[Sonic Automotive Letterhead]

EX-10.42 9 dex1042.htm SIDE LETTER TO SECOND AMENDMENT TO GUARANTY AND SUBORDINATION AGREEMENTS Side Letter to Second Amendment to Guaranty and Subordination Agreements

Exhibit 10.42

[Sonic Automotive Letterhead]

March 12, 2009

Mr. Thomas Eckert

Capital Automotive Real Estate Services, Inc.

8270 Greensboro Drive

McLean, VA 22102

 

  RE: Amendment of lease renewal terms relating to those certain Lease Agreements and the corresponding Landlords, Properties, Tenants and Guarantors between affiliates of Capital Automotive Real Estate Services, Inc. (“Capital Automotive”) and affiliates of the Sonic Automotive, Inc. (“Sonic”) as listed on the attached Exhibit A (collectively, the “Leases”). All capitalized terms not defined herein shall have the meanings attributed to such terms as in the Leases.

Dear Tom,

Sonic and Capital Automotive have agreed to extend the existing lease Renewal Terms listed in certain of the Leases from five (5) year to ten (10) year terms. This letter will confirm Sonic and Capital Automotive’s agreement to have their respective subsidiaries execute amendments evidencing the respective changes for each Lease as specifically noted on the attached Exhibit A. The parties agree that time is of the essence in this matter, and that the parties will execute, or cause the applicable affiliate to execute, these amendments within two (2) weeks after Capital Automotive delivers to Sonic the amendments for execution. If the lease amendments are not executed within such time frame (unless otherwise extended in writing by the parties), then the changes outlined on Exhibit A are deemed to have automatically taken effect as if each lease amendment had been executed.

Except as set forth above, nothing in this letter nor any conversations we may have shall constitute an amendment to or modification of the parties’ obligations under the Leases and other documents unless formally approved by the parties and agreed to in writing.

If the foregoing is acceptable to you, please execute a copy of this letter below. If you have any questions, please let us know.

 

Sincerely,
Sonic Automotive, Inc.

/s/ David P. Cosper

By: David P. Cosper
Its: Vice Chairman and CFO
[signatures continue on next page]

Page 2

March 12, 2009

 

Seen and Agreed:

Capital Automotive Real Estate Services, Inc.

 

/s/ Thomas Eckert

By: Thomas Eckert
Its: President and Chief Executive Officer

 

cc: Michael Dickerson

Stacey Barnet

Chris Sokira

Linda Nguyen

Jay M. Ferriero

Exhibit A

CARS Term Dates and Renewal Options

 

Dealership

  

Property ID

  

Title of

Next

Lease

Amendment

  

Landlord Entity

  

Original Tenant Entity

  

Lease

Date

  

Guaranty Date

  

Lease
Expiration
date

  

Remaining
Renewal Options

  

FMV
Rent
Reset at
2nd
renewal

  

Lease Amendment re:

Renewal to:

(6 different colors for the

6 different scenarios)

  

Additional Lease

Amendment to:

