Document:

<PAGE>

                                                                   Exhibit 10.27

                                SIXTH AMENDMENT
                                ---------------

                                      TO
                                      --

                               CREDIT AGREEMENT
                               ----------------

           THIS SIXTH AMENDMENT dated as of March 21, 2002 ("Sixth Amendment"),
is by and among CHANNELL COMMERCIAL CORPORATION ("Borrower"), a Delaware
corporation, the financial institutions signatory hereto (collectively, the
"Lenders") and FLEET NATIONAL BANK, as Administrative Agent for the Lenders (in
such capacity, together with its successors in such capacity, the
"Administrative Agent").

PRELIMINARY STATEMENTS

           (A) The Borrower, the Lenders and the Administrative Agent are
parties to the Credit Agreement, dated as of May 1, 1998 and as amended by
Amendment No. 1 to Credit Agreement, dated as of September 3, 1998 and Amendment
No. 2 to Credit Agreement, dated as of December 29, 1999, Amendment No. 3 to
Credit Agreement, dated as of July 20, 2000, Fourth Amendment to Credit
Agreement dated as of May 31, 2001, and Fifth Amendment and Waiver to Credit
Agreement dated as of December 17, 2001 (as heretofore amended, the "Original
Credit Agreement" and as it is hereby and as it may hereafter from time to time
be amended, modified and supplemented, the "Credit Agreement");

           (B) Each capitalized term used but not otherwise defined herein shall
have the meaning ascribed thereto in the Credit Agreement and/or relevant Loan
Documents.

           NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereby agree as follows:

Article I. Amendments to Credit Agreement and Security Agreement.
           -----------------------------------------------------

           This Sixth Amendment shall be deemed to be an amendment to the Credit
Agreement, and shall not be construed in any way as a replacement therefor. All
of the terms and provisions of this Sixth Amendment, including, without
limitation, the representations and warranties set forth herein, are hereby
incorporated by reference into the Credit Agreement as if such terms and
provisions were set forth in full therein. Capitalized terms used herein and not
otherwise defined shall have the meaning ascribed to them in the Credit
Agreement. The Credit Agreement is hereby amended in the following respects:

           1.1 Article I of the Credit Agreement, Section 1.01, Certain Defined
                                                                ---------------
Terms, is amended as follows:
-----
<PAGE>

          The following definitions are inserted in proper alphabetical order:

     "Sixth Amendment" means the Sixth Amendment and Waiver to the Credit
      ---------------
Agreement dated as of December 31, 2001.

     "Sixth Amendment Effective Date" shall have the meaning as set forth in the
      ------------------------------
preamble to Article III of the Sixth Amendment, i.e., the date on which all of
                                                ---
the conditions precedent to effectiveness of the Sixth Amendment shall have
occurred to the satisfaction of the Required Lenders and Administrative Agent.

          1.2 Article II of the Credit Agreement is amended as follows:

          the following shall be added to Article II as Sections 2.05(c) and
2.05(d):

          "Section 2.05(c) - Notwithstanding anything to the contrary contained
in this Article II from and after the date of the Sixth Amendment, Borrower
shall not request and Lenders shall not make any Revolving Advances and/or issue
any Letters of Credit in excess of $22,130,152.70 as same shall be reduced in
accordance with Section 2.05, it being understood and agreed by the Loan Parties
that any payments made in accordance with this Sixth Amendment shall not be
construed to create availability for borrowing purposes under the Credit
Agreement."

          "Section 2.05(d)(i) - On or before the date of the Sixth Amendment,
Borrower shall pay to Bank in immediately available funds an amount equal to
$3,000,000. Upon payment as aforesaid, the Revolving Facility Commitment shall
be permanently reduced by said amount.

          "Section 2.05(d)(ii) - On or before March 31, 2002, Borrower shall pay
to Lenders an amount equal to $3,500,000.00 in immediately available funds. Upon
payment as aforesaid, the Revolving Facility Commitment shall be permanently
reduced by said amount.

          "Section 2.05(d)(iii) - Immediately upon the sale of the Temecula
Property, Borrower shall pay or cause to be paid to the Lenders, in good funds,
an amount equal to no less than $1,500,000.00."

          1.3 Article VI of the Credit Agreement is amended as follows: Section
6.18 Financial Covenants is amended as follows:
     -------------------

          Section 6.18(a) Minimum Net Worth is deleted in its entirety and the
                          -----------------
following is substituted therefor:

          "(a) Minimum Net Worth. Commencing as of the fiscal quarter ending
               -----------------
March 31, 2002, and at all times thereafter, maintain, as of the last day of
each fiscal quarter, an excess of Consolidated total assets over Consolidated
total liabilities of the Borrower and its Subsidiaries of not less than the sum
of (i) Thirty Six Million Dollars ($36,000,000) plus (ii) 75% of positive
                                                ----
Consolidated Net Income (and excluding 100% of Consolidated net losses) of the
Borrower and its Subsidiaries since the date of this Sixth Amendment to and
including each date of determination computed on a cumulative basis for said
entire period, plus (iii) 100% of the Net Cash Proceeds received by the Borrower
               ----
from any Equity Offering."

                                       -2-
<PAGE>

          Section 6.18(b) Total Consolidated Debt to EBITDA. is deleted in its
                          ---------------------------------
entirety and the following is substituted therefore:

          "(b) Total Consolidated Debt to EBITDA. Commencing as of the fiscal
               ---------------------------------
quarter ending March 31, 2002 and at all times thereafter, maintain as of the
end of each fiscal quarter of the Borrower a ratio of (i) Total Consolidated
Debt (other than trade credit, accrued expenses and invoice taxes payable) to
(ii) EBITDA for the most recently completed quarter multiplied times four (4) of
not more than 3.00:1.0."

