Document:

EX-10.1 Partnership Agreement

 

Exhibit 10.1

PARTNERSHIP AGREEMENT OF

TONTO CAPITAL PARTNERS, GP

     This PARTNERSHIP AGREEMENT (“Agreement”) of TONTO CAPITAL PARTNERS, GP
(the “Partnership”) is entered into effective as of September 20, 2002 by and
among AYMAN SABI (“Sabi”), NOFAL KAHOOK (“Kahook”) and ABDEL KARIM SHEHADEH
(“Shehadeh” and Sabi, Kahook and Shehadeh are collectively referred to as the
“Partners”).

Preliminary Statements

     (1) The Partnership was formed on September 20, 2002 pursuant to an
unwritten agreement among the Partners.

     (2) It is the intent of the Partners that this Agreement document the
unwritten agreement among the Partners, effective as of the date of formation
of the Partnership.

     (3) The Partners intend to file a Statement of Qualification with the
Secretary of State of the State of Delaware in order to elect that the
Partnership be treated as a limited liability partnership.

Agreement

     NOW, THEREFORE, in consideration of the premises, the mutual covenants set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

ARTICLE I

DEFINITIONS; FORMATION AND BUSINESS

     1.1. DEFINITIONS. The following terms shall have the meanings set forth
below for purposes of this Agreement:

          (a) “Capital Contribution(s)” means the aggregate amount of cash and the
agreed fair market value of any other property contributed by a Partner to the
capital of the Partnership pursuant to Article II hereof or otherwise.

          (b) “Code” means the Internal Revenue Code of 1986, as amended.

          (c) “Managing Partner” means Sabi.

          (d) “Partner Loan” means amounts transferred to the Partnership by a
Partner as a loan.

          (e) “Percentage Interest” means the interest in the Partnership of each
Partner, expressed as a percentage, including such Partner’s share of profits
and losses

 

 

and cash distributions where such items are stated in this Agreement to be
allocated or made to the Partners in accordance with their respective
Percentage Interests.

     1.2. FORMATION. On September 20, 2002 the Partners formed a general
partnership under Delaware law, upon the terms and conditions and for the
purposes set forth in this Agreement.

     1.3. NAME. The name of the Partnership is “TONTO CAPITAL PARTNERS, GP”.
At such time that a Statement of Qualification is filed with the Secretary of
State of the State of Delaware electing that the Partnership be treated as a
limited liability partnership, the Partnership’s name shall become “TONTO
CAPITAL PARTNERS, LLP”.

     1.4. PRINCIPAL OFFICE. The principal business office and address of the
Partnership shall be maintained at c/o 2703-A Gateway Drive, Pompano Beach,
Florida 33069, or at such other place as the Managing Partner may from time to
time designate.

     1.5. TERM. The Partnership commenced on September 20, 2002, and its
existence shall continue until dissolution of the Partnership pursuant to this
Agreement.

     1.6. PURPOSES AND BUSINESS OF THE PARTNERSHIP. The purposes of the
Partnership are to hold title to 2,777,778 of the outstanding common shares
(the “Shares”) of Roadhouse Grill, Inc., a Florida corporation (the “Issuer”),
possess beneficial ownership of the Shares and to take such actions as may be
incident to and necessary or appropriate with respect to the ownership of the
Shares.

     1.7. OWNERSHIP OF PARTNERSHIP PROPERTY. All assets acquired with funds of
the Partnership or contributed as capital to the Partnership shall be
Partnership property. All Partnership property and all property and interest
in property, real or personal, owned by the Partnership shall be deemed owned
by the Partnership as an entity and shall be held in the name of the
Partnership. All documentation relating to the Shares must be signed by the
Managing Partner in order to be effective.

     1.8. DECISIONS RELATING TO PARTNERSHIP BUSINESS. All decisions relating
to the business of the Partnership, including decisions relating to the voting
and sale or other disposition of the Shares, shall be determined by the
Managing Partner. No Partner shall take any action in contravention of this
section with respect to any Partnership property.