Clearwater Toyota   SON-001, 002   1st   CARS-DB4, L.P.   Sonic Automotive, Inc.   9/18/1998   NO GUARANTY, Sonic is the Tenant   12/31/2012   One 5 yr option   n/a   1st option exercised; change remaining 5-yr option to one 10-yr option   Sonic Automotive, Inc. is Tenant, so there is no Guaranty, but there are no financial covenants in the lease. Need to add covenants to lease amendment.
Toyota West   SON-013   2nd   MMR Holdings, LLC   Sonic Automotive-1500 Automall Drive, Columbus, Inc.   8/13/1999   8/13/1999   1/31/2014   One 5 yr option   n/a   1st option exercised; change remaining 5-yr option to one 10-yr option  
Hatfield Hyundai   SON-014   2nd   MMR Holdings, LLC   Sonic Automotive-1400 Automall Drive, Columbus, Inc.   8/13/1999   NO GUARANTY on network, most likely 8/13/99   1/31/2014   One 5 yr option   n/a   1st option exercised; change remaining 5-yr option to one 10-yr option  
Mercedes Benz of Daytona Beach   SON-023   2nd   MMR Holdings, LLC   Sonic Automotive-1720 Mason Ave., DB, LLC   8/13/1999   8/13/1999   10/14/2013   One 5 yr option   n/a   1st option exercised; change remaining 5-yr option to one 10-yr option  
Capitol Chevrolet, SC   SON-099   2nd   CAR SON NEWSOME II L.L.C.   Sonic-Newsome Chevrolet World, Inc.   12/23/2003   12/23/03   6/24/2019   Four 5 yr options   YES   change all four 5-yr options to 10-yr options  
Town & Country Toyota   SON-005   5th   MMR Holdings, LLC   Marcus David Corporation   8/13/1999   8/13/1999   5/31/2022   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Infiniti of Charlotte—dealership   SON-006   5th   MMR Holdings, LLC   Sonic Automotive-9103 E. Independence, NC, LLC   8/13/1999   8/13/1999   12/30/2019   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Hatfield VW—Improvements   SON-015   3rd   CARS CNI-2 L.P.   Sonic Automotive-1495 Automall Drive, Columbus, Inc.   8/13/1999   8/13/1999   12/28/2019   Two 5 yr options   n/a   change both 5-yr options to 10-yr options  
Hatfield Kia/VW   SON-016   3rd   MMR Holdings, LLC   Sonic Automotive-1455 Automall Drive, Columbus, Inc.   8/13/1999   8/13/1999   1/31/2016   Two 5 yr options   n/a   change both 5-yr options to 10-yr options  
Lute Riley Honda   SON-019   3rd   CAR SON TX LUTE L.L.C.   Sonic-Lute Riley, L.P.   8/13/1999   8/13/1999   7/1/2019   Two 5 yr options   n/a   change both 5-yr options to 10-yr options  
Pensacola Honda—dealership   SON-030, 069   5th   MMR Holdings, LLC   Sonic-Shottenkirk, Inc.   9/01/1999   9/1/1999   12/22/2017   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Global BMW—dealership   SON-032   5th   CARS-DB4, L.P.   Sonic-Global Imports, L.P.   8/13/1999   8/13/1999   11/6/2021   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Century BMW—dealership   SON-049   3rd   MMR Holdings, LLC   Sonic Automotive 2752 Laurens Rd., Greenville, Inc.   8/13/1999   8/13/1999   12/22/2017   Two 5 yr options   n/a   change both 5-yr options to 10-yr options  
BMW of Fairfax—2008 Image Upgrade   SON-055, 056   6th   MMR Holdings, LLC   Sonic-Manhattan Fairfax, Inc.   8/13/1999   8/13/1999   9/25/2016   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Fort Myers   SON-062, 063, 064, 068   5th   CAR SONFREE, LLC   Sonic-FM Automotive, LLC, Sonic FM, Inc., Sonic Freeland, Inc. and Sonic-FM Nissan, Inc.   11/04/1999   11/4/1999   12/22/2017   Two 5 yr options   n/a   change both 5-yr options to 10-yr options   Amend lease to add Mini & VW new tenants, delete Nissan tenant: SAI Fort Myers B, LLC (dba MINI of Fort Myers) and Sonic-FM VW, Inc (dba VW of Fort Myers)
Capital Chevrolet, AL—dealership   SON-070   3rd   CAR SON CAP CHVY L.L.C.   Capitol Chevrolet and Imports, Inc.   9/28/2000   9/28/2000   9/25/2016   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Fort Mill Ford   SON-073-Lease1   2nd   SRE SOUTH CAROLINA-1, LLC   Fort Mill Ford, Inc.   12/19/2000   12/19/2000   12/18/2015   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Toyota of Ft Worth—used cars   SON-074   3rd   SON MCKNY II L.P.   Sonic-Fort Worth T, L.P.   1/23/2001   1/22/2001   12/22/2017   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
City Chevrolet   SON-075   2nd   CARS CNI-2 L.P.   Sonic - West Reno Chevrolet, Inc.   10/16/2001   10/16/2001   10/15/2016   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Lone Star Chevrolet   SON-076   2nd   CARS-DB4, L.P.   Lawrence Marshall Chevrolet, L.P.   10/31/2001   10/29/2001   10/31/2025   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Don Massey Cadillac-Plymouth   SON-077   1st   CAR SON MAS, L.P.   Sonic-Plymouth Cadillac, Inc.   3/29/2002   3/29/2009   3/28/2017   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Capital Hummer—Lansing   SON-078   2nd   CAR SON MAS, L.P.   Sonic-Capitol Cadillac, Inc.   3/29/2002   03/29/09   3/29/2020   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Crest Cadillac-Nashville   SON-080   2nd   CARS CNI-2 L.P.   Sonic-Crest Cadillac, LLC   3/29/2002   03/29/09   12/20/2020   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Crest Honda   SON-081   1st   CAR SON MAS TN II L.L.C.   Sonic-Crest H, LLC   5/20/2002   05/20/02   12/19/2022   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Massey Cadillac-Orlando   SON-082   1st   CAR SON MAS, L.P.   Sonic-North Cadillac, Inc.   3/29/2002   03/29/09   3/28/2017   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Massey Cadillac-Orlando satellite   SON-083   1st   CAR SON MAS, L.P.   Sonic-North Cadillac, Inc.   3/29/2002   03/29/09   3/28/2017   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Massey Cadillac-Sanford   SON-084   1st   CAR SON MAS, L.P.   Sonic-Sanford Cadillac, Inc.   3/29/2002   03/29/09   3/28/2017   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Massey Cadillac-Detroit   SON-085   1st   CAR SON MAS, L.P.   Massey Cadillac, Inc.   3/29/2002   03/29/09   3/28/2017   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Massey Cadillac-Detroit B/S   SON-086   1st   CAR SON MAS, L.P.   Massey Cadillac, Inc.   3/29/2002   03/29/09   3/28/2017   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Arnold Palmer Cadillac-Pineville   SON-087   1st   CAR SON MAS, L.P.   Arngar, Inc.   3/29/2002   03/29/09   3/28/2017   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Massey Cadillac-Garland   SON-088   1st   CAR SON MAS GAR, L.P.   Sonic-Cadillac D, L.P.   6/28/2002   06/28/02   6/27/2017   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Honda West   SON-089   1st   CARS CNI-2 L.P.   FAA Las Vegas H, Inc.   3/29/2002   03/29/09   9/28/2022   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Volvo of Houston   SON-090, 091   1st   CAR SON NSV II, L.P.   Sonic-Houston V, L.P.   3/29/2002   03/29/09   3/28/2017   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Frank Parra Autoplex   SON-092, 093, 094   1st   CAR SON PARR L.P.   Sonic-Frank Parra Autoplex, L.P.   7/02/2002   07/02/02   8/01/2017   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Acura 101 West   SON-095   1st   CARS CNI-2 L.P.   Sonic-Calabasas A, Inc.   7/16/2002   07/??/02   8/15/2017   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Toyota of Ft Worth—dealership   SON-096   1st   CAR SON MCKNY II L.P.   Sonic-Fort Worth T, L.P.   12/23/2002   12/23/02   12/22/2017   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Baytown Ford   SON-072-Lease1   2nd   CAR SON BAY L.P.   Sonic Automotive - 4701 I-10 East, TX, L.P.   12/19/2000   12/19/2000   12/18/2020   One 5 yr option   n/a   Change one 5-year option to 10-year option.  
Ron Craft Chevrolet/Olds/Cadillac   SON-072-Lease2   2nd   CAR SON BAY L.P.   Sonic Automotive - 3401 N. Main, TX, L.P.   12/19/2000   12/19/2000   12/18/2020   One 5 yr option   n/a   Change one 5-year option to 10-year option.  
Lone Star Ford   SON-020   2nd   MMR Viking Investment Associates, LP   Sonic Automotive of Texas, L.P.   8/13/1999   8/13/1999   8/12/2009   Two 5 yr options   n/a   Renew 10-years after initial term ends in Aug '08, change 2nd option to 10 yrs  
Town & Country Ford   SON-003   3rd   MMR Holdings, LLC   Town and Country Ford, Incorporated   8/13/1999   8/13/1999   8/12/2009   Two 5 yr options   n/a   Renew 5-years after initial term ends in Aug '08, change 2nd option to 10 yrs  
Newsome Auto (Florence Cvy/BMW/MB)   SON-051   2nd   MMR Holdings, LLC   Sonic-Newsome of Florence, Inc   8/13/1999   8/13/1999   5/17/2009   Two 5 yr options   n/a   Renew 5-years after initial term ends in Aug '08, change 2nd option to 10 yrs   Extend lease expiration date out 9 months to Feb 17, 2010 (lease nonrenewal notice deadline date is to be July 18, 2009)
Capitol Hyundai   SON-066   3rd   CAR BSC L.L.C.   Capitol Chevrolet and Imports, Inc.   3/03/2000   3/3/2000   12/20/2020   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Lute Riley Honda Body Shop   SON-105   2nd   CAR SON LRB L.P.   SONIC-LUTE RILEY, L.P.   4/30/2007   4/30/07   7/01/2019   Two 5 yr options   YES   change both 5-yr options to 10-yr options  
Baytown Chrysler Jeep Dodge   SON-017     MMR Viking Investment Associates, LP   Sonic Automotive-5221 I-10 East, TX, L.P.   8/13/1999   8/13/1999   1/27/2014   One 5 yr option   n/a   No modification of terms  
BMW-Volvo of Chattanooga   SON-035   3rd   MMR Tennessee, LLC   Sonic Automotive of Chattanooga, LLC   8/13/1999   8/13/1999   9/24/2016   Two 5 yr options   YES   No modification of terms  
Infiniti of Charlotte Parking Lot   SON-101     CAR SON CHAR L.L.C.   Sonic Automotive-9103 E. Independence, NC, LLC   12/30/2004   12/30/04   12/29/2019   Two 10 yr options   YES   No modification of terms  
Lonestar Chevrolet Parking Lot   SON-102     CAR SON STAR L.P.   SONIC-LS CHEVROLET, L.P.   12/30/2004   12/30/04   10/31/2025   Two 10 yr options   YES   No modification of terms  
Riverside Toyota   SON-103     CAR SON OK TOY L.L.C.   SONIC - OKLAHOMA T, INC.   12/28/2005   12/??/05   12/27/2020   Two 10 yr options   YES   No modification of terms  
Honda of Tysons Corner   ROS-001-Lease1     CARS-DB1, LLC   Sonic Tysons Corner H, Inc.   2/19/1998   1/9/2006   2/18/2018   One 10 yr option   n/a   No modification of terms. 1st option already exercised  
Honda of Tysons Corner (storage lot)   ROS-001-Lease3     CARS-DB1, LLC   Sonic Tysons Corner H, Inc.   2/19/1998   1/9/2006   2/18/2018   One 10 yr option   n/a   No modification of terms. 1st option already exercised  
Honda of Tysons Corner (body shop)   ROS-006     CARS-DB1, LLC   Sonic Tysons Corner H, Inc.   2/19/1998   1/9/2006   2/18/2018   One 10 yr option   n/a   No modification of terms. 1st option already exercised  
Volvo at Gwinnett Place   SON-031   2nd   MMR Holdings, LLC   Sonic Automotive 5260 Peachtree Industrial Blvd., LLC   8/13/1999   8/13/1999   8/12/2009   Two 5 yr options   n/a   Allow to terminate 8/12/2009  
Lexus of Marin   FIR-002     CAR FAA II L.L.C.   FAA SERRAMONTE L, INC.   1/14/1999   SEE COMMENTS   1/14/2019   Two 10 yr options   YES   No modification of terms  
Volvo & Honda of Santa Monica   FIR-003, 004     CARS-DB4, L.P.   FirstAmerica Automotive, Inc.   11/10/1999   SEE COMMENTS   11/09/2014   Two 10 yr options   YES   No modification of terms  
Momentum JVP (FFC)   MOM-001     CARS CNI-2 L.P.   SONIC FFC 3, INC.   9/01/1998   4/16/2004   4/15/2019   Two 10 yr options   YES   No modification of terms  
Momentum BMW   MOM-002     CARS CNI-2 L.P.   Sonic Momentum B, L.P.   1/22/1999   7/1/2004   6/30/2019   Two 10 yr options   YES   No modification of terms  
Momentum BMW B/S   MOM-004     CARS CNI-2 L.P.   Sonic Momentum B, L.P.   9/01/1998   7/1/2004   6/30/2019   Two 10 yr options   YES   No modification of terms  
Land Rover of Houston (dealership)   MOM-006     Capital Automotive, L.P.   Sonic Houston LR, L.P.   5/17/1999   4/16/2004   4/15/2019   Two 10 yr options   YES   No modification of terms  
Momentum Audi (FFC)   MOM-010     CAR 2 MOM L.P.   SONIC FFC 2, INC.   7/10/2002   4/16/2004   4/15/2019   Two 10 yr options   YES   No modification of terms  
Advantage VW   MOM-011     CAR 2 MOM L.P.   SONIC-JERSEY VILLAGE VOLKSWAGEN, L.P.   6/28/2002   8/5/2003   5/31/2017   Two 10 yr options   YES   No modification of terms  
Clearlake VW   MOM-012     CARS-DB4, L.P.   SONIC-CLEAR LAKE VOLKSWAGEN, L.P.   10/10/2002   8/5/2003   9/30/2017   Two 10 yr options   YES   No modification of terms  
Halifax Chevy - New Smyrna   SON-028   4th   MMR Holdings, LLC   Sonic Automotive-1919 N. Dixie Hwy., NSB, Inc.   8/13/1999   8/13/1999   8/1/2015   Two 5 yr options   YES   No modification of terms  
Friendly Ford Lincoln Mercury (Blount)   SON-065   3rd   CAR BSC L.L.C.   Sonic-Montgomery FLM, Inc.   3/03/2000   3/3/2000   3/02/2015   Two 5 yr options   YES   No modification of terms  
Volvo of Dallas   SON-071   2nd   CAR SON NSV L.P.   Sonic-Carrollton V, L.P.   10/06/2000   10/6/2000   10/05/2015   Two 5 yr options   YES   No modification of terms  
Fort Mill Hyundai   SON-073-Lease2   2nd   SRE SOUTH CAROLINA-1, LLC   Town and Country Chrysler-Plymouth-Jeep of Rock Hill, Inc.   12/19/2000   12/19/2000   12/18/2015   Two 5 yr options   YES   No modification of terms  
BMW of Ann Arbor (Infiniti sublease)   SON-100     SRE Michigan - 2, LLC   Sonic-Ann Arbor Imports, Inc.   6/28/2004   6/28/04   12/20/2021   Two 10 yr options   YES   No modification of terms  
Mercedes-Benz of Ann Arbor   SON-104     SRE MICHIGAN - 1, LLC   Sonic–Ann Arbor Imports, Inc.   6/30/2006   6/30/06   6/29/2021   Two 10 yr options   YES   No modification of terms  
Altman LM (North Charleston)   SON-048   2nd   MMR Holdings, LLC   Sonic-North Charleston, Inc.   8/17/1999   8/17/1999   8/16/2009   Two 5 yr options   n/a   No modification of terms; allow to terminate Aug 2009