          Section 6.18(c) Fixed Charge Coverage Ratio is deleted in its entirety
                          ---------------------------
and the following shall be substituted therefor:

          "(c) Fixed Charge Coverage Ratio. Commencing as of the fiscal quarter
               ---------------------------
ending March 31, 2002 and at all times thereafter, maintain as of the end of
each fiscal quarter of the Borrower a Fixed Charge Coverage Ratio of not less
than the following ratios for the requisite periods set forth below:

          Fiscal Quarter Ending:         Not less than:
          ---------------------          -------------

          March 31, 2002                   .84:1.00

          June 30, 2002                    1.00:1.00

          September 30, 2002               1.15:1.00

          For purposes of this Section 6.18(c), "Fixed Charge Coverage Ratio"
shall mean, the ratio of (i) EBITDA for the most recently completed fiscal
quarter of the Borrower less the sum of (A) Capital Expenditures made in cash
                        ----
during such period, and (B) the aggregate amount of federal, state, local and
foreign taxes paid in cash by the Borrower and its Subsidiaries during such
period, to (ii) Consolidated cash Interest Expense payable by the Borrower and
its Subsidiaries on all Debt during such period plus principal amounts of all
                                                ----
Debt payable by the Borrower and its Subsidiaries during such period excluding
the principal payment of $3,000,000 referenced Section 2.05 (d) (i) above and
excluding the principal payment of $3,500,000 referenced Section 2.05 (d) (ii)
above."

          Section 6.18(d) Minimum Consolidated Interest Coverage Ratio. shall be
                          --------------------------------------------
deleted in its entirety and the following shall be substituted therefor:

          "(d) Minimum Consolidated Interest Coverage Ratio. Maintain as of the
               --------------------------------------------
end of each fiscal quarter of the Borrower a ratio of (i) EBITDA for the most
recently completed quarter multiplied times four (4) to (ii) Consolidated
Interest Expense for the most recently completed four (4) fiscal quarters of not
less than 3.00:1.00."

          1.4 Article VIII of the Credit Agreement is amended by adding the
          following at the conclusion of Section 8.13:

          (a) "the Borrower shall fail by December 31, 2002 to refinance and
          indefeasibly repay in full the Obligations owing to the Lenders and
          the Agent."

                                       -3-
<PAGE>

          (b) "the Borrower and/or Guarantors shall fail to perform each and
          every term, condition or undertaking on its/their part to be performed
          under the Credit Agreement including but not limited to Sections
          2.05(d)(i), (ii), and (iii)and Section 4.1 of Article IV of the Credit
          Agreement."

Article II. Representations and Warranties; Confirmations
            ---------------------------------------------

          In order to induce the Lenders and the Administrative Agent to enter
into this Sixth Amendment, the Borrower and each of the other Loan Parties,
jointly and severally, represent and warrant to the Lenders and the
Administrative Agent that:

          2.1 As of the date hereof, and after giving effect to this Sixth
Amendment, no Default or Events of Default exists under the Credit Agreement,
and no event exists which, with the giving of notice or lapse of time, or both,
would constitute a Default or Events of Default.

          2.2 As of the date hereof and after giving effect to this Sixth
Amendment, each and every one of the representations and warranties set forth in
the Loan Documents shall be true, accurate and complete in all respects and with
the same effect as though made on the date hereof, and each shall hereby be
incorporated herein in full by reference as if restated herein in its entirety,
except for any representation or warranty limited by its terms to a specific
date and except for changes in the ordinary course of business which are not
prohibited by the Credit Agreement (as amended hereby) and which shall not,
either singly or in the aggregate, have a Material Adverse Effect.

          2.3 The execution, delivery and performance by (i) the Borrower of
this Sixth Amendment and any other Loan Document delivered pursuant hereto, and
(ii) each other Loan Party of any Loan Document to which it is a Party, are
within each such Loan Party's organizational powers and have been duly
authorized by all necessary corporate action on the part of each such Loan
Party. This Sixth Amendment is the legal, valid and binding obligation of the
Borrower enforceable against the Borrower in accordance with its terms and this
Sixth Amendment is the legal, valid and binding obligation of each Guarantor,
enforceable against each Guarantor in accordance with its terms.

          2.4 The execution, delivery and performance by the Borrower and each
other Loan Party of any Loan Document and consummation by the Borrower and each
other Loan Party of the transactions contemplated hereby and thereby does not
and shall not (a) conflict with or result in any breach or violation of any
provision of the certificate of incorporation or by-laws of the Borrower or any
other Loan Party, (b) result in any breach or violation of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default), under, or result in the termination of, or accelerate the
performance required by, or result in the creation of a Lien upon any of the
properties or assets of the Borrower or any other Loan Party under any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, deed of
trust, license, lease agreement or other instrument or obligation to which the
Borrower or any other Loan Party is a party or to which any of its properties or
assets are subject, (c) require any consent, approval, authorization or permit
of, or filing with or notification to, any third party or any governmental,
judicial, administrative or regulatory authority of the United States or of any

                                       -4-
<PAGE>

state, local or foreign government or subdivision thereof (a "Governmental
                                                              ------------
Entity") or (d) violate any order, writ, injunction, decree, judgment, ruling,
-----
law, statute, rule or regulation of any Governmental Entity.

          2.5 The Borrower hereby acknowledges and confirms that all of the
liens and security interests granted pursuant to the Loan Documents secure,
without limitation, the due payment and performance of all indebtedness,
liabilities and obligations of the Borrower to the Lenders under the Credit
Agreement as amended hereby, and that the term "Obligations" as used in the Loan
Documents (or any other term used therein to describe or refer to the
indebtedness, liabilities, and obligations of the Borrower to the Lenders and
the Administrative Agent) includes, without limitation, the indebtedness,
liabilities and obligations of the Borrower and the Administrative Agent to the
Lenders under the Credit Agreement as amended hereby.

          2.6 Each of the Guarantors hereby acknowledges and confirms that the
terms "Obligations", "Guaranteed Obligations" and "Guaranteed Liabilities" as
used in each Guaranty includes, without limitation, all of the indebtedness,
obligations and liabilities of the Borrower to the Lenders and the
Administrative Agent under the Credit Agreement as amended hereby.