     1.9. NO INDIVIDUAL AUTHORITY. No Partner, acting alone, shall have any
authority to act for, or to undertake or assume any obligation, debt, duty or
responsibility on behalf of any other Partner or the Partnership except as
expressly provided in this Agreement.

     1.10. NO RESPONSIBILITY FOR OTHER’S COMMITMENTS. The Partnership shall
not be responsible or liable for any personal indebtedness or obligation of any
Partner incurred either before or after the execution of this Agreement. No
Partner

 

 

shall be responsible or liable for any personal indebtedness or obligation
of any other Partner incurred either before or after the execution of this
Agreement.

     1.11. NO RESTRICTIONS ON OTHER ACTIVITIES. Nothing in this Agreement
shall be construed to restrict any Partner from engaging in any business
activity, even if such activity is competitive with the business of the
Partnership or the Issuer.

     1.12. TRANSFERS. Except for the transfer or assignment by a Partner of
his interest in the Partnership to an immediate family member, which may be
made without the prior written consent of the Managing Partner, no Partner
shall transfer or assign his interest in the Partnership to any other person or
entity without the prior written consent of the Managing Partner, which consent
shall not be unreasonably withheld. For purposes of this Section 1.12,
Managing Partner hereby agrees not to prohibit transfers or assignments
requested by a Partner unless such transfer or assignment would: (i) cause a
change in the manner of taxation of the Partnership, (ii) cause a change in the
status of the Partnership under applicable law, or (iii) constitute a violation
of federal or state securities laws or regulations. Notwithstanding the
foregoing, no transfer or assignment of any interest in the Partnership shall
be valid unless and until the transferee or assignee of such interest agrees in
writing (in a form to be provided by the Managing Partner) to be bound by all
of the terms and conditions of this Agreement as in effect from time to time.

ARTICLE II

CONTRIBUTIONS TO CAPITAL

     2.1. INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS. The initial Capital
Contributions of the Partners were made on September 20, 2002 or shortly
thereafter. The initial Capital Contributions of each of the Partners shall be
as set forth in the Partnership’s books and records.

     2.2. ADDITIONAL CAPITAL CONTRIBUTIONS. The Partners generally shall not
be required to make any additional Capital Contributions to the Partnership,
except that they shall be required to provide the Partnership with money equal
to their proportionate share of Partnership expenses or liabilities determined
in accordance with their Percentage Interests, to the extent that the
Partnership has insufficient funds available to pay for such items.

     2.3. RETURN OF CONTRIBUTIONS. Except as otherwise specifically provided
in this Agreement, no Partner shall have the right to withdraw any part of his
Capital Contribution.

     2.4. CAPITAL ACCOUNTS. An individual capital account shall be
maintained for each Partner in accordance with Section 704(b) of the Code,
related regulations, and the following rules:

 

 

          (a) Computation of Capital Account Balance. The capital account of a
Partner shall consist of the initial Capital Contributions as set forth in
Section 2.1 hereof, increased by: (i) the amount of any additional money
contributed by such Partner to the Partnership, (ii) the fair market value of
any additional property contributed by such Partner to the Partnership (net of
liabilities secured by such contributed property that the Partnership is
considered to assume or take subject to under Section 752 of the Code), (iii)
such Partner’s allocable share of Partnership income and gain, and (iv) the
amount of any Partnership liabilities assumed by the Partner or that are
secured by any Partnership property distributed to that Partner; and decreased
by (v) the amount of money distributed to such Partner, (vi) the fair market
value of property distributed to such Partner (net of liabilities secured by
such property that such Partner is considered to assume or take subject to
under Section 752 of the Code), (vii) such Partner’s allocable share of all
items of Partnership loss or deduction, and (viii) the amount of any
liabilities of such Partner that are assumed by the Partnership or that are
secured by any property contributed by that Partner to the Partnership.

          (b) Transferee’s Capital Account. Except as otherwise provided herein, in
the event of a transfer of any Partner’s interest in the Partnership, the
transferee shall assume the capital account balance of the transferor.

