EXHIBIT 10.16
FOURTH AMENDED AND RESTATED PROMISSORY NOTE
(Acquisition/Revolving Line of Credit)
(LIBOR Rate)
$350,000,000.00 Charlotte, North Carolina
December 6, 1999
FOR VALUE RECEIVED, SONIC AUTOMOTIVE, INC., a Delaware corporation
("Borrower"), whose address is 5401 East Independence Blvd., P.O. Box 18747,
Charlotte, North Carolina 28218, promises to pay to FORD MOTOR CREDIT COMPANY, a
Delaware corporation ("Lender"), or order, at 6302 Fairview Road, Suite 500,
Charlotte, North Carolina 28210, or at such other place as Lender may from time
to time in writing designate, in lawful money of the United States of America,
the principal sum of THREE HUNDRED FIFTY MILLION AND 00/100 DOLLARS
($350,000,000.00), or so much thereof as may be advanced from time to time,
together with interest, adjusted monthly, on the principal balance outstanding
from time to time (the "Principal Balance"), in like money, from the date of
this Fourth Amended and Restated Promissory Note (this "Note"), to and including
the Termination Date, at the rate of two and fifty hundredths percent (2.50%)
per annum above the LIBOR Rate (as defined herein) in effect from time to time
(the "Applicable Interest Rate"):
Capitalized terms used herein and not otherwise defined herein shall
have the meaning given to such terms in the Agreement.
For purposes of computing interest during the term of this Note, the
Applicable Interest Rate for each month shall be based on the LIBOR Rate in
effect on the last day of the prior month. All changes in the Applicable
Interest Rate shall become effective on the first day of a month following a
change in the LIBOR Rate and shall be deemed in effect throughout such month.
The Principal Balance and interest thereon at the Applicable Interest
Rate shall be due and payable as hereinafter set forth.
The outstanding Principal Balance hereunder may fluctuate up and down
from time to time as Advances are made, and Borrower repays the Principal
Balance, or any portion thereof; provided, however, that at any one time, the
aggregate of all Advances made hereunder may not exceed the lesser of (a)
$350,000,000.00 and (b) the Scaled Assets of the Sonic Group plus
$100,000,000.00.
This Note amends, restates, replaces and supersedes the Promissory Note
dated as of October 15, 1997 in the original principal amount of $26,000,000.00,
as amended and restated by that certain Amended and Restated Promissory Note
dated December 15, 1997, in the original principal amount of $75,000,000.00, as
amended and restated by that certain Second Amended and Restated Promissory Note
dated March 2, 1999 in the principal amount of $100,000,000.00, as further
amended and restated by that certain Third Amended and Restated Promissory Note
dated July 28, 1999 in the principal amount of $150,000,000.00 from Borrower to
Lender (collectively, the "Original Note"). Any interest accrued on the Original
Note as of the date hereof will be included in the next monthly payment due
hereunder.
The term "AGREEMENT" shall mean the Credit Agreement dated as of
October 15, 1997, as amended by that certain Credit Agreement Amendment dated
November 12, 1997, as amended and restated by that certain Amended and Restated
Credit Agreement dated as of December 15, 1997, as amended by that certain
Letter Agreement dated July 28, 1998, as amended by that certain Letter
Agreement dated September 21, 1998, as amended by that certain Letter Agreement
dated October 15, 1998, as amended by that certain Amendment to Amended and
Restated Credit Agreement dated March 2, 1999, as amended and restated by that
certain Second Amended and Restated Credit Agreement dated July 28, 1999, as
further amended by that certain First Amendment to Second Amended and Restated
Credit Agreement dated as of even date herewith between Borrower and Lender.
The term "LIBOR RATE" shall mean the monthly arithmetic average of the
per annum interest rate announced from time to time as the one month London
Interbank Offered Rates quoted each Monday for the previous Friday under the
Monday Rates Column of the Wall Street Journal, or as published in such other
publications as Lender may designate. In the event such rate is not quoted on
Monday for the previous Friday, the rate quoted on the first business day of the
week for the last business day of the previous week shall be utilized.
The term "PAYMENT DATE" shall mean the fifteenth day of each calendar
month, provided, however, if such day is not a Business Day, then the Payment
Date shall be the next succeeding Business Day following such fifteenth day.
The term "SECURITY DOCUMENTS" shall mean the Agreement and any and all
of the documents now or hereafter executed by Borrower and/or others, and by or
in favor of Lender, which wholly or partially guarantee or secure this Note or
are executed in connection with this Note.
The term "TERMINATION DATE" shall mean the earlier of (a) October 31,
2002 and (b) the date of the termination of the Commitment pursuant to either of
Section 2.3 or Section 7.1 of the Agreement.
From November 1, 1999 to and including the Termination Date, the
Principal Balance and interest thereon shall be due and shall be payable as
follows:
(a) consecutive monthly installments of interest at the Applicable
Interest Rate on the unpaid Principal Balance outstanding
commencing on the first Payment Date following the date hereof and
continuing thereafter on each Payment Date through and including
the Termination Date; and
(b) if at any time and for any reason the outstanding Principal
Balance exceeds the lesser of (i) $350,000,000.00 and (ii) the
Scaled Assets of Sonic Group plus $100,000,000.00, the Borrower
shall immediately make a mandatory prepayment in an amount equal
to such excess; and
(c) on the Termination Date, a final installment which shall include
all unpaid amounts of the Principal Balance and interest accrued
and unpaid thereon and any and all other payments due under this
Note and the Security Documents.
Each of such payments shall be applied first to interest at the
Applicable Interest Rate and the balance to reduction of the Principal Balance.
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Except for a prepayment of the Principal Balance in whole made in
connection with Borrower's termination of the Commitment, Borrower may prepay
the unpaid Principal Balance in whole or from time to time in part, upon payment
of interest accrued on the unpaid Principal Balance outstanding through the day
of prepayment and all other charges, without premium. Prepayments of the
Principal Balance shall be applied to installments of the Principal Balance
remaining unpaid in the inverse order of their maturity and shall be credited to
the Principal Balance as of the date of receipt by Lender. Notwithstanding the
foregoing, the Borrower may not so prepay the unpaid Principal Balance unless
Borrower shall have provided notice to the Lender of such prepayment by 12:00
p.m. on the day such payment will be made and the amount of such prepayment is
not less than $500,000.00.
Any prepayments of the Principal Balance made in connection with the
reduction or termination of the Commitment shall be subject to the terms and
conditions of Section 2.3 of the Agreement, including but not limited to the
payment of a termination/reduction fee equal to the amount by which the
Commitment has been reduced multiplied by:
(a) one-half of one percent (0.50%), if Borrower terminates the
Commitment on or before November 1, 2000; or
(b) three-eighths of one percent (0.375%), if Borrower terminates the
Commitment after November 1, 2000 but on or before November 1,
2001; or
(c) one-quarter of one percent (0.25%), if Borrower terminates the
Commitment on or after November 1, 2001 but before October 31,
2002.
Payment of this Note is secured by the Security Documents. All of the
agreements, conditions, covenants, provisions and stipulations contained in the
Security Documents which are to be kept and performed by Borrower are hereby
made a part of this Note to the same extent and with the same force and effect
as if they were fully set forth herein, and Borrower covenants and agrees to
keep and perform them, or cause them to be kept and performed, strictly in
accordance with their terms.
Time is of the essence hereof and if any of the Principal Balance or
interest on this Note or other sum due hereunder is not paid when due, to the
extent not in excess of the Maximum Rate (as such term is defined in the
Agreement) and in accordance with applicable law, any amount not paid by the
Borrower when due shall accrue interest at an additional five percent (5.0%) per
annum above the rate applicable thereto until such amounts have been paid in
full and shall be payable on demand by the Lender and at any rate not later than
the next succeeding Payment Date. If any Event of Default shall occur, then
Lender, at its option and without further notice, demand or presentment for
payment to Borrower or others, may declare immediately due and payable the
unpaid Principal Balance and interest accrued thereon to the date of such Event
of Default and thereafter at the Applicable Rate plus three percent (3%) per
annum, together with all other sums owed by Borrower under this Note and the
Security Documents.
This Note is the "Note" referred to in, and is entitled to the benefits
of, the Agreement. The Agreement, among other things, (i) provides for the
making of Advances by the Lender to the Borrower from time to time in an
aggregate amount not to exceed at any time outstanding the U.S. Dollar amount
first above mentioned, the indebtedness of the Borrower resulting from each such
advance being evidenced by this Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and also for the prepayment of the principal hereof prior to the Termination
Date upon the terms and conditions therein specified.
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Principal and interest are payable in lawful money of the United States
of America to the Lender, so such domestic account as the Lender may designate,
in same day funds. At the time of each Advance, and upon each payment or
prepayment of principal of each Advance, the Lender shall make a notation either
on the schedule attached hereto and made a part hereof, or in such Lender's own
books and records, in each case specifying the amount of such Advance, or the
amount of principal paid or prepaid with respect to such Advance, as the case
may be; PROVIDED that the failure of the Lender to make any such recordation or
notation shall not affect the Obligations of the Borrower hereunder or under the
Agreement.
The remedies of Lender, as provided in this Note and the Security
Documents, shall be cumulative and concurrent and may be pursued singularly,
successively or together, at the sole discretion of Lender, and may be exercised
as often as occasion therefor shall occur; and the failure to exercise any such
right or remedy shall in no event be construed as a waiver or release thereof.
Borrower waives presentment for payment, demand, notice of demand,
notice of nonpayment or dishonor, protest and notice of protest of this Note,
and all other notices in connection with the delivery, acceptance, performance,
default, or enforcement of the payment of this Note.
Lender shall not be deemed, by any act of omission or commission, to
have waived any of its rights or remedies hereunder unless such waiver is in
writing and signed by Lender and, then, only to the extent specifically set
forth in the writing. A waiver with reference to one event shall not be
construed as continuing or as a bar to or waiver of any right or remedy as to a
subsequent event.
This instrument shall be interpreted, and the rights and liabilities of
the parties hereto determined, in accordance with the internal laws (as
distinguished from the conflicts of law provisions) of the State of North
Carolina.
Whenever used, the singular shall include the plural, the plural shall
include the singular, and the words "Lender" and "Borrower" shall be deemed to
include their respective heirs, administrators, executors, successors and
assigns. The provisions of this Note shall be binding upon and inure to the
benefit of said heirs, administrators, executors, successors and assigns.
Borrower's successors and assigns shall include, without limitation, a receiver,
trustee or debtor in possession of or for Borrower.
In the event any one or more of the provisions hereof shall be invalid,
illegal or unenforceable in any respect, the validity of the remaining
provisions hereof shall be in no way affected, prejudiced or disturbed hereby.
This Note amends and restates in full the Original Note and is issued
in substitution for and not in payment of such prior Original Note and is not
intended to constitute a novation thereof.
IN WITNESS WHEREOF, Borrower, intending to be legally bound hereby, has
duly executed this Note under seal, the day and year first above written.
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SONIC AUTOMOTIVE, INC.,
a Delaware corporation
By: /s/ B. Scott Smith (SEAL)
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Name: B. Scott Smith
Title: President
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