          2.7 Each of the Guarantors hereby acknowledges and confirms that:

          (a) all of the liens and security interests granted pursuant to the
Security Agreement and any Collateral Document secure, without limitation, all
of the indebtedness, liabilities and obligations of such Guarantor to the
Lenders and the Administrative Agent under its Guaranty, as confirmed hereby,
and that the term "Obligations" as used in the Security Agreement and any
Collateral Document (or any other term used therein to describe or refer to the
indebtedness, liabilities and obligations of each Guarantor to the Lenders),
includes without limitation, the indebtedness, liabilities and obligations of
such Guarantor under its Guaranty, as confirmed hereby; and

          (b) all of the representations and warranties set forth in the
Security Agreement and each other Collateral Document, as confirmed hereby, are
true and correct as of the date hereof, except for any representation or
warranty limited by its terms to a specific date and except for changes in the
ordinary course of business which are not prohibited by the Security Agreement
or such other Collateral Document and which shall not, either singly or in the
aggregate, have a Material Adverse Effect.

Article III. Conditions Precedent to the Effectiveness of this Sixth Amendment.
             -----------------------------------------------------------------

          The Amendments contemplated by Article I hereof are subject to the
                                         ---------
satisfaction of each of the following conditions precedent. The date on which
all such conditions shall have been fulfilled to the satisfaction of the
Administrative Agent and the Required Lenders, and the date on which this Sixth
Amendment shall have become effective, shall be herein called the "Sixth
Amendment Effective Date".

          The Administrative Agent shall have received on or before the Sixth
Amendment Effective Date the following, and the following documents each of
which shall be dated as of the

                                       -5-
<PAGE>

Sixth Amendment Effective Date (unless otherwise specified), in form and
substance satisfactory to the Administrative Agent and the Lenders, and in
sufficient copies, for each Lender:

          3.1 Original, executed counterparts of this Sixth Amendment.

          3.2 $3,000,000 principal payment described in Section 2.05(d)(i).

          3.3 Intentionally omitted

          3.4 A fully executed Ratification of Guaranty and Acknowledgment of
Sixth Amendment and Waiver and Negative Pledge Agreement ("Ratification") in
form and substance satisfactory to the Administrative Agent whereby Egerton
reaffirms the Guaranty and agrees that until such time as the Obligations have
been indefeasibly paid in full, it shall not encumber, sell or otherwise dispose
of the U.K. Property.

          3.5 Certified copies of resolutions of the Board of Directors of the
Borrower, A.C. Egerton (Holdings) Limited, and each other Loan Party approving
this Sixth Amendment, the Ratification and each other Loan Document to which it
is or is to be a party, and of all documents evidencing other necessary
corporate action and governmental and other third party approvals and consents,
if any, with respect to this Sixth Amendment, and each other Loan Document.

          3.6 A copy of a certificate of the Secretary of State of the
jurisdiction of incorporation of the Borrower, dated reasonably near the date
hereof, stating that the Borrower has paid all franchise taxes to the date of
such certificate and the Borrower is duly incorporated and in good standing
under the laws of the State of the jurisdiction of its incorporation.

          3.7 A certificate of the Borrower and each other Loan Party signed on
behalf of the Borrower or such other Loan Party, as the case may be, by a
Responsible Officer and the Secretary or an Assistant Secretary of the Borrower
or such other Loan Party, as the case may be, dated the date hereof (the
statements made in such certificate shall be true on and as of the date hereof),
certifying as to (1) the absence of any amendments to the charter of the
Borrower or such other Loan Party since the date of the Secretary of State's
certificate referred to above, or in the case of A.C. Egerton (Holdings)
Limited, since the copies of its Memorandum and Articles of Association as in
effect on the date delivered to the Administrative Agent in connection with the
Fifth Amendment to Credit Agreement (save that if its Memorandum and Articles of
Association were amended since last delivered to the Administrative Agent in
connection with the Fifth Amendment to Credit Agreement, A.C. Egerton (Holdings)
Limited shall certify that such Memorandum and Articles of Association were
amended and provide a certified copy of such amended Memorandum and Articles of
Association to the Administrative Agent alongside the aforementioned
certificate), (2) the absence of any amendments to the bylaws of the Borrower
and each other Loan Party (except A.C. Egerton (Holdings) Limited) since the
last date of delivery thereof to the Administrative Agent, (3) the due
incorporation of the Borrower and each other Loan Party as a corporation
organized under the laws of the jurisdiction of its incorporation, and the
absence of any proceeding for the dissolution or liquidation of the Borrower or
any other Loan Party, (4) the truth of the representations and warranties
contained herein, (5) the satisfaction of the conditions precedent required of
the Borrower and its

                                       -6-
<PAGE>

Subsidiaries as set forth in this Article III, and (6) the absence of any event
occurring and continuing, or resulting from the transactions contemplated by
this Sixth Amendment, that constitutes a Default.

          3.8  A certificate of the Secretary or an Assistant Secretary of the
Borrower and each other Loan Party certifying the names and true signatures of
the officers of the Borrower and each other Loan Party authorized to sign this
Sixth Amendment, the Guaranty Confirmation and each other Loan Document to which
they are or are to be parties and the other documents to be delivered hereunder
and thereunder.

          3.9  Intentionally Omitted

          3.10 All accrued fees and expenses of the Administrative Agent and if
and as appropriate, among the Lenders (including, without limitation, the
reasonable fees and expenses of counsel for the Administrative Agent,
syndication, collateral examination appraisal, and other direct out-of-pocket
expenses) shall have been paid.

          3.11 The Administrative Agent shall have received, in form and
substance reasonably satisfactory to it, such other documents, agreements and
instruments as the Administrative Agent may reasonably request for a transaction
of the nature contemplated by this Sixth Amendment and all proceedings
(including, without limitation, under applicable foreign law) in connection with
the transactions contemplated by this Sixth Amendment, and all documents
incidental thereto shall be satisfactory to the Administrative Agent.