          (c) Interest. No interest shall be payable or paid on any present or
future capital account balance.

          (d) Conformance with Regulations. The provisions of this Section 2.4 are
intended to comply with Treasury Regulation Section 1.704-1(b) regarding the
maintenance of the capital accounts of the Partners and this Section 2.4 shall
be interpreted and applied in a manner consistent with such Regulations.

     2.5. PERCENTAGE INTERESTS OF THE PARTNERS. The Partners shall each have
the Percentage Interest in the Partnership set forth next to their names on
Exhibit “A” attached hereto.

     2.6. CHANGES IN PERCENTAGE INTERESTS. Allocations during any period in
which a Partner’s Percentage Interest varies shall be made using any convention
permitted by law and agreed to by the Managing Partner.

ARTICLE III

PROFIT OR LOSS

     3.1. DETERMINATION OF PROFIT OR LOSS. The items of income, gains,
expenses, deductions, losses and credits to the Partnership shall be determined
in accordance with generally accepted accounting principles, consistently
applied, as soon as practicable after the close of each calendar year.

     3.2. COSTS AND EXPENSES. The Partnership shall pay all costs and expenses
of the Partnership, which may include, but are not limited to: (i) all costs of

 

 

borrowed money; (ii) legal, audit, accounting, brokerage and other fees;
(iii) taxes and assessments on Partnership assets and other taxes applicable to
the Partnership; (iv) costs and expenses in connection with the business of the
Partnership; (v) expenses of organizing, revising, amending, converting,
modifying or terminating the Partnership; and (vi) the cost of preparation and
dissemination of the informational material and documentation relating to
potential sale, financing or other disposition by the Partnership of
Partnership property or interests.

     3.3. ALLOCATION. Except as provided in Section 3.4 below, the net
profits, net gains and net losses generated by the Partnership, whether from
the receipt of distributions with respect to the Shares or from the sale or
other disposition or refinancing of all or any portion of Partnership property,
shall be allocated among the Partners according to their respective Percentage
Interests in the profits and losses of the Partnership as set forth in Section
2.5 hereof.

     3.4. CHANGES IN PARTNERSHIP INTERESTS. Upon the contribution to, or
distribution from, the Partnership of property in connection with a change in
the interest of a Partner in the Partnership, if the Partners determine that it

is in the best interests of the Partners, the assets of the Partnership shall
be revalued on the books of the Partnership to reflect the fair market value of
such assets at the time of the occurrence of such event, and the capital
accounts of the Partners shall be adjusted in the manner provided under the
Code.

     3.5. CREDITING ACCOUNTS. Items of income, gains, expenses, deductions,
losses and credits shall be credited or debited as the case may be, to each
Partner’s capital account as provided in Section 2.4 hereof and pursuant to the
adjustments described in Section 3.4 hereof.

ARTICLE IV

DISTRIBUTIONS

     4.1. DISTRIBUTABLE AMOUNTS. The Partnership may make distributions of any
amounts of cash received by the Partnership as determined by the Managing
Partner from time to time. Notwithstanding the foregoing, no distribution
pursuant to this Section 4.1 shall be made unless after the distribution the
Partnership retains assets sufficient to pay all expenses and liabilities of
the Partnership.

     4.2. ALLOCATION OF DISTRIBUTIONS. Any distributions of available cash
which the Partners determine to make, pursuant to the guidelines and
restrictions set forth in Section 4.1, shall be made and allocated among the
Partners in the following priorities and proportions:

          (a) First, in payment of all liabilities of the Partnership to Partners,
including Partner Loans but excluding Capital Contributions;

 

 

          (b) Second, to the Partners in proportion to, and to the extent of, the
positive balances in their respective capital accounts; and

          (c) Then, any remaining distributions of available cash shall be made to
the Partners in accordance with their respective Percentage Interests.

