (C) proceed in a
location in New York, New York selected
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by the AAA. The expedited procedures set forth in Rule 51, et seq. of the
Arbitration Rules shall be applicable to claims of less than $1,000,000. All
applicable statutes of limitations shall apply to any Dispute. If there is any
inconsistency between the terms hereof and the Arbitration Rules, the terms and
procedures set forth herein shall control. Any party who fails or refuses to
submit to arbitration following a demand by any other party shall bear all costs
and expenses incurred by such other party in compelling arbitration of any
dispute. Notwithstanding anything in the foregoing to the contrary, any
arbitration proceeding demanded hereunder shall begin within ninety (90) days
after such demand thereof and shall be concluded within one hundred twenty (120)
days after such demand. These time limitations may not be extended unless a
party hereto shows cause for extension and then such extension shall not exceed
a total of sixty (60) days.
(iii) Arbitrators. Any arbitration proceeding in which the amount in controversy
is $5,000,000 or less will be decided by a single arbitrator selected according
to the Arbitration Rules, and who shall not render an award of greater than
$5,000,000. Any dispute in which the amount in controversy exceeds $5,000,000
shall be decided by majority vote of a panel of three arbitrators; provided that
all three arbitrators must actively participate in all hearings and
deliberations. The arbitrator will be a neutral attorney licensed in the
jurisdiction of the state where the hearing will be conducted or a neutral
retired judge of the jurisdiction, state or federal, of the state where the
hearing will be conducted, in either case with a minimum of ten years’
experience in the substantive law applicable to the subject matter of the
dispute to be arbitrated. In any arbitration proceeding, the arbitrator will
decide (by documents only or with a hearing at the arbitrator’s discretion) any
pre-hearing motions that are similar to motions to dismiss for failure to state
a claim or motions for summary adjudication. The arbitrator shall resolve all
disputes in accordance with the substantive Law of the State of New York and may
grant any remedy or relief that a court of such state could order or grant
within the scope hereof and such ancillary relief as is necessary to make
effective any award. The arbitrator shall also have the power to award recovery
of all costs and fees, to impose sanctions and to take such other action as the
arbitrator deems necessary to the same extent a judge could pursuant to the
Federal Rules of Civil Procedure or other applicable Law.
(iv) Preservation of Certain Remedies. Notwithstanding the preceding binding
arbitration provisions, the parties hereto and the other Loan Documents
preserve, without diminution, certain remedies that such Persons may employ or
exercise freely, either alone, in conjunction with or during a Dispute. Each
such Person shall have and hereby reserves the right to proceed in any court of
proper jurisdiction or by self-help to exercise or prosecute the following
remedies, as applicable: (A) all rights to foreclose against any real or
personal property or other security by exercising a power of sale granted in the
Loan Documents or under applicable Law or by judicial foreclosure and sale,
including a proceeding to confirm the sale, (B) all rights of self-help
including peaceful occupation of property and collection of rents, set off, and
peaceful possession of property, (C) obtaining
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provisional or ancillary remedies including injunctive relief, sequestration,
garnishment, attachment, appointment of receiver and in filing an involuntary
bankruptcy proceeding, and (D) when applicable, a judgment by confession of
judgment. Preservation of these remedies does not limit the power of an
arbitrator to grant similar remedies that may be requested by a party in a
Dispute.
10.16 USA PATRIOT Act Notice. The Lender that is subject to the Act (as
hereinafter defined) and the Lender hereby notifies the Company that pursuant to
the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the “Act”), it is required to obtain, verify and
record information that identifies the Company, which information includes the
name and address of the Company and other information that will allow the Lender
to identify the Company in accordance with the Act. The Company shall, promptly
following a request by the Lender, provide all documentation and other
information that the Lender requests in order to comply with its ongoing
obligations under applicable “know your customer” and anti-money laundering
rules and regulations, including the Act.
10.17 MIRE Events. Any increase, extension or renewal of the credit facility
evidenced by this Agreement shall be subject to flood insurance due diligence
and flood insurance compliance reasonably satisfactory to the Lender.
10.18 No Advisory or Fiduciary Responsibility. In connection with all aspects of
each transaction contemplated hereby (including in connection with any
amendment, waiver or other modification hereof or of any other Loan Document),
the Company acknowledges and agrees, and acknowledges its Affiliates’
understanding, that: (i) (A) the arranging and other services regarding this
Agreement provided by the Lender are arm’s-length commercial transactions
between the Company and its Affiliates, on the one hand, and the Lender, on the
other hand, (B) the Company has consulted its own legal, accounting, regulatory
and tax advisors to the extent it has deemed appropriate, and (C) the Company is
capable of evaluating, and understands and accepts, the terms, risks and
conditions of the transactions contemplated hereby and by the other Loan
Documents; (ii) (A) the Lender is and has been acting solely as a principal and,
except as expressly agreed in writing by the relevant parties, has not been, is
not, and will not be acting as an advisor, agent or fiduciary for the Company or
any of its Affiliates, or any other Person and (B) the Lender has no obligation
to the Company or any of its Affiliates with respect to the transactions
contemplated hereby except those obligations expressly set forth herein and in
the other Loan Documents; and (iii) the Lender and its Affiliates may be engaged
in a broad range of transactions that involve interests that differ from those
of the Company and its Affiliates, and the Lender has no obligation to disclose
any of such interests to the Company or its Affiliates. To the fullest extent
permitted by law, the Company hereby waives and releases any claims that it may
have against the Lender with respect to any breach or alleged breach of agency
or fiduciary duty in connection with any aspect of any transaction contemplated
hereby.
10.19 [Reserved].
10.20 Electronic Execution of Assignments and Certain Other Documents. The words
“execute,” “execution,” “signed,” “signature,” and words of like import in or
related to any document to be signed in connection with this Agreement and the
transactions contemplated hereby (including without limitation amendments or
other modifications, waivers and consents) shall be
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deemed to include electronic signatures, the electronic matching of assignment
terms and contract formations on electronic platforms approved by the Lender, or
the keeping of records in electronic form, each of which shall be of the same
legal effect, validity or enforceability as a manually executed signature or the
use of a paper-based recordkeeping system, as the case may be, to the extent and
as provided for in any applicable law, including the Federal Electronic
Signatures in Global and National Commerce Act, the New York State Electronic
Signatures and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act; provided that notwithstanding anything contained
herein to the contrary the Lender is under no obligation to agree to accept
electronic signatures in any form or in any format unless expressly agreed to by
the Lender pursuant to procedures approved by it.
10.21 [Reserved].
10.22 Acknowledgement Regarding Any Supported QFCs. To the extent that the Loan
Documents provide support, through a guarantee or otherwise, for any Swap
Contract or any other agreement or instrument that is a QFC (such support, “QFC
Credit Support”, and each such QFC, a “Supported QFC”), the parties acknowledge
and agree as follows with respect to the resolution power of the Federal Deposit
Insurance Corporation under the Federal Deposit Insurance Act and Title II of
the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the
regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in
respect of such Supported QFC and QFC Credit Support (with the provisions below
applicable notwithstanding that the Loan Documents and any Supported QFC may in
fact be stated to be governed by the laws of the State of New York and/or of the
United States or any other state of the United States): In the event a Covered
Entity that is party to a Supported QFC (each, a “Covered Party”) becomes
subject to a proceeding under a U.S. Special Resolution Regime, the transfer of
such Supported QFC and the benefit of such QFC Credit Support (and any interest
and obligation in or under such Supported QFC and such QFC Credit Support, and
any rights in property securing such Supported QFC or such QFC Credit Support)
from such Covered Party will be effective to the same extent as the transfer
would be effective under the U.S. Special Resolution Regime if the Supported QFC
and such QFC Credit Support (and any such interest, obligation and rights in
property) were governed by the laws of the United States or a state of the
United States. In the event a Covered Party or a BHC Act Affiliate of a Covered
Party becomes subject to a proceeding under a U.S. Special Resolution Regime,
Default Rights under the Loan Documents that might otherwise apply to such
Supported QFC or any QFC Credit Support that may be exercised against such
Covered Party are permitted to be exercised to no greater extent than such
Default Rights could be exercised under the U.S. Special Resolution Regime if
the Supported QFC and the Loan Documents were governed by the laws of the United
States or a state of the United States. Without limitation of the foregoing, it
is understood and agreed that rights and remedies of the parties with respect to
a Defaulting Lender shall in no event affect the rights of any Covered Party
with respect to a Supported QFC or any QFC Credit Support.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGES FOLLOW.]

