**WHEREAS**, the Company and the respective Loan Parties that are parties thereto have enteredinto the Security Agreement, the Pledge Agreement and other Security Instruments, securing theObligations under the Credit Agreement and other Loan Documents; and     **WHEREAS**, the Company has advised the Administrative Agent and the Lenders that it desires toamend certain provisions of the Credit Agreement to, among other things, (i) amend the definitionof “Permitted Indenture Refinancing Indebtedness” and clarify certain covenants in connection witha refinancing of the 2002-4.25% Indenture Indebtedness, (ii) clarify the definition of “Net CashProceeds” and (iii) make certain typographical corrections, in each case as more particularly setforth below, and the Administrative Agent and the Lenders signatory hereto are willing to effectsuch amendments on the terms and conditions contained in this Amendment;     **NOW, THEREFORE**, in consideration of the premises and further valuable consideration, thereceipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:     1. Amendments to Credit Agreement. Subject to the terms and conditions set forthherein, the Credit Agreement is hereby amended as follows:     (a) The definition of “Collateral” in Section 1.01 of the Credit Agreement isamended by adding the following sentence at the end of the definition”Notwithstanding the foregoing, during the period on or prior to December 31, 2009,“Collateral” shall not include cash proceeds of (A) the Special 2002 4.25%Refinancing Indebtedness or (B) the issuance of Class A Common Stock of the Companyin accordance with Section 7.16(a)(ii)(C); provided,however, that, commencing on January 1, 2010, such cash proceeds shallimmediately and automatically be deemed to be included in “Collateral.”     (b) The definition of “Net Cash Proceeds” in Section 1.01 of the CreditAgreement is amended so that, as amended, the definition shall read as follows:     “Net Cash Proceeds” means, with respect to any Disposition by any LoanParty or any of its Subsidiaries, the excess, if any, of:     (i) the sum of cash and cash equivalents received in connection with suchtransaction (including any cash or cash equivalents received by way of deferredpayment pursuant to, or by monetization of, a note receivable or otherwise, but onlyas and when so received) over     (ii) the sum of     (A) (1) with respect to any Disposition occurring on or before May 4, 2009, theprincipal amount of any purchase money Indebtedness that is secured by theapplicable asset and that is required to be repaid in connection with suchtransaction (other than Indebtedness under the Loan Documents), and (2)
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commencing on May 7, 2009, with respect to any Disposition occurring on orafter May 5, 2009, any Indebtedness that is secured by the applicable asset and thatis required to be repaid in connection with such transaction (including any NewVehicle Floorplan Loans or Used Vehicle Floorplan Loans required to be repaid inconnection therewith but excluding any Indebtedness under the Revolving CreditFacility and 2009 Indenture Indebtedness), and (in the case of clause (2)) any netobligations of such Person under any Swap Contract that relates to such Indebtednessand is also required by the terms of such Swap Contract to be repaid,     (B) the reasonable and customary out-of-pocket expenses incurred by such LoanParty or such Subsidiary in connection with such transaction and     (C) income taxes reasonably estimated to be actually payable within two yearsof the date of the relevant transaction as a result of any gain recognized inconnection therewith; provided that, if the amount of any estimated taxes pursuantto subclause (C) exceeds the amount of taxes actually required to be paid in cash inrespect of such Disposition, the aggregate amount of such excess shall constituteNet Cash Proceeds.     (c) The definition of “Permitted Indenture Refinancing Indebtedness” in Section1.01 of the Credit Agreement is amended so that, as amended, the definition shall read asfollows:     “Permitted Indenture Refinancing Indebtedness” means any refinancings,replacements, refundings, renewals or extensions of the 2009 Indenture Indebtedness,the 2002-4.25% Indenture Indebtedness, the 2003 Indenture Indebtedness or anyPermitted Indenture Refinancing Indebtedness, provided, that (i) the amountof such Indebtedness is not increased at the time of such refinancing, replacement,refunding, renewal or extension (such refinancing, replacement, refunding, renewalor extension being referred to hereafter as the “Applicable Refinancing”),except for a Temporary 2002-4.25% Indebtedness Increase that does not exceed$175,000,000 in the aggregate and does not continue beyond December 31, 2009, and(ii) such Indebtedness, after giving effect to the Applicable Refinancing, (A)(subject to the sentence below regarding the Special 2002-4.25% RefinancingIndebtedness) is not secured by any property other than property that secured suchIndebtedness prior to the Applicable Refinancing, (B) does not have any obligor orguarantor other than the obligors or guarantors of such Indebtedness prior to theApplicable Refinancing, provided that any refinancing, replacement, refunding,renewal or extension of the 2002-4.25% Indenture Indebtedness (or of any PermittedIndenture Refinancing Indebtedness with respect to the 2002-4.25% IndentureIndebtedness) may be guaranteed by the Loan Parties upon terms that are no morerestrictive to such Loan Parties than the guaranty provisions contained in the 2009Indenture Indebtedness, (C) other than with respect to any refinancing, replacement,refunding, renewal or extension of the 2009 Indenture Indebtedness or the 2002-4.25%Indenture Indebtedness (or of any Permitted Indenture Refinancing
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Indebtedness with respect to the 2009 Indenture Indebtedness or the 2002-4.25%Indenture Indebtedness), is subordinated to payment of the Obligations on terms thatare no less favorable to the Lenders and the other Secured Parties in any respectthan the subordination provisions contained in the applicable Indebtedness prior tothe Applicable Refinancing, provided that the holders of any Indebtedness arisingfrom the Applicable Refinancing of the 2009 Indenture Indebtedness (or of anyPermitted Indenture Refinancing Indebtedness with respect thereto) enter into anintercreditor agreement with the Administrative Agent that is at least as favorableto the Administrative Agent and the Secured Parties as the 2009 Indenture NotesIntercreditor Agreement (except that (1) no such intercreditor agreement shall berequired in the case of the Special 2002-4.25% Refinancing Indebtedness or anyPermitted Indenture Refinancing Indebtedness with respect thereto, and (2) nothingcontained in this clause (C) shall suggest that any Applicable Refinancing of the2002-4.25% Indenture Indebtedness (or of any Permitted Indenture RefinancingIndebtedness with respect thereto) may be secured), (D) is subordinated in rights tocollateral on terms that are no less favorable to the Lenders and the other SecuredParties in any respect than the collateral subordination provisions, if any,contained in the applicable Indebtedness prior to the Applicable Refinancing, (E)does not have a maturity, and does not require any principal payments, earlier thantwo (2) years following the Maturity Date, and (F) has terms that are no morerestrictive than the terms of the Loan Documents; and providedfurther that, after giving effect to the issuance of such Indebtedness, noEvent of Default shall have occurred and be continuing or would occur as a resultthereof. Notwithstanding clause (ii)(C) above, the Borrower may incur, on oneoccasion only, prior to December 31, 2009, Permitted Indenture RefinancingIndebtedness the proceeds of which will be used by the Borrower to refinance,replace, refund, renew or extend certain 2009 Indenture Indebtedness and 2002-4.25%Indenture Indebtedness (such Permitted Indenture Refinancing Indebtedness beingreferred to as the “Special 2002-4.25% Refinancing Indebtedness”), withoutrequiring the holders of such Indebtedness to deliver an intercreditor agreement,provided that (x) the aggregate principal amount of the Special 2002-4.25%Indenture Indebtedness is not greater than $175,000,000, (y) the Special 2002-4.25%Indenture Indebtedness (and any Permitted Indenture Refinancing Indebtedness withrespect thereto) is unsecured, and (z) the Special 2002-4.25% Indenture Indebtednesssatisfies the requirements of clause (i) and clauses (ii)(B), (D), (E) and (F)above, and any other requirements (other than clause (ii)(C)) of the definition of“Permitted Indenture Refinancing Indebtedness.”     (d) The following definition of “Special 2002-4.25% Refinancing Indebtedness” is addedto Section 1.01 of the Credit Agreement, in the appropriate alphabetical order:     “Special 2002-4.25% Refinancing Indebtedness” has the meaning specifiedwithin the text of the definition of “Permitted Indenture Refinancing Indebtedness.”