     4.3. LIQUIDATING DISTRIBUTIONS. Upon liquidation of this Partnership,
liquidating distributions shall be made as follows:

          (a) First, to pay all liabilities and obligations of the Partnership that
are then due and payable, except for Capital Contributions and liabilities to
the Partners;

          (b) Second, to establish any reserves that the Managing Partner determines
are necessary for any unpaid, future, or contingent liabilities or obligations
of the Partnership;

          (c) Third, to pay all liabilities of the Partnership to the Partners
including Partner Loans, but excluding Capital Contributions;

          (d) Fourth, to the Partners who have positive capital account balances pro
rata according to the positive capital account balances; and

          (e) Fifth, to the Partners in proportion to the respective Percentage
Interests.

     4.4 DISTRIBUTIONS OF PROPERTY. The Managing Partner may determine to
distribute property in lieu of cash to the Partners subject to the guidelines
and restrictions placed on cash distributions pursuant to Section 4.1. Any
distributions of property shall be allocated among the Partners in the
priorities and proportions set forth in Section 4.2.

ARTICLE V

RECORDS, ACCOUNTING AND BANK ACCOUNTS

     5.1. BOOKS, RECORDS AND REPORTS.

          (a) The Partners shall keep adequate books of account of the Partnership
wherein shall be recorded and reflected all of the contributions to the capital
of the Partnership, all distributions of cash and other property by the
Partnership, and all of the income, expenses and transactions of the
Partnership. Such books of account shall be kept on a calendar year basis at
the principal place of business of the Partnership, or such other place that
the Managing Partner deems appropriate, and each Partner and his authorized
representatives shall have free access to and the right to inspect such books
of account at reasonable times, during business hours, upon reasonable notice
to the Partnership.

 

 

          (b) No later than 60 days after the close of each calendar year, the
Partnership shall deliver to each Partner all information necessary for the
preparation of each Partner’s federal income tax returns.

          (c) Whenever required, the Partners and/or the Partnership shall prepare
and file all other reports required to be filed with legal authorities.

     5.2. ACCOUNTING DECISIONS. All decisions as to accounting matters, except
as specifically provided to the contrary herein, shall be made by the Managing
Partner in accordance with generally accepted accounting principles applied in
a consistent manner. The Partners may rely upon the advice of the
Partnership’s accountants as to whether a decision is in accordance with
generally accepted accounting principles.

     5.3. TAX MATTERS PARTNER. The Managing Partner shall be the tax matters
partner of the Partnership under section 6231(a)(7) of the Code.

 

 

ARTICLE VI

DISSOLUTION AND LIQUIDATION

     6.1. EVENTS OF DISSOLUTION. The Partnership shall be dissolved upon the
occurrence of any of the following events:

          (a) The mutual agreement of the Partners to dissolve the Partnership;

          (b) The sale or other disposition of all or substantially all of the
assets of the Partnership; or

          (c) The occurrence of any other event causing the dissolution of a
partnership under the laws of the State of Delaware or the issuance of a decree
of dissolution of the Partnership by a court of competent jurisdiction.

     6.2. LIQUIDATION. In the event of dissolution of the Partnership pursuant
to section 6.1:

          (a) The Partners shall wind up the affairs of the Partnership, and (i)
shall sell all Partnership assets as promptly as is consistent with obtaining
the fair value thereof, and shall apply and distribute the proceeds of
liquidation in the manner provided in Section 4.3, (ii) shall distribute the
property of the Partnership in kind in a manner consistent with Section 4.3 (to
the extent necessary, the Partnership shall in such case sell Shares to satisfy
debts owed to persons other than the Partners), or (iii) shall take any
combination of the actions referred to in clauses (i) and (ii) of this
sentence.

          (b) Subject to subsection (d) of this Section 6.2, each Partner shall look
solely to the assets of the Partnership for the return of his contribution, and
if the Partnership assets remaining after payment or discharge of the debts and
liabilities of the Partnership are insufficient to return the contributions of
each Partner, a Partner shall have no recourse against the Partnership or any
other Partner.

