EXHIBIT 10.9
PROMISSORY NOTE
(Revolving Construction Line of Credit)
(LIBOR Rate)
$50,000,000.00 Charlotte, North Carolina
June 23, 2000
FOR VALUE RECEIVED, SRE GEORGIA - 1, L.P., a Georgia limited
partnership, SRE GEORGIA - 2, L.P., a Georgia limited partnership, SRE GEORGIA -
3, L.P., a Georgia limited partnership, SRE TEXAS - 1, L.P., a Texas limited
partnership, SRE TEXAS - 2, L.P., a Texas limited partnership, SRE TEXAS - 3,
L.P., a Texas limited partnership, SRE ALABAMA - 1, LLC, an Alabama limited
liability company, SRE ALABAMA - 2, LLC, an Alabama limited liability company,
SRE ALABAMA - 3, LLC, an Alabama limited liability company, SREALESTATE ARIZONA
- - 1, LLC, an Arizona limited liability company, SREALESTATE ARIZONA - 2, LLC, an
Arizona limited liability company, SREALESTATE ARIZONA - 3, LLC, an Arizona
limited liability company, SREALESTATE ARIZONA - 4, LLC, an Arizona limited
liability company, SRE FLORIDA - 1, LLC, a Florida limited liability company,
SRE FLORIDA - 2, LLC, a Florida limited liability company, SRE FLORIDA - 3, LLC,
a Florida limited liability company, SRE NEVADA - 1, LLC, a Nevada limited
liability company, SRE NEVADA - 2, LLC, a Nevada limited liability company, SRE
NEVADA - 3, LLC, a Nevada limited liability company, SRE SOUTH CAROLINA - 1,
LLC, a South Carolina limited liability company, SRE SOUTH CAROLINA - 2, LLC, a
South Carolina limited liability company, SRE TENNESSEE - 1, LLC, a Tennessee
limited liability company, SRE TENNESSEE - 2, a Tennessee limited liability
company, SRE TENNESSEE - 3, LLC, a Tennessee limited liability company, SRE
VIRGINIA - 1, LLC, a Virginia limited liability company, and SRE HOLDING, LLC, a
North Carolina limited liability company (Collectively, "Borrowers"), whose
address is 6415 Idlewild Road, Suite 109, Charlotte, North Carolina 28212,
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 FIFTY MILLION
AND 00/100 DOLLARS ($50,000,000.00), or so much thereof as may be advanced from
time to time, pursuant to the terms of the Construction Loan Agreement (as
defined herein), together with interest on the principal balance outstanding
from time to time, in like money, from the date of the first advance of
principal by Lender under this Promissory Note (this "Note"), to and including
the Maturity Date (as defined herein), at the rate of two and twenty-five
hundredths percent (2.25%) per annum above the LIBOR Rate (as defined herein) in
effect from time to time (the "Applicable Interest Rate"):
This Note is issued by Borrowers pursuant to a Construction Loan
Agreement among Lender and Borrowers dated of even date (the "Construction Loan
Agreement"), which is incorporated herein by reference. Unless otherwise defined
herein or unless otherwise required by the context of this Note, capitalized
terms used in this Note will have the meanings ascribed to those terms in the
Construction Loan Agreement.
For purposes of computing interest during the term of this Note, the
Applicable Interest Rate for each calendar month shall be based on the LIBOR
Rate in effect on the last day of the prior calendar month. All changes in the
Applicable Interest Rate shall become effective on the first day of a calendar
month following a change in the LIBOR Rate and shall be deemed in effect
throughout such calendar month.
The Principal Balance and interest thereon at the Applicable Interest
Rate shall be due and payable as hereinafter set forth.
Prior to the Loan Maturity Date, the outstanding Principal Balance
hereunder may fluctuate up and down from time to time as Disbursements are made
and Borrower repays the Principal Balance, or any portion thereof; provided,
however, that the outstanding Principal Balance does not exceed $50,000,000.00.
The Disbursements shall be made subject to the terms of the Construction Loan
Agreement.
The term "Advance Termination Date" shall mean 42 months from the date
hereof.
The term "Agreement" shall mean the Master Construction Loan Agreement
dated as of even date herewith between Borrower and Lender.
The term "Budgeted Interest" shall mean, as to each Construction
Project, the amount of money shown in the Budget for such Construction Project,
from which Borrowers agree Lender may pay itself interest on sums disbursed
hereunder on a monthly basis as it accrues, provided that if Borrower shall pay
the interest with other funds, Lender will, at Borrowers' request, reimburse
Borrowers to the extent of the payment, but only to the extent available from
funds allocated as Budgeted Interest. All such sums disbursed by Lender to
payment of interest shall be considered a Disbursement for such Construction
Project and added to the Principal Balance.
The "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
Money Rates Column of the Wall Street Journal, or as published in such other
publication 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 "Construction Project Maturity Date" shall mean, as to each
Construction Project, the date the earlier of (i) fifteen (15) months less one
day from the date of the first Disbursement of the Advance for a Construction
Project, (ii) three (3) months after the Completion Date, or (iii) the Loan
Maturity Date.