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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be made,
executed and delivered by their duly authorized officers as of the day and year
first above written.
COMPANY:
SONIC AUTOMOTIVE, INC.
By: /s/ Heath R. Byrd   
Name:  Heath R. Byrd
Title:  Executive Vice President and
         Chief Financial Officer

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LENDER:
ALLY BANK
By: /s/ Matt Mayes 
Name: Matt Mayes
Title: Authorized Representative

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Schedule 1.01C
Certain ERISA Information
Five dealership subsidiaries of Sonic Automotive, Inc. located in Northern
California are currently contributing employers to the Automotive Industries
Pension Trust Fund (EIN # 94-1133245), Plan No. 001 (the “Plan”) (and one closed
dealership subsidiary previously also was a contributing employer), making
fixed-dollar contributions to the Plan pursuant to collective bargaining
agreements with the International Association of Machinists. The Plan is a
“Multiemployer Plan” (as defined in the Agreement) with numerous participating
contributing employers primarily located in the State of California. The federal
Pension Protection Act of 2006 (the “Act”) requires multiemployer defined
benefit pension plans to engage an actuary to annually evaluate the particular
pension plan’s funding status, and to determine the extent to which the
particular plan is projected to meet its obligations. A determination by the
actuary that the particular plan is in “critical status” pursuant to the Act
triggers requirements for the particular plan to adopt a rehabilitation plan
designed to improve the plan’s financial condition over time and improve the
plan’s ability to meet pension obligations in the future. In 2008, the Board of
Trustees of the Plan formally notified participating employers, among others,
that the Plan’s actuary certified the Plan to be in critical status pursuant to
the Act. The Board of Trustees of the Plan also adopted a Rehabilitation Plan to
address such status pursuant to the requirements of the Act, including
suspension or elimination of certain benefits that were previously available
under the Plan and requirements to increase participating employer contributions
for a seven-year period that began with the 2013 plan year. The Form 5500
recently filed for the Plan for the 2018 plan year included an actuarial
certification indicating that, as of January 1, 2019, the Plan is in critical
and declining status, and providing notice that the Plan is making the scheduled
progress in meeting the requirements of the Plan’s current Rehabilitation Plan,
based on the annual standards of the Rehabilitation Plan.

Schedule 1.01C

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

Schedule 4.01
Good Standing Jurisdictions and Foreign Qualifications
See Schedule 5.13

Schedule 4.01

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

Schedule 5.05
Material Indebtedness and Other Liabilities
None

Schedule 5.05

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

Schedule 5.06
Litigation
GEORGIA
Roberts v. Dyer & Dyer Volvo and Sans Arthur
The dealership’s driver was pulling a trailer on April 30, 2017 when he swerved
to the right and the trailer struck a pedestrian (diesel mechanic) who was
standing on or near a disabled tractor-trailer on I-85 South in Jackson County
Georgia. The accident occurred at approximately 2:03 pm in clear weather. Mr.
Roberts suffered multiple injuries including amputations of both legs below the
knees. Plaintiff filed his lawsuit against the dealership, the driver and Sonic
Automotive on September 18, 2017. Discovery is ongoing. A trial date has been
set for March 2, 2020. This matter is listed on this Schedule 5.06 solely due to
the fact that the plaintiff is seeking damages in excess of the Threshold Amount
and not as an exception to any other representation made in Section 5.06 of the
Credit Agreement.

Schedule 5.06

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

Schedule 5.13
Subsidiaries; Equity Interests
PART “A”

ENTITYASSUMED NAMEDomesticForeignSHAREHOLDER(s)AnTrev, LLCNC
Member:
SRE Holding, LLC, 100%
Arngar, Inc.Cadillac of South CharlotteNCSonic Automotive, Inc., 1,333Autobahn,
Inc.Autobahn MotorsCAL Dealership Group, Inc., 400,000Avalon Ford, Inc.DECASonic
Automotive, Inc., 4,164Cornerstone Acceptance CorporationFLNC
OH
TN
TXSonic Automotive, Inc., 100AM GA, LLCGAEchoPark Automotive, Inc. 100%AM Realty
GA, LLCGAEchoPark Automotive, Inc. 100%Car Cash of North Carolina, Inc.NCSonic
Automotive, Inc., 100EchoPark Automotive, Inc.EchoParkDECO
FL
NC
TX
CASonic Automotive, Inc., 100EchoPark AZ, LLCAZEchoPark Automotive, Inc.,
100%EchoPark CA, LLCEchoParkCAEchoPark Automotive, Inc., 100%EchoPark Driver
Education, LLCCOEchoPark Automotive, Inc., 100%EchoPark FL, LLCFLEchoPark
Automotive, Inc. 100%EchoPark NC, LLCEchoParkNC
Member:
EchoPark Automotive, Inc., 100%
EchoPark Realty CA, LLCCAEchoPark Automotive, Inc., 100%EchoPark Realty TX,
LLCTXEchoPark Automotive, Inc., 100%EchoPark SC, LLCSC
Member:
EchoPark Automotive, Inc., 100%