          (c) Any gain or loss on disposition of Partnership assets in the process
of liquidation shall be credited or charged to the Partners in accordance with
their Percentage Interests. Any Partnership property distributed in kind in
the liquidation (or at any other time) shall be valued and treated as though
the Partnership property were sold and the cash proceeds distributed. The
difference between the fair market value of the Partnership property
distributed in kind and its adjusted basis shall be treated as gain or loss on
sale of the Partnership property and shall be credited or charged immediately
prior to such distribution to the Partners in accordance with their respective
Percentage Interests.

          (d) Notwithstanding anything in this Agreement to the contrary, if, upon
liquidation of the Partnership, any Partner has a deficit balance in his
capital account (as determined pursuant to Section 2.6 hereof after giving
effect to all contributions, distributions and allocations for all taxable
years, including the taxable

 

 

year during which the liquidation occurs), then such Partner shall
contribute to the Partnership an amount equal to such deficit.

          (e) The proceeds of liquidation, including any deficit amounts contributed
pursuant to subsection (d) of this Section 6.3, shall be distributed to the
Partners according to Section 4.3 hereof.

ARTICLE VII

WITHDRAWAL OF A PARTNER

     7.1. DEEMED WITHDRAWAL. A Partner shall be deemed to withdraw as a
Partner when:

          (a) There is a voluntary or involuntary assignment or transfer of his
Partnership interest, including a transfer ordered by a court of competent
jurisdiction;

          (b) He makes an assignment for the benefit of creditors;

          (c) He files a voluntary petition in bankruptcy;

          (d) He is adjudicated bankrupt in an involuntary proceeding or is
adjudicated insolvent;

          (e) He files an answer or other pleading admitting or failing to contest
the material allegations of a petition filed against him in any proceeding
referred to in the applicable subparagraphs above;

          (f) A court of competent jurisdiction declares him incompetent to manage
his business affairs or the Partnership’s business affairs; or

          (g) He notifies all other Partners in writing of his voluntary withdrawal,
effective as of a date not sooner than thirty (30) days after the date of
delivery of such notice.

     7.2. DATE OF DEEMED WITHDRAWAL. The date that a Partner is deemed to
withdraw as a Partner shall be the date of the earliest of any of the events
listed in Section 7.1. A Partner shall cease to be a Partner on the date on
which he is deemed to withdraw.

ARTICLE VIII

MISCELLANEOUS

     8.1. AMENDMENTS. Any amendments to this Agreement shall be in writing and
signed by all parties hereto.

 

 

     8.2. NOTICES. All notices provided in this Agreement shall be directed to
the Partners at the addresses set forth on Exhibit “A” attached hereto and to
the Partnership at its principal business office, by hand delivery or by
registered or certified mail, provided that any party may change his/her/its
address by giving notice thereof to the other Partners.

     8.3. COUNTERPARTS. This Agreement may be executed in counterparts which
when taken together shall constitute one agreement, binding on all the parties
hereto.

     8.4. GOVERNING LAW. This Agreement shall be interpreted in accordance
with the laws of the State of Delaware.

     8.5. BINDING EFFECT. This Agreement shall inure to the benefit of and be
binding upon the undersigned Partners and their respective heirs, estates,
successors and permitted assigns. Whenever, in this instrument, a reference to
any Partner is made, such reference shall be deemed to include a reference to
the heirs, estates, successors and assigns of such Partner.

     8.6. SEVERABILITY. Every term and provision of this Agreement is intended
to be severable. If any term or provision hereof is illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the validity
of the remainder of the Agreement.

     8.7. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding and agreement among the parties hereto and supersedes any prior
understandings, whether written or oral, with respect to the subject matter
hereof, and there are no agreements, understandings, restrictions,
representations, or warranties among the parties with respect to the subject
matter hereof other than those set forth herein or herein provided for.

[Signatures on Next Page]

 

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as of
this 4th day of March, 2004, effective as of September 20, 2002.