The term "Deeds of Trust" shall mean those certain instruments entitled
Deeds of Trust and Assignment of Leases and Rents and Security Agreement (and
Financing Statement and Fixture Filing), from Borrowers to the Trustee specified
therein, in trust for Lender, and entitled Mortgages and Assignment of Leases
and Rents and Security Agreement (and Financing Statement and Fixture Filing)
from Borrowers to Lender, dated as of even date with this Note and any other
mortgages or deeds of trust granted by Borrowers to Lender executed hereafter,
securing payment of this Note, and covering certain real and personal property
described therein (collectively, the "Properties").
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The term "Loan Maturity Date" shall mean the date five (5) years less
one day after the Date hereof.
The term "Other Security Documents" shall mean any and all of the
documents other than this Note and the Deeds of Trust, now or hereafter executed
by Borrowers and/or Sonic Automotive, Inc., 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 "Principal Balance" shall mean the aggregate unpaid principal
balance of all Disbursements outstanding from time to time.
From the date hereof to and including the Loan Maturity Date, the
Principal Balance and interest thereon shall be due and shall be payable as
follows:
(a) consecutive monthly installments of interest on the unpaid
Principal Balance outstanding shall be due and payable at the Applicable
Interest Rate, commencing on the fifteenth day of the first full calendar month
after the date hereof, and continuing monthly thereafter on the fifteenth day of
each month through and including the Loan Maturity Date; and
(b) on each Construction Project Maturity Date, a principal installment
equal to the aggregate amount of all outstanding Disbursements made for such
Construction Project; and
(c) on the Loan Maturity 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 Deeds of
Trust and the Other Security Documents.
As to each Construction Project, unless paid by Borrowers from other
funds, Lender may disburse to itself to pay interest monthly as it accrues on
this Note, the amount allocated for interest before the Construction Project
Maturity Date, in the Budget for such Construction Project approved by Lender as
being available only for payment of that interest. Disbursements will be made on
behalf of Borrowers to Lender on the payment dates when interest is due and
owing hereunder and will be made by a bookkeeping entry on Lender's records
reflecting, as an additional disbursement hereunder, an amount equal to the
accrued interest due on the relevant payment date. If Borrowers shall pay the
interest with other funds, Lender will, at Borrowers' request, reimburse
Borrowers to the extent of the payment by crediting such sums to the outstanding
balance of the Disbursements attributable such Construction Project, but only to
the extent available from funds allocated for interest on this Note.
Borrowers may prepay the unpaid Principal Balance in whole or from time
to time in part, at any time, upon payment of interest accrued on the unpaid
Principal Balance outstanding through the day of prepayment and all other
charges due hereunder and under the Deeds of trust and the Other Security
Documents, without premium. All payments and prepayments received by Lender
prior to an Event of Default, including, without limitation, any condemnation
awards or insurance proceeds received under the Deeds of Trust which Lender is
permitted to apply on the indebtedness evidenced hereby will be applied first to
accrued unpaid interest at the Applicable Rate and then: (a) in the case where
such prepayment is not made in connection with the release of a Property
pursuant to Section 10 of the Construction Loan Agreement, to
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the outstanding balance of Disbursements then remaining unpaid for each
Construction Project, in the inverse order of their maturity, and (b) in the
case where such prepayment is made in connection with the release of a Property
pursuant to Section 10 of the Construction Loan Agreement, to the outstanding
balance of Disbursements then remaining unpaid for the applicable Construction
Project.
Notwithstanding any provision in this Note, the total liability for
payments of interest and payments in the nature of interest, including without
limitation, all charges, fees or any sums which may at any time be deemed to be
interest, shall not exceed the amount which Lender may lawfully collect. In the
event the total liability for payments of interest and payments in the nature of
interest, including without limitation, all charges, fees or other sums which
may at any time be deemed to be interest, shall, for any reason whatsoever,
result in an effective rate of interest, which for any month or other interest
payment period exceeds the amount which Lender may lawfully collect, all sums in
excess of those lawfully collectible as interest for the period in question
shall, without further notice to any party hereto, be applied as a premium-free
reduction of the Principal Balance immediately upon receipt of such sums by
Lender, with the same force and effect as though Borrowers had specifically
designated such excess sums to be so applied to the reduction of the Principal
Balance; provided, however, that Lender may, at any time, and from time to time,
elect, by notice in writing to Borrowers, to waive, reduce or limit the
collection of any sums (or refund to Borrowers any sums collected) in excess of
those lawfully collectible as interest rather than accept such sums as
prepayment of the Principal Balance.
Payment of this Note is secured by the Deeds of Trust and the Other
Security Documents. All of the agreements, conditions, covenants, provisions and
stipulations contained in the Deeds of Trust and the Other 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 Borrowers covenant and agree 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 within fifteen (15)
days of when due, Borrowers shall pay to Lender a late charge payment equal to
four percent (4%) of the amount of such installment or the maximum rate
permitted by law, whichever is less. If any "Event of Default" (as such term is
defined in the Deeds of Trust) shall occur, then Lender, at its option and
without further notice, demand or presentment for payment to Borrowers 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 rate of three percent (3%) per annum over the Applicable Interest Rate,
together with any reasonable attorneys' fees and costs (through and including
any appellate fees and other reasonable costs and any fees and costs incurred in
enforcing this Note and the Deeds of Trust or the Other Security Documents in
any bankruptcy or insolvency proceeding) incurred by Lender in collecting or
enforcing payment thereof to the extent allowed by law and all other sums owed
by Borrowers under this Note and the Deeds of Trust and the Other Security
Documents, anything in this Note and the Deeds of Trust and the Other Security
Documents to the contrary notwithstanding, all without any relief whatever from
any valuation or appraisement laws, and payment thereof may be enforced and
recovered in whole or in part at any time by one or more of the remedies
provided to Lender in this Note and the Deeds of Trust and the Other Security
Documents.
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The remedies of Lender, as provided in this Note and the Deeds of Trust
and the Other 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 except as provided in this Note, the Construction Loan
Agreement, the Deeds of Trust or any Other Security Documents 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 governed by and construed according to the
laws 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.
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 thereby.
The laws of South Carolina provide that in any real estate foreclosure
proceeding, a defendant against whom a personal judgment is taken or asked may
within thirty (30) days after the sale of the Property apply to the court for an
order of appraisal. The statutory appraisal value as approved by the court would
be substituted for the high bid and may decrease the amount of any deficiency
owing in connection with the transaction. THE UNDERSIGNED HEREBY WAIVE AND
RELINQUISHE THE STATUTORY APPRAISAL RIGHTS WHICH MEANS THE HIGH BID AT THE
JUDICIAL FORECLOSURE SALE WILL BE APPLIED TO THE DEBT REGARDLESS OF ANY
APPRAISED VALUE OF THE MORTGAGED PROPERTY.
IN WITNESS WHEREOF, Borrowers, intending to be legally bound hereby,
have duly executed this Note under seal on the day and year first above written.
SRE HOLDING, LLC, a North Carolina
limited liability company,
SREALESTATE ARIZONA - 1, LLC,
an Arizona limited liability company,
SREALESTATE ARIZONA - 2, LLC,
an Arizona limited liability company,
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SREALESTATE ARIZONA - 3, LLC,
an Arizona limited liability company,
SREALESTATE ARIZONA - 4, LLC,
an Arizona limited liability company,
SRE ALABAMA - 1, LLC,
an Alabama limited liability company,
SRE ALABAMA - 2, LLC,
an Alabama limited liability company,
SRE ALABAMA - 3, LLC,
an Alabama limited liability company,
SRE SOUTH CAROLINA - 1, a South
Carolina limited liability company,
SRE SOUTH CAROLINA - 2, a South
Carolina limited liability company,
SRE VIRGINIA - 1, LLC, a Virginia
limited liability company,
SRE TENNESSEE - 1, LLC, a Tennessee
limited liability company,
SRE TENNESSEE - 2, LLC, a Tennessee
limited liability company, and
SRE TENNESSEE - 3, LLC, a Tennessee
limited liability company
By: /s/ B. Scott Smith (SEAL)
--------------------------
B. Scott Smith, Vice President
of each of the companies
Attest: /s/ Stephen K. Coss
----------------------
Stephen K. Coss, Secretary
of each of the companies
SRE FLORIDA - 1, LLC, a Florida
limited liability company,
SRE FLORIDA - 2, LLC, a Florida
limited liability company,
SRE FLORIDA - 3, LLC, a Florida
limited liability company,
SRE NEVADA - 1, LLC, a Nevada
limited liability company,
SRE NEVADA - 2, LLC, a Nevada
limited liability company, and
SRE NEVADA - 3, LLC, a Nevada
limited liability company
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By: /s/ B. Scott Smith (SEAL)
--------------------------
B. Scott Smith,
President of each of the companies
Attest: /s/ B. Scott Smith
----------------------
Stephen K. Coss,
Secretary of each of the companies
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SRE GEORGIA - 1, L.P.,
a Georgia limited partnership,
SRE GEORGIA - 2, L.P.,
a Georgia limited partnership, and
SRE GEORGIA - 3, L.P.,
a Georgia limited partnership
By: SONIC AUTOMOTIVE OF
GEORGIA, INC., a Georgia
corporation, the General Partner of
each of the partnerships
By: /s/ B. Scott Smith (SEAL)
-----------------------
B. Scott Smith,
Vice President
Attest: /s/ Stephen K. Coss
----------------------
Stephen K. Coss,
Secretary
SRE TEXAS - 1, L.P.,
a Texas limited partnership,
SRE TEXAS - 2, L.P.,
a Texas limited partnership, and
SRE TEXAS - 3, L.P.,
a Texas limited partnership
By: SONIC OF TEXAS, INC.,
a Texas corporation, the
General Partner of each of the
Partnerships
By: /s/ B. Scott Smith (SEAL)
----------------------
B. Scott Smith,
Vice President
Attest: /s/ Stephen K. Coss
---------------------
Stephen K. Coss,
Secretary
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