Article IV. Conditions Subsequent
            ---------------------

          4.1 Borrower shall immediately notify Lenders of the time and place of
a closing involving the Temecula Property (the "Temecula Closing") and shall
provide to the Administrative Agent in advance of the Temecula Closing a draft
closing statement showing net proceeds to be derived therefrom.

          4.2 In the event that the Obligations are not indefeasibly paid to the
Administrative Agent for the benefit of Lenders in full by wire transfer on or
before June 30, 2002, Borrower shall pay to Administrative Agent for the benefit
of the Lenders a fee of $100,000 by wire transfer on or before June 30, 2002.

          In the event that the Obligations are not indefeasibly paid to the
Administrative Agent for the benefit of the Lenders in full by wire transfer on
or before September 30, 2002, Borrower shall pay to the Administrative Agent for
the benefit of the Lenders a fee of $100,000 by wire transfer on or before
September 30, 2002.

Article V. Reference to and Effect Upon the Credit Agreement.
           --------------------------------------------------

          5.1 Effect. The Credit Agreement, the Collateral Documents and all
              ------
agreements, instruments and documents executed and delivered in connection with
any of the

                                       -7-
<PAGE>

foregoing, shall each be deemed amended hereby to the extent necessary, if any,
to give effect to the provisions of this Sixth Amendment.

          5.2 No Waiver; References. The execution, delivery and effectiveness
              ---------------------
of this Sixth Amendment shall not operate as a waiver of any right, power or
remedy of the Administrative Agent or any Lender under the Credit Agreement, nor
constitute a waiver of any provision of the Credit Agreement, except as
specifically set forth herein. Upon the effectiveness of this Sixth Amendment,
each reference in:

               (i)   the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of similar import shall mean and be a reference to
the Credit Agreement as amended hereby;

               (ii)  the other Loan Documents to the "Credit Agreement" shall
mean and be a reference to the Credit Agreement as amended hereby;

               (iii) the Loan Documents to the "Loan Documents" shall be deemed
to include this Sixth Amendment, and each of the other Loan Documents;

Article VI. Miscellaneous.
            -------------

          6.1 Payment of Expenses. In addition to any and all expenses to be
              -------------------
paid by Borrower pursuant to the Loan Documents, the Borrower shall pay to the
Administrative Agent, for the pro rata accounts of each Lender, all reasonable
documentation expenses in connection with this Sixth Amendment, including
reasonable legal fees.

          6.2 Continuing Effectiveness of Credit Agreement. Except as
              --------------------------------------------
specifically amended hereby, the Credit Agreement and the other Loan Documents
shall remain in full force and effect in accordance with the terms and are
hereby ratified and confirmed.

          6.3 Headings. Section headings in this Sixth Amendment are included
              --------
herein for convenience of reference only and shall not constitute a part of this
Sixth Amendment for any other purposes.

          6.4 Law. THIS FIFTH AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
              ---
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.

          6.5 Successors. This Sixth Amendment shall be binding upon the
              ----------
Borrower, the other Loan Parties, the Lenders and the Administrative Agent and
their respective successors and assigns, and shall inure to the benefit of the
Borrower, the other Loan Parties, the Lenders and the Administrative Agent and
the successors and assigns of the Lenders and the Administrative Agent.

          6.6 Modification. No modification or waiver of or with respect to any
              ------------
provisions of this Sixth Amendment and all other agreements, instruments and
documents delivered pursuant hereto or thereto, nor consent to any departure by
the Administrative Agent or

                                       -8-
<PAGE>

the Lenders from any of the terms or conditions thereof, shall in any event be
effective unless it shall be in writing and executed in accordance with the
provisions of the Credit Agreement, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No consent to or demand on the Borrower in any case shall, of itself,
entitle it to any other or further notice or demand in similar or other
circumstances. This Sixth Amendment, together with the Credit Agreement, as
amended, embodies the entire agreement and understanding among the Borrower, the
Administrative Agent and the Lenders and supersedes all prior agreements and
understandings relating to the subject matter hereof.

          6.7 Severability. The provisions of this Sixth Amendment are
              ------------
severable, and if any clause or provision shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction and shall not in any manner affect such clause or provision in
any other jurisdiction, or any other clause or provision of this Sixth Amendment
in any jurisdiction.

          6.8 Execution in Counterparts. This Sixth Amendment may be executed in
              -------------------------
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute one and the same
instrument. Transmission of signatures by facsimile shall be deemed effective as
if original manually executed counterparts had been delivered.

          IN WITNESS WHEREOF, each of the parties hereto has caused this Sixth
Amendment to the Credit Agreement to be duly executed as of the date first above
written.

                         CHANNELL COMMERCIAL CORPORATION

                              By /s/ Thomas Liguori
                                ------------------------------------------------
                                   Name: Thomas Liguori
                                   Title: CFO

                              FLEET NATIONAL BANK
                              as Administrative Agent, Issuing Bank and a Lender

                              By /s/ George E. Durstin
                                ------------------------------------------------
                                   Name:  George E. Durstin
                                   Title: Vice President

                              WELLS FARGO BANK, NATIONAL ASSOCIATION
                              as a Lender

                              By /s/ Sylvia. N .Vargas
                                ------------------------------------------------
                              Name: Sylvia. N .Vargas
                              Title: Vice President

                                      -9-<PAGE>

                                                                   Exhibit 10.22

                              EMPLOYMENT AGREEMENT
                              --------------------

     This Employment Agreement ("Agreement") made this 1st day of November, 1997
between SONIC AUTOMOTIVE, INC. (formerly named Sonic Auto World, Inc.), its
successors or assigns, subsidiary corporations or affiliates (collectively, the
"Employer") and JEFFREY C. RACHOR ("Employee") and SONIC FINANCIAL CORP
("Guarantor").

                                    RECITALS
                                    --------

     WHEREAS, Employer desires to acquire certain of the automobile dealership
assets of Employee within the State of Tennessee; and

     WHEREAS, Employer desires to retain the services of Employee in order to
manage the existing dealerships and acquire and manage additional dealerships in
the states of Kentucky, Tennessee, Alabama and Georgia (the "Region").