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     (e) The following definition of “Temporary 2002-4.25% Excess Cash” is added toSection 1.01 of the Credit Agreement, in the appropriate alphabetical order:     “Temporary 2002-4.25% Excess Cash” means cash proceeds received by theCompany from the issuance of Class A Common Stock of the Company in accordance withSection 7.16(a)(ii)(C) or the issuance of Special 2002-4.25% RefinancingIndebtedness, which cash (as set forth in a notice delivered by the Company to theAdministrative Agent) is intended by the Company to be applied to the prepayment orpurchase (whether by open market purchase or pursuant to a tender offer) of the2002-4.25% Indenture Notes or the 2009 Indenture Notes, but has not yet been soapplied solely because the Company has not completed such prepayment or repurchase.     (f) The following definition of “Temporary 2002-4.25% Indebtedness Increase” is addedto Section 1.01 of the Credit Agreement, in the appropriate alphabetical order:     “Temporary 2002-4.25% Indebtedness Increase” means the circumstancethat, during the period from the incurrence of the Special 2002-4.25% RefinancingIndebtedness to refinance, replace, refund, renew or extend the 2002-4.25% IndentureIndebtedness or the 2009 Indenture Indebtedness and the date of the actualrefinancing, replacement, refunding, renewal or extension of the 2002-4.25%Indenture Indebtedness or 2009 Indenture Indebtedness (the “IndebtednessIncrease Period”), the aggregate of the outstanding amounts of the Special2002-4.25% Refinancing Indebtedness, the 2002-4.25% Indenture Indebtedness and the2009 Indenture Indebtedness may exceed the aggregate of the outstandingamounts of the 2002-4.25% Indenture Indebtedness and the 2009 Indenture Indebtednessimmediately prior to the incurrence of the Special 2002-4.25% RefinancingIndebtedness solely because the Company has not yet been able to complete anyprepayment or purchase (whether by open market purchase or pursuant to a tenderoffer) of the 2002-4.25% Indenture Indebtedness or the 2009 Indenture Indebtedness;provided that (a) in no event shall the aggregate amount of the Temporary2002-4.25% Indebtedness Increase exceed $175,000,000 and (b) in no event shall theIndebtedness Increase Period (or the existence of such Temporary 2002-4.25%Indebtedness Increase) continue beyond December 31, 2009.     (g) The definition of “2002-4.25% Indenture Indebtedness” in Section 1.01 ofthe Credit Agreement is amended by inserting the phrase “or replaced” immediately after the phrase“are refinanced”.     (h) The definition of “2002-4.25% Indenture Notes Restructure” in Section 1.01of the Credit Agreement is amended so that, as amended, the definition shall read as follows:     “2002-4.25% Indenture Notes Restructure” means the restructuring orreplacement of the 2002-4.25% Notes upon the following terms and conditions: (i)the outstanding balance of the Indebtedness evidenced by the 2002-4.25%
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Indenture Notes immediately prior to such refinancing or replacement is notincreased, except for a Temporary 2002-4.25% Indebtedness Increase that doesnot exceed $175,000,000 and does not continue beyond December 31, 2009, (ii) thematurity of the 2002-4.25% Indenture Notes (as refinanced or replaced) is notshorter than the maturity of the 2002-4.25% Indenture Notes immediately prior tosuch refinancing or replacement, and no principal payments or repurchases of the2002-4.25% Indenture Notes (as refinanced or replaced) are required to be made anyearlier than they would have been made under the terms of the 2002-4.25% IndentureNotes prior to such refinancing or replacement, (iii) the 2002-4.25% Indenture Notes(as refinanced or replaced) are unsecured, and (iv) the Company complies with thelimit on aggregate interest payments payable with the respect to the 2009 IndentureNotes and the 2002-4.25% Indenture Notes (including such 2009 Indenture Notes or2002-4.25% Indenture Notes, as refinanced or replaced, as permitted hereby)contained in Section 7.16. The refinancing or replacement of the 2002-4.25%Indenture Notes may include the elimination of their subordination in paymentpriority and may be accomplished by the incurrence of the Special 2002-4.25%Refinancing Indebtedness.     (i) Section 6.20 of the Credit Agreement is amended by adding the following newsubsection (c) at the end of that Section:     (c) Notwithstanding the foregoing, if (i) the Company establishes a new DepositAccount that contains only cash proceeds of (A) Permitted Indenture RefinancingIndebtedness with respect to the 2002-4.25% Indenture Notes or the 2009 IndentureNotes or (B) the issuance of Class A Common Stock of the Company in accordance withSection 7.16(a)(ii)(C), and (ii) the Company intends to use such proceedssolely to make prepayments or purchases (whether by open market purchase or pursuantto a tender offer) of the 2002-4.25% Indenture Notes or the 2009 Indenture Notes,then the Company shall not be required to deliver a new deposit account controlagreement for such Deposit Account (or to add such Deposit Account to any scheduleunder any existing deposit account control agreement), in each case unlessany cash remains in such account after December 31, 2009.     (j) The following Section 6.21 is hereby added to the Credit Agreement in theappropriate numerical order:**6.21 Permitted Indenture Refinancing Indebtedness**. At the time the Company or anyLoan Party enters into any Permitted Indenture Refinancing Indebtedness, the Companyshall deliver to the Administrative Agent a certificate, in form and substanceacceptable to the Administrative Agent, attaching copies of all materialdocumentation relating to such Permitted Indenture Refinancing Indebtedness andcertifying that (i) such Permitted Indenture Refinancing Indebtedness complies withthe requirements of Sections 7.16 and 7.09, the definition of“Permitted Indenture Refinancing Indebtedness” and, with respect to a refinancing orreplacement of 2002-4.25% Indenture Indebtedness, the
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definition of “2002-4.25% Indenture Notes Restructure” and (ii) no Event of Defaultshall have occurred and be continuing or would occur as a result thereof.     (k) Section 7.03(j) of the Credit Agreement is hereby amended by:     (A) inserting the phrase “or replaced” immediately after the phrase “that hasrefinanced”,     (B) inserting the parenthetical phrase “(it being understood that the term‘prepaid or purchased’ in this clause does not include 2002 5.25% IndentureIndebtedness that is refinanced or replaced by the 2009 Indenture Notes)”immediately after the phrase “on or prior to May 7, 2009”, and     (C) inserting the parenthetical phrase “(it being understood that the term‘prepaid’ in this clause does not include 2009 Indenture Indebtedness that isrefinanced or replaced by the Special 2002 4.25% Refinancing Indebtedness)”immediately after the phrase “prepaid as permitted hereunder”.     (l) Section 7.03(k) of the Credit Agreement is hereby amended by:     (A) inserting the phrase “or replaced” immediately after the phrase “that hasrefinanced”,     (B) inserting the parenthetical phrase “(except in the case of a Temporary2002-4.25% Indebtedness Increase that does not exceed $175,000,000 and does notextend beyond December 31, 2009)” immediately after the phrase “providedthat”, and     (C) inserting the parenthetical phrase “(it being understood that the term‘prepaid’ in this clause does not include 2002 4.25% Indenture Indebtedness that isrefinanced or replaced by the Special 2002 4.25% Refinancing Indebtedness)”immediately after the phrase “prepaid as permitted hereunder”.     (m) Section 7.03(l) of the Credit Agreement is hereby amended by:     (A) inserting the phrase “or replaced” immediately after the phrase “that hasrefinanced”, and     (B) deleting “2002-4.25% Indenture Indebtedness” in the sixth line andinserting “2003 Indenture Indebtedness” in lieu thereof.     (n) Section 7.15 of the Credit Agreement is hereby amended by:     (A) inserting the phrase “or replace” immediately after the phrase “orrefinance”, and
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     (B) inserting the phrase “or replaced” immediately after the phrase “that arerefinanced”.     (o) Sections 7.16(a)(ii) and (iii) of the Credit Agreement are hereby amendedso that, as amended, such Sections shall read as follows:(ii) the Company may (A) refinance or replace the 2002-4.25% Indenture Notes inconnection with a 2002-4.25% Indenture Notes Restructure, (B) refinance or replaceany Indebtedness permitted by Sections 7.03(j), (k) and (l)with Permitted Indenture Refinancing Indebtedness and (C) make prepayments orpurchases (whether by open market purchase or pursuant to a tender offer) of anyIndenture Indebtedness solely with net cash proceeds of cash capital contributionsprovided to the Company from any current or future stockholder so long as such cashcapital