	 	 	 
	/s/ Ayman Sabi
	 	 
	

	 	 
	AYMAN SABI
	 	 
	 
	 	 
	/s/ Nofal Kahook
	 	 
	

	 	 
	NOFAL KAHOOK
	 	 
	 
	 	 
	/s/ Abdel Karim Shehadeh
	 	 
	

	 	 
	ABDEL KARIM SHEHADEH
	 	 

 

 

EXHIBIT “A”

	 	 	 	 	 
	Name and Address	 	 
	of the Partners
	 	Percentage Interest

	Ayman Sabi
	 	 	43.3	%
	Nofal Kahook
	 	 	48.3	%
	Abdel Karim Shehadeh
	 	 	8.4	%<PAGE>
                                                                     Exhibit 4.2

                             SUPPLEMENTAL INDENTURE

         SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE"), dated as of
April 30, 2002, among AutoNation, Inc., a Delaware corporation (the "COMPANY"),
AutoNation Corporate Management, LLC, AutoNation Motors Holding Corp.,
AutoNation Imports of Arapahoe, Inc., Westmont A. Imports, Inc. f/k/a Maroone
Oldsmobile II, Inc., Westmont B. Imports, Inc., Westmont M. Imports, Inc.,
Naperville Imports, Inc., Tinley Park A. Imports, Inc. f/k/a Republic of
Rochester, Inc., Tinley Park J. Imports, Inc. f/k/a Orlando Imports, Inc.,
Tinley Park V. Imports, Inc. f/k/a Emich Lincoln-Mercury, Inc., AutoNation Fort
Worth Motors, Ltd., AutoNation GM GP, LLC f/k/a Emich Lincoln-Mercury, LLC,
AutoNation GM LP, LLC f/k/a Flemington Land Rover, LLC, AN Fremont Luxury
Imports, Inc. f/k/a Pitre Kia of Scottsdale, Inc., AutoNation Imports of Katy,
L.P. f/k/a AutoNation Chrysler Plymouth Jeep of North Houston, L.P., AutoNation
Imports Katy GP, Inc. f/k/a AutoNation Chrysler Plymouth GP, Inc., AutoNation
Imports Katy LP, Inc. f/k/a AutoNation Chrysler Plymouth LP, Inc. and White Bear
Auto Center, LLC f/k/a Cook-Whitehead Ford, LLC (each a "GUARANTEEING
SUBSIDIARY" and collectively, the "GUARANTEEING SUBSIDIARIES"), each of which is
a direct or indirect subsidiary of AutoNation, Inc. (or its permitted successor)
and Wells Fargo Bank Minnesota, National Association, as trustee under the
indenture referred to below (the "TRUSTEE").

                               W I T N E S S E T H

         WHEREAS, the Company has heretofore executed and delivered to the
Trustee the indenture (as amended, the "INDENTURE"), dated as of August 10,
2001, providing for the issuance of 9% Senior Notes due 2008 (the "NOTES");

         WHEREAS, the Indenture provides that each Guaranteeing Subsidiary shall
execute and deliver to the Trustee a supplemental indenture pursuant to which
each Guaranteeing Subsidiary shall unconditionally guarantee all of the
Company's obligations under the Notes and the Indenture on the terms and
conditions set forth herein (the "GUARANTEE"); and

         WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.

         NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Company, the Guaranteeing Subsidiaries and the Trustee mutually covenant and
agree for the equal and ratable benefit of the Holders of the Notes as follows:

         1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.

         2. AGREEMENT TO GUARANTEE. Each Guaranteeing Subsidiary hereby agrees
as follows:

                  (a)     To jointly and severally Guarantee to each Holder of a
                          Note authenticated and delivered by the Trustee and to
                          the Trustee and its successors and assigns,
                          irrespective of the validity and enforceability of the
                          Indenture, the Notes or the obligations of the Company
                          hereunder or thereunder, that:

                           (i)      the principal of and interest on the Notes
                                    will be promptly paid by the Company in full
                                    when due, whether at maturity, by
                                    acceleration, redemption or otherwise, and
                                    interest on the overdue principal of and
                                    interest on the Notes, if any, if lawful,
                                    and all other obligations of the Company to
                                    the Holders or the Trustee hereunder or
                                    thereunder will be promptly paid by the
                                    Company in full or performed by the Company,
                                    all in accordance with the terms hereof and
                                    thereof; and

                           (ii)     in case of any extension of time of payment
                                    or renewal of any Notes or any of such other
                                    obligations, that same will be promptly paid
                                    by the Company in full when due or performed
                                    by the Company in accordance with the terms

<PAGE>

                                    of the extension or renewal, whether at
                                    stated maturity, by acceleration or
                                    otherwise.