     WHEREAS, Employee is prepared to perform those duties as set forth in this
Agreement.

     NOW, THEREFORE, the parties intending to be legally bound agree as follows:

     1. Term of Employment. Employer hereby employs Employee, and Employee
        ------------------
hereby accepts employment from Employer for the period commencing with the
closing of the sale transferring those assets in which Employee has an interest
in various dealerships in the State of Tennessee to Employer (the "Commencement
Date") and ending five (5) years thereafter, unless sooner terminated pursuant
to the provisions of paragraph 5 hereof (the "Employment Period"), It is the
intention of Employer and Employee that the term of this employment coincide
with the term of the Non-Competition Agreement executed in connection with that
certain Asset Purchase Agreement dated June 24, 1997 pursuant to which Employer
shall acquire certain of the automobile dealership assets of Employee.

<PAGE>

         2. Duties of Employee. Employee shall be employed by Employer as
            ------------------
Regional Vice President over all of the automobile dealerships in which Employer
acquires a controlling ownership interest and which are located in the Region.
Employee's duties shall include, but not be limited to, acquisitions of
additional automobile dealerships within the Region for Employer. Employee shall
manage and supervise all Employer-owned dealerships within the Region and shall
report directly to the President. Employee shall serve Employer faithfully and
exclusively in the performance of Employee's duties and shall devote his full
time and best efforts to his employment, including the regularly established
working hours and such additional time as the requirements of Employer and the
performance of the Employee's duties require. Employee agrees to observe and
comply with all the rules and regulations of Employer as adopted and furnished
to Employee by Employer's Board of Directors from time to time. Employee
specifically understands that Employer shall have final authority over the terms
and conditions of all acquisitions.

         3.       Compensation.  For all services rendered by Employee under
                  ------------
this Agreement, he shall be entitled to compensation in accordance with the
following:

                  (a)  Base Salary. During the Employment Period, the Employee
                       -----------
         shall receive an annual base salary ("Annual Base Salary") of ONE
         HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($150,000.00) which shall be
         paid in equal monthly installments in the amount of TWELVE THOUSAND
         FIVE HUNDRED AND NO/100 DOLLARS ($12,500.00).

                  (b)  Special Bonus.  In addition to the Annual Base Salary as
                       -------------
         hereinabove provided, as long as Employee remains employed with
         Employer, the Employer shall pay to the Employee a special bonus
         (the "Special Bonus") in recognition of the Employee's

                                        2

<PAGE>

          services. Said Special Bonus shall be two and eight tenths percent
          (2.8%) of the annual net profit based on pre-tax earnings of all
          dealerships owned by the Employer within the Region, exclusive of any
          group or groups of commonly owned dealerships with gross revenues in
          excess of three hundred million dollars ($300,000,000) in sales
          acquired in a single transaction and/or as a part of a single
          transaction by Employer after the Commencement Date (the "Subsequently
          Acquired Large Dealerships"). The Special Bonus shall be paid in
          monthly installments based on 2.8% of net profit based on pre-tax
          earnings as determined from the prior month's manufacturer's monthly
          financial statement for each dealership owned by the Employer in the
          Region, exclusive of the Subsequently Acquired Large Dealerships. Such
          monthly installments shall be subject to a fifteen percent (15%)
          retainage which shall be held by Employer. Following the close of
          Employer's fiscal year, but in no event later than ninety (90) days
          after the close of Employer's fiscal year, payments from or
          withholding of such retainage shall be used, in addition to other
          funds if necessary, to settle any overpayment or underpayment of
          Employee's Special Bonus.

                  c. Override For Subsequently Acquired Large Dealerships. With
                     ----------------------------------------------------
          respect to the Subsequently Acquired Large Dealerships, Employee shall
          receive an override of one percent (1%) of the annual net profit for
          each such dealership (the "Subsequently Acquired Large Dealership
          Override"). The Subsequently Acquired Large Dealership Override shall
          be paid in monthly installments based on one percent (1%) of net
          profit based on pre-tax earnings as determined from the prior month's
          manufacturer's monthly financial statement for such dealerships. Such
          monthly installments shall be subject to a fifteen percent (15%)
          retainage which shall be held by Employer. Following the close of

                                        3

<PAGE>

                  Employer's fiscal year, but in no event later than ninety (90)
         days after the close of Employer's fiscal year, payments from or
         withholding of such retainage shall be used, in additional to other
         funds, if necessary, to settle any overpayment or underpayment of the
         Subsequently Acquired Large Dealership Override.

                  (d)   Initial Year Bonus. For the twelve months immediately
                        ------------------
         following the Commencement Date, Employee shall have the opportunity to
         earn an initial year bonus (the "Initial Year Bonus"), calculated as
         set forth below. If the net profit based on pre-tax earnings for such
         twelve month period for the Region, exclusive of Subsequently Acquired
         Large Dealerships, exceeds five million five hundred thousand dollars
         ($5,500,000), the Employee shall be entitled to an Initial Year Bonus
         in the amount of fifty thousand dollars ($50,000). If the net profit
         based on pre-tax earnings for such twelve month period for the Region,
         exclusive of Subsequently Acquired Large Dealerships, exceeds six
         million dollars ($6,000,000), then Employee shall be entitled to an
         Initial Year Bonus in the total amount of one hundred thousand dollars
         ($100,000). Any initial Year Bonus earned by Employee shall be payable
         within sixty (60) days of the close of such twelve month period.