Schedule 5.13-1

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

ENTITYASSUMED NAMEDomesticForeignSHAREHOLDER(s)EchoPark TX,
LLCEchoParkTXEchoPark Automotive, Inc., 100%EP Realty AZ, LLCAZEchoPark
Automotive, Inc., 100%EP Realty NC, LLCNC
Member:
EchoPark Automotive, Inc., 100%
EP Realty SC, LLCSC
Member:
EchoPark Automotive, Inc., 100%
SAI DS Realty TX, LLCTXSAI DS, LLC 100%SAI DS, LLCEchoParkTXVA
FL
NCSonic Automotive, Inc., 100%TT Denver, LLCEchoParkCO
Member:
EchoPark Automotive, Inc., 100%
TTRE CO 1, LLCCO
Member:
EchoPark Automotive, Inc., 100%
FAA Beverly Hills, Inc.Beverly Hills BMWCAFirstAmerica Automotive, Inc.,
10,000FAA Capitol N, Inc.CAFirstAmerica Automotive, Inc., 10,000FAA Concord H,
Inc.Concord HondaCAFirstAmerica Automotive, Inc., 10,000FAA Concord T,
Inc.Concord ToyotaCAFirstAmerica Automotive, Inc., 1,000FAA Dublin N,
Inc.CAFirstAmerica Automotive, Inc., 10,000FAA Dublin VWD, Inc.CAFirstAmerica
Automotive, Inc., 10,000FAA Holding Corp.CAFirstAmerica Automotive, Inc.,
10,000FAA Las Vegas H, Inc.Honda WestNVFAA Holding Corp., 10,000FAA Poway H,
Inc.Poway HondaCAFirstAmerica Automotive, Inc., 10,000FAA Poway T, Inc.
Poway Toyota
Poway Scion
CAFirstAmerica Automotive, Inc., 10,000

Schedule 5.13-2

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

ENTITYASSUMED NAMEDomesticForeignSHAREHOLDER(s)FAA San Bruno, Inc.CAFirstAmerica
Automotive, Inc., 10,000FAA Santa Monica V, Inc.CAFirstAmerica Automotive, Inc.,
10,000FAA Serramonte H, Inc.Honda of SerramonteCAFirstAmerica Automotive, Inc.,
10,000FAA Serramonte L, Inc.
Lexus of Marin
Lexus of Serramonte
CAFirstAmerica Automotive, Inc., 10,000FAA Serramonte, Inc.CAFirstAmerica
Automotive, Inc., 10,000FAA Stevens Creek, Inc.CAFirstAmerica Automotive, Inc.,
10,000FAA Torrance CPJ, Inc.CAFirstAmerica Automotive, Inc., 10,000FirstAmerica
Automotive, Inc.DECASonic Automotive, Inc., 100Fort Mill Ford, Inc.SCSonic
Automotive, Inc., 2,700Franciscan Motors, Inc.Acura of SerramonteCAL Dealership
Group, Inc., 700,000Frontier Oldsmobile-Cadillac, Inc.NCSonic Automotive, Inc.,
200Kramer Motors IncorporatedCAFAA Holding Corp., 250L Dealership Group,
Inc.TXCAFAA Holding Corp., 1,000Marcus David CorporationTown and Country Toyota
Town and Country Toyota Certified Used CarsNCSonic Automotive, Inc.,
579,000Massey Cadillac, Inc. (TN-MI)TNSonic Automotive, Inc., 100Mountain States
Motors Co., Inc.COSonic Automotive, Inc., 100%North Point Imports, LLCNorth
Point Volvo CarsGA
Members:
SAI Peachtree, LLC, 50%
Chris Auto Group, LLC, 50%
Ontario L, LLCCrown LexusCA
Member:
Sonic Automotive, Inc., 100%
Philpott Motors, Ltd.TX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%
Santa Clara Imported Cars, Inc.Honda of Stevens CreekCAL Dealership Group, Inc.,
1,082SRM Assurance, Ltd.Cayman IslandsSonic Automotive, Inc., 5,000

Schedule 5.13-3

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

ENTITYASSUMED NAMEDomesticForeignSHAREHOLDER(s)Stevens Creek Cadillac, Inc.CAL
Dealership Group, Inc., 230,000 Class ATown and Country Ford,
IncorporatedNCSonic Automotive, Inc., 471.25Windward, Inc.Honda of HaywardHICAL
Dealership Group, Inc., 140,500SAI AL HC1, Inc.ALSonic Automotive, Inc., 100SAI
AL HC2, Inc.Tom Williams Collision CenterALSonic Automotive, Inc., 100SAI Ann
Arbor Imports, LLCMI
Member:
Sonic Automotive, Inc., 100
SAI Atlanta B, LLCGlobal Imports (BMW)
Global Imports MINIGA
Member:
SAI OK HC1, Inc., 100%
SAI Broken Arrow C, LLCOK
Member:
SAI OK HC1, Inc., 100%
SAI Calabasas A, LLCCA
Member:
Sonic Automotive, Inc., 100%
SAI Chamblee V, LLCGA
Member:
SAI Peachtree, LLC, 100%
SAI Charlotte M, LLCNC
Member:
Sonic Automotive, Inc., 100%
SAI Chattanooga N, LLCNissan of Chattanooga EastTN
Member:
SAI TN HC1, LLC, 100%
SAI Clearwater T, LLCClearwater ToyotaFL
Member:
SAI FL HC2, Inc., 100%
SAI Cleveland N, LLCTN
Member:
SAI TN HC1, LLC, 100%
SAI Columbus Motors, LLCHatfield Subaru
Hatfield HyundaiOH
Member:
Sonic Automotive, Inc., 100%
SAI Columbus T, LLCHatfield Automall
Toyota WestOH
Member:
Sonic Automotive, Inc., 100
SAI Columbus VWK, LLCHatfield Volkswagen
Hatfield KiaOH
Member:
Sonic Automotive, Inc., 100
SAI Conroe N, LLCTXSonic Automotive, Inc., 100%SAI Denver B, Inc.
Bodyworks
Murray Motorworks
BMW of Denver Downtown
COSonic Automotive, Inc., 100

