Subordination Agreement (2001)Full Document 

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                             SUBORDINATION AGREEMENT

        This Subordination Agreement (as the same may from time to time be
amended, modified or restated, the "Agreement") is dated as of November 19, 2001
and is entered into by and between O. BRUTON SMITH (the "Junior Creditor") and
U.S. Bank Trust National Association (the "Trustee"), a bank organized under the
laws of the United States, as Trustee under an Indenture dated as of November
19, 2001 (the "Indenture") among Sonic Automotive, Inc. (the "Issuer"), the
Guarantors named therein (the "Guarantors"), and the Trustee, and acting
hereunder for the benefit of the holders (the "Holders") of the Issuer's
$75,000,000 in principal amount of Senior Subordinated Notes Due 2008, Series C
(the "Issuer's Senior Notes") issued pursuant to the Indenture (in such
capacity, "Senior Creditor").

                              W I T N E S S E T H:

        WHEREAS, the Junior Creditor has a financial interest in the Issuer
relating to the Issuer's obligation to repay the Junior Creditor a debt in the
principal amount of $5,500,000 evidenced by the Issuer's Subordinated Promissory
Note dated December 15, 1997 (collectively with any instrument that may be
substituted for such note, the "Subordinated Note");

        WHEREAS, the Issuer and the Trustee have entered into the Indenture for
the benefit of the Holders and providing for the issuance by the Issuer's Senior
Notes;

        WHEREAS, the Junior Creditor acknowledges that the issuance of the
Issuer's Senior Notes and the Issuer's receipt of the proceeds from the sale
thereof is of direct pecuniary value to the Junior Creditor;

        NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged by the Junior Creditor, and in order to induce the
Holders to purchase the Issuer's Senior Notes for the benefit of the Issuer and
to provide the ranking of the Issuer's Senior Notes among the Issuer's debt as
disclosed in the Issuer's Offering Memorandum dated November 8, 2001 relating to
the sale of the Issuer's Senior Notes, the Junior Creditor hereby agrees with
Trustee, for the benefit of the Holders, as hereinafter set forth.

        1.  Certain Defined Terms.  In addition to the terms defined above and
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elsewhere in this Agreement, the following terms used in this Agreement shall
have the following meanings, applicable both to the singular and the plural
forms of the terms defined:

        As used in this Agreement:

        "Issuer" shall mean Sonic Automotive, Inc., a Delaware corporation or
any successor assign or assign of Sonic Automotive, Inc., including, without
limitation, a receiver, trustee or debtor-in-possession.

        "Senior Debt" shall mean (a) the indebtedness evidenced by the Issuer's
Senior Notes and all other obligations, liabilities, and indebtedness issued or
arising pursuant to the Indenture, in each case whether now existing or
hereafter arising (and whether such indebtedness arises or accrues before or
after the commencement of any bankruptcy, insolvency or receivership
proceedings) directly between Issuer and the Senior Creditor, or acquired
outright, conditionally or as collateral security from another by the Senior
Creditor, including, without limitation, interest and fees accruing pre-petition
or post-petition at the rate or rates prescribed in Issuer's Senior Notes and
costs, expenses, and attorneys' and paralegals'



fees, whenever incurred (and whether or not such claims, interest, costs,
expenses or fees are allowed or allowable in any such proceeding); and (b)
amounts disbursed or advanced (including, without limitation in connection with
the provision of any financing or other financial accommodations pursuant to
Section 364 of the Bankruptcy Code) by the Senior Creditor which the Senior
Creditor, in its good faith discretion and to the extent the same may be
permitted under the Indenture, deems necessary or desirable to preserve or
protect any collateral now or hereafter securing all or any portion of the
Senior Debt or to enhance the likelihood or maximize the amount of repayment of
the Senior Debt, including, but not limited to, all protective advances, costs,
expenses, and attorneys' and paralegals' fees, whensoever made, advanced or
incurred by the Senior Creditor in connection with the Senior Debt or the
collateral therefor ("Preservation Debt").

        "Subordinated Debt" shall mean (a) all principal of, and premium, if
any, and interest on, the Subordinated Note, and (b) all other indebtedness,
fees, expenses, obligations and liabilities of the Issuer (or any other person,
firm, partnership or corporation for the benefit of Issuer) to the Junior
Creditor, whether now existing or hereafter incurred or created, under or with

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