                  (e)   In determining pre-tax earning for the purpose of
         computing Employee's Special Bonus, the Subsequently Acquired Large
         Dealership Override and the Initial Year Bonus, the following shall
         apply:

                        (1) No deduction shall be taken for federal and state
                  income taxes owed by the dealerships;

                        (2) No deduction shall be taken for bad debts which have
                  not been processed through the company's customary credit
                  approval procedures;

                                       4

<PAGE>

                        (3)   Pre-tax profits shall be determined before any
                  management fee expense allocation from Employer;

                        (4)   Overhead expenses or other expenses which have
                  been incurred by any dealership which are allocated to said
                  dealership but do not directly relate to the operation of said
                  dealership or that portion so allocated which is not
                  reasonably related to the operation of the dealership shall
                  not be deducted in determining pre-tax profits. To illustrate,
                  expenses incurred by a parent corporation or an affiliate
                  which do not have a direct bearing on the operation of the
                  dealership would be deducted in arriving at Employee's Special
                  Bonus.

                        (5)   Pre-tax profits shall be determined before
                  Employee's Special Bonus, the Subsequently Acquired Large
                  Dealership Override and the Initial Year Bonus.

             4.   Fringe Benefits. During the Employment Period, Employee shall
                  ---------------
         receive with other similarly situated employees of the Employer, all
         the fringe benefits of Employer, together with the following additional
         fringe benefits;

                  (a)   The use of two luxury demonstrator vehicles annually of
         Employee's choice, including all reasonable related expenses such as
         insurance, maintenance and gasoline.

                  (b)   Medical insurance coverage for Employee and his
         dependents and reimbursement of the Employee for the reasonable costs
         of disability insurance with a reasonable monthly benefit for life and
         with a waiting period of no more than ninety (90) days. This disability
         insurance shall contain other provisions so that it will replace to the

                                       5

<PAGE>

         extent reasonably possible Employee's Base Salary in case Employer
         terminates this Agreement upon Employee's disability as set forth
         herein.

                  (c)   Prompt reimbursement for all reasonable employment,
         travel, entertainment and other business related expenses incurred by
         the Employee in accordance with the most favorable policies, practices
         and procedures of the Employer and its affiliated companies in effect
         for the Employee at any time during the ninety (90) day period
         immediately preceding the Commencement Date or, if more favorable to
         the Employee, as in effect generally at any time thereafter with
         respect to other peer executives of the Employer and its affiliated
         companies.

                  (d)   An office of a size and with furnishings and other
         appointments, and an exclusive personal secretary and other assistants
         at least equal to the most favorable policies, practices and procedures
         of the Employer and its affiliated companies in effect for the Employee
         at any time during the ninety (90) day period immediately preceding the
         Commencement Date or, if more favorable to the Employee, as provided
         generally at any time thereafter with respect to other peer executives
         of the Employer and its affiliated companies.

                  (e)   An annual paid vacation in accordance with the most
         favorable policies, practices and procedures of the Employer and its
         affiliated companies as in effect for the Employee at any time during
         the ninety (90) day period immediately preceding the Commencement Date
         or, if more favorable to the Employee, as in effect generally at any
         time thereafter with respect to other peer executives of the Employer
         and its affiliated companies.

         5.       Termination of Employment. This Agreement shall terminate as
                  -------------------------
         follows:

                                       6

<PAGE>

     (a)  Death or Disability. The Employee's employment shall terminate
          -------------------
automatically upon the Employee's death during the Employment Period. If the
Employer determines in good faith that the Employee becomes unable to perform
the essential functions of his position, with or without reasonable
accommodation, then Employer shall give to the Employee written notice of its
intention to terminate the Employee's employment. In such event, the Employee's
employment with the Employer shall terminate effective on the thirtieth (30th)
day after receipt of such notice by the Employee (the "Disability Effective
Date") provided that, within the thirty (30) days after such receipt, the
Employee shall not have returned to full time performance of the Employee's
duties.

     (b)  Cause. The Employer may terminate the Employee's employment at any
          -----
time, without notice and with immediate effect for Cause. For purposes of this
Agreement "Cause" shall mean

          (i)    a material breach by the Employee of the Employee's obligations
     as set forth herein (other than due to disability) which material breach is
     not remedied within five (5) business days after receipt of written notice
     from the Employer specifying such a breach;

          (ii)  the conviction of the Employee of a felony;

          (iii) actions by Employee involving moral turpitude;

          (iv)  willful failure of Employee to comply with reasonable directives
     of Employer's Board of Directors;

          (v)   chronic absenteeism of Employee;

          (vi)  willful misconduct of Employee resulting in damage to Employer;

                                       7

<PAGE>

          (vii) Employee's illegal use of controlled substances.

     (c)  Good Reason. The Employee's employment may be terminated by the
          -----------
Employee during the Employment Period for good reason. For purposes of this
Agreement, "Good Reason" shall mean:

          (i)   the assignment to the Employee of any duties materially
     inconsistent in any respect with the Employee's position (including status,
     offices, titles and reporting requirements), authority, duties or
     responsibilities as contemplated by this Agreement or any other action by
     the Employer which results in a substantial diminution in such position,
     authority, duties or responsibilities, excluding for this purpose,
     isolated, unsubstantial arid inadvertent action not taken in bad faith and
     which is remedied by the Employer promptly after receipt of written notice
     thereof given by the Employee;

          (ii)  any failure by the Employer to comply with any of the material
     provisions of this Agreement other than isolated, insubstantial and
     inadvertent failure not occurring in bad faith and which is remedied by the
     Employer promptly after receipt of notice thereof given by the Employee;

          (iii) the Employer's requiring the Employee to be based at any office
     or location other than in Tennessee;

          (iv)  any failure of the Employer to comply with and satisfy the
     provisions of paragraph 7 of this Agreement.

     (d)  Without Cause. Either Employee or Employer may terminate this
          -------------
Agreement at any time, for any reason or without any reason. Such a termination
shall be deemed a termination "without cause".

                                       8

<PAGE>

         6.     Obligations of the Employer Upon Termination.  The parties agree
                --------------------------------------------
as follows:

                (a)   Death or Disability. If the Employee's employment is
                      -------------------
         terminated by reason of the Employee's death or disability during the
         Employment Period, Employee or Employee's estate shall be paid the
         Employee's Annual Base Salary together with those fringe benefits
         described in paragraphs 4(a) and 4(b) hereof through the remaining term
         of this Agreement.