Schedule 5.13-4

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

ENTITYASSUMED NAMEDomesticForeignSHAREHOLDER(s)SAI Denver C, Inc.COSonic
Automotive, Inc., 100SAI Denver M, Inc.Mercedes-Benz of DenverCOSonic
Automotive, Inc., 100SAI Fairfax B, LLCBMW of FairfaxVA
Member:
SAI VA HC1, Inc., 100%
SAI FL HC1, Inc.FLSonic Automotive, Inc., 100SAI FL HC2, Inc.FLSonic Automotive,
Inc., 100SAI FL HC3, Inc.FLSonic Automotive, Inc., 100SAI FL HC4, Inc.FLSonic
Automotive, Inc., 100SAI FL HC7, Inc.FLSonic Automotive, Inc., 500SAI Fort Myers
B, LLCBMW of Fort Myers
MINI of Fort MyersFL
Member:
SAI FL HC2, Inc., 100%
SAI Fort Myers H, LLCFL
Member:
SAI FL HC4, Inc., 100%
SAI Fort Myers M, LLCMercedes-Benz of Fort MyersFL
Member:
SAI FL HC7, Inc., 100%
SAI Fort Myers VW, LLCVolkswagen of Fort MyersFL
Member:
SAI FL HC4, Inc., 100%
SAI GA HC1, LLCGA
Member:
Sonic Automotive of Nevada, Inc.,
100%
SAI Irondale Imports, LLCAudi Birmingham
BMW of Birmingham
Jaguar Birmingham
Land Rover Birmingham
MINI of Birmingham
Porsche BirminghamAL
Member:
SAI AL HC2, Inc., 100%
SAI Irondale L, LLCLexus of BirminghamAL
Member:
SAI AL HC2, Inc., 100%
SAI Long Beach B, Inc.Long Beach BMW
Long Beach MINICASonic Automotive, Inc., 100SAI McKinney M, LLCMercedes-Benz of
McKinneyTXSonic Automotive, Inc., 100%SAI MD HC1, Inc.MDSonic Automotive, Inc.,
100SAI Monrovia B, Inc.BMW of Monrovia
MINI of MonroviaCASonic Automotive, Inc., 100SAI Montgomery B, LLCBMW of
MontgomeryAL
Member:
SAI AL HC1, Inc., 100%
SAI Montgomery BCH, LLCClassic Cadillac
Classic Buick GMCAL
Member:
SAI AL HC1, Inc., 100%

Schedule 5.13-5

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

ENTITYASSUMED NAMEDomesticForeignSHAREHOLDER(s)SAI Montgomery CH, LLCCapitol
Chevrolet
Capitol HyundaiAL
Member:
SAI AL HC1, Inc., 100%
SAI Nashville CSH, LLCCrest CadillacTN
Member:
SAI TN HC1, LLC, 100%
SAI Nashville H, LLCCrest HondaTN
Member:
SAI TN HC3, LLC, 100%
SAI Nashville M, LLCMercedes-Benz of NashvilleTN
Member:
SAI TN HC1, LLC, 100%
SAI Nashville Motors, LLCAudi Nashville
Porsche of NashvilleTN
Member:
SAI TN HC2, LLC, 100%
SAI OK HC1, Inc.OK
Sonic Automotive, Inc., 100
Sonic Automotive of Nevada, Inc., 300
SAI Oklahoma City C, LLCOK
Member:
SAI OK HC1, Inc., 100%
SAI Oklahoma City H, LLCOK
Member:
SAI OK HC1, Inc., 100%
SAI Oklahoma City T, LLCOK
Member:
SAI OK HC1, Inc., 100%
SAI Orlando CS, LLCMassey CadillacFL
Member:
SAI FL HC3, Inc., 100%
SAI Peachtree, LLCGA
Members:
SAI GA HC1, LLC, 100%
SAI Pensacola A, LLCAudi PensacolaFL
Member:
SAI FL HC2, Inc., 100%
SAI Philpott T, LLCPhilpott ToyotaTXSonic Automotive, Inc., 100%SAI Riverside C,
LLCOK
Member:
SAI OK HC1, Inc., 100%
SAI Roaring Fork LR, Inc.pLand Rover Roaring ForkCOSonic Automotive, Inc.,
100SAI Rockville Imports, LLCAudi Rockville
Porsche BethesdaMD
Member:
SAI MD HC1, Inc., 100%
SAI Rockville L, LLCMD
Member:
SAI MD HC1, Inc., 100%
SAI S. Atlanta JLR, LLC
Jaguar South Atlanta
Land Rover South Atlanta
Jaguar Land Rover South Atlanta
GA
Members:
SAI GA HC1, LLC, 100%
SAI Santa Clara K, Inc.CASonic Automotive, Inc., 100SAI SIC, Inc.GASonic
Automotive, Inc. 100%SAI Stone Mountain T, LLCGA
Member:
SAI GA HC1, LLC, 100%

Schedule 5.13-6

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

ENTITYASSUMED NAMEDomesticForeignSHAREHOLDER(s)SAI TN HC1, LLCTN
Member:
Sonic Automotive of Nevada, Inc.,
100%
SAI TN HC2, LLCTN
Member:
Sonic Automotive of Nevada, Inc.,
100%
SAI TN HC3, LLCTN
Member:
Sonic Automotive of Nevada, Inc.,
100%
SAI Tulsa N, LLCOK
Member:
SAI OK HC1, Inc., 100%
SAI Tulsa T, LLCOK
Member:
SAI OK HC1, Inc., 100%
SAI Tysons Corner H, LLCVA
Member:
SAI VA HC1, Inc. 100%
SAI Tysons Corner I, LLCVA
Member:
SAI VA HC1, Inc., 100%
SAI VA HC1, Inc.VASonic Automotive, Inc., 100SAI Vehicle Subscription,
Inc.DETXSonic Automotive, Inc. 100%SAI VS GA, LLCGASAI Vehicle Subscription,
Inc. 100%SAI VS TX, LLCTXSAI Vehicle Subscription, Inc. 100%SAI West Houston B,
LLCBMW of West HoustonTX
Member:
Sonic Momentum B, LP, 100%
Sonic 2185 Chapman Rd., Chattanooga, LLCEconomy Honda SuperstoreTN
Member:
Sonic Automotive of Nevada, Inc.,
100%
Sonic Advantage PA, LPMomentum Luxury Cars Audi West Houston Porsche of West
HoustonTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%
Sonic – Buena Park H, Inc.Buena Park HondaCASonic Automotive, Inc., 100Sonic –
Cadillac D, LPTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%

Schedule 5.13-7

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

ENTITYASSUMED NAMEDomesticForeignSHAREHOLDER(s)Sonic – Calabasas A, Inc.CASonic
Automotive, Inc., 100Sonic Calabasas M, Inc.Mercedes-Benz of CalabasasCASonic
Automotive, Inc., 100Sonic – Calabasas V, Inc.CASonic Automotive, Inc., 100Sonic
– Camp Ford, LPTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%
Sonic – Capitol Cadillac, Inc.MISonic Automotive, Inc., 100Sonic – Capitol
Imports, Inc.SCSonic Automotive, Inc., 100Sonic – Carrollton V, LPTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%
Sonic – Carson F, Inc.CASonic Automotive, Inc., 100Sonic – Carson LM,
Inc.CASonic Automotive, Inc., 100Sonic – Clear Lake N, LPTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%
Sonic – Clear Lake Volkswagen, LPTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%
Sonic – Denver T, Inc.Mountain States ToyotaCOSonic Automotive, Inc., 100Sonic
Development, LLCNCAL CA
CO FL
GA MD
MI NV
OH OK
SC TN
TX VA
Member:
Sonic Automotive, Inc., 100%
Sonic Divisional Operations, LLC
CBS
Central Buying Solutions
NV
AL AZ
CA CO
FL GA
MD MI
NV NC
OH OK
SC TN
TX VA
WI
Member:
Sonic Automotive, Inc., 100%

