Promissory Note (Revolving Line of Credit Construction Loan)

EXHIBIT 10.11

PROMISSORY NOTE (Revolving Line of Credit Construction Loan)


$50,000,000.00


December 31, 2002


Borrower:


The Entities executing this Note in the signatures below


Borrower' s Address for Notice:


5401 East Independence Boulevard Charlotte, North Carolina 28212


Lender:


Toyota Motor Credit Corporation


Lender' s Address for Payment:


19001 South Western Avenue Torrance, California 90509-2958


Promise to Pay:


For value received, the undersigned Borrower promises to pay to the order of Lender the sum of Fifty Million and No/100 Dollars ($50,000,000.00), to the extent advanced by Lender, together with interest on the unpaid balance of such amount, in lawful money of the United States of America, in accordance with all the terms conditions and covenants set forth below. For purposes of this Note, " Borrower" shall include all the entities executing this Note as set forth below.

Definitions : Capitalized terms used in this Note and not defined herein shall have the meanings assigned to such terms in the Loan Agreement (defined below). In addition, the following terms shall have the meanings set forth below:

Acquisition Advance Termination Date September 30, 2006.

Advance Each disbursement of loan proceeds under this Note pursuant to the Loan Agreement (unless otherwise noted herein, an " Advance" shall be deemed to include (i) an Acquisition Advance for the purchase of Property under Section 3.1 of the Loan Agreement, (ii) a " Draw" under Section 4.3(s) of the Loan Agreement, and (iii) a disbursement for Budgeted Interest under Section 4.9(e) of the Loan Agreement and as set forth below).

Applicable Rate A varying or fluctuating rate per annum that is equal to LIBOR plus two and one-quarter percent (2.25%). LIBOR is initially determined on the date of the applicable Advance. LIBOR shall be adjusted, as necessary, as of first calendar day of each month, based on the LIBOR rate in effect as of the last Business Day of the preceding month.

Construction Project Loan Maturity Date - As to each Construction Project Loan Amount, the date being the earlier of (i) 15 months from the date of the Acquisition Advance for


such Construction Project, (ii) the date of Substantial Completion, or (iii) the Loan Maturity Date.

Default Interest Rate The Maximum Lawful Rate, or if no such Maximum Lawful Rate is established by applicable law, then the Applicable Rate plus three percent (3%) per annum.

Draw Termination Date November 30, 2007.

LIBOR - The London Interbank Offered Rate for one (1) month deposits, as published by The Wall Street Journal in its " Money Rates" section. Should the method of establishing LIBOR, or the publication of the London Interbank Offered Rates for one (1) month deposits in The Wall Street Journal cease or be abolished, then LIBOR shall be based on a comparable index selected by Lender.

Loan Agreement - Master Loan Agreement dated as of even date herewith among Borrower, Lender and Sonic Automotive, Inc. This Note is issued pursuant to the terms of the Loan Agreement.

Loan Documents This Note, the Loan Agreement, the Security Documents, and any other instruments evidencing this Note or otherwise governing, guaranteeing or pertaining to the loan evidenced by this Note.

Loan Maturity Date December 31, 2007.

Maximum Lawful Amount - The maximum, nonusurious and lawful contractual amount of interest, that may collected or received by Lender under applicable state or federal law.

Maximum Lawful Rate - The maximum, nonusurious and lawful contractual rate of interest that may be charged by Lender under applicable state or federal law.

Permanent Note - The Promissory Note dated of even date herewith executed by Borrower and payable to Lender in the principal amount of $100,000,000.00.

Principal Balance - The aggregate unpaid principal balance of all Advances, outstanding from time to time.

Security Documents All deeds of trust, mortgages, security agreements, guaranties, pledges, assignments, or any other instruments securing this Note.

TERMS OF NOTE

Interest and Principal Provisions:

(a) Interest Accrual : The Principal Balance of this Note advanced but from time to time remaining unpaid prior to maturity shall bear interest at the Applicable Rate, but never


greater than the Maximum Lawful Rate. The Applicable Rate will automatically fluctuate upward or downward with changes to LIBOR in accordance with the provisions herein, without notice to Borrower or any other person. The (i) past due installments of principal and interest on this Note, and (ii) entire Principal Balance after acceleration of the Principal Balance, shall bear interest at a per annum rate equal to the Default Interest Rate.

(b) Payment Terms : From the date hereof to and including the Loan Maturity Date, this Note shall be due and payable as follows:

(i) Interest - Accrued interest on the unpaid Principal Balance outstanding shall be due and payable monthly. On the Loan Maturity Date, all accrued but unpaid interest shall be due and payable. Budgeted Interest may be paid as provided in (ii) below.

(ii) Budgeted Interest Unless paid by Borrower from other funds, Lender may disburse to itself to pay interest monthly as it accrues on this Note, the amount allocated for Budgeted Interest for each Construction Project as being available only for payment of that interest on that Construction Project. Disbursements will be made on behalf of Borrower to Lender on the payment dates when interest is due and owing in accordance with the terms of this Note 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, after making a disbursement for Budgeted Interest as set forth above, Borrower shall pay the interest with other funds, Lender will, at Borrower' s request, reimburse Borrower to the extent of the payment, but (i) only to the extent available from funds allocated for Budgeted Interest for that Construction Project, and (ii) only if all interest owing on other Construction Projects is paid in full. The exhaustion of the amount of Draws available for Budgeted Interest shall not impair the obligation of Borrower to pay interest on the Construction Loan.

(iii) Principal On each Construction Project Loan Maturity Date, a principal installment equal to the aggregate amount of all outstanding Advances made for such Construction Project shall be due and payable.

(iv) Loan Maturity Date On the Loan Maturity Date, a final installment, which shall include all unpaid amounts of the Principal Balance and interest accrued thereon, and any and all other payments due under this Note, shall be due and payable.

(v) Due Dates and Application of Payments The monthly payments of interest shall commence on the first day of the first month following funding of the first Advance hereunder, and shall continue regularly and monthly thereafter on the first day of each succeeding month. The amount of each of such payments in respect of the outstanding Advances shall be aggregated each month and shall be due as one monthly installment. Each installment shall be applied first to accrued but unpaid interest and the balance to reduction of the Principal Balance.


Advances and Prepayments:

(a) Revolving Line of Credit : This Note shall evidence Borrower' s indebtedness for Advances from time to time made under a revolving credit line pursuant to the Loan Agreement, which indebtedness may from time to time be decreased, increased, paid in full and then renewed. Interest will accrue only from the date that Advances are made pursuant to the Loan Agreement, and the liability of the undersigned is limited to the Principal Balance from time to time actually disbursed p ...