                           Failing payment when due by the Company of any amount
                           so guaranteed or any performance so guaranteed which
                           failure continues for three days after demand
                           therefor is made to the Company for whatever reason,
                           the Guarantors shall be jointly and severally
                           obligated to pay the same immediately.

                  (b)     The obligations hereunder shall be unconditional,
                          irrespective of the validity, regularity or
                          enforceability of the Notes or the Indenture, the
                          absence of any action to enforce the same, any waiver
                          or consent by any Holder of the Notes with respect to
                          any provisions hereof or thereof, the recovery of any
                          judgment against the Company, any action to enforce
                          the same or any other circumstance which might
                          otherwise constitute a legal or equitable discharge or
                          defense of a Guarantor.

                  (c)     The following is hereby waived: diligence,
                          presentment, demand of payment (except as specifically
                          provided in (a) above), filing of claims with a court
                          in the event of insolvency or bankruptcy of the
                          Company, any right to require a proceeding first
                          against the Company, protest, notice and all demands
                          (except as specifically provided in (a) above)
                          whatsoever.

                  (d)     This Guarantee shall not be discharged except (i) by
                          complete performance of the obligations contained in
                          the Notes and the Indenture or (ii) as provided in
                          Section 5 hereof.

                  (e)     If any Holder or the Trustee is required by any court
                          or otherwise to return to the Company, the Guarantors,
                          or any Custodian, Trustee, liquidator or other similar
                          official acting in relation to either the Company or
                          the Guarantors, any amount paid by either to the
                          Trustee or such Holder, this Guarantee, to the extent
                          theretofore discharged, shall be reinstated in full
                          force and effect.

                  (f)     The Guaranteeing Subsidiaries shall not be entitled to
                          any right of subrogation in relation to the Holders in
                          respect of any obligations guaranteed hereby until
                          payment in full of all obligations guaranteed hereby.

                  (g)     As between the Guarantors, on the one hand, and the
                          Holders and the Trustee, on the other hand, (x) the
                          maturity of the obligations guaranteed hereby may be
                          accelerated as provided in Article 6 of the Indenture
                          for the purposes of this Guarantee, notwithstanding
                          any stay, injunction or other prohibition preventing
                          such acceleration in respect of the obligations
                          guaranteed hereby, and (y) in the event of any
                          declaration of acceleration of such obligations as
                          provided in Article 6 of the Indenture, such
                          obligations (whether or not due and payable) shall
                          forthwith become due and payable by the Guarantors for
                          the purpose of this Guarantee, failing payment when
                          due by the Company which failure continues for three
                          days after demand therefor is made to the Company.

                  (h)     The Guarantors shall have the right to seek
                          contribution from any non-paying Guarantor so long as
                          the exercise of such right does not impair the rights
                          of the Holders under the Guarantee.

         3. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees that the
Guarantees shall remain in full force and effect notwithstanding any failure to
endorse on each Note a notation of such Guarantee.

         4. GUARANTEEING SUBSIDIARIES MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
Each Guaranteeing Subsidiary may not sell or otherwise dispose of all or
substantially all of its assets, or consolidate with or merge with or into
(whether or not such Guarantor is the surviving Person) another corporation,

                                       2
<PAGE>

Person or entity whether or not affiliated with such Guarantor except to the
extent limited by the provisions set forth in the Indenture, including, without
limitation, Section 5.1 of the Indenture.