                (b)   Cause. If the Employee's employment shall be terminated
                      -----
         for Cause during the Employment Period, Employee shall be paid the
         Employee's Annual Base Salary together with those fringe benefits
         described in paragraph 4(a) and 4(b) hereof throughout the remaining
         term of this Agreement.

                (c)   Reason. If, during the Employment Period, the Employee
                      ------
         shall terminate employment for Good Reason, he shall be paid his Annual
         Base Salary together with those fringe benefits described in paragraphs
         4(a) and 4(b) hereof throughout the remaining term of this Agreement.

                (d)   Without Cause. If Employee's employment is terminated
                      -------------
         without cause, then Employer shall continue to pay Employee his Annual
         Base Salary together with those fringe benefits described in paragraphs
         4(a) and 4(b) hereof throughout the remaining term of this Agreement.

         7.     Stock Option. If and when Employer completes an initial public
                ------------
offering of its common stock pursuant to an effective registration statement
under the Securities Act of 1933, as amended (the "IPO"), Employee shall be
eligible to participate in a stock option plan to be adopted by Employer for its
employees at such time (the "Stock Option Plan"). Employee's initial grant under
the Stock Option Plan shall be in an amount equal to at least

                                       9

<PAGE>

forty percent (40%) of the highest number of options granted to any employee of
Employer pursuant to Employer's initial round of grants under the Stock Option
Plan. The exercise price of such initial options shall be the fair market value
of the shares of the common stock on the date of such initial grant, it being
the intention of Employer to set such initial exercise price at the same price
per share of Employer's common stock sold in the IPO. Any grants of options
thereafter under the Stock Option Plan shall be at the discretion of Employer's
Board of Directors. The terms and conditions of any options granted to Employee
pursuant to the Stock Option Plan shall otherwise be governed by the provisions
of the Stock Option Plan.

     8.   Restrictive Covenants. For purposes of this Agreement, "Restrictive
          ---------------------
Covenants" mean the provisions of this paragraph 8. It is stipulated and agreed
that Employer is engaged in the business of owning and operating automobile
and/or truck dealerships, which business includes, without limitation, the
marketing and selling of new and used vehicles and the servicing of automobiles
and trucks (the "Business"). It is further stipulated and agreed that as a
result of Employee's employment by Employer, and as a result of Employee's
continued employment hereunder, Employee has and will have access to valuable,
highly confidential, privileged and proprietary information relating to
Employer's Business, including, without limitation, existing and future
inventory information, customer lists, sales methods and techniques, costs and
costing methods, pricing techniques and strategies, sales agreements with
customers, profits and product line profitability information, unpublished
present and future marketing strategies and promotional programs, and other
information regarded by Employer as proprietary and confidential (the
"Confidential Information"). It is further acknowledged that the unauthorized
use or disclosure by Employee of any of the Confidential Information would
seriously damage Employer in its Business.

                                       10

<PAGE>

     In consideration of the provisions of this paragraph 8, the compensation
and benefits referred to in paragraphs 3 and 4 hereof, which Employee
acknowledges are legally sufficient to support enforceability by the Employer of
the Restrictive Covenants against Employee, Employee agrees as follows:

          (a)  During the term of this Agreement and after its termination or
     expiration for any reason, Employee will not, without Employer's prior
     written consent, use, divulge, disclose, furnish or make accessible to any
     third person, company or other entity, any aspect of the Confidential
     Information (other than as required in the ordinary discharge of Employee's
     duties hereunder).

          (b)  During the term of this Agreement and for a period of two years
     after the date of the expiration or termination of this Agreement for any
     reason (the "Restrictive Period"), Employee shall not, directly or
     indirectly:

               (i)   Employ or solicit the employment of any person who at any
          time during the twelve (12) calendar months immediately preceding the
          termination or expiration of this Agreement for any reason was
          employed by Employer;

               (ii)  Provide or solicit the provision of products or services,
          similar to those provided by Employer to any person or entity within
          the "Restricted Territory," as hereinafter defined, who purchased or
          leased automobiles, trucks, or services from Employer at any time
          during the twelve (12) calendar months immediately preceding the
          termination or expiration of this Agreement for any reason;

               (iii) Interfere or attempt to interfere with the terms or other
          aspects of the relationship between Employer and any person or entity
          from whom

                                       11

<PAGE>

          Employer has purchased automobiles, trucks, parts, supplies, inventory
          or services at any time during the twelve (12) calendar months
          immediately preceding the termination or expiration of this Agreement
          for any reason;

               (iv)  Engage in competition with Employer or its respective
          successors and assigns by engaging, directly or indirectly, in a
          business involving the sale or leasing of automobiles or trucks or
          which is otherwise substantially similar to the Business, within the
          "Restricted Territory," as hereinafter defined; or

               (v)  Provide information to, solicit or sell for, organize or own
          any interest in (either directly or thorough any parent, affiliate or
          subsidiary corporation, partnership, or other entity), or become
          employed or engaged by, or act as agent for, any person, corporation
          or other entity that is directly or indirectly engaged in a business
          in the "Restricted Territory," as hereinafter defined, which is
          substantially similar to the Business or competitive with Employer's
          business; provided, however, that nothing herein shall preclude the
          Employee from holding not more than three percent (3%) of the
          outstanding shares of any publicly held company which may be so
          engaged in a trade or business identical or similar to the Business of
          the Employer. As used herein, "Restricted Territory" means the
          Standard Metropolitan Statistical Areas, as determined by the United
          States Office of Management and Budget, for Houston, Texas; Charlotte,
          North Carolina; Chattanooga, Tennessee; and Nashville, Tennessee. (c)
          Notwithstanding anything to the contrary contained in this Agreement,
          paragraphs 8(b)(ii), 8(b)(iv) and 8(b)(v) shall not preclude Employee
          from maintaining his investment in NEBCO of Cleveland, L.L,C. d/b/a
          Toyota of

                                       12

<PAGE>

          Cleveland and Abra Auto Body and Glass, L.L.C., so long as Employee
          does not, directly or indirectly, engage in the active management of
          or participate in the operation of such entities during the term of
          this Agreement or the Restrictive Period, subject to the last sentence
          of this paragraph 8(c). Notwithstanding the foregoing sentence,
          Employee shall be permitted to engage in the active management and/or
          participate in the operation of NEBCO of Cleveland, L.L.C. d/b/a
          Toyota of Cleveland and Abra Auto Body and Glass, LL.C. in the event
          that Employee's employment with Employer is terminated "without cause"
          by Employer.