contributions are made in exchange solely for Class A Common Stock of theCompany which common stock (1) does not include any warrants, options, put rights,preferred dividend or distribution rights, “maturity date” or similar cash paycomponents, or any other rights not typically associated with common stock and (2)is not convertible into any other security, obligation or instrument; and(iii) in the event the 50% NCP Requirements have been met, and subject to compliancewith Section 2.14(l), the Company may make prepayments or purchases (whetherby open market purchase or pursuant to a tender offer) of the Indenture Indebtednessor any Additional Subordinated Indebtedness permitted by Section 7.03(m) inan unlimited amount using only Net Cash Proceeds of a Disposition.     (p) Section 7.16(b) of the Credit Agreement is hereby amended by deleting the phrase“2002-4.25% Indenture Notes as refinanced as permitted hereby” and inserting in its place thephrase “2009 Indenture Notes or 2002-4.25% Indenture Notes as refinanced or replaced as permittedhereby”.     (q) Section 7.21 of the Credit Agreement is hereby amended by adding the followingproviso at the end of such Section:“and provided further that (during the period prior to December 31, 2009)any Temporary 2002-4.25% Excess Cash shall be excluded from the calculation of theamount of collected cash balances pursuant to this Section; but providedfurther that on January 1, 2010, the Borrower shall immediately prepayoutstanding Revolving Loans, L/C Borrowings and Swing Line Loans and CashCollateralize the remaining L/C Obligations, in an aggregate amount equal to theamount of any remaining Temporary 2002-4.25% Excess Cash as of January 1, 2010, andsuch prepayments shall be applied in the order set forth in clauses firstthrough third of Section 2.14(m), and the Aggregate RevolvingCommitments shall be automatically, immediately and permanently reduced on January1, 2010 by the amounts of any such required prepayments but only until such time asthe
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Aggregate Revolving Commitments have been reduced to $185,000,000;provided that, in no event shall the Aggregate Revolving Commitments (aftergiving effect to such reduction) be in an amount less than the then OutstandingAmount of L/C Obligations.”     2. Effectiveness; Conditions Precedent. This Amendment and the amendments to theCredit Agreement herein provided shall become effective upon satisfaction of the followingconditions precedent:     (a) the Administrative Agent shall have received: (i) counterparts of this Amendment, duly executed by the Company,the other Loan Parties, the Administrative Agent and Lenders which constituteRequired Lenders;  (ii) such other documents, instruments, opinions, certifications,undertakings, further assurances and other matters as the Administrative Agent,the Revolving Swing Line Lender, the New Vehicle Swing Line Lender, the UsedVehicle Swing Line Lender, the L/C Issuer or any Lender shall reasonablyrequest; and     (b) all fees and expenses payable to the Administrative Agent and the Lenders (including thefees and expenses of counsel to the Administrative Agent) to the extent invoiced on or prior to thedate hereof shall have been paid in full (without prejudice to final settling of accounts for suchfees and expenses).     3. Consent of the Guarantors. Each Guarantor hereby consents, acknowledges and agreesto the amendments set forth herein and hereby confirms and ratifies in all respects the Guaranty towhich such Guarantor is a party (including without limitation the continuation of such Guarantor’spayment and performance obligations thereunder upon and after the effectiveness of this Amendmentand the amendments contemplated hereby) and the enforceability of such Guaranty against suchGuarantor in accordance with its terms.     4. Representations and Warranties. In order to induce the Administrative Agent andthe Lenders to enter into this Amendment, the Company and each other Borrower and Guarantor eachrepresents and warrants to the Administrative Agent and the Lenders as follows:     (a) The representations and warranties made by the Company and each other Borrower andGuarantor in Article V of the Credit Agreement and in each of the other Loan Documents towhich such Person is a party are true and correct on and as of the date hereof, except to theextent that such representations and warranties expressly relate to an earlier date and exceptthat, the representations and warranties contained in subsections (a) and (b) of Section5.05 of the Credit Agreement shall be deemed to refer to the most recent statements furnishedpursuant to clauses (a) and (b), respectively, of Section 6.01 of the Credit Agreement;     (b) The Persons appearing as Guarantors on the signature pages to this Amendment constituteall Persons who are required to be Guarantors pursuant to the terms of the Credit