         5. RELEASES. The Guarantee of each Guaranteeing Subsidiary will be
released in accordance with the provisions set forth in the Indenture,
including, without limitation, Section 10.4 of the Indenture. The Trustee will
provide any written confirmation or evidence of the termination of such
Guarantee as reasonably required by the Company. Any Guarantor not released from
its obligations under its Guarantee shall remain liable for the full amount of
principal of and interest on the Notes and for the other obligations of any
Guarantor under the Indenture as provided in Article 10 of the Indenture.

         6. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator, stockholder or agent of any of the Guaranteeing Subsidiaries, as
such, shall have any liability for any obligations of the Company or any
Guaranteeing Subsidiary under the Notes, the Indenture, any Guarantees or this
Supplemental Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder of Notes by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. Such waiver may not be effective to
waive liabilities under the federal securities laws.

         7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.

         8. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.

         9. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.

         10. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity, legality or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiaries and the
Company.

                                       3
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.

                              AUTONATION, INC.

                              By: /s/ Jonathan P. Ferrando
                                  ----------------------------------------------
                                  Name: Jonathan P. Ferrando
                                  Title: Senior Vice President, General
                                         Counsel and Secretary

                              AUTONATION CORPORATE MANAGEMENT,
                                   LLC
                              AUTONATION GM GP, LLC F/K/A EMICH
                                   LINCOLN-MERCURY, LLC
                              AUTONATION GM LP, LLC F/K/A
                                   FLEMINGTON LAND ROVER, LLC
                              AUTONATION MOTORS HOLDING CORP.
                              AUTONATION IMPORTS OF ARAPAHOE, INC.
                              WESTMONT A. IMPORTS, INC. F/K/A MAROONE
                                   OLDSMOBILE II, INC.
                              WESTMONT B. IMPORTS, INC.
                              WESTMONT M. IMPORTS, INC.
                              NAPERVILLE IMPORTS, INC.
                              TINLEY PARK A. IMPORTS, INC. F/K/A
                                   REPUBLIC OF ROCHESTER, INC.
                              TINLEY PARK J. IMPORTS, INC. F/K/A ORLANDO
                                   IMPORTS, INC.
                              TINLEY PARK V. IMPORTS, INC. F/K/A EMICH
                                   LINCOLN-MERCURY, INC.
                              AN FREMONT LUXURY IMPORTS, INC. F/K/A
                                   PITRE KIA OF SCOTTSDALE, INC.
                              AUTONATION IMPORTS KATY LP, INC. F/K/A AUTONATION
                                 CHRYSLER PLYMOUTH LP, INC.
                              AUTONATION IMPORTS KATY GP, INC. F/K/A AUTONATION
                                 CHRYSLER PLYMOUTH GP, INC.
                              WHITE BEAR AUTO CENTER, LLC F/K/A COOK-WHITEHEAD
                              FORD, LLC

                              By: /s/ Jonathan P. Ferrando
                                  ----------------------------------------------
                                    Name: Jonathan P. Ferrando
                                    Title: Vice President and Secretary

                              AUTONATION FORT WORTH MOTORS, LTD.

                              By:      AUTONATION GM GP, LLC F/K/A EMICH
                                                LINCOLN-MERCURY, LLC

                                       By: /s/ Jonathan P. Ferrando
                                           -------------------------------------
                                             Name:  Jonathan P. Ferrando
                                             Title: Vice President and Secretary

                                       4
<PAGE>

                              AUTONATION IMPORTS OF KATY, L.P. F/K/A
                                 AUTONATION CHRYSLER PLYMOUTH JEEP
                                 OF NORTH HOUSTON, L.P.

                              BY:      AUTONATION IMPORTS KATY GP, INC.
                                           F/K/A AUTONATION CHRYSLER
                                           PLYMOUTH GP, INC.

                                       By: /s/ Jonathan P. Ferrando
                                          --------------------------------------
                                          Name: Jonathan P. Ferrando
                                          Title: Vice President and Secretary

                              WELLS FARGO BANK MINNESOTA, NATIONAL
                                 ASSOCIATION, AS TRUSTEE

                              By: /s/ Robert L. Reynolds
                                 -----------------------------------------------
                                 Name: Robert L. Reynolds
                                 Title: Vice President

                                       5

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