     9.   Remedies. It is stipulated that a breach by Employee of the
          --------
Restrictive Covenants would cause irreparable damage to Employer. Employer, in
addition to any other rights or remedies which Employer may have, shall be
entitled to an injunction restraining Employee from violating or continuing any
violation of such Restrictive Covenants. Such right to obtain injunctive relief
may be exercised at the option of Employer, concurrently with, prior to, after
or in lieu of, the exercise of any other rights or remedies which Employer may
have as a result of any such breach or threatened breach. Employee agrees that
upon breach of any of the Restrictive Covenants, Employer shall be entitled to
an accounting and repayment of all profits, royalties, compensation, and/or
other benefits that Employee directly or indirectly has realized or may realize
as a result of, or in connection with, any such breach. Employee further agrees
that the Restrictive Period shall be extended by a period of time equal to any
period of time in which any Employee is in violation of the Restrictive
Covenants.

     10.  Acknowledgment of Reasonableness.  Employee has carefully read and
          --------------------------------
considered the provisions of this Agreement and has had the opportunity for
consultation with an

                                       13

<PAGE>

attorney of Employee's choice and agrees that the restrictions set forth herein
are fair and reasonably required for the protection of Employer. In the event
that any provision relating to the Restrictive Period, the Restricted Territory
or the scope of the restrictions shall be declared by a court of competent
jurisdiction to exceed the maximum period of time, geographical area or scope
that such court deems reasonable and enforceable under applicable law, such time
period, geographical area or scope of restriction held reasonable and
enforceable by the court shall thereafter be the Restricted Period, Restricted
Territory and/or scope under this Agreement.

     11.   Surrender of Books and Records. Employee acknowledges that all files,
           ------------------------------
records, lists, designs, specifications, books, products, plans and other
materials owned or used by Employer in connection with conduct of its business
shall at all times remain the property of Employer, and that upon termination or
expiration of this Agreement for any reason, Employee will immediately surrender
to Employer all such materials.

     12.   Entire Agreement. This Agreement contains the entire agreement of the
           ----------------
parties hereto, and shall not be modified or changed in any respect except by a
writing executed by the parties hereto.

     13.   Successors and Assigns. The rights and obligations of Employee under
           ----------------------
this Agreement shall inure to the benefit of Employer, its successors and
assigns, and shall be binding upon Employee and his respective successors, heirs
and assigns. Employer shall have the right to assign, transfer, or convey this
Agreement to its affiliated companies, successor entities, or assignees or
transferees of substantially all of Employer's business activities. This
Agreement, being personal in nature to the Employee, may not be assigned by
Employee without Employer's prior written consent.

                                       14

<PAGE>

     14.   Notice. All notices required and permitted to be give hereunder shall
           ------
be in writing and shall be deemed to have been given when mailed by certified or
registered mail, return receipt requested, addressed to the intended recipient
as follows or at such other address as is provided by either party to the other:

     If to Employer:                      With a copy to:

     Sonic Automotive, Inc.               Edward W. Wellman, Jr.
     Attention: Bryan Scott Smith, CEO    Parker, Poe, Adams & Bernstein, L.L.P.
     P.O.  Box 18747                      2500 Charlotte Plaza
     Charlotte, NC 28218                  201 South College Street
                                          Charlotte, NC 28244

     If to Employee:                      With a copy to:

     Jeffrey C. Rachor                    H. Wayne Grant, Esq.
     c/o John Konvalinka, Esq.            Grant, Konvalinka & Harrison, P.C.
     Grant, Konvalinka & Harrison, P.C.   9th Floor, Republic Centre
     9th Floor, Republic Centre           633 Chestnut Street
     633 Chestnut Street                  Chattanooga, TN 37450
     Chattanooga, TN 37450

     15.   Governing Law; Forum. This Agreement shall, in all respects, be
           --------------------
governed by and construed according to the laws of the State of North Carolina.
Any dispute or controversy arising out of or relating to this Agreement shall
also be governed by the laws of the State of North Carolina. Any suit or other
proceeding arising out of or relating to this Agreement shall be instituted and
maintained in the state courts of Mecklenburg County, North Carolina, and the
parties hereby waive any objection to such jurisdiction and venue and
irrevocably submit to the jurisdiction of such court in any such action or
proceeding. Each party shall bear its own costs and expenses, including without
limitation, attorneys' fees, in connection with any such suit or proceeding.

     16.   Guaranty. Guarantor joins in this Agreement for the purpose of
           --------
temporarily guaranteeing the obligations of Employer as set forth herein.
Guarantor shall be irrevocably

                                       15

<PAGE>

released from this guaranty at such time as (i) Sonic Auto World, Inc. shall
have a net worth of $20 million, or (ii) Sonic Auto World, Inc. shall complete
an initial public offering of its common stock pursuant to an effective
registration statement under the Securities Act of 1993, as amended, which
initial public offering results in net proceeds to the issuer of not less than
$50 million.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the date first above written.

                                       EMPLOYEE:

                                       /s/ Jeffrey C. Rachor              (SEAL)
                                       -----------------------------------
                                       Jeffrey C. Rachor

                                       EMPLOYER:

                                       SONIC AUTOMOTIVE, INC.

                                       By: /s/ B. Scott Smith
                                           -------------------------------------
                                       Title: B. Scott Smith
                                              ----------------------------------

                                       16

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