Schedule 5.13-8

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

ENTITYASSUMED NAMEDomesticForeignSHAREHOLDER(s)Sonic – Downey Cadillac,
Inc.CASonic Automotive, Inc., 100Sonic eStore, Inc.NCSonic Automotive, Inc.,
100Sonic FFC 1, Inc.DETXSonic Automotive, Inc., 100Sonic FFC 2, Inc.DETXSonic
Automotive, Inc., 100Sonic FFC 3, Inc.DETXSonic Automotive, Inc., 100Sonic –
Fort Mill Chrysler Jeep, Inc.SCSonic Automotive, Inc., 1,000Sonic – Fort Mill
Dodge, Inc.SCSonic Automotive, Inc., 1,000Sonic – Fort Worth T, LPTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%
Sonic – Frank Parra Autoplex, LPTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%
Sonic – Harbor City H, Inc.Carson HondaCASonic Automotive, Inc., 100Sonic
Houston JLR, LPJaguar Houston North Land Rover Houston NorthTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%
Sonic Houston LR, LPLand Rover Houston Central Jaguar Houston CentralTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%
Sonic Fremont, Inc.CASonic Automotive, Inc., 100%Sonic – Houston V, LPTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%
Sonic – Integrity Dodge LV, LLCNV
Member:
Sonic Automotive, Inc., 100%
Sonic – Jersey Village Volkswagen, LPTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%

Schedule 5.13-9

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

ENTITYASSUMED NAMEDomesticForeignSHAREHOLDER(s)Sonic – Lake Norman Chrysler
Jeep, LLCNC
Member:
Sonic Automotive, Inc., 100%
Sonic – Las Vegas C West, LLCCadillac of Las VegasNV
Member:
Sonic Automotive, Inc., 100%
Sonic – Lloyd Nissan, Inc.FLSonic Automotive, Inc., 100Sonic – Lloyd Pontiac –
Cadillac, Inc.FLSonic Automotive, Inc., 100Sonic – Lone Tree Cadillac, Inc.Don
Massey Collision CenterCOSonic Automotive, Inc., 100Sonic – LS Chevrolet, LPLone
Star ChevroletTX
Sonic – LS, LLC, 0.1%
Sonic Automotive West, LLC, 99.9%
Sonic – LS, LLCDETX
Member:
Sonic of Texas, Inc., 100%
Sonic – Lute Riley, LPLute Riley HondaTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%
Sonic – Massey Cadillac, LPTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%
Sonic – Massey Chevrolet, Inc.CASonic Automotive, Inc., 100Sonic – Mesquite
Hyundai, LPTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%
Sonic Momentum B, LPMomentum BMW Momentum MINI Momentum Collision CenterTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%
Sonic Momentum JVP, LPMomentum Porsche Momentum Volvo Cars Land Rover Southwest
Houston Jaguar Southwest HoustonTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%
Sonic Momentum VWA, LPMomentum Volkswagen
Audi Central HoustonTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%

Schedule 5.13-10

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

ENTITYASSUMED NAMEDomesticForeignSHAREHOLDER(s)Sonic – Newsome Chevrolet World,
Inc.SCSonic Automotive, Inc., 100Sonic – Newsome of Florence, Inc.SCSonic
Automotive, Inc., 100Sonic – North Charleston Dodge, Inc.SCSonic Automotive,
Inc., 100Sonic – North Charleston, Inc.SCSonic Automotive, Inc., 100Sonic of
Texas, Inc.TXSonic Automotive, Inc., 100Sonic – Plymouth Cadillac, Inc.MISonic
Automotive, Inc., 100Sonic Resources, Inc.NVSonic Automotive, Inc., 100
100Sonic – Richardson F, LPNorth Central FordTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%.
Sonic – Sanford Cadillac, Inc.FLSonic Automotive, Inc., 100Sonic Santa Monica M,
Inc.W.I. SimonsonCASonic Automotive, Inc., 100Sonic Santa Monica S, Inc.CASonic
Automotive, Inc., 100Sonic – Shottenkirk, Inc.Pensacola HondaFLSonic Automotive,
Inc., 100Sonic – Stevens Creek B, Inc.
Stevens Creek BMW
Stevens Creek Pre-Owned
Stevens Creek BMW Pre-owned
CAL Dealership Group, Inc., 300,000Sonic –Volvo LV, LLCNV
Member:
Sonic Automotive, Inc., 100%
Sonic Walnut Creek M, Inc.Mercedes-Benz of Walnut CreekCASonic Automotive, Inc.,
100Sonic – West Covina T, Inc.CASonic Automotive, Inc., 100Sonic – Williams
Cadillac, Inc.ALSonic Automotive, Inc., 100Sonic Wilshire Cadillac, Inc.CASonic
Automotive, Inc., 100Sonic Automotive – 1495 Automall Drive, Columbus,
Inc.OHSonic Automotive, Inc., 100Sonic Automotive – 1720 Mason Ave., DB,
Inc.FLSonic Automotive, Inc., 100

Schedule 5.13-11

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

ENTITYASSUMED NAMEDomesticForeignSHAREHOLDER(s)Sonic Automotive - 1720 Mason
Ave., DB, LLCFL
Member:
Sonic Automotive – 1720 Mason
Ave., DB, Inc., 100 units
Sonic Automotive – 2490 South Lee Highway, LLCTN
Member:
Sonic Automotive of Nevada, Inc.,
100%
Sonic Automotive – 3401 N. Main, TX, LP
Baytown Auto Collision Center
Ron Craft Cadillac
Ron Craft Chevrolet
TX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%
Sonic Automotive – 4701 I-10 East, TX, LPBaytown FordTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%
Sonic Automotive – 6008 N. Dale Mabry, FL, Inc.FLSonic Automotive, Inc.,
100Sonic Automotive – 9103 E. Independence, NC, LLCInfiniti of CharlotteNC
Member:
Sonic Automotive, Inc., 100%
Sonic Automotive 2424 Laurens Rd., Greenville, Inc.SCSonic Automotive, Inc.,
100Sonic Automotive 2752 Laurens Rd., Greenville, Inc.Century BMW
Century MINISCSonic Automotive, Inc., 100Sonic Automotive Aviation, LLCNC
Member:
Sonic Automotive, Inc., 100%
Sonic Automotive F&I, LLCNVNC
Member:
Sonic Automotive, Inc., 100%
Sonic Automotive of Chattanooga, LLCBMW of ChattanoogaTN
Member:
Sonic Automotive of Nevada, Inc.,
100%
Sonic Automotive of Nashville, LLC
MINI of Nashville
BMW of Nashville
BMW Certified Pre-Owned Nashville
TN
Member:
Sonic Automotive of Nevada, Inc.,
100%
Sonic Automotive of Nevada, Inc.NVSonic Automotive, Inc., 1,000Sonic Automotive
of Texas, LPTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%

Schedule 5.13-12

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

ENTITYASSUMED NAMEDomesticForeignSHAREHOLDER(s)Sonic Automotive Support, LLCNV
Member:
Sonic Automotive, Inc., 100%
Sonic Automotive West, LLCNV
Member:
Sonic Automotive, Inc., 100%
SRE Alabama – 2, LLCALSRE Holding, LLC, 100%SRE Alabama – 5, LLCALSRE Holding,
LLC, 100%SRE Alabama 6, LLCSRE Holding, LLC 100%SRE California – 1, LLCCASRE
Holding, LLC, 100%SRE California – 2, LLCCASRE Holding, LLC, 100%SRE California
– 3, LLCCASRE Holding, LLC, 100%SRE California – 4, LLCCASRE Holding, LLC,
100%SRE California – 5, LLCCASRE Holding, LLC, 100%SRE California – 6, LLCCASRE
Holding, LLC, 100%SRE California – 7 SCB, LLCCASRE Holding, LLC, 100%SRE
California – 8 SCH, LLCCASRE Holding, LLC, 100%SRE California – 9 BHB, LLCCASRE
Holding, LLC, 100%SRE California 10 LBB, LLCCASRE Holding, LLC, 100%SRE
California 11 PH, LLCCASRE Holding, LLC, 100%SRE Colorado – 1, LLCCOSRE Holding,
LLC, 100%SRE Colorado – 2, LLCCOSRE Holding, LLC, 100%SRE Colorado – 3, LLCCOSRE
Holding, LLC, 100%SRE Colorado – 4 RF, LLCCOSRE Holding, LLC, 100%SRE Colorado –
5 CC, LLCCOSRE Holding, LLC, 100%SRE Florida – 1, LLCFLSRE Holding, LLC, 100%SRE
Florida – 2, LLCFLSRE Holding, LLC, 100%SRE Georgia 4, LLCGASRE Holding, LLC,
100%SRE Georgia 5, LLCGASRE Holding, LLC, 100%SRE Georgia 6, LLCGASRE Holding,
LLC, 100%SRE Holding, LLCNCAL AZ
CO TXSonic Automotive, Inc., 100%SRE Maryland – 1, LLCMDSRE Holding, LLC, 100%

Schedule 5.13-13

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

ENTITYASSUMED NAMEDomesticForeignSHAREHOLDER(s)SRE Nevada – 2, LLCNVSRE Holding,
LLC, 100%SRE North Carolina – 2, LLCNCSRE Holding, LLC, 100%SRE North Carolina –
3, LLCNCSRE Holding, LLC, 100%SRE Ohio 1, LLCOH
Member:
SRE Holding, LLC, 100%
SRE Ohio 2, LLCOH
Member:
SRE Holding, LLC, 100%
SRE Oklahoma – 1, LLCOKSRE Holding, LLC, 100%SRE Oklahoma – 2, LLCOKSRE Holding,
LLC, 100%SRE Oklahoma – 5, LLCOKSRE Holding, LLC, 100%SRE South Carolina – 2,
LLCSCSRE Holding, LLC, 100%SRE South Carolina – 3, LLCSCSRE Holding, LLC,
100%SRE South Carolina – 4, LLCSCSRE Holding, LLC, 100%SRE Tennessee – 1,
LLCTNSRE Holding, LLC, 100%SRE Tennessee – 2, LLCTNSRE Holding, LLC, 100%SRE
Tennessee – 3, LLCTNSRE Holding, LLC, 100%SRE Tennessee – 4, LLCTNSRE Holding,
LLC, 100%SRE Tennessee – 5, LLCTNSRE Holding, LLC, 100%SRE Tennessee 6, LLCTNSRE
Holding, LLC, 100%SRE Tennessee 7, LLCTNSRE Holding, LLC, 100%SRE Texas – 1,
LPTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%
SRE Texas – 2, LPTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%
SRE Texas – 3, LPTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%
SRE Texas – 4, LPTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%

Schedule 5.13-14

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

ENTITYASSUMED NAMEDomesticForeignSHAREHOLDER(s)SRE Texas – 5, LPTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%
SRE Texas – 6, LPTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%
SRE Texas – 7, LPTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%
SRE Texas – 8, LPTX
Partners:
Sonic of Texas, Inc., 1%
Sonic Automotive of Nevada, Inc.,
99%
sSRE Texas 9, LLCTX
Member:
SRE Holding, LLC, 100%
SRE Texas 10, LLCTX
Member:
SRE Holding, LLC, 100%
SRE Texas 11, LLCTX
Member:
SRE Holding, LLC, 100%
SRE Texas 12, LLCTX
Member:
SRE Holding, LLC, 100%
SRE Texas 13, LLCTX
Member:
SRE Holding, LLC, 100%
SRE Texas 14, LLCTX
Member:
SRE Holding, LLC, 100%
SRE Texas 15, LLCTX
Member:
SRE Holding, LLC, 100%
SRE Texas 16, LLCTX
Member:
SRE Holding, LLC, 100%
SRE Virginia - 1, LLCVAMD
Member:
SRE Holding, LLC, 100%
SRE Virginia – 2, LLCVASRE Holding, LLC, 100%

Schedule 5.13-15

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

PART “B”

SubsidiaryD/B/ADomesticForeignShareholdersNorth Point Imports, LLCNorth Point
Volvo CarsGA
Members:
SAI Peachtree, LLC, 50%
Chris Auto Group, LLC, 50%

Schedule 5.13-16

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

Schedule 5.20(c)
Mortgaged Properties

PropertiesOwnerOwnerLease
Nashville Vacant Land
1577 Mallory Lane
Brentwood, TN 37027

Parcel Number(s):
0351 00202 000 094 086
Sonic Development, LLCN/AN/A
EchoPark Atlanta – Frys
3296 Commerce Ave.
Duluth, GA 30096

Parcel Number(s):
R6207 010
AM Realty GA, LLCAM GA, LLCN/A
Baytown Ford Vacant Land
John Martin Road
Baytown, TX 77521

Parcel Number(s):
059-150-019-0121
SRE Texas – 6, L.P.Sonic Automotive – 4701 I-10 East, TX, L.P.N/A
Philpott Land
12 ac. adjacent to Philpott Toyota, 2229 US 69
Nederland, TX

Parcel Number(s):
061880-000/000100-00000
SRE Texas-11, LLCSAI Philpott T, LLCN/A
EP Grand Prairie
2615 W IH 20 Frontage Rd.
Grand Prairie, TX 75052

Parcel Number(s):
000075782976
EchoPark Realty TX, LLCSAI DS, LLCLease Agreement, dated March 1, 2018, as
amended from time to time
Audi Pensacola
6200 Technology Drive
Pensacola, FL 32505

Parcel Number(s):
SAI Pensacola A, LLC
(as ground lease)
Same as ownerN/A

Schedule 5.02(c)

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

6303 Pensacola Blvd. Pensacola, FLSAI Pensacola A, LLCSame as ownerN/AEchoPark
Greenville
107 Duvall Drive
Greenville, SC 29607

Parcel Number(s):
0272.00-01.014.01EP Realty SC, LLCEchoPark SC, LLCN/AStahlman Lumber
4007 Greenbriar Drive
Houston, TX 77098
Parcel Number(s):
138-688-001-0001SRE Texas - 15, LLCSonic Houston JLR, LPN/AMcKinney Land
12.6 ac at NEQ of Central Cir. & Bray Central Dr.
McKinney, TX

Parcel Number(s):
R-2161-00C-001R1SRE Texas 13, LLCSAI McKinney M, LLCN/A

Schedule 5.02(c)

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

Schedule 6.07
Casualty Insurance Requirements
Each Casualty Policy for each Mortgaged Property shall:
(i)  include coverage for, and specifically state that coverage is provided for
named windstorms, hail and terrorism;
(ii)  provide coverage in an amount not less than one hundred percent (100%) of
the replacement cost value for such Mortgaged Property;
(iii)  have a deductible no greater than $500,000.00 per occurrence and contain
a replacement cost endorsement;
(iv)  contain a lender’s loss payable endorsement containing provisions
equivalent to those provisions contained in Form 438BFU and naming the Lender as
the mortgagee;
(v)  be evidenced by an Acord Certificate Form 27 or Form 28 or equivalent form
in favor of the Lender, as mortgagee, and such evidence shall be provided to the
Lender;
(vi)  if such Casualty Policy is a blanket policy, provide that the blanket
limit is subject to a so-called “Agreed Amount” or “No Co-Insurance” clause, or
such Casualty Policy shall specifically state the applicable co-insurance
percentage and the scheduled value with respect to such Mortgaged Property; and
(vii)  except as provided in clause (vi) above, not contain any co-insurance
clauses or provisions that would reduce the coverage under such Casualty Policy.

Schedule 6.07

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

Schedule 7.03
Intentionally Omitted

Schedule 7.03

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

Schedule 7.25
Post-Closing Deliveries
None

Schedule 7.25

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

Schedule 10.02
Lender's Office; Certain Addresses for Notices;
Tax Identification Number
Loan Parties:
c/o Sonic Automotive, Inc.
4401 Colwick Road
Charlotte, NC 28211
Attn: Stephen K. Coss and Heath R. Byrd
Tel: 704-556-2420 and 704-566-2482
Fax: 704-927-3412 and 704-973-0798
Email: steve.coss@sonicautomotive.com and heath.byrd@sonicautomotive.com

Taxpayer Identification Number: 56-2010790.
Company’s website: www.sonicautomotive.com

Lender:
Ally Bank
SE Business Center
3885 Crestwood Parkway Suite 400
Duluth GA 30096
Attn: Robert W. Gordon
Tel: 770-381-3232
Fax: 770-381-3006
Email: robert.w.gordon@ally.com

Schedule 10.02

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

EXHIBIT A
FORM OF ADVANCED REQUEST
Date: __________, _____
To: Ally Bank
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of ___________ (as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the “Credit Agreement” the terms defined therein being used herein
as therein defined), among Sonic Automotive, Inc., a Delaware corporation (the
“Company”), and Ally Bank.
The undersigned hereby requests and Advance:
1. On __________________________________ (a Business Day).
2. In the amount of $__________________.
The undersigned hereby represents and warrants that (i) such request complies
with Section 2.01 of the Credit Agreement and (ii) each of the conditions set
forth in Sections 4.02(a) and (b) of the Credit Agreement have been satisfied on
and as of the date of such Borrowing.
The Borrower hereby requests that [check one line below and fill in blank spaces
next to the line as appropriate]:

i_____________Funds to be deposited into a deposit account per current standing
instructions. Complete amount of deposit if not full loan advance amount:
_____________.ii_____________
Funds to be wired per the following wire instructions:
Amount of Wire Transfer: __________________
Bank Name: ___________________
ABA:  ________________________
Account Number: _______________
Account Name: ________________
Reference: ___________________
iii_____________Funds to be wired per the attached Funds Flow (multiple wire
transfers).iv_____________Funds to be wired per the current Notice of Account
Designation.

Exhibit A-1

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

SONIC AUTOMOTIVE, INC.
By: _________________________________
Name: _________________________________
Title:  _________________________________

Exhibit A-2

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

EXHIBIT B
[RESERVED]

Exhibit B-1

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EXHIBIT C
[RESERVED]

Exhibit C-1

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EXHIBIT F-1
[RESERVED]

Exhibit F-1-2

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EXHIBIT E
FORM OF SUBSIDIARY GUARANTY
[attached]

Exhibit E-1

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EXHIBIT F
FORM OF COMPLIANCE CERTIFICATE
Financial Statement Date: ____________, ______
To: Ally Bank
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of
_________________, 2020 (as amended, restated, extended, supplemented or
otherwise modified in writing from time to time, the “Credit Agreement”; all
terms used herein but not otherwise defined herein have the respective meanings
given thereto in the Credit Agreement), between Sonic Automotive, Inc., a
Delaware corporation (the “Company”), and Ally Bank (the “Lender”).
The undersigned Responsible Officer hereby certifies as of the date hereof that
he/she is the _________________ of the Company, and that, as such, he/she is
authorized to execute and deliver this Certificate to the Lender on the behalf
of the Company, and that:
[Use following paragraph 1 for fiscal year-end financial statements]
1. Attached hereto as Schedule 1 are the year-end audited financial statements
required by Section 6.01(a) of each Credit Agreement for the fiscal year of the
Company ended as of the above date, together with the report and opinion of an
independent certified public accountant required by such section.
[Use following paragraph 1 for fiscal quarter-end financial statements]
1. Attached hereto as Schedule 1 are the unaudited financial statements required
by Section 6.01(b) of each Credit Agreement for the fiscal quarter of the
Company ended as of the above date. Such quarterly financial statements fairly
present the financial condition, results of operations and cash flows of the
Company and its Subsidiaries in accordance with GAAP as at
[Use following paragraph 1 for fiscal month-end financial statements]
1. Attached hereto as Schedule 1 are the unaudited financial statements required
by Section 6.01(c) of each Credit Agreement for the fiscal month of the Company
ended as of the above date. Such monthly financial statements fairly present the
financial condition, results of operations and cash flows of the Company and its
Subsidiaries in accordance with GAAP as at such date and for such period,
subject only to normal year-end audit adjustments and the absence of footnotes.
2. The undersigned has reviewed and is familiar with the terms of each Credit
Agreement and has made, or has caused to be made under his/her supervision, a
detailed review of the transactions and condition (financial or otherwise) of
the Company and its Subsidiaries during the accounting period covered by the
attached financial statements.
Exhibit F-1