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Agreement and theother Loan Documents, including without limitation all Persons who becameSubsidiaries or were otherwise required to become Guarantors after the Closing Date, and eachof such Persons has become and remains a party to a Guaranty as a Guarantor;     (c) This Amendment has been duly authorized, executed and delivered by the Borrowers andGuarantors party hereto and constitutes a legal, valid and binding obligation of such parties,except as may be limited by general principles of equity or by the effect of any applicablebankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors’ rightsgenerally; and     (d) No Default or Event of Default has occurred and is continuing.     5. Entire Agreement. This Amendment and all the Loan Documents (collectively, the“***Relevant Documents***”), sets forth the entire understanding and agreement of the parties hereto inrelation to the subject matter hereof and supersedes any prior negotiations and agreements amongthe parties relating to such subject matter. No promise, condition, representation or warranty,express or implied, not set forth in the Relevant Documents shall bind any party hereto, and nosuch party has relied on any such promise, condition, representation or warranty. Each of theparties hereto acknowledges that, except as otherwise expressly stated in the Relevant Documents,no representations, warranties or commitments, express or implied, have been made by any party tothe other in relation to the subject matter hereof or thereof. None of the terms or conditions ofthis Amendment may be changed, modified, waived or canceled orally or otherwise, except in writingand in accordance with Section 10.01 of the Credit Agreement.     6. Full Force and Effect of Loan Documents. Except as hereby specifically amended,modified or supplemented, the Credit Agreement and all other Loan Documents are hereby confirmedand ratified in all respects and shall be and remain in full force and effect according to theirrespective terms.     7. Counterparts. This Amendment may be executed in any number of counterparts, eachof which shall be deemed an original as against any party whose signature appears thereon, and allof which shall together constitute one and the same instrument. Delivery of an executedcounterpart of a signature page of this Amendment by telecopy or electronic delivery (including by..pdf) shall be effective as delivery of a manually executed counterpart of this Amendment.     8. Governing Law. This Amendment shall in all respects be governed by, and construedin accordance with, the laws of the State of North Carolina applicable to contracts executed and tobe performed entirely within such State, and shall be further subject to the provisions ofSection 10.14 of the Credit Agreement.     9. Enforceability. Should any one or more of the provisions of this Amendment bedetermined to be illegal or unenforceable as to one or more of the parties hereto, all otherprovisions nevertheless shall remain effective and binding on the parties hereto.
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     10. References. All references in any of the Loan Documents to the “Credit Agreement”shall mean the Credit Agreement, as amended hereby and as further amended, supplemented orotherwise modified from time to time.     11. Successors and Assigns. This Amendment shall be binding upon and inure to thebenefit of the Company, the Borrowers, the Administrative Agent, each of the Guarantors andLenders, and their respective successors, legal representatives, and assignees to the extent suchassignees are permitted assignees as provided in Section 10.06 of the Credit Agreement.*[Signature pages follow.]*
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     **IN WITNESS WHEREOF**, the parties hereto have caused this instrument to be made, executed anddelivered by their duly authorized officers as of the day and year first above written.         **COMPANY****:**         **SONIC AUTOMOTIVE, INC.,**as a Borrower      and as a Guarantor         By: