EXHIBIT 10.41A
SONIC AUTOMOTIVE, INC.
0000 XXXX XXXXXXXXXXXX XXXXXXXXX
XXXXXXXXX, XXXXX XXXXXXXX 00000
October 16, 1997
KIA of Chattanooga, LLC
European Motors of Nashville
European Motors, LLC
Jaguar of Chattanooga LLC
Cleveland Chrysler-Plymouth-Jeep Eagle LLC
Xxxxxx Xxxxxx Dodge, LLC,
Cleveland Village Imports, Inc.
Saturn of Chattanooga, Inc.
Xxxxxx Xxxxxx Ford, X.X.
Xxxxxx X. Xxxxxx XX
Xxxxxxx X. Xxxxxx
and the additional signatories to the Asset Purchase Agreement
RE: AMENDMENT TO THE ASSET PURCHASE AGREEMENT
Dear Sirs:
Reference is made to the Asset Purchase Agreement, dated as of June 24,
1997, as amended (the "Agreement"), by and among you and the undersigned.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings given to them in the Agreement.
This will confirm our agreement to amend the Agreement as follows:
1. Saturn of Chattanooga, Inc. ("Saturn") shall no longer be a Seller
under the Agreement and shall be deleted as a party to the Agreement for all
purposes.
2. The Purchase Price shall be reduced by $5,900,000 to reflect the
reduction in value represented by the Purchased Assets to be sold by Saturn,
with $4,600,000 of such reduction being applied to reduce the Base Price to
$18,400,000 and $1,300,000 of such reduction being applied to reduce the
Adjustment Amount to $9,200,000. Furthermore, the reduced Adjustment Amount of
$9,200,000 shall be allocated as follows:
Initial Adjustment Amount $4,200,000
Escrowed Adjustment Amount 1,000,000
Notes $4,000,000
----------
$9,200,000
October 16, 1997
Page 2
3. The Closing Date Deadline shall be extended to November 21, 1997.
4. The transaction shall close in escrow on or about November 1, 1997,
subject to funding of the Purchase Price, which shall occur not later than the
close of business on the Closing Date Deadline. Upon completion of the closing
in escrow, all conditions to closing under the Agreement, other than payment of
the Purchase Price by the Buyer, will be deemed satisfied. From November 1, 1997
until the date of funding, the Sellers shall continue to operate the Purchased
Assets in the ordinary course and shall pay no dividends or distributions to
their shareholders; at funding, the Buyer shall also pay interest on the amount
of the Purchase Price payable at Closing (i.e., at funding) at prime rate for
the period from and including November 1, 1997 to and including the date of
funding. If funding does not occur by the close of business on the Closing Date
Deadline, the closing in escrow shall be void ab initio and the provisions of
the Agreement, including Article 11, shall be applicable.
5. At the time of the closing in escrow referred to in paragraph 4
above, the Buyer shall deliver a letter of credit of NationsBank, or another
bank reasonably acceptable to the Sellers' Agent, in the amount of the Buyer's
Termination Fee. The costs of such letter of credit shall be borne by the
Sellers.
6. The rents under the respective Dealership Leases with respect to the
Sellers listed on Exhibit A attached hereto are hereby agreed to as the rents
under the respective Dealership Leases.
7. The Non-Competition Agreement shall be amended to permit Xxxxxx
Xxxxxx to continue as the owner/operator of Saturn consistent with past
practice.
October 16, 1997
Page 3
Please indicate our mutual agreement by signing a copy of this letter
in the space provided below and returning it to the undersigned.
Very truly yours,
SONIC AUTOMOTIVE, INC.
/s/ Xxxxx Xxxxx Xxxxx
_________________________________
By: Xxxxx Xxxxx Xxxxx
Title: President
Accepted and Agreed as of the
date first set forth above:
KIA OF CHATTANOOGA, LLC
By: /s/ Xxxxxx X. Xxxxxx, XX
________________________________
Name: Xxxxxx X. Xxxxxx, XX
Title: Chief Manager
EUROPEAN MOTORS OF NASHVILLE, LLC
By: /s/ Xxxxxx X. Xxxxxx, XX
________________________________
Name: Xxxxxx X. Xxxxxx, XX
Title: Chief Manager
EUROPEAN MOTORS, LLC
By: /s/ Xxxxxx X. Xxxxxx, XX
_________________________________
Name: Xxxxxx X. Xxxxxx, XX
Title: Chief Manager
October 16, 1997
Page 4
JAGUAR OF CHATTANOOGA LLC
By: /s/ Xxxxxx X. Xxxxxx, XX
_________________________________
Name: Xxxxxx X. Xxxxxx, XX
Title: Chief Manager
CLEVELAND CHRYSLER-PLYMOUTH-JEEP EAGLE LLC
By: /s/ Xxxxxx X. Xxxxxx, XX
_________________________________
Name: Xxxxxx X. Xxxxxx, XX
Title: Chief Manager
XXXXXX XXXXXX DODGE, LLC
By: /s/ Xxxxxx X. Xxxxxx, XX
_________________________________
Name: Xxxxxx X. Xxxxxx, XX
Title: Chief Manager
CLEVELAND VILLAGE IMPORTS, INC.
By: /s/ Xxxxxx X. Xxxxxx, XX
_________________________________
Name: Xxxxxx X. Xxxxxx, XX
Title: President
SATURN OF CHATTANOOGA, INC.
By: /s/ Xxxxxx X. Xxxxxx, XX
__________________________________
Name: Xxxxxx X. Xxxxxx, XX
Title: President
October 16, 1997
Page 5
XXXXXX XXXXXX FORD, L.P.
by: Nebco of Southeast Tennessee, Inc.
its: General Partner
By: /s/ Xxxxxx X. Xxxxxx, XX
_______________________________
Name: Xxxxxx X. Xxxxxx, XX
Title: President
THE SHAREHOLDERS:
/s/ Xxxxxx X. Xxxxxx, XX (SEAL)
______________________________________________
XXXXXX X. XXXXXX, XX
/s/ Xxxxxxx X. Xxxxxx (SEAL)
_______________________________________________
XXXXXXX X. XXXXXX
/s/ Xxxx X. Xxxxxxx, Xx. Trustee (SEAL)
_______________________________________________
Xxxx X. Xxxxxxx, Xx., Trustee
/s/ Xxxxx XxXxx (SEAL)
_______________________________________________
XXXXX XxXXX
/s/ Xxxxx X. Xxxxxx, XX (SEAL)
_______________________________________________
XXXXX X. XXXXXX, XX
/s/ Xxxxxxx X. XxXxxxxx (SEAL)
_______________________________________________
XXXXXXX X. XxXXXXXX
October 16, 1997
Page 6
/s/ Xxx Xxxxx (SEAL)
______________________________________________
XXX XXXXX
NEBCO OF SOUTHEAST TENNESSEE, INC.
By: /s/ Xxxxxx X. Xxxxxx, XX
_______________________________________
Name: Xxxxxx X. Xxxxxx, XX
Title: President
INFINITI OF CHATTANOOGA, INC
By: /s/ Xxxxxx X. Xxxxxx, XX
_______________________________________
Name: Xxxxxx X. Xxxxxx, XX
Title: President
/s/ Xxxx X. Xxxxxx (SEAL)
_____________________________________________________
XXXX X. XXXXXX
XXXX X. XXXXXX TRUST U/W XXXXXX XXXXXXX XXXXXX
By: /s/ Xxxx X. Xxxxxx
____________________________________
Xxxx X. Xxxxxx, Trustee
By: /s/ Xxxx X. Xxxxxxxxxx, Xx.
_____________________________________
Xxxx X. Xxxxxxxxxx, Xx., Trustee
By: /s/ Xxxxx X. Xxxxxxxxxx
____________________________________
Xxxxx X. Xxxxxxxxxx, Trustee
EXHIBIT A
Schedule 1.3(e)
Allocation of Purchase Price and Assumed Liabilities
The allocation of the Purchase Price and the Assumed Liabilities among
the Purchased Assets is to be mutually agreed by the Sellers and the Buyer at or
prior to the Closing; provided that (i) the amount allocated to the
Non-Competition Agreement (as defined in subsection 1.4(d) of the Agreement)
shall be as set forth therein, (ii) the Base Price shall be allocated entirely
to goodwill and the Net Book Value shall be allocated to the Purchased Assets
other than goodwill.
The Net Book Value will be allocated among the Sellers in accordance
with the Net Book Value as reflected on the Closing Balance Sheet prepared by
the Sellers. The $23 Million "Base Price" is to be allocated among the Sellers
as follows:
Infiniti/Jaguar $ 684,000
BMW/Volvo of Chattanooga 5,835,000
BMW/VW of Nashville 6,242,000
Saturn of Chattanooga 4,600,000
Xxxxxx Xxxxxx Ford 230,000
Dodge of Chattanooga 3,681,000
Cleveland Village Honda 1,728,000
Total $23,000,000
Subject to change based on financial information as of the date of closing.
EXHIBIT B
LEASE AMOUNTS
____________________________________________________________________________
ENTITY RENT PER MONTH RENT PER YEAR
____________________________________________________________________________
KIA 11,070 132,840
____________________________________________________________________________
BMW 23,320 279,840
____________________________________________________________________________
CCPJE 15,952 191,424
____________________________________________________________________________
Jag/In 27,852 334,224
____________________________________________________________________________
Honda 12,858 154,296
____________________________________________________________________________
CarMart 7,500 90,000
____________________________________________________________________________