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2. A review of the activities of the Loan Parties during such fiscal period has
been made under the supervision of the undersigned with a view to determining
whether during such fiscal period each Loan Party has performed and observed all
of its Obligations under the Loan Documents, and
[select one:]
[to the best knowledge of the undersigned during such fiscal period, each Loan
Party performed and observed each covenant and condition of the Loan Documents
applicable to it, and no Default has occurred and is continuing.]
--or--
[the following covenants or conditions have not been performed or observed and
the following is a list of each such Default and its nature and status:]
3. The representations and warranties of the Company and each Loan Party
contained in Article V of the Credit Agreement, and any representations and
warranties of any Loan Party that are contained in any document furnished at any
time under or in connection with the Loan Documents, are true and correct on and
as of the date hereof, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date, and except that for purposes of this
Compliance Certificate, the representations and warranties contained in
subsections (a) and (b) of Section 5.05 of the Credit Agreement shall be deemed
to refer to the most recent statements furnished pursuant to clauses (a), (b)
and (c), respectively, of Section 6.01 of the Credit Agreement, including the
statements in connection with which this Compliance Certificate is delivered.
4. The financial covenant analyses and information set forth on Schedule 2
attached hereto are true and accurate on and as of the date of this Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as
of ______________,____.
SONIC AUTOMOTIVE, INC.
By: ________________________________
Name: ________________________________
Title:  ________________________________

Exhibit F-2

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For the Quarter/Year ended ________________ (“Statement Date”)
SCHEDULE 1
to the Compliance Certificate

[Financial Statements to be attached ]

Exhibit F-3

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For the Quarter/Year ended __________________ (“Statement Date”)
SCHEDULE 2
to the Compliance Certificate
($ in 000’s)

[to be attached]

Exhibit F-4

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EXHIBIT G
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (the “Joinder Agreement”), dated as of , 20__ is made by
[__________________], a (the “Joining Subsidiary”), and delivered to ALLY BANK
(the "Lender") , under that certain Credit Agreement (as amended, revised,
modified, supplemented or amended and restated from time to time, the “Credit
Agreement”), dated as of __________________, 2020 between Sonic Automotive,
Inc., a Delaware corporation (the “Company”) and the Lender. All capitalized
terms not otherwise defined herein shall have the meanings given to such terms
in the Credit Agreement.
WHEREAS, certain Subsidiaries of the Company and the Lender have entered into a
Subsidiary Guaranty Agreement dated as of __________, 2020 (as amended, revised,
modified, supplemented or amended and restated from time to time, the
“Subsidiary Guaranty Agreement”);
WHEREAS, the Joining Subsidiary is required by the terms of the Credit Agreement
to become a “Guarantor” under the Subsidiary Guaranty Agreement and be joined as
a party to the Subsidiary Guaranty Agreement as a Guarantor (as defined in the
Subsidiary Guaranty Agreement);
WHEREAS, the Joining Subsidiary will materially benefit from the Loan made
available and to be made available to the Company by the Lender under the Credit
Agreement;
NOW, THEREFORE, the Joining Subsidiary hereby agrees as follows with the Lender:
1.Subsidiary Guaranty Agreement.
a.Joinder. The Joining Subsidiary hereby irrevocably, absolutely and
unconditionally becomes a party to the Subsidiary Guaranty Agreement as a
“Guarantor” (such term as used in this Section 1 having the meaning set forth in
the Subsidiary Guaranty Agreement) and bound by all the terms, conditions,
obligations, liabilities and undertakings of each Guarantor or to which any
Guarantor is subject thereunder, including without limitation the joint and
several, unconditional, absolute, continuing and irrevocable guarantee to the
Lender of the payment and performance in full of the Guaranteed Liabilities (as
defined in the Subsidiary Guaranty Agreement) whether now existing or hereafter
arising, all with the same force and effect as if the Joining Subsidiary were a
signatory to the Subsidiary Guaranty Agreement.
b.  Affirmations. The Joining Subsidiary hereby acknowledges and reaffirms as of
the date hereof with respect to itself, its properties and its affairs each of
the representations, warranties, acknowledgements and certifications applicable
to, and each of the waivers by, any Guarantor contained in the Subsidiary
Guaranty Agreement.
2.  Miscellaneous.
Exhibit G-1

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a.  Notices. Except as otherwise provided herein, whenever it is provided herein
that any notice, demand, request, consent, approval, declaration or other
communication shall or may be given to or served upon any of the parties by any
other party, or whenever any of the parties desires to give and serve upon any
other party any communication with respect to this Joinder Agreement, each such
notice, demand, request, consent, approval, declaration or other communication
shall be in writing and shall be given in the manner, and deemed received, as
provided for in the Credit Agreement.
b.  Severability. Whenever possible, each provision of this Joinder Agreement
shall be interpreted in a manner as to be effective and valid under applicable
law, but if any provision of this Joinder Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Joinder Agreement. This Joinder
Agreement is to be read, construed and applied together with the Credit
Agreement and the other Loan Documents, which, taken together, set forth the
complete understanding and agreement of the Lender and the Joining Subsidiary
with respect to the matters referred to herein and therein.
c.  Successors and Assigns. This Joinder Agreement and all obligations of the
Joining Subsidiary hereunder shall be binding upon the successors and assigns of
the Joining Subsidiary (including any debtor-in-possession on behalf of the
Joining Subsidiary) and shall, together with the rights and remedies of the
Lender, hereunder, inure to the benefit of the Lender, all future holders of any
instrument evidencing any of the Obligations and their respective successors and
assigns. No sales of participations, other sales, assignments, transfers or
other dispositions of any agreement governing or instrument evidencing the
Obligations or any portion thereof or interest therein shall in any manner
affect the Liens granted to the Lender under the Loan Documents. The Joining
Subsidiary may not assign, sell, hypothecate or otherwise transfer any interest
in or obligation under this Joinder Agreement.
d.  Counterparts. This Joinder Agreement may be authenticated in any number of
separate counterparts, each of which shall collectively and separately
constitute one and the same agreement. This Joinder Agreement may be
authenticated by manual signature, facsimile or, if approved in writing by the
Lender, electronic means, all of which shall be equally valid. Without limiting
the foregoing provisions of this Section 5(d), the provisions of Section 10.10
of the Credit Agreement shall be applicable to this Joinder Agreement.
e.  Section Titles. The Section titles contained in this Joinder Agreement are
and shall be without substantive meaning or content of any kind whatsoever and
are not a part of the agreement between the parties hereto.
f.  Delivery. The Joining Subsidiary hereby irrevocably waives notice of
acceptance of this Joinder Agreement and acknowledges that the Obligations are
and shall be deemed to be incurred, and credit extensions under the Loan
Documents made
Exhibit G-2

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and maintained, in reliance on this Joinder Agreement and the Joining
Subsidiary’s joinder as a party to the Subsidiary Guaranty Agreement, as herein
provided.
g.  Governing Law; Venue; Waiver of Jury Trial. The provisions of Sections 10.14
and 10.15 of the Credit Agreement are hereby incorporated by reference as if
fully set forth herein.
IN WITNESS WHEREOF, the Joining Subsidiary has duly executed and delivered this
Joinder Agreement as of the day and year first written above.

JOINING SUBSIDIARY:[________________________]By:  
Name:  
Title:

Exhibit G-3

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EXHIBIT H – EXHIBIT O
[Reserved]
-1-